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Most of us in Silicon Valley dream of founding a company, but few of us will succeed. Statistics long-ago established that most businesses fail—and it is a tribute to entrepreneurs that this does not dissuade us. There are many well-known explanations for failure: market timing; product effectiveness; a founder’s leadership skills. Yet these are all secondary factors. At the core of whether we succeed or not is something far more fundamental involving the human psyche.
Being the founder or co-founder several companies, I’ve had the opportunity to fail and succeed a couple of times myself. (My computer distribution company, V-Max, made it three years. Interwoven, the enterprise content management company, is still publicly traded. My current company, Baynote, uses software to guide consumers through Web content and is now two years old.) And I’m involved with several entrepreneurial organizations in Silicon Valley where I see top talents from MIT Stanford and leading tech firms. From this experience I’ve concluded that most entrepreneurs fail because not because they lack good ideas, unique know-how or even market readiness. When entrepreneurs fail, it is usually because we lack mental readiness.
A first-time entrepreneur can dramatically increase his odds of success by preparing himself mentally, as well as physically, for the madness of starting a company. Here some of the biggest psychological challenges you’ll face as a founder—and my tips for overcoming them:
1) The Fear of losing your idea
Don’t be afraid of someone running away with your idea. Market validation is the only way to confirm your business concept. This requires much more than just reading analyst research reports or drawing market charts. Validating your idea requires sharing it, with a lot of people. But often out of fear that someone will steal their idea, many entrepreneurs don’t actually go out and do what is necessary to validate it. The most effective method is to talk to as many experts and potential customers in the field as you can. Collect the wisdom of crowds. Then it’s up to you to integrate their ideas with your own – to see the whole elephant.” Only from this level of research and sharing will ingenuity emerge, making your idea even better and mission impossible becomes doable.
2) The Fear of hearing ‘No’
Interpreting the feedback you’ve sought on your idea can be scary. Here is a simple yet totally unknown logic to entrepreneurs: when everyone tells you ‘Yes’ on your startup idea, you probably shouldn’t do it. Your idea is either too late to the market or not unique enough to have an edge. On the other hand, if you hear a ‘No’ a lot, don’t get depressed or defensive, pay more attention. This might be good news. The way to tell a promising ‘No’ from the your-start-up-is-over ‘No’ is to follow up by asking the person why s/he has said ‘No.’ Sometimes the reason why someone thinks an idea won’t work can be interpreted as a unique advantage of the invention. Meaning an objection might actually be an endorsement!
3) Fear of Vulnerability
Entrepreneurship is a physical game, as well as a mental game. This is not a natural pastime for humans. Our evolution had conditioned us to want to stick with the comfort of the pack – our family, our village and our large company. Once upon a time when we left the group to “journey alone,” we risked being eaten by predators. Defying survival instincts honed over millions of years causes stress and sometimes illness in modern men: A friend of mine from eBay got really sick in the process of bootstrapping his startup, and then miraculously healed when he gave up and went back to eBay. But scientific studies have linked feelings of stress and fear to chemical reactions in the brain. Physical and mental exercise fostered by running, yoga or even golf can alter your brain chemistry and transform stress into energy that will help you. Don’t be afraid of leaving the pack, but combat your psychological vulnerability with physical vitality. You’ll be surprised how much it helps.
Startups are not for the faint-hearted. Unfortunately, most of us are not born with the characteristics needed to successfully found one. In the process of building your startup, you will have many moments of fear, despair and loneliness – it doesn’t matter how confident and secure you are as a person. Accept that these feelings will come, but arm yourself for them. Understanding your psyche is as important to your success as understanding technology, or your market. Preparing yourself to handle the moments of psychological strain you’ll endure as a founder is and often what separates winners from losers. This is how serial entrepreneurs are able to succeed in multiple startups across different industries and time horizons. So, follow your instincts, embrace your inner butterflies, and enjoy the journey!