haiku for an entrepreneur:
pitches don’t change the world
people do, by being fierce
and doing the work.
haiku for an entrepreneur:
pitches don’t change the world
people do, by being fierce
and doing the work.
Since initially publishing this newsletter to subscribers two days ago there have been two additional touchpoints worth highlighting:
* firstly, a comprehensive piece has been published on TechCrunch, After the Gold Rush, which lists a number of views from other pundits that back up my prognosis;
* secondly, reports from New York City of a young startup founder who appears to have jumped to her death.
These two incidents may in no way be connected, but the point of this piece is that entrepreneurs should prepared themselves psychologically for the rigours of startup life, which may become a lot harder in coming months.
Here is the original piece I wrote:
I’ve never been much of a doomsday kind of person. I’ve been through two venture capital ice ages and definitely would not wish one on anyone. That said, the signs are there that we may well be heading into another one – it may be a gradual cooling rather than an overnight freeze, but entrepreneurs need to prepare.
The facts first:
In Q4 financing of startups fell by 6.6% to $17.13bn. This is still high, but it is the lowest in five quarters.
Venture capitalists in Silicon Valley are reigning in the throttle. New financing rounds are being done at lower valuations.
Startups are being urged to cut their cash burn even if they may not yet need to. 10% cuts are now becoming common place. Thanks to John Furrier of SiliconANGLE for this data.
Stats from WSJ/Dow Jones VentureSource point out that the number of US startups valued at $1bn or more for the first time has tentatively dropped by 50% for Q1 ’16 in contrast to Q4, which itself was over 50% down from the Q3 peak. They also point out that 35 of the 48 US tech venture-backed IPOs are trading below their IPO price.
We all know that most startups fail. In the currently cooling climate the number of failures may well skyrocket. Entrepreneurs should continue to listen carefully to their advisers and VC investors regarding trimming back on burn rate and shoring up resources. But what about their emotional side? The pressure of a cooling market can lead to significant psychological stress on founders.
I want to highlight 3 areas that may well help entrepreneurs psychologically prepare with excerpts from my upcoming book, Be Fierce: The Leaders Guide to Unleashing Your Potential:
– Dealing with Failure
– Dealing with Success
– Being Resilient
1. Dealing with Failure
For some people the fear of failure holds them back from doing things. At best such fear is self limiting, at worst it can be debilitating.
Mick Ebeling (of Not Impossible Labs) was able to progress beyond his fear of failure through learning to jump first and making the assumption that the net would appear. He believed things were going to work out even though when he leapt he had no idea how.
You can follow that belief, or you can follow the fear.
He puts it philosophically. We don’t know why we are here, on earth, but it’s not just to make money or have fun. He visualises us all on rickety little boats that are motoring across the narrow of expanse of time that is our lifespan. If we want to be successful then we’ve got to leave a way behind us. If we take life too slow and steady we don’t create a wake and then what’s the point.
The secret to success, for Mick, was the realisation that failure isn’t a big deal.
We tend to find ourselves entangled in what we should and shouldn’t do. When we unravel this we formulate constraints on what can and can’t be done.
They appear fact-like, but they are far from it. They only amount to conversations that we have in our heads, but so often they seem to crystallise into facts.
That’s not a bad thing, as long as the solidifying conversations are motivated by positive, motivating thoughts. It’s when we view fear-induced inner conversations as fact that we limit ourselves.
Without training and mindfully creating a different set of thoughts we can default to that negative conversation.
And so we need to do all we can to banish negative thoughts, banish fear and focus on having a positive conversation in our heads.
You can change reality through the power of what you say to yourself. As your positive thoughts and conversations crystallise into facts, you change reality by having these positive facts guide you, instead of the fearful ones.
By imagining a “Yes” when you’re expecting a “No”, by acting confident when you’re feeling nervous, you can become the person you want to be. Act like the person you want to be and success will triumph over failure.
Success and failure are far from random. They live within the very DNA of our character and personality. They are expressed through our thoughts and actions.
