Why am I here?
It’s 2011. I could be at home, actually working on my startup. But instead I’m here, at a startup happy hour. Wearing a startup T-shirt, talking about startups. And learning that there are now startups that help you start a startup.
Like so many things, it all began with an email. It said I was invited to an exclusive entrepreneur happy hour. I RSVP’d instantly, jazzed to have been included.
Standing there, I realize this was a mistake. As I recite my buzzy elevator pitch for the 27th time, I start to feel regret. This is my fifth startup happy hour this month, not to mention numerous panels, dinners, and conferences. Is this actually helping my company?
Every city now promotes itself as having a vibrant tech “community,” a code word for pitch events, happy hours, and, of course, entrepreneurial meetups. More often than not, these events and “resources” cripple early-stage founders. If that weren’t the case, then we’d probably see the dismal startup survival rate skyrocket, thanks to all this networking.
Mostly, it has the opposite effect. By giving a false sense of progress to people running companies with head counts you can count on one hand, startup communities are hobbling founders with self-congratulation so all-consuming that it jeopardizes their success.
Worse, these events are addictive, feeding into the psychological needs that virtually all of us have, which founders are particularly susceptible to: the need to see progress, the need to be commended, and the need to never miss out.
While no one to my knowledge has yet studied the psychology of a networking event, research on video game addiction helps explain our desire to spend more and more time away from real work–in my case, drinking watery beer and eating supermarket cheese with other people who aren’t getting anything done, either.
Video games drive addictive behavior by activating the medial forebrain pleasure circuit and releasing huge amounts of dopamine. In fact, the American Academy of Neurology has found that “the dopamine release that comes from gaming is so powerful . . . it can almost shut the prefrontal regions down.” One of the most significant reasons why video games cause such a strong chemical reaction is their ability to manipulate our reward sensors.
Ever notice that certain games give you surprise rewards throughout game play? That’s because, according to research Professor David Zald at Vanderbilt University, variable rewards are among the most effective dopamine generators. In other words, if we know exactly when the next reward will occur, we tend to get bored and lazy, and decide the wait isn’t worth it. But if the next reward could come at any moment, our brains release a flood of dopamine when it finally arrives. This is why slot machines are addictive: The jackpot could come at any moment—just one more try!
For entrepreneurs, networking events can trigger similar reactions. The chance to eat cheese cubes and swap business cards may not sound nearly as thrilling, but it’s the sense of opportunity that gets you hooked. Go to enough events, and you will–occasionally, anyway–meet people who are actually helpful. But you’re not sure exactly when or where the next helpful connection will appear. It’s like dating: Maybe the next one won’t be a dud.
So you go to every gathering imaginable. Startup founders call this hustling. In reality, it’s just networking roulette.
The fear of missing out (FOMO) is another reason why entrepreneurs wind up spinning their wheels instead of actually building businesses that work. Anita Sanz, a clinical psychologist, explains that FOMO is the byproduct of the fight-or-flight response our brains activate when we detect the likelihood that we’ll miss vital information. We’re actually hardwired to recoil from anything that smacks of disadvantage.
When you’re starting your company, networking events seem like a key to success. Everyone else you know is going, and you hear stories about people raising money from a random connection at a happy hour. The FOMO becomes competitive: If you miss that one crucial conversation, you could fall way behind your peers.
And then there’s the flattery. I went to that happy hour because it was billed as “exclusive”: “Who, me? What an honor!” Research shows that flattery is one of the most powerful psychological forces. In one study at Carnegie Mellon University, 95% of people complied with a task request after getting flattered, compared to 40% compliance for those who didn’t hear flattery.
This isn’t lost on marketers, especially those in the tech community. From “exclusive summits” to “intimate roundtables,” event hosts know that everyone wants to be part of a selective club. Of course, there are often ulterior motives: Many entrepreneurial events are hosted by folks from accountants to real estate agents who want to surround themselves with future customers.
When I started my second company, TrackMaven, I pledged to not waste time on events that I wasn’t just about certain would help the business. Sure, it still felt great to get invited, and I did worry I’d miss out on some good stuff. But on balance, there were more productive things I could do with my time. While my first startup capped out at six-figure revenue and never scaled, my second (thanks to an amazing team) is only three years old with millions in revenue and grew 170% last year.
Getting there required a lot of focus. It also required a dramatic shift in the sorts of people my team and I have spent our time talking to–not other entrepreneurs, but customers. Have a free evening? Take a customer to dinner. Not sure what your next step in product development might be? Ask a customer what they think. Looking to meet venture capitalists? It’s your customers who VCs themselves often ask to identify promising businesses.
And when it comes to startup events, it’s simple: If there are customers there, go. In fact, the irony is that I now attend even more events than I did with my first company. But instead of startup mixers, my team and I hit up dozens of events every quarter where we meet customers and prospects.
Entrepreneurs have every incentive–psychological and practical–to lean into startup communities. But building a company is about spending time in a specific industry and going deep, not rubbing elbows with others like you. That means fewer happy hours with fellow startup wonks and more time with your actual users. You’ll save mental energy–not to mention calories on pretzels and beer.