Brinkmanship
#24 Brinkmanship
This series is about what I’m learning, observing and experiencing while building our startup Saent (pronounce “Saint”). The good, the bad and especially the ugly, each time in under 500 words.
“Brinkmanship deliberately creates a situation that is slightly out of control. It’s often an effective device, but equally often it remains something of an adventure.”
That description comes from Thinking Strategically, a book on game theory. It’s a tactic commonly used in politics and international relations; a current example is the tension between China and the USA in the South Chinese Sea.
China is hard at work building out small landmasses in those waters to turn them into islands they can claim as theirs. In response, America has started maneuvering its warships around in the area, which has lead China to respond in kind with live ammunition fire drills, and so on.
Neither truly wants the situation to escalate, but by slightly upping the other with each subsequent move, the potential of escalation is intended to convince the other party to back down. However, and this is they key to brinkmanship, nobody knows exactly what will tilt the situation into disaster (all out war), nor are both parties completely in control of when and how this might happen.
“The key to understanding brinkmanship is to realize that the brink is not a sharp precipice, but a slippery slope, getting gradually steeper.”
*Entrepreneurial brinkmanship* While there is a bit less at stake here at Saent, brinkmanship struck me as an apt way of describing managing a startup. Lack of resources, known unknowns about your customers, unknown unknowns about your customers, funding negotiations, known competitors, unknown competitors, product development decisions, marketing activities — the list is endless and your coffers of cash far from bottomless.
The brink in a startup runs between you and running out of cash. While it seems a cashflow forecast should be able to fend off disaster, the situation is not always so clear cut:
- Do we refuse this shitty investment offer, even though we have few alternatives?
- Do we push ahead on this marketing campaign with our last funds?
- Shall I spend my time on product, recruiting, sales or fundraising?
- Do we fix this existing feature or implement a much-requested new one?
- Should we bring onboard a new team member, or work with what we’ve got?
- And so on.
Likely none of these decisions individually pushes you over the edge, but a combination of a few wrong calls might spell disaster. It’s therefore essential to develop a sense for the cliff and how far you can push things (which you can only learn through experience).
Perhaps even more critical is surrounding yourself with a good team; if you’re too bold, find people who are a bit more conservative. If you’re too indecisive, find someone who is not. And make sure to have one or more key advisors who have been there before. Nothing beats having walked the walk and having survived the brink before!
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