We choose which side of the fine line we find ourselves on – success or failure – by our courage in the face of both adversity and uncertainty and also how we choose to visualise ourselves. Do you see yourself as failing or succeeding?
2. Dealing with Success
Success can come with a dark side.
Loneliness and depression affect everyone in all walks of life. Successful people are more prone to it and entrepreneurs even more so.
Mark Suster, a venture capitalist at Upfront Ventures, believes that success breeds loneliness. It can be a depressogen and in some studies the rate of depression in successful people is higher than 1 in 3.
Mark identifies four reasons success can be a lonely place:
1) the expectations don’t stop – they get higher
2) there is so much more at stake and so many more livelihoods and legacies that you plan for
3) it is only a heartbeat away from failure and the press love a rise and fall story
4) you find yourself surrounded by a bubble and often a bubble with vested interests in your actions.
As leaders you can be thrust into the spotlight of success with far more impetus than other people and are therefore susceptible to the sudden onset of loneliness and depression, many times with no experience in how to identify or cope with it.
One moment Jim was a struggling entrepreneur. His mother kept yelling at him to get a real job. His friends told him that he was crazy. The next moment his company was valued at over a billion dollars and some guy he’d only ever previously seen on the cover of magazines was thrusting a very, very big check into his hands. He spent six months mastering golf and travelling the world. Deep down he began to feel more and more hollow inside. He was becoming detached from his former entrepreneurial self and didn’t know how to identify himself anymore.
What can you do to deal with the dark side of success? There are two avenues you can take.
Explore the dark
Your life exists as a narrative, a story arc with a past, present and future. In order to truly achieve well-being you need to delve into parts of your past and present that you may feel much trepidation about. There may be dark times when your arc dipped low and this darkness cannot be avoided. It must be explored as it leads to the next point.
Tackle the triggers
Loneliness is often exacerbated by triggers. Things happen in your life that for most people would be viewed as slightly negative, but you view them as off-the-charts negative. Having explored the dark you become aware why these things have such an effect on you. You can identify very early on, even before the trigger starts having an accentuated impact on you, that it is there and you can act.
3. Being Resilient
You want to achieve your best, you want to stand out from the pack. We all do.
And so you push yourself. Nothing wrong with being driven, it can help you attain your stretch goals. You equate stress with success. There is nothing wrong with this on the face of it.
Pushing yourself to overcome a challenge with the awareness that you may well have too few resources at hand to do so is the very definition of stress. And in many instances this stress is the very thing that drives you over the edge and empowers you to overcome that challenge. Cultivating short term stress can only lead to better performance, but it can also protect you through a boost to your immune system.
The issue, though, is that you don’t stop there. You push yourself continuously. You don’t give yourself time to decompress.
Isolated stress turns into chronic stress, and that is deadly.
And yet, as a society, we take pride in how hard we work, in how much stress we are under.
Have you ever asked someone how they are and they’ve replied, “Great, very relaxed, taking my time to complete a few projects.”
You are more likely to get the response, “I’m so stressed. I’ve been working like crazy and I’ve got so much to do.”
Take note of a person’s body language when they give you such a reply. They will puff out their chest with pride, their eyes will widen in excitement and they will smile at you. All is right in their world, this is how it ought to be.
And yet it isn’t ok. Annual stress-related healthcare costs have soared into the hundreds of billions of dollars. Chronic stress will weaken your energy reserves, it will reduce your ability to think and ultimately it can kill you.
Stress, like happiness, lives on a continuum. At one end stress is short-term, it is good. At the other it is chronic and bad. To cultivate stress and optimise your performance you need to determine what your stress limits are. Just the right amount and you are in the zone. Too much and you cross the point of marginal returns and the efficacy of stress in boosting your performance degrades.
The most reliable measure of your particular place on the stress continuum is your resilience: how quickly you recover from a stress event. It translates directly from Latin: “to jump or leap again”.
Resilience measures how long it takes you to revert to your restorative state in which you charge up your strength for your next challenge.
