Edu: Founder Sanity - 5 Rules For Keeping Your Cool When Building Your Startup

Episode #76: Staying sane as a founder

​

Yaniv: As a founder, it is your job to put all the pieces of the puzzle together. It is your job. To assemble the crack team, right?

This is like Oceans 11. You don't have to know all the stuff yourself. You don't have to know how to like crack a safe and do explosives and evade surveillance and all those things on your own. Your job is to bring together the team, to bring together the knowledge, to ask the right questions, to share a vision, so that then you can go in and succeed together.

 hi everyone. I'm Yaniv

And I'm Yaniv. I'm Yaniv. Hey, I'm Yaniv,

I'm Yaniv, that's right. Chris is out today with a sore throat. So I'm waiting into the scary waters of solo podcasting. I've not done this before, so we'll see what happens. But don't worry, I've got something today that I think you'll enjoy a lot. Today I'm going to share my five rules for staying sane as a founder.

Being a founder is not the easiest career path to take. So I reckon we can all benefit from sharing what we've learned along the way to stay sane and stay in the game for the long term. These rules have helped me. Your mileage may vary. Of course. feel free to write in and share your own tips for staying sane because I'm sure there are a lot of other great tips out there that all of you have got.

Now, before we jump into this episode, I'd like to remind you all about the Startup Podcast Pact and to make a specific request this week. for those who've been listening for a while, you know what the PACT is. If you listen for more than one or two episodes and get value from it, we ask you to do a few things.

To support the show, such as subscribing, rating, and reviewing us and following us on YouTube. This week we have started a mailing list and we would love you to sign up. We are going to send out a weekly wrap up of All Things TSP episode, sneak peeks, other content from me and Chris Invitations to participate in TSP initiatives and more.

So go on Honor the Pact, go to TSP show, that's our website, and sign up to our mailing list there. Great on with the show?

Like I said, being a founder is not the easiest career choice, and I've been a founder for a couple of years now.

Before that, I've worked at startups and scale ups, and I've also. Dealt with a lot of founders and seen a lot of the ways things can go right and wrong, over that time I've started developing five rules for myself for staying sane as a founder. I'm sure these rules will be added to and amended to as I stay in this game for longer.

But this is working for me for now, and I thought I'd love to share it with you all. I.

So rule number one, keep your eye on the ball, not on the prize. this is an interesting thing, right? The best financial outcomes in startups tend to go to those who are obsessed, not with those financial outcomes, but with building something amazing.

I'm sure there are startups that have reached multi-billion dollar valuations because the founders have come in and said, you know what? I want to be a billionaire and I'm going to figure out a way to be a billionaire. But that's not the way most of the big successes happen. The big successes happen because a founder or group of founders become obsessed with building something amazing, with solving a real problem in a massive way at scale to make a G in the universe.

As Chris sometimes says, not with the financial outcome, sometimes the financial outcome is, nice to have. Sometimes I don't even care about it at all. The financial outcome. Comes in effect as a corollary to really being obsessed with having impact solving this problem. And the amount of value that's generated by doing that is what ensures the financial outcome.

So there is this funny paradox, right? You cannot be thinking constantly of the prize if you wake up every day for your startup saying, I can't wait to make a billion dollars. Well, a, you're not very likely to make a billion dollars with that attitude. In fact, you're not very likely to make a billion dollars at all.

There aren't many billionaires in the world, but more importantly, it's going to be a real grind every day you wake up and doing a startup's not easy. It takes a long time. There are a lot of setbacks. If every day, what motivates you to go to work is, am I closer to having a unicorn? Then you're gonna have a lot of days that are not going to feel good.

But if you wake up every day and think, what have I learned? What are the best ways to address the problems that are in front of us right now? What is my next move? How do I solve this beautiful puzzle that I've set for myself? Then you will have a much better journey. You will have more longevity in the game and you'll make better decisions that ultimately in the long term are more likely to result in that massive financial outcome.

