In startups two things are stressful; money and growth.
Money is obvious because it stresses everyone out, whether in life or in business. Not having money forces you take the long route. Having it creates worry around keeping it. Running out of it is like dying a slow death.
Growth on the other hand is the quiet killer.
Without growth you can’t get off the ground. With it, comes expectations that mentally f*@# with you. They are expectations that have a compounding effect on everyone involved.
When a company is succeeding everyone is stoked. You check your numbers multiple times per day. You send business updates more frequently. You start hiring more people. You begin making predictive forecasts and allocating budgets. You raise more money at an increasing price. You even begin to believe that building a startup is easy.
If the growth rate stalls, you start doing everything less. The uneasiness that sits in your stomach tells you to check less, update less, and hype less. As if putting your head in the sand will help the problem pass by like a bad dream.
If the growth rate goes backwards then you have an even larger problem on your hands. Your ability to raise new capital becomes increasing limited. Your best employees will start looking towards faster growing startups. Your cash plans will start falling apart, faster. And if you are still the CEO, you will be forced to cut your way to profitability and/or raise money at much worse terms. Being stressed doesn’t even begin to cover the depth of emotions you will be feeling.
The bigger the platform is that you create, the more stressful growth becomes.
Ultimately the quest for growth is one of the biggest drivers in CEO loneliness. It’s compounding effect leaves you with few places to turn. Although everyone handles this stress differently, here are a few things that can help.
Especially early in your history, report the good with the bad and do it on a regular basis. Having consistent off-sites, board meetings, quarterly planning, bi-monthly sprints, business updates and daily stand-ups will result in more consistent leadership across everything that you do. It will also create outlets that force consistent, unemotional, information sharing.
The reality is that a startup is one big thesis project with no true understanding of its potential success. And every step you make is progress towards proving that your thesis is either right, not quite right, or terribly wrong.
Attack What’s Not Working
It takes a lot of courage, but always start with what’s most broken. Whether it’s product engagement, customer service, or dwindling cash always approach the problems that are causing systemic failures. And don’t always do it alone, learn from other startups about how they have solved similar problems.
This practice doesn’t always fix what’s broken, but it does create a culture of being direct.
Manage Your Cash
Through profits or burn rate, the longer your cash lasts the more time you have to figure out your startup’s recipe. Unfortunately it can take a lot of time to discover a scalable recipe. Often what you think is obvious, isn’t. And what you don’t expect is what ends up happening.
With growth, the first step is often to hire people. You assume that more people will make your existing results go faster and so you add. Except each addition accelerates your burn rate, multiples communication challenges, and adds more stress to the plan.
Staying small isn’t a bad way to go until you learn how to build predictability into your growth.
Talk About The End
All startups have an end. Whether you IPO or not, everyone’s time eventually comes to a close. Realizing this up front changes the way you think about your own company and the culture you create.
If your startup ends tomorrow what will you do?
Before being fired I had never considered this question. I just assumed my first company would continue forever. Therefore my personal emotions inhibited my true ability to lead. Not able to separate my job as a CEO from my emotions as a founder it made the entire experience significantly more stressful. It got to the point that I couldn’t sleep or eat. It just consumed every inch of my mind.
By talking about the end now, it helps to remove the fear of the unknown. It makes the rest of the journey easier to manage and your work more matter of fact. In the end, your thesis is either going to work or it isn’t.