Stop the Insanity!

Dion Lim was your classic startup junkie. Hooked on the thrill of creating new businesses, Lim jumped from one startup to the next, working 90-hour weeks and mainlining email and take-out food. He always imagined that he would slow down -- eventually. Then one day, he came home from a string of business trips to an empty house. Amy, his wife of six years, was gone.

"I was totally frantic," Lim says. "There was no note, nothing." Later that evening, Amy phoned from a nearby hotel. She wasn't leaving him; she just wanted to give him a taste of what it was like to be married to a startup exec -- never knowing where he was or when he was coming home. Lim vowed then and there to make room in his work life for his real life. And so last fall (less than a year later), he and his wife started a business together -- an Internet incubator called Simians.com that they now run out of their home, in Los Altos, California. "It's great," says Lim, 32. "I get to develop new companies and see my wife every day."

Charlie Kim didn't wait for things to get quite so out of hand before coming to his senses about startup life. A grueling two-year stint at Morgan Stanley was enough to convince the young human-resources analyst that he'd do things differently when he left the company to run one of his own. Having studied turnover patterns at the blue-chip investment bank, Kim, 27, discovered that half of the employees who left did so to improve their personal lives, rather than to make more money. "People were working until 1 AM, drinking coffee, eating junk," he says, "and they were miserable."

Today, none of Kim's 115 employees at Next Jump Inc., a New York-based publisher of print and online college guides, are expected to work weekends or pull all-nighters -- except during rare crunch periods. "I don't want anyone to be drained or exhausted," says Kim about his colleagues.

More and more Internet entrepreneurs are starting to think like Kim and Lim. When it comes to startup life, it's time to reconsider old business plans. Forget about those macho, 24-7 firms where employees eat lunch at 5 PM, there's a futon room for all-nighters, and the only acceptable work ethic is a cheery I'm-ready-to-work-myself-to-death devotion to the job. Maybe it's because the sheer thrill of the startup is wearing off -- particularly for folks who have been through a few of them. Maybe it's because the potential for astronomical payoffs after just a few years of 100-hour workweeks seems like yesterday's news. Maybe it's because a new generation of people -- adults who have kids and more on their minds than playing Foosball at midnight -- are streaming into the dotcom sector. Or maybe it's because the ever-escalating battle for talent is forcing startups to become more humane with their human capital.

Whatever the reason, a new breed of startup is emerging -- call it the saner startup -- and its leaders are paying more than lip service to the idea that pursuing your business dreams shouldn't mean destroying your personal life.

Saner startups are abolishing many of the rituals that have come to define the life of an Internet entrepreneur. The daily all-hands meeting? Gee, I think we have real work to do. The Friday-afternoon beer blast? Hmmm, maybe it makes more sense for people to get home in time for dinner with their families. The every-other-month off-sites to coordinate strategic plans and build trust across departments? Here's an idea: Let's spend more time executing our current strategy rather than debating a new one. The all-nighter as a universal symbol of commitment and tenacity? News flash: People make better decisions when they're rested.

"It's all about working smarter and respecting people's time, so that everyone in the company becomes more productive," says Gregory Slayton, 40, president and CEO of ClickAction Inc., an online direct-marketing firm based in Palo Alto, California. Adds Slayton, who has worked at two previous startups: "You don't want to be burning and churning your people. It's counterproductive."

Make no mistake: The founders of saner startups are just as fervent about their companies as their more-crazed dotcom brethren are, and most of them still put in pretty long days. But they also believe that a company's viability depends on recruiting and retaining people who can work, change, and innovate over the long term. Pardon the familiar metaphor, but building a great company is a marathon, not a sprint, and many of the runners are dropping out early in the race.

"If you pay people well and give them lots of stock options but then treat them like dogs, they will cash out when they can," says David Russo, 55, executive vice president of human resources at BuildNet, a Research Triangle Park, North Carolina-based company that sells management software to home builders and suppliers. "They'll leave because it's a toxic environment. And that turnover costs the company." Fran Rodgers, 53, founder of WFD Inc., a Boston-based work-family consultancy, agrees: "If you want to start a company that lasts, you have to ask yourself, 'Am I creating a culture that is sustainable?' "

So how do you build a saner startup? We posed that question (and many others) to some of the sanest and smartest startup experts we could find. Here, then, are six essential strategies for improving your company's mental health -- and its long-term prospects in the marketplace.