If you just wanna get rich, honestly, being a founder is probably not one of the better ways to do it. go into finance, go be an investment banker or something. Sure, there is a chance if you do a really great job, that you will have a. Big exit, but that is not the reason to do it. If you focus on the big exit, it is likely never to come.

You know, they say the watched pot never boils, and I think that is true, with startup outcomes and exits. So there are a couple of other things that come along with this. the first is Enjoy the ride. The outcome is uncertain. You don't wanna be thinking about it anyway. So you wanna be there in the moment, learning and enjoying every day in whatever ways you can with whatever challenges it presents you, so that you can squeeze all the juice out of that day.

At Circular, my startup, we have a number of values, my favorite value, and one that we didn't crib from anyone else. This one was completely original, in a sense, was be present, right? And. That is one of our values because we say there are so many stages to a startup. There are gonna be ups, there are gonna be downs.

The good times won't last, so let's enjoy them. The bad times won't last, so let's be present and reflect on them and realize that they're not going to stay forever, but be present and enjoy the ride because quite likely, At the end of it, there won't be a financial outcome. Most startups fail, right?

That is the outside view. Most startups fail, and so you need to be comfortable with that and say, well, even if it is failing, even if it has failed, it was a hell of a ride. And I learned a lot. And that brings me to my third point around keeping your eye on the ball and not the prize. You may never get a financial exit.

You may never get a big. Check as a result of your startup, but there is actually a guaranteed return if you do it right. And that guaranteed return is the personal growth that you get, all the things that you learn, all the connections you make, all the resilience you build along the way. Well, no one can take that away from you

And so the way I think of a startup is, I get to try to solve a big problem. I get to learn and grow along the way. And I can say the last few years, my pace of personal growth and professional growth has certainly exceeded my growth. When I was, middle manager at a large tech company, for example, you know, I did grow a lot there as well, but the pace here has accelerated and whatever happens at circular, whatever comes next, I get to keep that.

So that is guaranteed. Money in the bank as it were. but what is not guaranteed is the actual, literal money in the bank. So don't focus on that. Focus on the thing that you're definitely going to get and then treat the rest as a windfall, There's a sort of a variation as well of under promise and over deliver, have lower expectations for your financial outcome.

And so whatever then does come treat as a delightful bonus. That is not the main reason that you have done what you're going to do.

Okay, so that was rule number one. Keep your eye on the ball and not on the prize. Rule number two, I call this observe the Stockdale Paradox.

So the Stockdale Paradox was probably made famous by the book.

Good to Great, which is a wonderful book. If you haven't read it, I recommend it very much. So it's available as an audio book, which is how I like to consume these fat business books. and the Stockdale Paradox is named after an American military leader. I can't remember his rank. Stockdale, who was a prisoner of war in the Second World War, and he kind of led his men through years in a p a W camp.

And the idea of the Stockdale paradox is when eventually he was released and the rest of his group were released after many years, I think it was three or four years in a P o W camp with very harsh conditions. he made an observation. which is that the people who survived best through those years of hardship and, really dark times weren't the perpetual optimists.

The folks who are like, this is okay, you know, the Marines are coming. We'll be home by Christmas, it'll be fine. Because you know what happened that Christmas, they weren't rescued. The war didn't end, and then another year passed and the next Christmas, the war didn't end either. And so those folks, they.

Eventually got broken by the fact that their dreams, their hopes, their optimism kept being dashed. So that was the optimists and I guess the pessimists, the folks who just allowed themselves to be broken, to become hopeless and dark. They also perished the folks who had the best outcome, who.

Survive the privations of this p o w camp. The best were the ones who were realistic. And the way this was framed and good to great, I believe is, you must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time have the discipline to confront the most brutal facts of your current reality, whatever they might be.

The most brutal facts of your current reality. So one way that I see less experienced founders fail is that they don't realize how brutal the world can be, The world is not friendly to startups with large dreams, and there's a specific reason for that. it's not just a sort of general indifference, which does exist, right?

The world doesn't owe you anything, but there's more than that, when you are trying to. Make a big change in the world, which is sort of what you're doing with the startup. even if it is in a particular vertical of SaaS, you're trying to make a big change in that small niche.

