Emotional Struggle, Entrepreneurs and Bold VCs: How Silicon Valley is Destigmatizing High Performance Psychological Pressures

Silicon Valley VC firm, Felicis Ventures recently made the news in Forbes with their founder development program supporting leadership coaching and other development programs.

So what’s new I hear you say?

Firstly, the partners at Felicis Ventures point out they were inspired by fields like professional sports where coaches are a regular fixture in helping high performance athletes deal with the pressures and psychological struggles they may face. In this respect they are markers for a growing trend of acknowledgement and support for people suffering from high stakes stress. We are coming from a low bar in which such suffering has long been stigmatized so I am by no means trivialising this move by Felicis.

But secondly, venture capitalists are in the business of giving entrepreneurs money so, again, what’s new? Yes, but in the vast majority of instances this funding is dilutive of the existing shareholders, meaning it is not provided without some form of quid pro quo, mostly via equity in the investee company, a seat or seats on the board of directors and a whole lot of influence on key decisions in the operations of that business.

So here is what makes the Felicis pledge so radical. They are providing 1% towards founder development on top of the dilutive capital they invest and they are taking this out of their own management fees.

The way VC works is various institutions, high net worth individuals and corporations provide the investment pool – these limited partners get a return on investment of about 80% less a 20% carry that goes to the VCs for their efforts in successfully deploying the investment pool. The more successful, the more carry for the VCs. In addition, the VCs get an ongoing management fee during the time they are deploying and managing the investment pool. This is called a management fee and is around 2% per annum. This fee is what the VC firm uses for operational costs during the life of a fund, which can range up to 10 years.

So for Felicis to slice a chunk off of these fees and provide it to the entrepreneurs they invest in is a big deal. And to do so without any directly-correlated increase in their shareholding in an investee company makes it unusual in the VC space.

But hey, it’s a smart decision.

Here’s why: they are essentially signalling to these startup leaders that it is ok to check in on themselves and ensure they are tracking right emotionally and mentally despite the rigours of running a high growth business; they are doubling down on their investment in these entrepreneurs with a personal investment in their well being; besides hopefully adding somewhat to the success of these investments this signalling also points to Felicis playing the long game of investing not only into a company, but into its people; it shows they care and when their investees turn into serial entrepreneurs and are deciding who to invite in as investors in their next company, you can bet they will seriously consider Felicis.

Smart, right!

So how does this play out amongst the Felicis portfolio?

Canva is one of my favourite startups (disclosure: my son Josh works there) and also a Felicis investee company. They are a growth rocket ship and have a full-time coach on board with plans to bring in more. In their ad on LinkedIn for an Internal Coach for their Manila office they say:

“…looking for a unique person to execute with key stakeholders a world leading internal coaching methodology for personal coaching, group coaching and team coaching…we do not believe in top down management, we believe in helping all of our teams to reach their goals and to deliver value to our community through coaching and mentorship.”

What this points to is that the Felicis 1% pledge has had a wonderful cascading effect: Canva is not only focusing on personal development among the founders and leadership, but also across the company.

What do other VCs say about what Felicis is doing?

Brad Feld of Mobius Venture Capital in Boulder is both a veteran venture guy and a supporter of coaching for entrepreneurs around depression and mental health. He has blogged that he is delighted to see the article in Forbes: Acknowledging the Value of Coaching and Therapy for Founders.

And this is really what it is all about: Felicis, in one bold move, is making massive strides towards destigmatizing coaching and therapy and boosting their portfolio while they are about it. Well done, guys.

Mahendra Ramsinghani, who runs the Secure Octane seed fund, also has an article in TechCrunch on this topic titled Investors are waking up to the emotional struggle of startup founders. As someone who at one time wrote research notes on the Gartner Hype Curve I love his use of the curve for plotting the phases a startup goes through. Way cool!

As many of you know, I’ve also been a big supporter of coaching and leadership development for entrepreneurs over the years. In fact, I was so convinced of the importance of this work I left Gartner in 2015 and set up Exoscalr to focus on working with high performance leaders and their teams. It is fantastic to see further recognition of this rewarding approach to supporting the people building the future.

Hey Technologist, Revel In Your Culture of Killing It, But Realize That Inside You Are Dying

I want to highlight an article in the NY Times about the Big Sur, California-based Esalen Institute reopening. Why this is so interesting is because its new mission is “to help technologists who discover that ‘inside they’re hurting”.

