Defined as excessive pride or self confidence, author Steven Pressfield wrote this about hubris:
But ambition must never be allowed to rise to the level of hubris. The minute we believe that we are the source of that which comes through us … that’s when the gods start dusting off their thunderbolts.
My own experience of hubris is that it can destroy in a matter of months something that can take 10 years to build.
Four years ago, my business was growing at an astounding rate and we were selling some new and exciting products that no-one else had yet bought to market. Profits were good, supply was good, and demand was ever-increasing.
After struggling for so many years, it was a dream come true, so I dropped my defensive game. I put all of my energy into driving sales, added staff, and bought even more stock. I was recognised nationally as the founder of one of Australia’s fastest growing businesses.
But I wasn’t paying attention to the greater landscape, and (naively) assumed that the good times would just keep on rolling. More than that I wanted to believe that this was what I had worked so hard for, so surely I didn’t have to apply the usual rules which I had used to build my business so far?
When competing products were announced I didn’t change a thing. I kept on buying stock. I didn’t want to miss out on a single sale. When the competing product hit the market, not only was it superior, but the prices began at 30% less than mine. My sales plummeted. Suddenly I had non-cancellable PO’s that I couldn’t afford to buy, stock that wasn’t moving, I was rapidly running out of cash, and had way more staff than I needed.
Rather than cutting my losses at that point, regrouping and downsizing, I did the opposite. I pushed harder. I took on expensive radio advertising. I kept renting an expensive house. I lowered prices to drive volume. I mingled with other high flyers.
It was hubris at it’s finest, and of course none of it worked.
Finally in 2016 I ran out of money and had to lay off 80% of my staff because I could no longer afford to pay them. I cashed in every investment I had saved up over the previous 10 years and borrowed heavily just to stay afloat. I had suppliers threatening to take legal action. Some actually did.
I’m not back to zero yet, but in some ways I’m glad that this happened. I’ve learned how a business can run in much more efficient ways and how to focus on the most important thing that I need to do each day. I’ve learned how to hustle, and then hustle some more.
The moral of the story is that no matter how well things are going, and no matter how successful you become, the basics are always going to apply.
Work with humility. Allow the profits to run, but as soon as the signals point to a downturn, cut your losses. Expect good times, but be prepared to make sacrifices when bad times appear.
Be bold my friends, but stay sharp.