It's still a big change in the world, and the world doesn't really like to change. A kind of immune system kicks in a status quo bias, right? The reason the status quo is a status quo is because it is a stable system, and so you are trying to dislodge a system that has a sort of stability, a sort of equilibrium that system's going to fight back against you doing that.

And so it's gonna be rough. There are gonna be setbacks, things are gonna go backwards. You're gonna have two steps forward and one step back, and sometimes one step forward and two steps back, and the world is gonna beat you down. This is going to be a slog. It's not going to be pleasant. So what happens to optimists, just as with the, the optimists in the p oow camp they think that the cleverness of their idea, the dedication that they are showing, the clear sightedness and ambition is going to be enough to affect change. And they're gonna get beaten down. And if they're not careful, that's going to crush them and they're going to be become bitter.

They're gonna become disillusioned, and then they're kind of going to get out of the game. And that's because they. May have had the unwavering faith that they can and will prevail in the end. but at the same time, they have not had the discipline to confront the most brutal facts of their current reality, whatever they might be.

I sometimes call this, you know, be an optimist, but not a full. Right. The optimism is baked in. There are very few founders, if any, who are not optimists because if you are not an optimist, if you're an actual pessimist, if you do not have unwavering faith that you can and will prevail in the end, well, you wouldn't get into this game in the first place because there are plenty of reasons to believe that this thing is not going to be a success.

And so if you don't have this kind of sense that you will be able to prevail, then you wouldn't become a founder in the first place. So I don't see The negative founder is a major issue. The major issue is the founder who does not have the discipline to confront the most brutal facts of their current reality.

This is going to be a difficult journey. It's going to have highs, it's going to have lows. Guaranteed. There might be one or two startups out there that just went straight up and to the right. I doubt it, but even if they exist, they're the exceptions that prove the rules. When you get talking to founders, when you get them in a more vulnerable moment, even ones who have built incredible large.

Tech companies, they had near death experiences. They had deals that fell through, they had staes with investors. They may have fallen out with co-founders. They have had just the worst thing of all complete indifference in the market. Nobody buying the thing that they're trying to sell. And they've confronted that and by confronting it, they have made the necessary changes to then make the next move and then eventually prevail.

And that is how you do this thing. The world doesn't owe you anything. The world will fight back. And so if you want to prevail, you need to confront that brutal reality every day and figure out what your next move is gonna be to fight back. So that was the second rule. Observe the Stockdale paradox.

Now here's the third rule. The third rule is care A lot, but not too much. This one's been on my mind. This is advice I've been giving a few people lately, and I think this one is maybe a little bit contrarian. I think the traditional thinking is that a founder needs to be kind of obsessed with their startup and, Care more than anything about its success, I think that is both true and not true. I think if you care too much, it can become ruinous because you as a founder, start to conflate your identity with the identity of the startup, you start to conflate yourself worth With the success of the startup, I think it can be damaging to your mental health.

I also think it can cause suboptimal decisions because you start to move from the massive ambition towards a success to more of a fear of failure, because if you care that much, the worst thing that could happen is to fail. And Chris and I have talked a lot on previous episodes about how failure is actually integral to the whole process of startups at every level of scale, right?

This is fractal. You have individual experiments that fail. You have projects that fail. You have entire market segments, entire products that fail. And of course you have startups that fail, but you are not your startup. So even if the startup fails, you can live to play another day. And I'll talk about that in the last rule. So, You need to care a lot. you need to be thinking about this thing a lot. But here's the way I think about it we had a whole episode when we talked about how startups are like theoka, and I say, Treat being a founder. Treat your startup like a game, or perhaps more like a puzzle.

And when I say treat it like a game, I don't mean be frivolous or don't take it seriously, but when you talk about a game, there's a certain level of detachment, right? You think about, how do I win this? It's a challenge, it's a puzzle. How do I solve it? The game you're playing doesn't wrap into your identity.

