5 Minute Biz Magic: Solving Chicken & Egg Dilemmas

Today’s 5 Minute Magic is about tackling resource constraints and perceived growth dilemmas in the early stages and the growth periods of a developing organization. Many times when entrepreneurs feel the pinch of cashflow issues or waiting for something to be finalized before another aspect of the business can move forward, there is a sense of frustration and confusion that is hard to manage.

It’s often described as a struggle of “the chicken and the egg”… that in order for one thing to happen, another thing must fall into place first. Like how you can’t generate revenue if you don’t have a product to sell. And you can’t bring on a cofounder or hire staff without funds to pay them. And you can’t develop a product without the funding to make it, but you can’t get an investor without a prototype or traction in the market… and the “chicken and egg dilemmas” in startup life go on and on…

Fortunately, there are ways to deal with these “dilemmas” without staying in an unproductive state of max frustration and just waiting around. But it takes some thoughtfulness and the ability to suspend disbelief, detach from the obvious answers, and continuously motivate oneself to make forward progress, no matter how small that progress is. And it’s not easy.

The obvious answer, when facing resource constraints, is to a) do nothing and b) wait. Wait for things to come together, wait for the magic resources to appear, wait for karma to sweep all of the components you need your way. In my experience, this is an incredibly painful and lazy way to build a business. It’s painful because it is v-e-r-y s-l-o-w, in fact the slowest way to solve these problems. And it’s lazy because it requires very little effort, to wait and stress, to wait and complain, to wait and get frustrated.

Suspending disbelief requires an entrepreneur to consider that before economic life operated on a cash-based system, it had other tools to trade goods and services back and forth. Like bartering. Like DIY (do-it-yourself). Like trading time for goods or what I have for what you need. Suspending disbelief requires an entrepreneur to put aside a “linear or sequential model” of developing the business, where things happen one after the other in a rigid sequence – “first you get a cofounder, then you build a product, then you get customers, then you get investors, then you get rich, then you leave the business, voila!!!” – and instead latch onto a more circular and concurrent way of doing things: more like playing a game of Tetris or juggling, than like setting up long rows of Dominoes and waiting for the first one to knock everything else into place.

It basically goes like this: I have X resource right now,  but lack resources to solve A, B, C, so instead of getting hung up about that, I’m going to utilize X resource to try to fix X problem and generate 1 additional resource to help tackle A, B, or C. For example, I have all of my personal time available (but no cash and no prototype), so instead of complaining that I don’t have any cash and spinning my wheels trying to persuade people to help me find investors (problem D, E, and F), I’m going to use the time that I have to go to Startup Weekend to pitch my idea to a small group that can help me make a prototype over the weekend and create a business model. Or, I only have a part-time technical cofounder who has to work a full-time job and can give me time on the nights and weekends, so instead of getting frustrated about how slow development is going, I’m going to have him/her work on the prototype over 2-3 months, while I concurrently work to drum up users who can test it and vet the market feasibility, and also work my own consulting / contract gigs to generate extra cash so in 3 months we have our own funds to hire an additional developer and formally launch marketing efforts.

It’s not exactly sexy, because it doesn’t follow the “linear / sequential model” (1st funding – then product dev – then instant wealth!!!) that many entrepreneurs have in mind when they first begin, but this kind of hybrid, creative, resourceful problem-solving is the KEY WAY to address and resolve chicken & egg dilemmas.  The alternative is that you spend a lot of time and a lot of social capital waiting out the down time between when you have small resources and when you can tackle development a piece-at-a-time. This approach takes years – sometimes 4 years or more, whereas a more circular / concurrent development style can shorten the timeframe and strengthen the core economic engine of the business, because it’s functioning more like how actual businesses operate, and less like a side project, hobby, or vanity project.

If you’re struggling with how to set concurrent goals that drive more progress during resource constraint periods in your business, start by identifying specific, key milestones to focus on, beyond just securing funding or waiting until a prototype is ready. Then get to work making those milestones come to life. And if you want help learning a new style of entrepreneurship, we’d love to have you join our next Sprint program, where we teach these skills and work 1:1 to help entrepreneurs put their plans into action and turn good ideas into revenue-generating businesses.

This 5-Minute Biz Magic was written by TenX’s founder, Carolynn Duncan. If you enjoyed this post and want to suggest a topic / problem for another 5-minute magic solution, please let her know.