A must read for everyone who dreams about or learns to fly airplanes is Stick and Rudder: An Explanation of the Art of Flying. This old school classic talks about energy in flying. Flying safely is really all about understanding where you keep and how you use energy. The key for pilots is that your energy is critical to keeping you alive and it is stored in two ways: Airspeed or Altitude. You need them both to stay in the air.
This is opposite from parental advice we received growing up: we were taught that going too fast or climbing too high in the tree is dangerous. In the world of airplanes, airfoils, gravity, thrust, lift, and manmade engines that can quit when you least expect it, low and slow is what we call dangerous and stupid! Low and slow means you don’t have energy. When you don’t have energy, you don’t have choices. Gravity will make your decisions for you. And gravity made the decisions rarely end well. When you have energy in the form of airspeed, you can cash it in for some altitude. You know, think of a roller-coaster, going fast at the bottom, pull back on the stick and you go UP… you get altitude. When you are high and slow, it’s easy to gain speed by pushing the nose over and really pick up some speed.
There are so many metaphors to entrepreneurship and leadership here I can hardly stand it! So I’ll just hit my favorite.
Airspeed is to Altitude as Cash Flow is to Cash Reserves
My finance geek friends love this one and remind me all the time. Both cash flow and cash reserves are important, but one without the other for an individual or a company means you have limited choices. When… no let’s be optimistic and say IF… your engine quits and your speed drops (aka cash flow), with reserves on hand, you cash in some altitude for airspeed… voila, you live! If you are cruising low and slow with no altitude (reserves) and your income stream slows down, gravity will grab you quickly and noticeably. In those situations: “Gravity will ruin your day,” as pilots say. The good news is that if you don’t have cash reserves, but you have cash flow, you just have to figure out how to convert some of it. Build your cash reserves by taking less out of the business, or delaying some hires, new purchases, or investments. Convert the energy from speed to altitude in case your engine quits. Your life depends on it. Just remember that low and slow is dangerous. Work hard to get one or the other.
By the way, in case you didn’t catch it, this whole metaphor applies to both personal and business finances.
One more caveat and flying lesson that may make some of you feel better.
Pop quiz: When an airplane is taking off, does it have a lot of speed? or altitude? NO!! It’s a critical phase of flight where you have no choice but to be low and slow. You have to sacrifice the speed that the engine could give you for altitude. You climb, climb, climb to get your altitude as fast as you can. Losing an engine on take off… well that’s bad… like, very bad… but don’t think about it right now. If you’re in startup mode with your company, you’re in a critical phase of flight. You’re converting your personal energy, and every penny of cashflow to get higher, get the altitude you need to sustain flight. It’s ok to be in this phase of flight, but only for a little while. If you can’t get altitude or airspeed soon, you should consider going back to the airport before gravity starts thinking for you. It’s probably the prudent thing to do.
See, I’m not totally oblivious to risk!
ps. Did I convince you to go take a flying lesson yet?