The game is a puzzle that is laid out in front of you that you care about winning, but you have Decent level of emotional detachment from, except for Monopoly, which is why it's banned in my house and many others. There's something about Monopoly that you just cannot emotionally detach from. but I digress.

The point is, if you treat it like a game, like a puzzle, you can then dispassionately strategize and think about what are the right moves to make. In order to get the outcome that you want without involving you, your ego, your identity, too much into it, right? So you are not your job. You are playing a game.

Your job is to maximize or rather optimize for the outcomes that you're trying to achieve in that game. and only you can say what those are. Although here on the startup podcast, I guess we, we focus primarily on Silicon Valley style startups at scale, that receive venture capital and, and try to get to a really massive outcome.

And so if that's what you're trying to optimize for, you need to play the game. In a certain way. So treat it as a game. Understand the rules of the game that you're playing. Try to figure out the optimal strategies, and then execute on those and execute obsessively and execute with focus and care a lot about it.

But try not to take those emotional hits, have a little bit of detachment. they sometimes talk about doctors having that kind of detachment from their patients because if you're an oncologist, And you have patients dying every day. If you care too much about those patients, you're not going to do what those patients need you to do, which is to maximize their chances of survival because you're gonna be an emotional wreck.

So you need to practice this level of clinical detachment. And I think the same is true for founders and it can be really hard. the final piece I'd like to say here, which is perhaps a bit controversial. I did post about this on LinkedIn a little while ago. I said, I think it's important to be ruthless, to be successful as a founder.

I'll go even a little bit further here. perhaps just as a devil's advocate, but I think it's an interesting point. I feel that in a startup to a point, and I'll, put some nuance here. The ends do justify the means, and it's important to be just a little bit. Psychopathic a little bit sociopathic.

To be a bit cold and calculating in the same way as if you're playing a game, you're not thinking about, the individual lives of the virtual soldiers that you're, deploying or whatever the game is, right? you're thinking, how do I win this game? Now we're dealing with real people here.

So I'm, certainly not justifying cruelty or callousness or throwing away people's lives without a second thought. but what I do see happening at startups and what I sometimes have to fight against myself is this type of, ruinous empathy around people, around ideas, around feelings, around maintaining people's jobs, around not criticizing people, not holding them to a high enough standard.

Not cutting projects when you need to. It's not just people. the problem there is you are being kind and empathetic on the micro level. You're making individual decisions that seem like they are in the interest of the people who you are making them for, but you're not focusing on the macro.

And the thing about startups is they usually die. Most startups are default dead, right? And so if you. Run a startup a bit too nicely if you care too much about the people and their feelings and so on. I'm trying to be careful in my words here, but ultimately, this is a conclusion that I've reached from first principles in a sense, right?

You focus on these micro kindnesses, on these micro acts of empathy. You will not be making the difficult decisions that you need to make to make the macro work. Right. And so if you won't let someone go because they're not the right person for the job, if you won't provide direct and sometimes harsh feedback to somebody so they can do the right thing, if you're not willing to kill a project that is someone's personal hobby because it's not in the interest of the company, then the company will fail.

And then the question is all those people who perhaps you showed that kindness to, who you weren't detached from, who you weren't clinical about. Are they now better off than if you had made the difficult decisions that get you to the end that you need to get to as an organization? And I think as long as you always act without cruelty, without callousness, if you act generously, if you act with empathy, I.

And in a human way, you really do need to focus on the ends more than on the means, in terms of running your startup. And again, there are caveats here. I'm not, telling people to be unethical to break the law, to treat people horribly. No. But if you allow yourself to be distracted from a fairly single-minded goal, that generally will spell ruin.

And I think that's really hard. So, That is my third rule for staying sane as a founder is care a lot. Care a hell of a lot, but don't care too much. Okay, here comes rule number four. Rule number four of how to stay sane as a founder is don't try to do it alone, lean on others. it's popular to talk about imposter syndrome and I think imposter syndrome, which is the sense that you are not.

