Overcoming Setbacks: the Mental Challenge for ALL Entrepreneurs
One of the hardest things as a startup founder is that the highs are very high and the lows are incredibly low. And sometimes they all happen on the same day.
You win a big customer account but then your best engineer quits.
You have plenty of customers and revenue but they refuse to pay or are delaying paying the account receivables leading to a cash crunch.
You get a term sheet but the investor drags on the due diligence far beyond the 30 days standard while you are slowly running into insolvency
You sign the top notch executive hire you’ve been chasing for a year but then your lead investor decides to pull their term sheet.
Note: Yes, the last two points do happen often sadly, although usually not Silicon Valley VC funds who know this kills their reputation. Usually east coast hedge fund or PE firm players which is why i hate them.
I hate the stories being bandied around in the media of how successful entrepreneurs just had this unending series of successes or even the idea of overnight success from nowhere. Almost every successful founder I know who has done well, and I mean “hundreds of millions or billion dollars” well, had so many “we’re out of money'' near death moments in the course of their startup. Everyone of them has had to manage their psychology so they can work their way through these times.
Frankly as our society and life has gotten more tumultuous, being more resilient and stoic in the face of setbacks is critical.
You get that bill that you weren’t expecting. An unexpected expense or cost in the business that comes up. Accounts receivables or investment that just doesn’t seem to show up in time.
For someone like myself, who is a planner, who likes structure, hates change and has deep emotional issues with money (or lack thereof), I’ve really struggled with dealing with these types of small setbacks in a constructive and calm way. Leon Castillo said “the more you despair, the less you’ll achieve.”
I only learned this the hard way in 2020 and developed some tactics to cope better with this:
I’ve had to flip my psychology to welcoming these challenges and obstacles as learning opportunities ie. you screwed up or miscalculated somewhere, so go fix it.
Also that it’s a privilege to be in this position, as Louis Hays wrote “a bill is an acknowledgement of our ability to pay.”
I’ve had to build time and money buffers into my plans as I tend to manage things far too tightly.
Getting lots of sun, going for walks to the beach (I am in California after all :) and talking through these issues with good friends helps a lot too. Not just mindlessly trying to grind my way through it or bang my head against the wall. It helps to step away from the situation and normal environments to get a new perspective & new ideas.
Basically, I had to really learn the mindset from my successful founder friends on how to manage my psychology better, thus being in a better place to overcome these situations faster and more efficiently and in a slightly less painful manner too.
If you like stability in life, this is a hard way to live. But the entire world is becoming more unstable as we’ve been seeing since 2020. So this entrepreneurial mode is going to be the default way that most of us will be forced to live. Even if we are dragged into it kicking and screaming. This entrepreneur thing is very hard and that is why all founders need to be applauded & encouraged in what they do.