Get Psyched!

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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!

12 Comments

empolissori

She took the cigarettes of becauseor in her mouth, currently married it and youthfully said, Mmm, that adjustments like your actresses in nude Matt.

aroxomatt

Jack – thanks very much for your response. I think the overall message is that when you think its dead – keep on going.

If anything it’ll prolong the amount of time available for the “stars to align”, or more accurately, for you to find a way to make some luck.}

ulink

It took me over two years to muster up the nads to take the leap into the entrepreneurial life. Dealing with the fear before and now has been the largest hurdle. And I see more coming.

Ahhhhhh, I am going for a bike ride!}

joshatfoundread

Jack, Totally agree.I’m six months into my new start-up. We’ve already done work for big name clients – General Motors, RayBan, Warner Bros. Records – helping them get their video exposed on blogs, video share sites and p2p services. But every day is a struggle. Those dark moments would be less stressful if I had a partner. I would suggest adding that to the list, maybe, Fear of Committing, and paying the price for it. http://www.feedcompany.com}

florian

Jack – very inspiring. I found myself in your article many times. Being in the seed phase of a sns in germany, which is a way tougher market still for vertical networks than especially SV is, lets me discover behavioral patterns and bodly reactions which I didn’t know I had until I got to start this venture. Thanks for putting in words what I had felt over the last couple of month and giving me strength through knowing that all of this is normal and I not the only one…}

jackjia

Will – I want to challenge the assumption that you need to know a lot of people before you can start a company. Certainly you need to be in the field working for a few years before taking on the world. And you need to network often and wide. However, when I started Baynote, my connections (after being Interwoven CTO for 8 years) were not near to be enough. I allocated $5,000 to buy people breakfast, lunch, dinner and drinks just to get their feedback. I didn’t know Prof. Cliff Nass and Prof. Rajeev Motwani, the two professors at Stanford who helped me PROFOUNDLY for the foundation of Baynote. However I knew people who knew them. The 6 degrees of separation told us that we are all very closely connected. For starting a business, the important people are within 2 or 3 degrees from you. If we cannot find those advisors to exchange ideas, how can we later find customers to test and sell our products?}

jackjia

Matt – Thanks for the question. I had more “near death” experiences than actual death with the start-ups that I was part of. Luck was certainly a factor but only a small one. More importantly, it is about how we handled each near death incident. That’s what I mean by feeling despair and hopeless. A smart team or a mentally prepared founder has the ability to transfer the negative energy to innovations and breakthroughs. Winner and losers are decided right there. In the Interwoven case, we were almost dead several times – running out of money with no Silicon Valley VC willing to invest in us, in-fights, massive delay of the initial product launch, failed to deliver a product that would give us 100% more revenue and market. 2.5 years later, the company was worth $7 billions and everyone thought Interwoven was destined to succeed. That was so far from the truth if we knew what we went through. NOTE, in no case, we were down because of competitions. I learned in hard ways that a startup’s biggest and maybe the only enemy is itself. It is the people within.

By definition, a startup will fail. There are way too many reasons why a startup can and will die. It is like hiking through the Amazon jungles. There is no known path that will get us out of there. We are dead for sure if the hiker doesn’t have the fundamental survival skills INDEPENDENT of each roadblock. Luck can only carry us so far. Then it is all about our determination, flexibility and mental & physical readiness.}

bsenftner

Taking care of your body has huge mental rewards. Often I find myself realizing solutions to issues right after getting my wind back from a 45 minute treadmill, or during a break from a several mile hike. Eating well and exercising gives me the stamina to push through crunch periods when others’ fatigue renders them useless. Meditating, maintaining a presence in the now and trusting one’s decision instincts goes a long way towards silencing the inner critic. I’ve also found that if I’m feeling stressed to check my thinking against this list:
http://en.wikipedia.org/wiki/Cognitive_distortion
which is a great means to tell if you’re playing yourself and cut it out.}

aroxomatt

Jack – can you tell us more about your failures. I often find that a good conceptual understanding of why something failed is more valuable than why something succeeded.

Especially where the failed company was beaten by a competitor in the marketplace.}

24pfilms

Jack,
Thanx for writing an excellent article. Having recently started a new startup(www.bikinizero.com), I have gone through many of the said startup symptoms. I also had been working for 3 months without a day off, I finally took a weekend off and was able to not focus on the business. Well needless to say come Monday morning, I had gained new insights and perspectives that I had not seen while in the trenches. Thanx for the renewed perspective.}

wschroter

I think all of the “you need to be strong willed to succeed” advice is well-taken, but let’s not ignore another important point – it really helps to be incredibly well-connected to talent, advisors and venture capitalists to make things happen. 9 times out of 10 when you read about a hot SV startup, you can trace their success back to the people they knew going into it.}

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