Fit to be doing your role, and it's just a matter of time until you found out as an imposter. I think this exists in a lot of different ways across a lot of different facets of society, but there's no doubt as a founder, it's very easy to feel imposter syndrome because nearly by definition you're going to be facing novel situations novel to you on a very regular basis You are not going to know how to solve those problems, how to deal with those situations very well because you've never dealt with them before. You are inexperienced. You are ignorant in a whole bunch of things that you need to do to be successful as a founder. And so it's very easy to sink into this imposter syndrome to say, I'm not fit to be a founder because I don't know how to do these things.

The realization that I had is, The imposter syndrome only works if you think that a founder should have all the answers already, right? Because then you're an imposter compared to this mythical founder who has all the answers. And so I think when I realized that basically no founders have all the answers, that the job isn't to know it all and execute it perfectly.

No. The job is to somehow, someway muddle through and. Reach the outcomes you want. There's no prize for going it alone. there's no prize for already knowing all the answers to the test. You should be asking for help. Nobody has a clue about half the things they're doing in Founder Land. It's true. So ask for help.

There are no prizes for going solo. Now, does that mean you have to have a co-founder? No. Personally, I think being a solo founder sounds pretty hard, but you can do it. But the idea of The person who is leading from the front, who knows all the answers, who shields their team, who sees further than everybody else.

I think that is the wrong view of the type of leader that a founder needs to be. You know, they say heavy is the head that wears the crown, and that's true. So the game as I see it, is to avoid wearing the crown. As a founder, it is your job to put all the pieces of the puzzle together. It is your job. To assemble the crack team, right?

This is like Oceans 11. You don't have to know all the stuff yourself. You don't have to know how to like crack a safe and do explosives and evade surveillance and all those things on your own. Your job is to bring together the team, to bring together the knowledge, to ask the right questions, to share a vision, so that then you can go in and succeed together.

And you should be very open about your ignorance. You should be very open about where you need to be helped. You should be very curious and always asking questions and, and all those things are closed off to you if you spend all your time worrying that you'll be found out as an imposter and therefore pretending that.

You know it all. So as well as the mental health cost, of course, as with that nearly paradoxical thing about the best financial outcomes going to the founders who care least about them. I think the truth is the founders who are most effective for the most successful, who in some sense, Are the least imposters are the ones who are the most vulnerable, who are the most open to asking for help?

Who are the most willing to admit their ignorance? Who are keenest to ask questions? Those are the founders who are going to succeed. And if the measure of being an imposter is that you don't have what it takes to succeed, this becomes a self-fulfilling prophecy. If you think you need to have all the answers already.

I love to quote. Steve Jobs quote, I know I've used it before on the podcast, which is I don't hire smart people so I can tell them what to do. I hire smart people so they can tell me what to do.

Now, Steve Jobs was, at least in terms of his reputation, was somewhat an autocratic leader and someone who is quite top down.

But even he knew that he needed to get the best out of all the people on his team, rather than just micromanaging them and pretending he had all the answers. Now, You are probably not Steve Jobs. I sure as hell am not. Steve Jobs had certain skills, certain tastes that was once in a generation. Assume you don't have that.

And so if you wanna succeed, ask for help. Get the best people possible helping you, whether they're working for you, whether they're advising you, mentoring you, whether they're peers, whether you are simply. Reading books, listening to podcasts, reading articles, get help. There are no prizes for doing this thing alone.

But there sure as hell are prizes for getting the best people involved and building something amazing. So that is my rule number four. Don't try to do it alone. Lean on others.

Finally, I have rule number five, which is prioritize staying in the game over winning the game. startups are a type of infinite game, right?

By which I mean, you can always pick yourself back up from a failure as long as you haven't wiped yourself out. And I've talked about the fact that failures are fractal, right? That you can fail. On a single experiment, you can fail on a project, on a product, on a team, on a startup, but then you can always pick yourself up and do the next thing unless you wipe yourself out.

