Startups can fail for any manner of reasons, from recruiting the wrong people to running out of money. For Professor Nigel MacLennan, there is one factor that determines a startup's future above all others, and it's one that is often entirely ignored.
"Psychology is the single the biggest predictor in whether a startup succeeds or fails," he says. "Success takes place inside the brain."
Professor MacLennan is a chartered psychologist with a doctorate in leadership coaching, and has experienced his own share of entrepreneurial success.
He set up his first business in 1983 and sold it at the age of 31 for enough money to retire on. These days he spends most of his professional life coaching performance psychology executives with his company PsyPerform.
Central to his strategy for success is a resolute determination and steadfast self-belief, underpinned by a perpetual positivity that is essential to persevere.
Research suggests that the mind tends to focus on positivity at a subconscious level, a phenomenon known as the Pollyanna principle.
This optimism needs a clear objective so as not to become delusional, such as the dream of Bill Gates to have "a computer on every desk and in every home".
MacLennan recommends replacing the negative thought with a positive one, rather than repressing it all together. Problems need to be addressed in order to be resolved, but they can't become fatal through a fear of their being insurmountable.
Instead, one must accept that setbacks are inevitable and that you will have to change your original plans and overcome barriers from the start.
"Persistence is the defining attribute of the entrepreneur," he says. "Entrepreneurs are the best at overcoming problems, simply because they've had more exposure."
Each individual venture has only a slim chance of success. Of every 400 musicals that are written, says Professor, only one is produced, and of every 400 that are produced, only one makes it to the bright lights of Broadway. The chances of any musical getting from the script to Broadway, then, are one in 160,000.
That doesn't mean that an initial rejection is final. Even everyday items of today such as the barcode and pen all failed spectacularly when they first came to market.
Billionaire Richard Branson is known for making a myriad of different businesses successful, but his litany of failures is also impressively lengthy, as anyone who remembers Virgin Drinks, Virgin Brides, Virgin Clothing, VirginStudent, Virgin Cars, or Virgin Flowers would agree.
Startups are similarly unlikely to be an instant success. Reported failure rates are notoriously untrustworthy, but first time hits are hard to find, as even tech luminaries Mark Zuckerberg, Bill Gates and Steve Jobs found out early in their careers. They learnt what were the factors behind their early failings and added the elements that were missing to their future ventures.
The tech scene is particularly guilty of repeating clichés about embracing failure to succeed, but MacLennan is keen to emphasise that the reaction is what matters. Failure is only of value if you use it to learn how things don't work and the ways in which they can.
"The best place to really understand success is from analysing your own successes and your own track record," he says.
The path to success
Most roads to success start with a vague wish, thought or desire. This later crystallises into a clear vision or objective, and grows in intensity the more that it develops.
"If they don't, we tend to let them go," says MacLennan.
Self-motivation, energy and unbreakable self-belief are essential to make an idea into a reality, as there will always be challenges to overcome and reasons to procrastinate or give up. You also need to always take responsibility for results.
MacLennan says entrepreneurs must envision themselves not as who they are, but as who they have to become.
The balance of relentless self-belief and acceptance of failure can be difficult to find.
“Whether you think you can or you think you can’t, you’re right," says MacLennan. "What goes on inside your heads is the most important thing in entrepreneurship.
"You need to really believe in the product, but know that chances are it won't work and that when it gets to that point you'll have to modify it in some way."
The chain of self-responsibility
MacLennan says our actions are determined by a pathway he calls "the chain of self-responsibility".
Events have an emotional reaction which guides our behaviour, which in turn determines the results. That reaction can be controlled.
"Our inner dialogue is what determines our reactions, not the events themselves," says MacLennan.
"We become what we think about. We need to be choosing our thoughts, not letting the doubt take over. When the doubt creeps in, optimism creeps out."
MacLennan argues that belief will find a way to see success if you're prepared to make the necessary sacrifices to get there, whether that means giving up gold or living in your office.
Psychological experiments have shown that every sense can be deceived. The neurological mechanism for controlling data can be manipulated to send it a different part of the brain.
Self-deceit may be the trickiest of all, but controlling one's beliefs can make effective behaviour habitual over time. MacLennan says it's essential that an entrepreneur chooses the right identity, which they then must take ownership of and nurture."
“Eventually an event leads to a habit and then results," he explains. "Make sure that the habits you set up are the ones that are going to lead to your success."
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