You may undergo a major stress and feel like you have recovered quickly. Feeling fine you take on another stress almost immediately. Again, you feel like you’ve made a quick recovery so you dive into a new challenge. However, each stress can build up a level of resistance to reverting to your restorative state. The end result is that you don’t ever fully restore your energy levels. And then one day you suffer a cataclysmic health issue.
When I was an analyst I saw the effect of this firsthand. My colleagues would step off the plane from a particularly gruelling few weeks travelling, only to literally turn around and do it again the next day. Meanwhile, they were pushing themselves to keep up their writing regime so that could meet their publishing deadlines and also working on keynote presentations for looming events. While they thrived on the stress of each one of these activities, it was their cumulative effect that wore them down.
Besides the constant barrage of challenges that we rise to, you may also be depleting your resilience simply by thinking or participating in routine events like reading a magazine or watching the news on TV. Our default though pattern is to think negatively and so the more we engage in activities that are open to being viewed in a negative light, such as emails and interactions with work colleagues, the more likely we are to stress over them and wear ourselves down. Similarly, marketers and the media are well aware of our how stress-inducing stimuli seize our attention and the daily deluge of ‘act now’ messages we receive have a similar affect.
How can you reduce the effect of stress and build up your resilience?
You come home from work after a busy day and decide to destress with a glass of wine. You try to drown out the thoughts that are stressing you by escaping into a reality program, the latest serial on Netflix or a novel.
But then you have to come back to reality. You do this day after day, night after night until the weekend arrives and you find that you are even more stressed.
This is because constant suppression of negativity leads to an increase in negativity. Not only does it cause you to have more negative emotions, but it can also reduce your self-esteem and lead to depression.
The most effective method to build up resilience is to breathe. By controlling your breathing patterns you alter your emotions and induce stress reduction.
When I was in the military I trained myself to take in a deep breath and let it out slowly. This would help to reduce my anxiety about a stressful situation and also increased my clarity of thought so that I could determine how to deal with the situation in the most effective way.
Taking in slow and deep breaths can stimulate your vagus nerve, which acts against your stress-induced fight or flight response to a stressful situation.
Extending your inhalation and exhalation for just 10 minutes a day can noticeably relax you. This in turn reduces your heart rate and lowers your blood pressure. It can also reduce inflammation, improve digestion and brain function.
Deep abdominal breathing involves expanding your diaphragm, the muscle that sits lengthways between your stomach and chest, and reducing your number of breaths by 50% per minute – long and slow, 4-5 seconds in and then 4-5 seconds out.
If you want an even quicker method to activate your vagus nerve, you can immerse you face into a basin of cold water. This method is best done after vigorous exercise. You mainly want to ensure that your eyeballs are completely submerged in the water as they are one of the key vagus nerve stimulation areas.
CEO Richard had a predominantly negative internal dialogue. “We are going to use up all our cash and have to shut down, what will you do then?” Such statements came in waves and at times it seemed like a constant barrage. He delved into one of these times, which has been triggered by a marketing campaign that his internal dialogue told him would fail. What Richard realised is that before the negative thought train left the station there was a primal feeling in the middle of his chest. Feeling always precedes thought. For Richard this was a sharp twisting, squeezing feeling that he best described as crippling anxiety.
He was able to work with this feeling through the practice of meditation. While sitting in his quiet place and meditating, one of these thoughts hit him. Instead of letting it take a hold he decided to explore the feeling itself rather than the accompanying thoughts. He asked himself, “What does it look like? If it were a real thing how would it feel to the touch? What would it smell like?”
These interstitial questions created a major shift in his thought processes. He was able to create a gap between the feeling and the thoughts. Ordinarily, he would notice the feeling and ask himself what was causing him to be anxious. Reasons would flood in. Over a period of months he worked in that gap and strengthened his ability to notice and separate it out.
This enabled him to realise that his anxiety did not stem from any one thing. Instead he had an overarching sense of dread, a feeling that many people experience purely as a result of being conscious.
The act of trying to push that feeling out of his mind had been heightening his anxiety. He decided to accept that it was there, it was a part of him and this acceptance helped ease its affect on him.