And I think this is analogous to, finance and, you know, the sort of concept of anti fragility and whatnot. The idea with finance, with compounding returns is, You wanna take risk, but you don't wanna take too much risk, right? Because the one thing that can kill your cycle of compounding growth over your lifetime is if you wipe yourself out, right?

If you go bankrupt, you go all the way back to square one. You have lost all of that compounding. And furthermore, you've probably shaken your confidence to the point that you're not going to play that game again. You have wiped yourself out, and so in a sense, if you take maximum risk, And I'm talking in finance, right?

If you take maximum risk and you're getting good returns year after year, let's say you put everything into like leveraged crypto, but then the Black Swan event happens, the bad thing happens and you are wiped out. You're out of the game. You might think that you're smart because you've made these better annual returns, but you haven't invested in making yourself someone who can stay in the game for a long time and so you will not get that compounding result Startups.

The same again, at every level of scale I talked about all the way back at rule number one, that the thing that you can guarantee that you'll get out of your startup as long as you do it right is all the growth and learning social capital networks that you've built. You get to keep those and take them to your next thing.

But even within a startup, right, within your current startup. You can push hard, you can burn the candles at both ends. You can put everything of yourself into the startup, you can see sometimes now how some of these rules overlap with and interact with each other if you care too much, right?

I said rule number three, care a lot, but not too much if you care too much. That's a bit like putting all your money into leverage crypto, right? If your identity is wrapped into a particular startup, or even worse, into a particular solution to a problem, so you can't even pivot your startup and then you do not succeed.

You haven't just spent the time and capital or whatever it is you use to try that. No, you've burnt your identity, you've burnt your mental health, you've made yourself bitter. You've destroyed some of that. Essential optimism, and you're going to have a hard time picking yourself up from that because you haven't just lost a game or failed to crack a puzzle. No, you have cracked your identity, and that's a hard thing to put back together. So don't wipe yourself out. Don't burn yourself out. Remember that no matter what age you are listening to this podcast, life is pretty long. if you're lucky, and if you're not, well, none of us can control that.

But life is pretty long and you want to, benefit from the compounding because in the same way that. in personal finance or any other sort of finance, you benefit from compounding. You also benefit from compounding in your career in startups in your career as a founder.

Because like I said, the thing that is guaranteed is the growth and the learning. And the longer you do this, the better you are going to get at it. And you know, statistics bear this out by the way, which is that, although. The media like to focus on the twenty-something founders and there are some incredible twenty-something founders.

The truth is that the typical, founder of, I think this was the study, was startups that ended up being worth at least a hundred million dollars. I think the median age of the founder was 41. and I think there were more 60 year olds who were founding successful companies, at that level than 20 year olds.

So the experience does matter. The youthful energy is great, but if you use that youthful energy to build experience, to start that compounding early, just in the same way that you should be saving money from when you're young, then that compounding is going to serve you throughout your career.

So there you have it team. Those are my five rules for staying sane as a founder. Rule number one, keep your eye on the ball, not on the prize. Rule number two, observe the Stockdale paradox. Rule number three, care a lot. But not too much. Rule number four, don't try to do it alone. Lean on others. And rule number five, prioritize staying in the game over winning the game.

Hopefully some of those resonated with you and can help bring you some peace and some. Stability as you go through what is definitely a long-term play when you are founding startups. This is not a short-term play. This is not something that you do, to get rich quick. So, hopefully those rules help give you an even keel and serve you well.

Now, like I said at the start, I'm sure some of you have other rules to keep yourself sane. I'm sure some of them are better than the five that I put forward. So if you wanna hop on on LinkedIn or just dmm me with your rules for staying sane as a founder, or maybe send in a voice recording and we can play it in the next episode, that would be amazing.

Once again, please honor the startup podcast Pact. This week we want you to sign up to our mailing list. Go to TSP show and sign up right now before you move on to the next thing. This is the perfect time. Stop. Take a deep breath, type in TSP show. That's eight characters. Type in your email and away you go.

Thanks so much for listening. I hope you enjoyed my solo monologue episode. Hopefully Chris will be back next week, and we'll be back to normal programming. Have a good one.