Harnessing
Entrepreneurial Manic-Depression: Making the Rollercoaster Work for
You
by
Tim Ferriss
The
sky is falling!
Ever since the media’s
Chicken Little response to the tremors in the financial markets, I’ve
felt like shouting from the rooftops “now you know how it feels to
be an entrepreneur!”
I just lost 9%
overnight?! Fill a bathtub and get the toaster. I’ve had enough.
Wait… I actually gained
13% while in the bathroom? I’m f**king Superman!
This is a guest post on
capitalizing on — vs. countering — the “entrepreneur’s
disease” (manic depression) through 4 cyclical stages. This is done
by pairing appropriate activities to specific — though not
necessarily positive — emotional states…
The author is Cameron
Herold, former COO of 1-800-GOT-JUNK, whose professional resume
includes:
-Helping build revenues
from $2 Million to $105 Million in 6 years (no debt or outside
shareholders)
-Building a PR team that
landed more than 5,000 stories in those same 6 years
-Hiring 220 people in 4
months
-Leading the sale,
branding, and integration of 450+ franchise locations.
-Teaching his
psychological theories at the Entrepreneurial Masters Program at MIT.
I first saw this
presentation at an Entepreneurs’ Organization (EO) event in Omaha
prior to my successful Warren Buffett quest at the annual Berkshire
Hathaway shareholders meeting.
I encourage you all to
read this, especially with the fear mongering that is just getting
started.
Cameron:
Marc Andreessen,
co-founder of Netscape, once wrote:
“First and foremost,
a start-up puts you on an emotional rollercoaster unlike anything you
have ever experienced. You flip rapidly from day-to-day – one where
you are euphorically convinced you are going to own the world, to a
day in which doom seems only weeks away and you feel completely
ruined, and back again. Over and over and over. And I’m talking
about what happens to stable entrepreneurs. There is so much
uncertainty and so much risk around practically everything you are
doing. The level of stress that you’re under generally will magnify
things incredible highs and unbelievable lows at whiplash speed and
huge magnitude. Sound like fun?”
Many ultra-successful
entrepreneurs are even clinically diagnosed as manic-depressive or
bi-polar. Francis Ford Coppola has it. So does Ted Turner.
This article is about the
emotional intricacies of being an entrepreneur – about what you’re
going to feel during the journey.
The concept that we’re
going to examine is called the Transition Curve. It resembles a
rollercoaster.
Regardless of whether or
not you believe you will ride an emotional rollercoaster running a
business, you will. You have two fundamental choices: you can hold on
and scream, or you can wave your hands in the air and have some fun.
I’m going to walk you
through these different analogies, but let’s first look at the
various stages of this process, which repeat.
* Stage 1: The
first stage of the concept is called “Uninformed Optimism”.
At this stage on a rollercoaster, just getting to the top of the
rollercoaster, you experience feelings of an adrenalin rush,
characterized by excitement and nervous energy.
* Stage 2: The
second stage is called “Informed Pessimism”. As you
ride over the top of the curve you now have a bit more information.
Feelings of fear, nervousness, and frustration begin to set in.
Perhaps you even want to get off of it.
* Stage 3 : The
third stage is called “Crisis of Meaning”. You’re
past scared. You feel despair. It’s as if you’re standing on the
edge of a cliff ready to jump, and you begin to think “Today the
rollercoaster’s going off the bottom of the track for the very
first time.” You feel helpless and you’re both terrified and
frozen.
* At this point, you
face a critical juncture. You can come off the bottom of the
curve and crash and burn, which is when your business goes bankrupt,
you lose your marriage, you start drinking, or you end up in a
doctor’s office because of stress. Or you can come around the
corner because you’re getting support at “Crisis of Meaning”
and you can enter an upward swing call “Informed Optimism”.
* Stage 4 :
Informed Optimism. You’re calm. You’re informed.
You might even say you are cautiously optimistic.
Capitalizing
on All Emotional Phases — Activity Pairing
Here
is the critical point – at each stage of the curve, you can do
things to leverage the feelings and energy — positive or negative —
that you have at that moment. Fighting against these phases is like
working against a natural force.
Stage
1 – Uninformed Optimism
As an example – at
Stage 1 – Uninformed Optimism – it’s both a great place and a
dangerous place to be for your business, depending on what you are
working on or in at that time.
When you’re starting
your business, you have seed financing, some friend and family money,
or you’ve just started the business with $50 in your pocket. You
can start a business without a lot of money directly because you’re
benefiting from uninformed optimism. You can take risks when you’re
feeling like this. Because you’re so full of excitement you don’t
really know what’s coming yet. So you’re uninformed and your
fully optimistic – or you wouldn’t have started.
When you’re at
Uniformed Optimism you should be doing things like:
* Talking to the media.
Imagine if a newspaper calls you when you’re at that stage of
uninformed optimism. How’s your media interview going to go? It’s
going to go amazing because you have unbridled excitement and big
thinking.
* Talking to potential
investors. That’s why everyone was investing through the 90s with
the dotcom bubble. The entrepreneurs were so full of uninformed
optimism and enthusiasm.
* Doing speeches in
public – the audience will love you.
* Recruiting new
employees – they’ll all want to work for you.
* Networking for new
clients – who wouldn’t want to buy from you?
