5 Resiliency Secrets From America's Top Founders
Editor's note: The following guest post has been adapted from the book, "How They Did It."
By Robert Jordan
How do entrepreneurs create highly successful companies? After interviewing 45 of America's leading company founders, I learned that it doesn't take luck to start and grow a company that sells for $100 million or more, or goes public for $300 million or more, as each of theirs did. But it does take resilience -- the ability to see an obstacle as something to climb over and move beyond.
Each of these entrepreneurs faced at least one major setback that should have stopped them in their tracks; instead, they rebounded stronger, smarter, leaner, and meaner than before.
Here are 5 ways they did it:
1. If you can't hit home runs, go for singles.
In the pharmaceutical industry, your odds of getting a drug approved are 1 in 1,000. It takes 10 years and $800 million to get a "home run" drug approved -- the kind of drug that becomes a household name. Jeff Aronin, founder of Ovation Pharmaceuticals, knew he couldn't compete. But instead of giving up, he decided to focus on drugs for "smaller" diseases like epilepsy and Huntington's disease that the big hitters weren't interested in. He eventually sold his company for $900 million.
2. Turn disappointment into a discipline.
In the Internet age, we take for granted how relatively easy it is to start a tech company. But in 1974, Cyborg System's Mike Blair was trying to start a software company at a time when there was no software industry, let alone the internet. Venture capitalists gave him blank stares, and banks couldn't figure out what he was doing. That lack of funding forced a discipline on Blair and his team. It forced them to build the business slowly, grow organically, and be focused on making a profit and having positive cash flow. His software company was acquired by Hewitt in 2003 for nine figures.
3. Have something to prove.
Sometimes with startups, you've spent so many years talking about and working on the concept that your very reputation is on the line if it doesn't go forward. When GE withdrew research funding from Rock Mackie's radiation therapy project after four years, he had to lay off his entire staff and scramble to get funding for TomoTherapy during the dotcom bubble. But Mackie never gave up because he had something to prove -- that a university professor and a handful of brilliant grad students could launch a world-class company. Now the company employs 600 people and was just acquired by Accuray for $277 million.
4. Don't talk about a Plan B; have one.
Baxter Corporation's president Bill Gantz raised $42 million in 1992 -- a lot of money at that time -- when he left to start Pathogenesis to develop what he thought was a perfect drug with no side effects. There was only one problem: After the clinical trial, they discovered it didn't work. Luckily, Gantz had identified another drug along the way that worked really well, and had convinced the owners of that drug to license it to his company before he knew about the failed trial. He didn't think he would ever need it, but as it turned out, that "Plan B" drug saved his company -- and led to the sale of the company to Chiron Novartis for $720 million in cash.
5. Sometimes it's OK to benefit from disasters.
The turning point for Lakeview Technology came when Bill Merchantz installed his company's new software for a really big client -- New York City Transit Authority. The software didn't work. Worse, it even destroyed some of the client's data. For some reason, his engineers were on vacation or out of town, so he and one team member spent 72 sleepless hours inventing disaster recovery software to solve the problem -- only to lose the client. But it gave him a great idea, and he built the business on the new disaster recovery solution, which became wildly successful. Now Lakeview's clients range from Allstate to McDonald's.
Do you have a great resiliency story? Let me know in the comments.
Robert Jordan has been launching and growing companies and helping other entrepreneurs do the same for the past 20 years. He is author of "How They Did It: Billion Dollar Insights from the Heart of America" (RedFlash Press). Learn more about the 45 founders and the book at www.HowTheyDidItBook.com.