The best laid plans will not work out. We don’t live in Eden. We live in a world where there are good intentions, but life gets in the way. Things go wrong all the time.
And for the entrepreneur, the person pioneering on the frontier of ideas and seeking to make them happen in reality, things always go wrong. There’s simply too much uncertainty around what is novel and untried.
The idea that an entrepreneur is someone who takes great risk and throws caution to the wind is a misnomer and a foolish path to follow. That’s not very smart or rational. Much of what entrepreneurship requires is exploration, discovery and testing. Smart entrepreneurs are always looking to reduce risk.
Otherwise, the uncertainty will smack you in the face. There is a method that works to avoid striking out early and often and that revolves around thinking through contingencies.
Entrepreneurs have to test their ideas, and when their work takes a turn, there should be contingencies in place.
So, let’s say you are testing a new software product idea. You are committed to spending $10K on the project with a developer you have found. You haven’t worked with this person in the past so you don’t have any idea how they might perform.
Instead of betting the farm, you could create multiple contingencies:
- Split the project up with a couple developers and define their complementary roles.
- Capture the knowledge in a centralized repository so there is continuity on the source code development.
- Create a competitive situation with parallel development paths and split budgets to see what solution works best.
- Set milestones and payouts based on clearly defined deliverables.
- Sell a solution instead of a tool should the delivery get compromised and use a first client to underwrite the project.
Your ideal plan will not play out. When dealing with something unproven and custom, smart entrepreneurs think through the various scenarios and have contingency solutions ready to go.
It not only takes the stress out, but you are being realistic. You can’t control people, problems or, much less, account for every possibility.
Entrepreneurs do not have the luxury of repeated methods that their corporate counterparts enjoy. They maintain and manage what is known and take incremental steps on already proven ideas.
If you are creating and innovating, then you have a much higher probability of failure. But it doesn’t have to stop there. With contingencies, you have the opportunity to take second, third and ninth shots along the way as you hone in on delivering.