By doing so he was accessing his deep well of resiliency, which was as much a part of him as his struggle with anxiety. He did so by essentially standing still, feeling the feeling and not pushing it away with a justification for its existence. From this position of strength he could then return to focus on his purpose, what was driving him to build his company. Coming back to that purpose and holding to it increased his resiliency to the negative barrage.
Remember these three areas, Dealing with Failure, Dealing with Success and Being Resilient, when things get tough for you in your leadership role. Apply them regularly and they will help you deal with the pressure.
At EXOscalr we work with our clients to unleash their potential and make a difference. We draw on decades of experience, including insights gained in venture capital, corporate innovation, building high growth organizations and advising the Fortune 1000 on transformation.
As a professional coach and adviser I constantly focus on the trends in achieving exponential growth and how you can make more difference.
I read all my email at firstname.lastname@example.org and I’m also at +1-650-529-4181 and +1-646-480-0205. Feel free to reach out.
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Think about all the vagaries of running a high-technology venture – as executive leaders you need to be setting the vision, formulating strategies for success and operationally attracting and retaining top-level talent, leading and managing teams, sourcing and deploying scarce resources and negotiating ongoing funding rounds, all while building a sustainable platform and compelling products.
Some CEOs and executive leaders have an innate ability to juggle all these balls, keeping them up in the air and constantly moving their business forward. But for every one such person they are 10 others who become increasingly overwhelmed by the level of chaos that surrounds them.
How can you ensure that across your business, or if you are a venture capitalist across your portfolio, there is a constant capability to harness this chaos and turn it into a proactive force for directionally-correct and exponential growth?
At EXOscalr our mantra is:
No plan, No progress
We have developed a comprehensive Exponential Growth Engine & Operating System designed to support a company and a portfolio of companies in executing and operating at optimal efficiency and performance levels, both individually, as a company and as a portfolio.
The Exponential Growth Engine consists of a set of growth levers, algorithms and methodologies for consistently achieving greater scale. The first step is putting in place a bespoke Exponential Growth Engine for each company and then constantly applying granular methodologies for measuring, monitoring and progressing their rate and direction of growth.
The second step is implementing a companywide, team and individualOperating System (this can be applied consistently across a portfolio as well) that is comprised of three core parts:
1. planning – a cascading set of directionally correct personal and business activities,
2. data – methods for ongoing monitoring and the production of rich data,
3. progress – data-driven refinement designed to keep people, teams, companies and portfolios directionally correct to their overall goals.
Our data points show that such a complex system approach greatly enhances and significantly increases collective capability for achieving high levels of growth.
Here is my recent podcast interview with Anthony Kirby on his show, Chase Your Impossible.
We discuss near death experiences, venture capital, Silicon Valley, corporate life, listening to your soul voice and a whole lot more.
As Anthony says, “It’s a jam packed 1hr of content filled with nuggets of gold. Listen to the words to live by at the end of the show – they’ll move your soul.”
The Silicon Valley tech-mythology-machine, replete as it is with unicorns and trolls, is a wondrous device designed as much to assist in reality distortion and suspension as it is in self-paving its streets with digital gold.
We all know the story of how the Valley has reinvented itself through various technology phases. Currently it is awash with apps and social media. Even though they helped create this social flow, a few of the tech pundits are swimming against this tide, reinventing themselves as mindfulness gurus, but that’s a fairy tale for another time.
There is a new tide washing into the Valley: autonomy – artificial intelligence, self-driving everything, asset-rich services on demand and cognitive systems that know us to the point where they are 2-3 moves ahead of us in our own personal game of thrones. Their aim is to be 6 moves ahead, and they are rapidly progressing to this point.
But this is all backdrop.
The real foundation of Silicon Valley, the grease in its gears is FEAR. In particular, the FEAR of MISSING OUT (FOMO) is driving the Valley’s sense of urgency.
