A VC in Vacationland

Just the opposite is often true in startups. Entrepreneurs should embrace paranoia. It’s the juice that fuels the creativity engine.

It can also be a serious mental disease in some people and I am not trying to make fun of those afflicted by it.

As Andy Grove often stated, paranoia is good in business.  They could use a lot more of it at Intel these days. But be careful that paranoia does not make you go after every potential competitor to your space.  Hollywood Entertainment, Blockbuster’s big competitor, learned this lesson the hard way by buying Reel.com in the dot com boom, and investing hundreds of millions in trying to peddle VHS format on the web, instead of investing in the new digital push movie technologies we now take for granted five years later. However, focused paranoia does have an important role in managing startups.

With apologies to Tom Evslin, I would like to offer the following thoughts on the positive aspects of being a bit paranoid in startups:

• Understand what is going to make you successful
• Question daily if the underlying conditions driving success still exist
• Don’t assume the past is predictive of the future
• Make a new plan before the old one fails.

If you are not capable of being paranoid, at least become a "worry wart" as I outlined in my previous Blog On Leadership: Managing Transitions. Remember that, in the end, no one but you will be more responsible for the overall success of your start up, not you advisors, not your investors and not your employees.