The Mental Entrepreneur and Herd Instinct
Some of it is organic, but a lot is just industry propaganda
I was seating with my psychotherapy client the other day. He’s an entrepreneur that recently raised his third round. Came to see me after suffering a series of panic attacks and severe anxiety. It actually happened right after he closed the last round. You’d probably think he’d relax once done.
Another founder-client of mine raised “just” one round – a long time ago. He doesn’t know what stress-free living is anymore. His runway is running short and he’s stressed out about it to the point of panic. Doesn’t think he could survive it if the investors ditch him.
Entrepreneurship is lonely and it won’t free you
One of the misconceptions I see in founders that come to see me is that being an entrepreneur frees you. It can. Until you get investors. Or employees. Or debt. Or just start doing real business with real clients. Fundraising does not alleviate the stress levels. It causes them. “Before” is usually less stressful than “after”.
If you are really building a successful business it won’t take long until you find yourself in a situation where the only person that will understand the stress and the pressure you are going through will be yourself. You’ll lie awake at nights thinking how you’re letting your partner down, how you’re neglecting your kids and how you don’t know what you’re going to do if cash doesn’t come in or the board outvotes you. This is the time when the amount you raised in the last round doesn’t mean anything to you anymore. You are left without allies. The investors want their thing, not yours. Your wife will never understand, even though she puts up with it. Everyone thinks you are living the dream but you can’t tell anyone the truth because the house of cards would come crashing down. Your chest is pounding, your palms are sweating, you’re alone. How did you get yourself into this? Can you get yourself out of it?
Don’t fall for industry propaganda
Before I started my career in psychotherapy, I was an entrepreneur. A founder. I went through the aches and pains with my own skin in the game. Doing that I met a lot of victims of propaganda – the instillment of the delusion that startups are cool and that fundraise is the next best thing to getting born (boys usually have another best thing, but this is not an article for boys). Life only happens after you fundraise, right?
I raised my first round. Substantial one for seed investment. I thought I had it going and moved to London – because that’s where the networks are; and the money; the numerous VCs and accelerators. Most of all, that’s where the knowledge is. Well, it turned out to be another delusion put up by mass propaganda and collective psychology. What everyone is doing is surely what I should also be doing.
Ask any serious founder that built their startup in London and they will tell you that the London startup scene is something completely different from the perception it has from the outside – outside of the country and outside of the industry. And the reality and delusion are two separate worlds.
The collective pull
Newbie founders are running around accelerators, pithing events, tech journalists and angel investors – the angel investors that are not really investors. They’re all running after the same thing – like a flock of birds after a crumb or like a bunch of ecstatic teenagers trying to get an autograph.
Then you have the other part of the same world. One with the real founders that built and funded their businesses in silence. They don’t show themselves at meetups; they don’t tend to hang out together to talk about business, because they have enough of that already; they are trying to solve their problems of solitude, loneliness, stress and having no one understand them.
None of these worlds are anything like the perception you will get googling tech articles. So, what do you do with a delusion like that?
Being part of the “movement” is not the same as building a business
I went to startup pitches and met founders that didn’t see beyond the first round. I went to conferences where judges were evaluating stratups based on how flashy their gadgets were and not whether they can even monetise. Ask yourself how many second time startup founders and serial entrepreneurs you have met at pitching events and “top notch” startup events. And now ask yourself why. Maybe they learned that it doesn’t really work the way it’s meant to; the way it’s advertised to.
And then then you have the accelerators run by large corporations that just put up their former marketing director or some similar “creative” employee to run them – because she in fact is a marketing director and she, therefore, is “creative”. Top it up with beanbags and you are all about startups.
All this creates an illusion that building a business is about winning pitches, raising funding and networking. But it’s not. It all crashes down when you try to make it going down this route. It might be the industry that is putting up this perception purposefully, and you can’t blame it for that. But, just like with eating junk food, you’re the one who decides to eat it and you are the one who’s responsible for eating it.
Know what you are doing and why
So, why eat junk food when you want to stay healthy – in this case, mentally healthy. And staying mentally healthy will impact your physical health and influence the relationships you put yourself in; the environment you choose; the world you live in. Even the business you chose to take on.
Why, then, are you running around trying to get media coverage, when you actually know that media coverage will do close to zero in getting you revenue? Why are you running around applying to accelerators, when the real reason you are applying is not in the fact that you need a couple of grand, but more that you want validation of your product and, with that, validation of yourself? And getting into an accelerator is not a validation of anything but the ability to fill out an application form. And you should in no way be regarding it as anything but that. Why are you networking with other founders when you should really be networking with business partners that will enable you to scale? Why are you raising a hundred thousand in seed funding when you know that that will only give you six months’ runway and you’ll have to raise at least four months before you run out of money? Yes, that’s two months from now.
What kind of rationale drives this? Are founders chasing crumbs just because everyone else is doing it? In my case, I raised my first seed round where no other startup was raising. At least I haven’t seen anyone doing it.
Or maybe there’s this thought of social inclusion “Hey, if you don’t chase the same pile of money as everyone and if you don’t apply to the same pitches as everyone, well that means you don’t really have a startup; you’re not a startup founder; you’re not one of us. Go play ball somewhere else.” This might explain all the co-working space psychology also.
It’s not always good to be where everyone else is
And then you have the scarcity element, which Cialdini explains nicely in his works. There’s only so much money out there to fund new flashy ideas. It’s like gold. Who would not want to get their hands on gold. And if you finally manage, it must surely mean you made it big time. So, getting funded where there’s less funding available must surely be a sign of superior validation, right? You managed to do what others are trying to do. Way to go.
It’s obvious that all this chasing puts pressure on you. So why would anyone willingly want to be a part of all this hard work that is often self-damaging? Not only that people are doing it willingly but also go at it with unworldly excitement. I don’t see this much enthusiasm going on when raising A, B, C, D or whatever later round. I don’t see it while doing IPOs? Why then? Because there’s this perception of lottery around the entire industry. The perception that building a unicorn is a numbers game – “One in so many becomes a unicorn. What if I am that next one.” People don’t see building a business as something they need to make happen, they see it as something that is a subject of chance. And that’s the appeal of lottery. The chance of making it without yourself influencing it.
All this delusion is bound to come crashing down at some point. And the funny thing is that it’s bound to crash regardless of whether you make it big or whether you fail. I have seen founders really make it and then turn around in misery, looking at all the luggage they were given to carry and all the skeletons they hid in their closets. And if you don’t make it. Well then you have to deal with failure, loss of hope, disappointment and loss of purpose.
So, be kind to yourself. Put yourself first and don’t be harder on yourself than you are with other people. Ask yourself why you’re doing what you’re doing.
To find out more about Ales Zivkovic and how you can work with him, visit aleszivkovic.com.