In the countless business classes I took in my twenties, over and over I heard the statistic that more than half of startups fail in less than two years—long before they pay off their overhead and become legitimate cash flow centers. And every time the professor, teacher, or business titan cited this fact, he or she reminded the students that these kinds of statistics only include businesses that the government can track.
Subtext: The statistics we hear day in and day out are actually skewed. Many an entrepreneurial dreamer dips a toe into the waters of business just to see what happens—never acquiring an LLC or filing taxes. Sad though it is to say, these less-trackable businesses absolutely fail at a much higher rate.
You know the businesses I’m talking about: The photographers who go the mile to build a website, but then always seem to do work just for family and friends and therefore never charge. The hat knitters who open up shop on Etsy, and after three or four months with maybe just a single solitary sale, close their doors. The self-serve cafes with “Live, Love, Latte” accents throughout the room and no more than a Facebook page for you to find them online. The symptoms of a failed startup are often evident from the onset.
But why wouldn’t an aspiring businessperson want only to dip a toe in? With statistics that say you’re likely to fail, you’d be a fool to go in whole-heartedly, investing in help and materials and education, and showing up each day and owning that “this is my career now.” Right?
Confidence and Stress
There is a simple yet excellent TEDTalk in which social psychologist Amy Cuddy asserts that the way we as individuals physically carry ourselves can not only affect how we are perceived from the outside, but can actually rewire our own brain chemistry. In a study her team conducted in which participants were asked to maintain either a “high-power pose” or a “low-power pose” for two full minutes, results showed that those who maintained the high-power poses saw a huge leap in testosterone levels from before starting the experiment, and a drop in cortisol, while those who maintained the lower-power poses saw a marked drop is testosterone and an increase in cortisol. In a nutshell, two key confidence and stress hormones were deeply affected—in just two minutes of simulation power poses.
How does this relate to business startups? Consider for a moment how confidence and stress impact behavior. When you’re confident, do you make decisions more easily? When you’re stressed, do you start trying to protect your own backside? There are some typical responses that humans exhibit when feeling powerful or pressured. These behaviors extend to our relationships, where we choose to live, how well we take care of our health and appearance, our career moves, and our financial decisions. Why should they not extend to our businesses?
The way you present your startup to the world can be high-power or low-power. If you go into business thinking, “If it takes off, I will invest more into it,” then invariably you go into business with low-power presentation. You print business cards, but you don’t hand them out; you build a website, but you don’t figure out how to send traffic to it; you create a great product, but don’t charge enough to make money back on it. This sends an ambiguous message out into the world: I’m in business, but I’m not in business.
We make “sweeping judgments and inferences” from presentation, Amy Cuddy says in her TEDTalk. We hire and promote based on presentation, she says; we choose whom we will date based on presentation. If you have a low-power way of presenting your business, you can be certain that the sweeping judgments and inferences people make will be that you don’t have confidence in yourself to succeed. And if you aren’t going to succeed, then they’re not going to invest in you. When it seems that no one is responding to your product or service, you yourself take your toe out of the water, so to speak, and thus the downward spiral into failure is made complete.
On the other hand, if you present your business in a high-power way, then you can get strangers excited to invest in you—i.e., spend money at your business. Seeing people get enthusiastic about your product, you can convince yourself that you are going to succeed… and thereby increase your odds of making it happen.
High-power presentation means investing from the start. It means doing market and product research; outsourcing the parts of your presentation you can’t do masterfully on your own; having a credible business name, with a website to match; setting up a business bank account and acquiring an LLC; printing business cards and handing them out like it’s your job (because it is); creating referral or loyalty programs; and generally showing up every day and owning, “This is my career now.”
Interestingly, many (if not most) successful entrepreneurs start out the same way as the toe-dippers I described at the beginning of this blog post. Many businesspeople who are successful today had numerous startups that didn’t make it, and had to learn a lot of lessons through failure to find the work they were passionate enough about to see through with the confidence for the business to survive. Examples include Blake Mycoskie, the founder of TOMS shoes; Elsie Larson and Emma Chapman, co-owners of A Beautiful Mess; and Marie Forleo, host of MarieTV and founder of B School.
That said, when you have failed at even one venture, or if you’re thinking of starting a business for the first time, you want to cut to the front of the line. You don’t want to have to fail five times over the course of a decade to get to where you want to go. One of the best things you can do for your startup if you truly want to succeed is to stretch outside your comfort zone when it comes to confidence. In essence, choose to start in a high-power pose.
To shift the presentation of your startup from low-power to high-power (by the way, this is the reason to share this blog post with anyone you know who wants to own a business), consider taking these fast and easy “fake-it-’til-you-make-it” actions:
• Start claiming your business as your career. When a new friend or acquaintance asks, “So, what do you do?” answer with what you want your business title to be. “I’m a personal stylist” or, “I’m a strength coach” sound much more confident than “I work in insurance but I’m trying to become a stylist,” or “My ultimate goal is to be a strength coach but for now I bartend at night.” Identify as the thing you’re trying to do, so that when people think of you, they think of what you want to get paid to do, and inversely, when they know someone who needs what you’re charging for, they’ll think of you.
• Get your website in top shape. Too often I hear truly talented people who can do truly excellent work telling potential clients, “I have a website, but don’t go to it—I need to update it,” or, “Don’t fill out the contact form—just shoot me a text. Here’s my number.” These kinds of statements make it sound like you haven’t done work in a while; and if you haven’t done work in a while, it’s probably because you don’t take yourself seriously or you’re not very good. If instead you give people your card and say, “Check out my website—I’ve got tons of options, and if you need something custom, I’m sure we can cook it up for you,” then the question of your capability is taken right off the table. You can just go straight to figuring out how to meet the need of the client instead of defending yourself.
• Figure out how what you do helps people and focus on that aspect of the work. Everyone feels a little gun-shy about asking for money for doing something they are naturally gifted at or love to do. It can feel unfair to charge for something that comes easily to you and that you may even have done as a favor for friends in the past. However, almost every product or service offers something of value to the person who pays for it—beauty, confidence, relief, decreased anxiety, time, organization, comfort. And if they are in the market for that benefit and you can offer it, then it’s fair to take money in exchange for it. It’s also a great way to market what you love to do, because people are rarely paying for a product or service itself. They are paying for the side effects the product or service offers them. The more you focus on how whatever you sell helps other people, the easier it will be to approach prospective clients and the more readily they will want to pay you for it.
Of course, there are many more layers to the concept of feigning confidence, which is why I’m working on a new book, Hacking Success: How to Trick the Universe into Handing You the Life You Don’t Think You Deserve. In the meantime, these tips should get you started. And if you’re still struggling, watch Amy Cuddy’s TEDTalk and maybe start practicing some high-power poses as part of your morning routine.