Entrepreneurs and business leaders, particularly from the technology industry are starting to get one of my key messages: “Technology without meaning is like work without fulfilment: purposeless noise.”

As Ben Tauber, the new Executive Director at Esalen, puts it:

There’s a dawning consciousness emerging in Silicon Valley as people recognise that their conventional success isn’t necessarily making the world a better place. The CEOs, inside they’re hurting. They can’t sleep at night.

Another nearby centre, 1440 Multiversity, which lies nestled in the California redwoods near Santa Cruz, has a similar message in its goal: to recognise that the blazing success of the internet catalysed powerful connections, yet did not help people connect to themselves.

1440 was founded by Scott Kriens, Chairman and former CEO of Juniper Networks, with the rationale that there is “great power in immersion learning – setting aside daily urgencies and dedicating uninterrupted time and energy to focus on our more important, but often more elusive, priorities.”

One of the key questions technologists are starting to ask themselves is whether they are doing the right thing for humanity. It’s all very well building a highly addictive, behaviour changing piece of technology, but if it doesn’t progress humanity in some way then what is the point?

Before heading up Esalen, Ben Tauber had created a real-time celebrity geo-stalking service called JustSpotted and then joined Google as an acqui-hire. He then decided his work was causing harm. “I realized I was addicting people to their phones. It’s a crisis that everyone’s in the culture of killing it, and inside they’re dying.”

As former Google chef Bodhi Kalayjian, who now bakes bread at Esalen says, “Everybody’s got a soul. It’s about finding it.”

The article also quotes Gopi Kallayil, Google’s chief evangelist of brand marketing. He has been wondering about the impact of his work and said that many of the people who came to him had floundered this year.

Ultimately, it’s about finding meaning in your work and ensuring that what you invest your precious time into is something that you can feel proud of.

What is an Elder in Residence Program and Why Does Your Business Need One?

In a previous post (Here’s How Older Generations Can Reinvent as Elders and Continue Their Impact) I talk about the importantance of older generations reinventing themselves as elders. I refer to two fantastic examples of individuals joining high tech Silicon Valley companies when they are in their early 50’s. Both have had a profound effect on their respective businesses: Fred Kofman at LinkedIn and Chip Conley at airbnb.

These are relatively ad hoc arrangements and testament to the foresight of the CEOs of those companies for pioneering this path. And then it struck me: what if this was formalised and crystallised into a program that other companies can follow, add to and learn from?

And so I began thinking: when I was at NICTA I had a problem – 600 very, very smart scientists on staff and a remit to create an entrepreneurial culture and commercialise their research. How was I going to help these academically-driven people reinvent as entrepreneurs? And I needed to do so on rocket boosters as we had enormous pressure to produce results.

One of the most successful things I did was to set up an Entrepreneur in Residence Program. I recruited a number of serial entrepreneurs to join us for a year. In this time they firstly acted as mentors to our scientists and secondly identified a project they could work closely with to fast track a spin out. If they were successful in spinning out a new venture they would take the CEO role and lead it through its growth.

The result of this EiR Program was a definite boost to the organization’s entrepreneurial culture and a slew of venture-backed spin outs in record time.

My aim is to take this learning and apply it to creating an Elder in Residence Program. I see the benefits to a company, particularly one that is growing rapidly and dealing with how to scale leadership, being:

1. A close trusted confidante for the CEO – part adviser, part mentor, part CEO coach;

2. A leadership program that will boost compassion, resilience, wisdom and, ultimately, increase diversity, engagement and organizational transformation.

CEOs often have excellent advisers and investors in their milieu, but I see this to be a role more embedded inside the business – working closely with the CEO one on one as well as building up the leadership team for the purposes of scaling – as they transition say from 150 to 300 staff it is imperative that they are ready for this growth inflection point and the rule of 3 and 10 (at 3 and at 10 things change in any organization and as it scales simply add zeroes onto 3 and 10 and the principle continues to be applicable).

How to Get Better Outcomes With Less Effort

Isn’t it about time you got better outcomes with less effort?

CEO Coaching is your go to method: it’s about leadership development; it’s about being inspired, but ultimately it’s about impact. Your return on investment is a boost to your productivity and your overall well being; which is why at EXOscalr we refer to it as fuel for the soul, rocket fuel for your business.

CEO Coaching helps you find clarity: in your vision, in your role; and this translates across your business with people becoming less confused, more engaging and their overwhelming sense of fear dissipating.

