The 50 Bar Limit

(or: Is it time to exit already?)

Scuba diving is fun. Its a fantastic experience. Any diver will tell you this. And its addictive â€¦ once a diver, always a diver.

I’ve lost track of the number of dives I’ve done (I think its upward of 500). And in every one of my dives, I’ve always prayed: “How I wish I could stay underwater for ever!”

But you don’t. Because of the 50 Bar limit. Here’s why.

When you dive, you keep track of the air left in your tank. You start with about 200 Bar (for those more scientifically inclined, that’s about 3000 PSI) of pressure. And as you continue the dive, this pressure continues to fall. And finally when you are at about a quarter tank of air left (50 Bar, or about 750 PSI), you start your time-to-surface-and-get-back-to-the-boat plan. And that means doing a safety stop, where you quietly stay at a depth of 5 meters for about three to five minutes, before you surface.

What happens if you ignore the 50 Bar limit, and stay down till you are down to, say, the last few breaths? Well, for one, you are now in the danger zone. If anything goes wrong, and have to get out without doing a safety stop, you risk decompression sickness (also called the bends). And two, even if you don’t get the bends, but for some reason need spare air in your tank (for instance, your buddy is now out of air, and (s)he needs it), you’re out of luck. Either way, you risk lives.

The 50 bar limit for startups

Entrepreneurship is fun, too (wait, hear me out!). The feeling of doing “your own thing”, not having a boss, dictating your own time .. all of these are, well, addictive too. I actually have an entrepreneur who had failed, and gone back to a job, quit in a few months and jump back into starting up again say 

“Man, when you’r used to cocaine, talcum powder makes a very poor substitute”. 

That’s how addictive entrepreneurship can be.

But I’ve also met with those folks who have struggled, and struggled, and struggled at their start-up till they are completely burnt out. Broken. Totally broke, and then trying to figure out what to do. And that, sadly, seems to happen more often than not.

But it doesn’t need to be that way, folks. If you could figure out your 50 bar limit, you can have a fantastic “dive” into your start-up, and still exit, wanting more.

Here’s what I suggest as three possible 50 bar checks.

1 Customers (not investors) first. Speak to 10? 20? 50? (you decide) prospective customers first. Even before you build a product, or hire people, or take up office space, or anything that is going to cost you money. Tell them about how your product or service is going to solve a specific problem for them. If an overwhelming majority of them (read: more than 50%) don’t go: “Wow! When can I buy it?”, you’ve hit your 50 bar limit, right there.

2 Sell first, build later. Get your customers to pay for your product or service first. Something. Anything. Get a committment. If you don’t get even one, you may have hit your 50 bar limit. Time to check how much air you have in your tank (read: money available) before you decide what to do next.

3 Cash-flow stagnation. Track your cash inflow vs cash outflow. Actual, real cash hitting your bank, minus what is leaving (for safety, add your payables too into this). If this is not improving, month on month, you are approaching your 50 bar limit. Again, this would be the time to check your air (read: money available) before you decide what to do next. 

But remember this: I’m not asking you to quit your startup dreams. Just as the 50 bar limit in diving helps me to surface, take a break and go back down to enjoy another dive, use the 50 bar limit in entrepreneurship to take stock and get right back in.

That’s all, folks. Except this. I once had a scuba instructor scold me: “There are old divers, and there are bold divers. But there ain’t no old, bold divers”. 

I’d say the same applies to start-up founders too.