FOMO is the ultimate reality distortion field creator. This is best explained through examining the fluidity between viewing a new venture in terms of its friction points versus how much it could scale with limitless fuel. Take Uber as an example. Donning friction-tainted lenses restricted many from seeing it as anything more than yet another taxi service, operating in a highly regulated market with well entrenched incumbents. However, for those who looked at Uber through fuel-filled lenses, they saw its true potential, namely to revolutionise transport. They were able to suspend reality long enough to understand the ultimate promise of Uber. Those who then went on to invest early enough into the company may be rewarded handsomely.
In a low FOMO environment, i.e. most other places on the planet than Silicon Valley, there is little incentive for people to don fuel-filled lenses. They have the luxury of sitting back and waiting for a venture to achieve sufficient traction, they wait for the entrepreneurs to derisk the business. However in a high FOMO environment, those who hesitate: miss out.
Nowhere else on the planet is the FOMO-meter so high. In fact, it is off the charts in comparison to many other geographies. The same can be said for the boardrooms of so many companies. Does your company have a FOMO culture at executive level? For most organisations the answer is a resounding “no”. How then can incumbents compete against agile Silicon Valley startups? The short answer is that they cannot.
Ask the former Kodak board if they understood FOMO. Apparently not.
I’d like to advocate that every board, every senior executive needs to up their FOMO ante. How high you might ask? Not to hysterical levels, but high enough to palpably increase the urgency around tackling disruptive innovation. High enough to also burn the boats and chart new courses if necessary. Definitely higher than the dual path some would advocate of keeping business as usual turning over while exploring new paths on the side.
How do you instill FOMO into the boardroom?
1. In the short term, have your board do a tour of the Valley. Not the bells and whistles version with champagne on the tour bus, but the grungy start up tour where they get exposed to the highest levels of FOMO.
2. In the mid term, look to bring Silicon Valley into the boardroom. Place at least one FOMO expert on the board. Their experience and skills will prove invaluable to you in dealing with the status quo.
Rewind back to early 2014 and I was enjoying working for the world’s leading research and advisory firm as an executive leadership and innovation analyst. I spent my days flying around the world advising Fortune 500 Boards, CEOs and CxOs on growth, leadership and disruptive innovation.
On a Sunday night, mid-February, I’d prepped for an international flight in the morning and then…I dropped dead from a sudden cardiac arrest. I was able to revive myself, but was in a state of conscious ventricular tachycardia, a severely life threatening condition in which the heart beats at an extremely rapid rate. I was rushed to hospital and spent several weeks undergoing a number of surgeries and also had a mini stroke, which was terrifying. I’ve detailed my health journey over this time (here and here), but in summary after an initially positive response my health deteriorated from mid 2014 leading to a further operation in December. Since then my health has improved dramatically.
Coming out of hospital for the first time in March 2014, I felt extremely grateful for being alive, for breathing fresh air and I saw the world through fresh eyes. I felt at the time that I had to make use of this opportunity to do something world changing. How could resuming the status quo be sufficient?
As Joseph Campbell puts it, “Only birth can conquer death – the birth, not of the old thing again, but of something new.“
But what was it that I would do that was new? As the months passed, I spoke with many people, considered diving into a few opportunities and also went back to my work as an analyst. I realized that I’d been given a very rare second chance at life and to honour that I needed to do more than what I had been doing. I also realised that what I did had to resonate within me, deeply.
Steve Jobs explains this so eloquently, “Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”
Even though I had some very trying times over the course of 2014, I was enthused by the journey I’d embarked on to search for my soul work, my calling. I came to realise that during my time as a VC and previously as a coach, I found most joy in helping great people transform themselves into being extraordinarily great – asking the right questions, guiding them to make the right decisions and acting as a trusted advisor. In this regard the role of a VC and a coach are very similar. As Roelof Botha of Sequoia Capital points out, the role of a VC is to help entrepreneurs navigate and solve problems on their own, to provide perspective and ask the right questions, and to provide frameworks for decision-making.
And so I’m super excited to announce that I’ve left my high flying analyst role and set up EXOscalr, the elite performance and transformational coaching and advisory firm. Our moonshot is to help create $1 trillion in value over the next ten years while also positively impacting 2 billion people. To achieve this goal we are working with entrepreneurs and leaders who have the capability to build exponentially scalable or exoscale companies, leaders who we can guide through a transformation into elite performers.