How Reinvention Leads to Continuous Personal and Business Success

We are immersed in a viciously competitive environment in which massive, disruptive change is happening at a ferocious pace. How do we survive such a world, both at a personal and business level?

IBM’s Chair and CEO Ginni Rometty says we “gotta keep reinventing.” But why is reinvention so important and how often should you focus on it?

I asked a panel of six successful reinventors, ranging from private equity and high tech venture capitalists to ad execs, design thinkers and serial entrepreneurs, to weigh in.

Why is reinvention so important to us at a business and personal level?

Sydney-based serial entrepreneur, Pierce Cody views true reinvention as changing the whole way you go about doing stuff. He is on his fourth reinvention: first he was in traditional advertising and then outdoor advertising. He went orthogonal and built an organic whole foods business and today is pioneering digital signboards for real estate with Cody Live (disclosure, I am a shareholder).

Mike Flax lives in Cape Town from where he runs a successful real estate investment business, Spear REIT. He began his career as an accountant, but feeling that his creativity was being stifled he shifted into real estate.  He prefers to see reinvention as a process of ever evolving and is aware of the need to be constantly making small adjustments to his personal and business life.

Also based in Cape Town, Greg James believes that reinvention is key in all aspects of life as we have to constantly evolve and grow. He trained as an accountant and spent years in Switzerland as a mining industry executive managing mergers and acquisitions. He then returned to South Africa and reinvented himself as a private equity practitioner, setting up the Sagitta Group.

“We have to adapt to the changing nature of our world and environment. In order to achieve we have to grow and learn, without this we will stagnate. The world waits for no one. We live in an ever evolving world.”

Peter Bray began his career in Australia founding two advertising agencies before making the leap to New York, where he headed up digital at Saatchi & Saatchi. His take is that reinvention is often the first chance a person has to consciously chart their destiny.

“So much of the first part of our career is falling into a certain time and place. Reinvention is really the first chance for us to consciously invent.”

Design thinker extraordinaire, Doreen Lorenzo was President at frog design and Quirky before she shifted into the role of educator. She is now Director of the Center of Integrated Design at The University of Texas at Austin. Doreen sees reinvention as just another form of learning and in life, we should be continuous learners.

Third generation venture capitalist, Tim Draper lives in Silicon Valley where he founded one of the world’s leading technology venture capital firms, Draper Fisher Jurvetson. In addition to his focus on building high growth technology companies he has also shifted into educating and motivating entrepreneurs as the headmaster of Draper University. He believes in progress.

“Progress to a better life, a better world and to search other worlds. We need to continue to make progress and reinvention allows us to continue to progress faster and better.”

How often should individuals and businesses be considering reinvention and change?

One insight that emerges from the answers given above is that reinvention is not necessarily a one-off.

Mike Flax reflects this, “Individuals and businesses should be continuously refining their business model or raison de’etre. It should never be a once-off change but rather a continuum. By employing your intellect and questioning the future constantly, you will make small, fine-tuning decisions to subtly alter your course daily.  The Big Bang reinvention is clear recognition that you haven’t been paying attention to the world.”

Greg James suggests that people and businesses should always have reinvention in the forefront of their thinking.

Doreen Lorenzo does. She thinks about reinvention a lot.

“I believe that a number of companies and business models would benefit in terms of output and success if design thinking were a greater part of general workflow and product development.

You look at the most successful companies in the world – Apple, Google, Amazon – at the forefront of their process is the human experience. They are constantly thinking how to best respond to the ever changing needs of their customers. Often times companies are too focused on the bottom line or pleasing the board without truly thinking about the end result.

Take Amazon for example, they take a hit on their bottom line every quarter to ensure that their customers are getting the best possible prices, the quickest delivery and the best experience. They bet on revenues catching up to the experience. Now, not every company can afford to do that but it’s an interesting model that addresses human-centric experience above almost anything else. More companies need to think this way and incorporate the human in earlier pieces of the process.

Tim Draper echoes this sentiment, “Every minute of every day, people and businesses should be thinking of how they can improve and do their work better and delight their customer more.”

What would be your one piece of advice to anyone wanting to reinvent themselves or their business?

Mike Flax says the one piece of advice he would venture would be not to chase material success at the expense of wellbeing.

“For you, enough will never be enough and you will never attain inner peace. Chase an ideal bigger than you and your immediate needs. Work towards something that can benefit as wide a group of people or creatures as possible.”

“Don’t try and change the world or others. Just try and change yourself. Because if you can change and improve yourself, by doing so, you will be an example for others to follow. And then they will change themselves and be an example to others and, eventually, the world will be changed as a result of your simple act of changing yourself.”

