The Emotional Side of Entrepreneurship
How the Culture of “Killing It” Hurts Founders and Companies
Silicon Valley has a problem that not enough people are talking about. Great companies are flaming out or being embroiled in scandals because founders aren’t asking for help when they need it.
Because asking for help is feared to be a sign of weakness. And that hurts founders, their companies, and the entire start-up ecosystem. VCs often sense these problems but find it difficult to even begin the conversation. As the main people founders look to for guidance, VCs should make it their jobs to kill the culture of “killing it.”
Anyone who has started or even worked in a fast-growth startup will tell you entrepreneurship is hard. But very few people will tell you just how hard it really is.
People don’t often use the words “Depressed, Isolated, or Paranoid” to describe key characteristics of many start-up founders, but if you get them alone and help them get honest, those are words that come up. We should know because as executive coaches we are constantly having honest conversations with entrepreneurs.
The sad truth is that many entrepreneurs still think that they can’t talk about the hardest part of their job. They feel they have to be “killing it” at all times, especially when speaking with their investors. They are afraid that if they share any of their weaknesses or challenges, their investors will begin to think that it is time to replace them.
This has has led many founders to live in isolation, telling themselves if they show any weakness they could undermine the board’s opinion of them which may affect their ability to continue to run the organization.
VCs perpetuate this idea by not proactively speaking with their founders about what’s hard and helping to get them the resources they need. Starting a company is the hardest thing most of us will ever do in our careers and not being open and honest about that fact hurts founders and undermines their chances of building successful (and profitable) companies.
Sure, we’ve all heard the stories of the bull-headed visionary who achieved success by brute force and dogged persistence. They’re sometimes lauded for having built companies with cultures of back-stabbing, petulance, and secrecy.
But according to research we’ve conducted over the last six months through the Traction Gap Institute and Wildcat Venture Partners, those companies are the exception rather than the rule. In our research, we found that the vast majority of successful companies are run by people who purposefully build healthy company cultures around values like collaboration, grit, and transparency. They deal with the isolation of entrepreneurship head-on, not as an afterthought.
While the bull-headed visionary stories are sexy stories to tell, they are not the norm, and they certainly don’t tell the full story. In many of these cases, companies succeed in spite of the founder’s flawed leadership, not because of it.
Taking all this into consideration, here are three things VCs and Founders can do right now to help foster the emotional resilience to stay healthy and succeed:
1. Set Realistic Expectations
There’s no faster way to guarantee you will create distance with your founders and disincentivize them from telling you the truth than by having unrealistic expectations. We hear horror stories all the time of investors who ride their founders for bottomline results on unrealistic timelines, forcing the CEO to sacrifice his/her own sanity and that of the team as the entire organization frantically tries to keep their investors happy.
It is important for Founders and investors to sit down together and establish a clear “contract” that sets out realistic expectations. We have found in our work that periodically reviewing this contract at Board meetings can be helpful to both VCs and Founders in managing expectations.
There is nothing worse to investors than being “surprised” by something that they didn’t expect to happen. We find that the best contracts are those that contain both bottom-line results and dimensions important to building a strong team and organizational culture. As coaches, we often facilitate candid discussions between investors and Founders about challenges regarding leadership, team and organizational issues.
2) Create a Culture that Rewards Transparency
Many VCs think they are the closest people to their founders, but that perception is often one-sided. Founders often tell their investors one story (the one they think the investors want to hear) while avoiding telling the “real” story. Founders often don’t feel like they can tell their investors the whole truth, especially when the chips are down or when the issue is something the founder feels he/she has to face alone.
Investors who are able to establish open lines of communication with their founders tend to build more productive relationships. And a happy CEO who can have an open relationship with you will turn around and build a company with a culture that rewards transparency, as well.
One coaching tip we often give to Founders is to have a section at the Board meeting where they can discuss the question, “What keeps me up at night?” This regular item on the agenda can often fuel a great discussion between Founders and their investors on some of the real challenges that Founders are facing. The objective is to foster increased dialogue and transparency getting some of the “unspoken” issues out on the table.
In our coaching with Founders, we encourage them to initiate and welcome these conversations and to look at this kind of dialogue as critical to building a successful company. We find less stress among Founders who are able to engage in these conversations in a way that communicates strength and not weakness.
3) Get a Coach
This might seem self-serving coming from us, but if we didn’t think it were important work, we wouldn’t be doing it.
As investors, you might think you should be the one person your founders can confide in, but given the nature of the relationship (namely that board members can replace the CEO if they really wanted to), founders will never be able to tell their Board members truly everything. A coach can be an important partner to VCs in bridging this gap.
As Founders, take the initiative to find a coach to help you navigate the tricky relationship in managing expectations with investors. Work on building a transparent relationship that avoids the surprises that often derail Founders. Every great modern CEO has a coach, and if you are a new Founder in your first venture, an investment in the right coach can be one of the best investments you can make.
At the end of the day, entrepreneurs perform better when they are working against realistic expectations, can engage with investors transparently, and have an independent ally in their corner. Give you founders that, VC’s. Demand that, Founders. And as a result, you will build better companies without having to engage in the culture of “killing it.”
This article was co-authored by Edward Sullivan and John Baird of Velocity Group, an executive coaching firm dedicated to helping CEOs and their teams scale themselves and their companies. We hope this article raises eyebrows and inspires conversation. Please leave comments below or send us an email at firstname.lastname@example.org.