Yesterday I was on a panel sharing with Khailee, talking about founder well-being. The panel was part of a 500 startup course on startup growth and founder mindsets. Then I sat in for the afternoon session on “founder fears, anxieties, identities, attachments” facilitated by Justin from the Good Culture.
This morning, I woke up to a feature section on BT on “the dark side of entrepreneurship” – real stories of how startup founders struggle to survive.
Founder well-being has been something close to my heart in the recent years. I have played my fair share of “kopi-mate” to many founders who had fund raising / cash flow problems, unsupportive family, co-founder disputes, product market fit issues, all sorts of major failures, etc. Regardless of background, I would say 90% of the founders went through some kind of self doubt and huge amount of struggles (internal or external triggers) especially in the first 1-2 years of their journeys. The questioning voice in the mind gets louder unfortunately when the path gets rocky.
Last year I wrote a piece on how founders need to prioritise and focus on what’s important to them. And since then, whenever I have a chance to speak to new founders or others exploring this path, I give them an “opening pitch” on how they should really understand themselves and what being a founder means. I do not do “development journalism” (quoting the BT article) or sugar coat the founder journeys.
Dealing with the stresses of running a startup
I think we all know what the common founder stresses are. But what are the causes of these stresses? They could be internal and external. And via the course yesterday, I got a new insight: the identities (beliefs) we have for ourselves and the attachments that come with the identities / expectations from ME to ME.
My personal translation: do you really know yourself and do you know why you are going on this journey?
My observation is that many lose track of the core / original reasons of why they are on this path. They get overwhelmed and start defining their own progress and success with the public / visual yardsticks (amount raised, valuations, publicity received etc) So they feel the beating (from who??) that they read or hear about.
Some self-check in questions: did I start this business to raise money? So what happens now that I can’t raise (enough) money? Do I really need to raise? Am I bothered by the right things?
Forced onto a submarine
My submarine analogy always draws the laughter, especially from founders who have been on the journey for a while. Some call it a roller coaster ride, but I personally feel it’s more a lllloooonnnngggg submarine ride.
- You feel way below the water mark, with pressure from all directions, and it’s dark all round;
- there is no trek to follow, you got to figure out everything on your own;
- you need your own engine to push you up to breathe.
Your own engine – your core, your belief, your act of will. You could have the best or the worst co-founders, the most supportive or the most mercenary investors. Whatever it is, only you can pick yourself up. You can have well meaning supporters all around to ideate and design solutions, but only you alone can really get you to breathe. Remember to come up for air.
I would like to highlight 2 main stress sources to founders. One not so obvious but the second a known big source. I try to offer a different perspective to hopefully to build better founder foundations.
It’s a life choice, and not just impacting your life.
So, why do you become an entrepreneur? How much time and money do you intend to spend on this? Does your FAMILY / HUSBAND or WIFE or boy/girlfriend / CHILDREN agree with you on this choice?
A lot of times, founders or founders to-be spend time market researching to validate the idea, and increasingly (a good sign actually) many do their soul searching. But when I ask, so does your life partner agree to this? Some of the married ones would say yes, and that they have done up a financial plan for the family. Those are really great. Then I would ask, so did your children agree to this? Most of the time, they would laugh (again), but some would be shocked I ask this. I was speechless when one chap told me he was getting married the following week but the bride didn’t know he had just resigned to devote full time to the startup.
I got married in year 3 of my business, had my first boy in year 4 and 2nd boy in year 5. I was in business with my husband, so I didn’t have to ask for his blessing. My kids came later than my business; besides they were too young to really know then. But when they started schooling, they asked a few times why I never was in school as a parent volunteer, while all their friends’ moms were there (some everyday…)? And just last year, my oldest boy wrote a letter telling me how he used to feel “resentful” that we were working all the time and seldom had time to play with them. On the financial side, we were tight during earlier days. An inside joke between Der Shing and me: the first baby chair we got was really bare-bone, and suspect not in compliance with safety standards; 2nd boy got a hand-me-down; third one we could afford a better one, so it was a “mercedes” with good fabric; the youngest boy’s was a rolls royce and was so comfortable to sit in that he is the first of our four to ever happily get onto a baby chair.
The point I am trying to put across is, as a founder, you have made a life choice, and this life choice impacts not just you, but your loved ones too. And very often, your loved ones do not really have a choice. It’s nice to hear more and more founders actually discuss their decisions with their partners and get their initial buy-in. I would like to highlight it’s important to spell out timeline and financial expectations. For the children, I am not saying they get to vote on the decision, but at least for the older kids, explain and plan so that you are still part of their growing up.
The expectation mismatch and misunderstandings with/from loved ones would likely arise due to the lack of communications at the start or them experiencing the impact on their life due to your decision. So they would start applying pressure on you. Be fair to them and know why they are stressing you. Your founder-choice has impacted their lives greatly, and worse if they had no say earlier on. This is a foundation level stress that many founders experience, and typically cause the business-related stresses to magnify many folds.
Bottom line, entrepreneurship is a life choice impacting beyond you. But still, life is much more than just being a founder. We are father, mother, friends, sons and daughters. Founder is only one of the many roles we play.
Fund raising woes
Go back to the question of why you start this business and what your goals are.
I get very disturbed by founders who say: I have a great idea using [buzzword] and want to raise money to start on this idea. Well, you need to prove that you are the RIGHT business before anyone would part their money. Translate to: please prove that you can do it first. Idea alone are bubbles on paper. End of the day, investors are looking for returns. A disciplined investor has a defined investment thesis and goes through a list of checks and validations to confirm before they make their investment decisions.
So, other than friends or families who really know you, it’s rather unlikely to find an investor (VCs and angels alike) to invest purely based on concepts and ideas. (serial entrepreneurs with proven track records excluded)
Broadly speaking, I evaluate businesses based on its founding team, business progress and industry, deal terms on offer. And my considerations and conclusions are shaped by my personal experiences, my likes and dislikes and also if I understand the business.
In the recent AngelCentral update to our members, I shared that close to 10% of the investment requests we received in the past 6 months are of unrealistic valuation expectations and a further 40+% of the investment requests were unsuitable – traction low, business model unclear, cap table issues and so on. For investors, the decision not to invest is varied, and founders should understand it’s a business decision, and it’s never personal. So, do not take it personally. See it as a feedback and filter/ accept/ reject accordingly. At AngelCentral, for companies shortlisted for pitch interviews, my partners make sure that they give some value-add during the face to face. Still founders should filter and take what’s relevant. My partners have years of experiences in advising startups, but nonetheless we don’t know everything under the sun.
Post funding, the investors very likely become a different kind of stress to founders. My personal take is to always understand where they come from and manage expectations on both sides. Der Shing’s piece of how investors want to be treated is a good start. End of day, founders are in the driver seats. You make the call and decisions regarding your business – be it investor aligned or not. Be ready to face the outcome, both good and bad. Treat your investors as your sounding board, and leverage them where appropriate. But own the process of decision making and running your business.
To wrap up, know thyself is the first step, and recognise it’s a choice you have made. Do not underestimate the demands of entrepreneurship and that it’s a long journey. If you have to call it a day, recognise it’s the business that did not work out. You still have a lot to give as an individual.