Recently, Elon Musk announced the pricing for the Cybertruck at $60,990 — a steep climb from Musk’s initial $39,000 claim in 2019. Was this manipulation or simple optimism when he laid out the initial pricing?
Musk’s pattern includes the unfulfilled promise of self-driving cars within years, made back in 2014, yet we are still waiting for true self-driving vs. just driver assist. This is not to say that the technology isn’t amazing. I’ve enjoyed my Model X since 2016, and shareholders of Tesla have reaped benefits with stock prices soaring to almost 30x from 2014.
Now let’s consider another case: Billy McFarland of Fyre Festival, who believed up until the last 24 hours before the event that he could still pull it off. Yet it turned into a complete disaster despite all the people around him warning him not to go ahead with the festival. Or take Elizabeth Holmes of Theranos, who, like Steve Jobs and Elon Musk, wove a reality distortion field — but without their success. In both cases, they were inflicted with the disease of optimism, but this time it led to fraud charges and jail time.
Is optimism OK when entrepreneurs pull it off? Elon Musk has a reputation for doing amazing things that have never been done before. So it’s arguably a good thing that he presses the team to do the impossible.
Optimism can be a good thing for entrepreneurs because it can fuel motivation and drive them to take risks and pursue their goals with enthusiasm. It can also help them maintain a positive mindset in the face of challenges and setbacks, allowing them to persevere and find creative solutions. Blind optimism is the key ingredient in any startup. If we truly saw the roller coaster ahead, we would likely not launch that business.
Optimism can also inspire confidence in others, attracting investors, partners, and customers to support the entrepreneur’s vision. Nothing motivates employees more than being part of something successful, and every entrepreneur needs to share that vision with investors, staff, and even their family.
However, optimism can also be a bad thing for entrepreneurs because it can lead them to overlook or downplay potential risks and red flags, causing them to make poor decisions or ignore warning signs. This can result in financial issues, personnel problems, or other issues that could have been addressed earlier. Additionally, excessive optimism can create a bias towards unrealistic expectations, leading to overconfidence and a failure to properly plan or manage resources.
As we approach 2024 and our annual strategic planning, we have a chance to reset our approach with our team. Too many times in the past we have set goals for the company that were unrealistic, leading to a sense of failure amongst the team. In the book Start. Scale. Exit. Repeat., we tackle the importance of goal-setting in companies: “In other words, setting a goal isn’t enough in itself. You have to get buy-in from the team.
According to one study, around 90 percent of businesses fail to reach all their strategic goals. Why? Because they lack alignment. This is often because the C-suite fails to communicate the goals effectively or clearly, they focus on goals that don’t matter to the team, they don’t get feedback from the team, or they fail to utilize the strengths of the team.”
Fundamentally, it is a balancing act. As leaders we need to be aspirational, while at the same time we need our goals to be SMART – specific, measurable, attainable, relevant, and time-bound. Finding that equilibrium can often prove more challenging than anticipated for the entrepreneur.
Colin C. Campbell (www.colinccampbell.com) has been a serial entrepreneur for over 30 years and is the author of Start. Scale. Exit. Repeat.: Serial Entrepreneurs’ Secrets Revealed! – a No. 1 bestseller on Amazon. He has founded and scaled various internet companies that collectively have reached a valuation of almost $1 billion. Having successfully navigated the exits of companies like Tucows Interactive, Internet Direct Canada, Hostopia, GeeksForLess, and .CLUB Domains, Campbell has not only cemented his name as a start-up expert but has also collected an array of accolades – including spots on the Inc. 500 and Inc. 5000 rosters for several years in a row. A sought-after speaker in the world of entrepreneurship, Campbell has spoken at several high-profile universities and events. He also leads Startup Club, with almost one million members continuing to share his experiences as he interviews experts, authors, and serial entrepreneurs.