Pierce Cody believes that the first thing in reinventing yourself is the need to realise that you have got to do it.

“If you think everything is ticketyboo, while Rome is burning then you are never going to do it properly. You have to realise that you have a problem.”

“The question then is whether it is a solveable problem. Maybe it is. Maybe it is simple and you should’ve thought about it before. You might need to seek help from other people. Whenever you are in doubt and you are struggling, ask yourself whether you can change the rules of engagement.”

“Probably the most important thing I do in my life is that if I’m travelling on a shit road: a shit highway to shitdom, then I try to get off that road. I would really suggest to people if they are in that situation that they question whether there is another way to do it? When you are faced with a huge wall in front of you, change the rules of engagement and go around it.

What if Pierce was giving that advice to his 17 year old self?

“I’d give the same advice. I’ve done that with two of my three children. If it’s not working where you are, try and change the rules of engagement. No matter how weird that is and foreign, try.”

Greg James suggests you have a vision of where you want to be. Never let go of that vision and pursue it and as the world changes make sure you adapt your plans accordingly.

Peter Bray advises you to forget about trying to fit in and just be yourself.

“I dumbed myself down in the past far too much in order to not be threatening. In terms of my 17 year old self, I would say be more self-ish. If I were on my deathbed, I’d ask my 17 year old self to be kinder to myself.

Doreen Lorenzo keeps her advice simple: just do it.

This can be the greatest challenge for so many people and business though. They are caught between the status quo and a rapidly changing environment. They are too comfortable in their discomfort.

In his piece of advice Tim Draper suggests a way to break this stalemate: “Take the first step. The next step is easier and so on.”

 

It’s Time to Create Your Lean Life Now

Here’s your situation: your life resembles an incumbent corporation (complex, disengaged, and listless); you want to disrupt yourself; you want to create the startup of you, but you don’t know how to do it; you are stuck between your dreams and reality.

And here’s what you know: change is hard; you’ve got to feel that you are ready for change, but there’s never enough time nor is it ever the right time; today you are too busy dealing with all the complexities of your life, that slow moving corporation, to fully contemplate or embark on changing your life.

It’s time to get off the corporate treadmill.

Stop with the excuses.
There is a better way.
You can disrupt your life.
For the better.
Now!

It’s time to create a lean life. 

It’s time to develop a MVC for the startup of you. This minimum viable change and minimum viable challenge will recalibrate your life.

An MVC may seem like a small step, but it will reverberate deeply within you; it will catalyse a different path for you, a path to greatness, a path that is so much more aligned with the true you.

You will sing again.
You will laugh.
You will lean into your lean life free from unnecessary complexities: a simpler, more agile you will emerge, ready to spring into action and grab opportunities that you have only ever wished for before.

I am running a limited number of Lean Life advisory sessions for entrepreneurs and business owners. These are intensive sessions designed to kickstart the startup of you. You will not only develop your MVC, but will formulate a Life Canvas that you can use to iterate and chart your reinvention.

If you are interested in applying for one of these sessions let me know by email (rand at exoscalr dot com) and I’ll be in touch.

A Near Death Experience Changes Perspective on Success

Sometimes major life events, like near death experiences, can help entrepreneurs find some much-needed perspective about what success means to them.

Read and listen to me being interviewed by the high energy Ramon Ray.

How to Unleash Your Potential

Think about this for a moment. When we are young we dream impossible dreams, but as we get older these can be all but knocked out of us:  perhaps by societally induced constraints; perhaps by our parents’ ambitions for us, perhaps by our peer group’s limiting beliefs, perhaps by our inherited dogma, or perhaps by our upbringing.

You know the score: as we hit failures, feel pushed outside our comfort zone, and get older, we start to develop a series of self-limitations that can hold us back from using even more.

Sadly, we might believe we’ve missed the boat, that we’re not capable enough, or don’t have the right personality or social set to attain success.

Don’t worry. There’s a solution. The good news is that we are all born with the powers we need to achieve our absolute potential.

What if I could show you how to be fierce and harness your super powers to reinvent your life, and through them, achieve your absolute potential, as if born again, without constraints?

Would you be in?

Let me lead you through my new book, Fierce Reinvention: A Guide to Harnessing Your Superpowers for Entrepreneurial and Leadership Success ($11.99 digital, $15.99 print (USD), October 2017), which is available from Amazon.