I invite you to join me on this journey.
Technology pioneer George Dyson spoke to the Long Now Foundation this week in San Francisco about “The Digital Universe And Why Things Appear To Be Speeding Up”.
His first nugget was that at the dawn of the digital universe over 60 years ago it was all of 5 kilobytes in size. In todayspeak that’s about half a second of MP3 audio! It’s purpose was as far away from making music as you could imagine. It was set up to design hydrogen bombs.
Fast forward and as the digital footprint expanded exponentially, its acceleration became reflected in the self replication of computers: the pace today is 5-6 trillion connected resistors being added per second.
George used a brilliant analogy, that as a long time waterman resonates with me – as a kayak builder, he initially emulated the wood-scarce Arctic natives to work with minimum frame inside a skin craft. But (today, we are) in the tropics, where there is a surplus of wood, natives make dugout canoes, formed by removing wood.
According to George, “We’re now surrounded by so much information we have to become dugout canoe builders. The buzzword of last year was ‘big data.’
Stewart Brand, from the Long Now Foundation, defines the situation today as: Big data is what happened when the cost of storing information became less than the cost of throwing it away.
Have you started carving your canoe yet?
I’ve been advising the Student Union at The University of Sydney on the setup of Incubate, a campus-wide startup development program. This initiative is designed to assist students get their ventures off the ground and will commence over the summer.
The launch event for Incubate is taking place at 5h30pm on the 20th September in the foyer of the New Law Building on the Darlington campus. I’ll be chairing a panel on the innovation shift from Silicon Valley to other global centres. Panelists include Matt Barrie (Freelancer), Nikki Durkin (99dresses) and Matt Byrne (Curicon).
Come on over – it will be a fun event.
In response to Jess Gardner’s article in last week’s BRW magazine, I was invited to pen a Letter to the Editor. It was published today. Here it is in its entirety:
Silicon Valley is the ultimate entrepreneur coach. It is synonymous with two core tenets for entrepreneurial success: focus and accountability. Palo Alto’s adrenalin-filled atmosphere focuses the minds of entrepreneurs.
For those who get funded, their investors hold them absolutely accountable.
Silicon Valley is also a state of mind. Being an entrepreneur there garners immediate respect.
Palo Alto was ground zero for the hippie movement and this points to its transformational role. It has reinvented itself a multitude of times as technology trends have shifted.
Within this transformational state of mind, Steve Jobs created the world’s most valuable company. Check in, and be an entrepreneur.
Not too long ago, Australia transformed itself into a sporting nation. From paddock to Olympic podium, we stand proud as a nation.
Jessica Gardner’s article points to a country ready for another change.
A generation aspires to be entrepreneurial but is also asking itself hard questions. The start-up scene in Australia is shifting but still resembles a cottage industry.
It’s time we focused again. It’s time to hold ourselves accountable and to transform into a nation of entrepreneurs. One focus, one nation, working together we can do it.
Check in, and be an Australian entrepreneur.
One of the most balanced articles I’ve read on the “should I stay, should I go – to Silicon Valley” debate was published today in Business Review Weekly.
Well done Jess Gardner – solid research.
This part of her article resonates most for me and it’s solid Cannon-Brookes advice:
Atlassian’s path shows it is possible to build a successful global operation from scratch in Australia but Cannon-Brookes says the company has also benefited from a blended approach. He has spent about two years in total, out of the past six, at Atlassian’s San Francisco digs (the company also has an office in The Netherlands and developers in Poland).
“I would definitely tell them [start-up founders] to spend time in the US,” he says. “It doesn’t need to be a pitchforks at 20 paces kind of a thing. We definitely gain as entrepreneurs, as a business, a tonne from having spent a lot of time there .?.?. I’ve learned a lot but that doesn’t mean that I don’t bring those learnings back and apply them down here and vice versa.”
Entrepreneurs: Be inspired, travel and do great things!
His point is that in the early stages, entrepreneurs shouldn’t regard the decision as a prerequisite step on the start-up path.