Olympic host cities follow a crisis trend. Cost overruns are a given, and budget often is simply a number from which to start. Panic over whether infrastructure will be completed in time usually starts at least 18 months before the games are due to begin. So it wasn’t a surprise when Rio de Janeiro organizers started to trumpet the same issues. Add the Zika virus into the mix and the country began spiraling down into socioeconomic collapse. In 2009, when Brazil won its Olympic bid, the country was in an economic boom. Now, Brazil is suffering its worse recession in 30 years.
Early stage companies can fail for countless reasons. In fact, there are so many moving parts to creating a business that there are almost endless ways to fail -- lack of sales, insufficient budget and bad management included. However, there are lessons that entrepreneurs can learn from the Rio Olympics.
1. Learn from the mistakes of others.
The Olympics leave big a footprint, with every iteration of the Games promising improved infrastructure, world-class facilities, economic stimulation and overall long term benefit. Yet, there is often a different outcome, as is the case with the summer games of recent memory. Sadly only a decade after the 2004 Athens Games, the Olympic facilities are nearly indistinguishable from their country's 2,500-year old ruins. In Beijing, the iconic Bird's Nest Stadium costs more than $11 million a year to sit tenantless. In London, redevelopment zone residents struggle with socioeconomic issues. Underestimated costs, white elephants and questionable economic impact is the Olympic motif. History tells us that Rio 2016 will sadly be more of the same.
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Richard Branson, the founder of the Virgin Group
Entrepreneurs should strive to break the mold. Look to other businesses, both successes and failures, with a critical eye to identify and build off of best practices.
2. This is business. Don’t get emotional.
National Geographic calls the Olympics a money pit and points out that host cities are left with debt that could take decades to pay off, facilities that are no longer needed but continue to drain funds for maintenance and little to no discernible benefit.
This can be likened to the uphill battles many entrepreneurs find themselves in. It all can be very emotionally taxing. Separating emotions from executive decision making is key to avoiding these pitfalls.
3. Prepare for the worst.
A plan B is mandatory, and there should be a well-formed plan C, as well. On top of that, entrepreneurs should have an exit strategy that accounts for failure.
Serial entrepreneur Jerry Jao, writing for Entrepreneur magazine, explains that genuinely preparing for the possibility of failure enables you to best recognize it and to timely react.
”Toward the end of my first company's existence… we learned that the solutions we were building simply did not solve a problem that was big enough. We… closed the business because when looking at the facts, we did not have a business.”
Identifying failure also, says Jao, makes it easier to move on.“We had planned for it mentally, emotionally and financially, and decided we weren’t going to take it personally, which was why it only took us two weeks to recharge and start our next venture.”
4. Consider changing things up.
In May of 2014, two years before Rio was scheduled to host the Olympic Games, numerous reports surfaced of the IOC asking London if it could step up to replace Rio, using the same facilities built for the 2012 games. The logistics were deemed impossible, but if a move of that scale was even contemplated, surely entrepreneurs should at least consider how their companies could benefit from considering alternatives like moving locations.
Obviously, moving the Olympics would have been a Herculean task, but thinking in terms of strategic options for your business, might not be a bad idea.
5. Be realistic and stay realistic.
According to Business Insider, since 1968, “…not a single Olympic games hit their budget with an average cost overrun of 167 percent. Only Beijing 2008 (4 percent) and Vancouver 2010 (17 percent) had cost overruns of less than 29 percent.”
Rio's original budget of $11.9 billion could actually turn out to be 50 percent higher, as rising costs of the games now exceed $15 billion.
Setting specific, measurable, attainable, realistic, and timely goals ( SMART goals) is the secret sauce for successful entrepreneurs.
The above are all lessons entrepreneurs can learn from the Rio’s mishaps thus far. Balance those with lessons of success, as well. The best entrepreneurs know the benefits of both.