"The Dip", a book for Quitters

The Dip is for Quitting?
Now, don't get me wrong - I like Seth's ideas about the dip itself. However, I'm not convinced it's always a Cul-De-Sac, Cliff, or Failure. I think there's something else here, something that we call "The Pivot". I think it's wrong to look at The Dip as a place for quitter analysis, but rather it should be examined as an opportunity to Pivot.

9 out of 10 Businesses Leaves 1
We all know the stats: 9 out of 10 business fail in their first year, of the 10% that make it to the 2nd year, 50% of those will fail. Is it really that all these instances are bad business ideas, or wrong business ideas? I wonder if the majority of business failures are due to operational failures - financial issues, late paying clients, mismanagement, partner issues - or because there's no product/market fit? I always equate it to that Bible verse, "love covers a multitude of sins". In business, "cash covers a multitude of sins". If you were rolling in coin, the standard operational failures don't affect you as much. If you're flat broke, everything seems like a massive failure. The point is this - don't use The Dip to say, "drats, wrong business - stupid cul de sac". Use The Dip to say, "what does it take to get to product/market fit?"

Don't Quit! Pivot!
The premise of The Pivot is that you are always some short series of changes away from success, from product/market fit. The Pivot is the point at which you recognize it, almost always from your vantage point well beneath anything in The Dip. The key thing about The Pivot is that things are crushing in from all around - stuff is just bad. Sales are too slow. Relationships suck. Demos fail. It seems the world is, for whatever reason, dead set against your efforts. This is the time you really need to examine yourself, see what you're made of, and see what the steps are between you and product/market fit. Can you get there? The keys to a successful Pivot are generally:

• Identify those steps to Product/Market Fit! This is the real point of being in a dip anyway. It should show you something that you're not seeing - there's a reason you're there, why is it? Odds are this is a key to making your Pivot.
  
• Commit to the new vision and gut anyone who won't. It's harsh, but you can't have it any other way. One of my favorite books, Good to Great, talks about your Hedgehog Concept. And well, either you just found it or it just changed - so make sure you have all the right people on the bus.
  
• Remove all hindrances and traditions. Odds are there wasn't something else causing your Dip in the first place. I always go back to the fact that even today, there are people who are successful with lawn care businesses. I used to not get this. I mean, sure demand is increasing with new housing starts, but one business for every 5 houses doesn't quite scale. The point is this - if you have a reasonable vision, you can make it work. Period. If you're not strong in one particular area, outsource it - but be wise about it. (Most of the time, the Dip teaches you this too.) Get the right people on the bus and get the crud out of your way.

So, for the penultimate caveat: I think he's right about the dead end... but I don't think he did a good job of helping us wayward non-quitters identify it. To put it bluntly, only quit when you're out of money and no one will give you any - well, any more, because it's not unlikely that you haven't gotten some from them already.

How about 32nd Best in the World?
There'll be plenty more time to post on the Pivot, so I thought I'd take this last paragraph to rail on Seth a little more. Here's the quote:

If you're not going to get to #1, you might as well quit now.

This particular quote takes an entire page in the book, with nice strong bold capital letters. Now, in my own small humble opinion, this doesn't seem quite right. If people always waited until they had the idea that they would be best in the world at something, would they ever move forward with anything? No doubt you've had some idea that 6, 12, 18 months later became something as big as Google or Starbucks. You might have even prototyped it, designed it, or built a database or something - but because of this very principle, you immediately found some constraint that caused you not to pursue it...

Someone is already doing it. It's impossible. It will be too expensive to build. No one will buy it. I suck at it. I don't have time. I need to watch the Family Guy repeats I've Tivo'ed over the last 2 years.

Don't Fall for The Pre-Dip Dip
This is what I would call pre-dip dipping. Now let's take a look at this from the individual market perspective. The entire idea of #1 is talking about a pie slice... which we all know isn't a good way to look at the world, but it's the way the world wants to look at things. The Unified Communications market is $15B, and then we say Microsoft, Cisco, Avaya, Nortel, IBM, and the smattering of niche players take up$ 14.9B. So, even if I can make it through the gauntlet of small business (50% of the 10%) I'm only going after a $1MM pie. Bummer.

Don't get suckered by the Pre-Dip Dip. It's just this kind of nonsense that keeps people from doing BIG THINGS. There's something to be said for how you set expectations. First, Be You, and get a good start on solid footing. Then let things come together - product, market, sales, revenues. Make sound decisions, but move forward aggressively towards the vision, no matter how many elephants are pooping in your sandbox. See if you can be the best in town, then move from there. I like Wil's post, there are some great $3M companies out there. Build on a series of smaller successes - get there first, then ramp. It will be a lot more fun.