When you’re at
Uniformed Optimism there are also some things you should avoid doing:
* Spending money is a bad
thing to be doing at this point. Because when you are really excited
and full of optimism you think nothing will go wrong. The last thing
you want to be doing is spending all this money because the reality
is – at some point, you’ll cross the curve and discover harsher
realities.
* You don’t want to be
doing business planning
* You don’t want to be
working on your budget
* You don’t want to be
making buying decisions
* You don’t want to be
making hiring decisions
* You don’t want to be
doing your accounting, or your bookkeeping.
* Anything that requires
you to be making financial decisions or planning logical shouldn’t
be done when you’re at the manic energy or uninformed optimism
stage.
Remember that when you’re
at that uninformed optimism stage, anything that’s outward facing —
talking about your company, selling the story, raising money — is
well-matched. Simultaneously, at that stage, you don’t want to make
buying decisions, or hiring decisions, or planning decisions, or
budgeting decisions.
Stage
2 – Informed Pessimism
At Stage 2 – Informed
Pessimism – you have more information now. You’re not as excited
as you once were. Coffee is helpful to get you started. You are
worrying at times. You aren’t depressed or scared – but you’re
somewhere in between scared and excited. You’re just a little bit
pessimistic now. The great aspect of this stage is that it prevents
you from making careless mistakes due to overly optimistic thinking.
When you’re at Informed
Pessimism you should be doing things like:
* Planning the next phase
of your growth
* Intermediate-term
strategic planning
* Budgeting, as you’ll
be more realistic
* Purchasing things like
advertising – you’ll be careful with where you spend your money
and will not over-purchase advertising based on exuberant
pie-in-the-sky sales forecasts.
When you’re at Informed
Pessimism, there are also a few things you should absolutely avoid
doing.
Do not:
* make hiring decisions.
* talk to the media or do
speaking events.
* work in roles where
being excited would help you get a better result – wait until
things turn around emotionally for you.
Stage
3 – Crisis of Meaning
This is a scary stage and
can feel like you’re standing on the edge of a building needing to
jump. It will feel like all the odds are stacked against you and that
everything is going wrong. It will be hard to get out of bed in the
morning. Sleeping at night will be close to impossible due to worries
and fear. You’ll feel like you’re paralyzed and can do little
more than clean your filing cabinet drawers successfully.
When you’re at Crisis
of Meaning you should be doing things like:
* Cleaning your filing
cabinet drawers – seriously. Doing a few little things can often
perk people up.
* Reaching out to your
support groups like friends, family, your church, groups like the
Entrepreneurs Organization etc. to ask them for help, advice or to
just lend an ear.
* Trying to set your TOP
5 daily and only work on the most important items each day.
* Taking breaks and going
for walks, getting exercise, getting outdoors.
* Writing lists – lists
about what you are strong at, lists about what you love – make
lists that, when you read them, will help rebuild your confidence.
* Realizing that many
others have been in this exact same place and usually turn the
corner, just like you will.
* Remembering “The
Little Engine That Could” – I think I can, I think I can – it
can take time, but things will rebound.
When you’re at Crisis
of Meaning there are also some things you should absolutely avoid
doing:
* Don’t talk to others
who are depressed.
* Don’t talk to others
who are “half empty” types
* Don’t take any
“all-in” Vegas poker type risks where you put everything on the
line hoping for a big win.
* Don’t try to “rally
the troops.” Your employees, the media ,etc. will all smell fear.
And your fear will lead to making things worse
* Don’t turn to the
bottle. Vices during stages of depression will lead to you spiraling
out of control.
* Don’t think that you
can “handle it” all on your own. You can’t. And when people
“need” others, your true friends really will be there to support
you
* Don’t try to learn
more. Reading books and magazines about how to be successful or how
to grow your company will only make you feel worse about your current
situation. They’ll just make you feel even more bogged down.
Reading stuff like this is great when you round the corner though.
Stage
4 – Crash & Burn
I don’t really waste
any time explaining this stage or what to do here – because if you
slide off the curve, here it really is over – the company is done
and/or so are you in the role leading it. Usually this is bankruptcy
or forced sale, etc..
Stage
5 – Informed Optimism (or Hopeful Realization)
This last stage is much
like when the little engine that could turned the corner – and
realized “he did”. You’ll start feeling excited and energized
again. You’ll start rebuilding your confidence. And you’ll start
to feel momentum working in your favor again. You’ll also have a
lot more insights and experiential learning to draw from. You’ll
realize you have more competence and confidence than before and
everything will start to go your way again.
When you’re at Informed
Optimism you should be doing things like:
· Hiring
· Strategic Planning
· Reorganization of your
team – putting the right people in the right seats
· Cutting the wrong
people
· Generally getting
everything in order to really start growing again.
When you’re at Informed
Optimism there are also things you should avoid doing:
· Don’t lose focus.
· Don’t let your
confidence slip.
· Don’t get cocky or
you’ll fall backwards off the curve.
Conclusion
This cycle repeats
itself. Enjoy the ride instead of fighting it.
Guest
author Cameron Herold’s training modules are used by CEOs and
companies in more than 15 countries
October
3, 2008
This
is a repost of an article that appeared on The Blog of Tim Ferriss
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