Can you walk away and kill your company every time something bad happens? Of course not. You need to find a way out of the situation.

This is the end. There is no way out.

I will have to file for bankruptcy now.

I cannot keep the business alive because that core employee has resigned.

I cannot close that financial round because one investor left the table at the last moment.

To all the entrepreneurs out there, does this sound familiar? How many times did you think that this was the end, and how many times was it really the end?

One of our board members at Yonder, who has founded, grown, and sold a successful company, once told me: “Tom, it’s much harder to kill a company than you think. It always goes on somehow.”

Living on the Edge

Entrepreneurs live on the edge. They try to do the impossible with no resources and in record time. And whenever resources become available, they plug it into growth immediately.

Change of scene. Military guys live on the edge, too. They try to do the impossible with the resources they have at the start of the war, but resources are worn down and knocked out as the war drags on. As replenishments will not come through, they will have to find new ways to fight their war.

Back to entrepreneurship. Resources are not just knocked out in wars, but also in companies. The knock-out usually doesn’t come in the form of an artillery shell or a cruise missile, but in the form of unforeseen events.

Urgent bugs that divert resources from your dev team and delay your roadmap.

Cyber attacks that erode trust with customers and prospects.

Customer escalations, no matter if they are justified or not.

Delays in tender processes and contract awards that give you liquidity headaches.

Can you bury your head in your hands and quit the business every time something like this happens? Of course not. You need to find a way out of the situation.

Enter Options: Your Way Out

Options are a simple yet complicated thing.

Simple because everybody knows what options are, and that you should always present at least two options, option A and option B. That’s what they told you in business school.

Complicated because many times, the presented options A and B are not real options. In the military, we say that options need to differentiate in three criteria: Reserve, organization, and center of gravity.

Too academic? Let’s look at an example by returning to the example of an investor leaving the table shortly before closing a financial round. One option would be to find a replacement investor. A second option would be to reduce the size of the round and adapt your budget. In contrast, filling the gap with replacement investor A and filling the gap with replacement investor B are not two options, but just one.

Options in Good Times

When things go well, people tend to see only one option — because it’s easy to say you can’t fulfill a certain task without additional resources. When times are good, somebody will always be willing to give you additional resources — remember the investor frenzy in 2021/2022, when money was cheap, valuations were high, and investors backed pretty much every opportunity there was.

Presenting options was less about real options, and more about looking smart. Quite often, option A was what you wanted, and option B was complete bull**it — but hey, you presented two options.

Options in Bad Times

Looking at the current state of the world, it looks like the good times will be gone for some time. Resources have drained up, and you will need to do more with less. So option A and option bull*it will not get you anywhere. You will need to think hard about how to achieve your mission, and possibly you don’t have just two options, but ten options for each problem at hand. You will need to fight hard for the best way forward, taking into consideration the resource constraints. That will yield the occasional unconventional option that you wouldn’t discover in good times.

That’s how you win wars, and that’s how you create innovation.