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How to remake the entrepreneurial spirit in the wake of COVID-19

Amid this crisis, we need to make sure that entrepreneurship is open to all—making a commitment to promoting diversity and putting in place education and funding mechanisms to make sure that people of every age, economic or cultural background have a chance to go out, take a risk, and build something new.

How to remake the entrepreneurial spirit in the wake of COVID-19
David Sax [Photo: Christopher Farber]

Entrepreneurship is a deeply personal journey, and it remains difficult because it is so personal. This unpleasant truth is often overlooked by Silicon Valley’s startup myth-making, which romanticizes entrepreneurship and glorifies risk-taking with macho slogans about embracing failure, but rarely, if ever, acknowledges the actual human cost of that. This is the difficult truth about what it means to be an entrepreneur and the real reason, beyond economics, why so few people (one in ten Americans) decide to become one, despite all the glamour associated with it.

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I should know. Working for myself has always been immensely difficult. It vacillates between the dread of not having enough work and the stress of having too much. Entrepreneurship is a daily experience of going to war with my ego, where I dive into an idea with the utmost optimism in the morning (“This is a brilliant idea!”), only to wrap myself in a blanket of self-hatred by the afternoon (“You are a fraud”). As an entrepreneur, everything is personal.

This was apparent even before COVID-19 brought the majority of global economic activity to a halt, personally impacting millions of entrepreneurs around the world. From San Francisco startups to small down main streets, big cities to farmers, freelancers to founders and CEOs, the challenge seems insurmountable, and the toll on these entrepreneurs, who bear the emotional and spiritual cost of this on their backs and in their souls, is almost immeasurable. How are entrepreneurs able to survive this, maintaining both their businesses, and their sense of self-worth, when so much of what is happening is entirely out of their control? What will this crisis do to the soul of the entrepreneur?

Lately the news has made me think of a conversation I had two years ago with Craig Kanarick, a friend of mine, who had to sell his company Mouth (an online market for specialty foods). I had invested in Mouth with my father, but while we began our conversation speaking about failure, Kanarick reflected on the most difficult times he had experienced as an entrepreneur, which was actually during the height of his success in the late 1990s. At the time he was the cofounder of a digital marketing agency called Razorfish, which grew into twenty-three hundred employees in nine countries and a market cap of $4 billion at its peak. Overnight, Kanarick became an entrepreneurial icon of the dot-com startup boom, profiled in WIRED and 60 Minutes. He had blue hair and wild outfits, partied with celebrities, and was regularly featured in the society pages. This outward success hid an inward struggle.

“The journey of the entrepreneur is so bipolar,” Kanarick said. “Because while I felt like all those good things were happening, I’m dealing with unbearable stress and concern about the company, employees, and brand. You can become a little paranoid.”

All of this compounded into a pervasive loneliness that hit Kanarick right when he reached the top. “I had two hundred million on paper when the company went public,” he said. “There was no one I could talk to that about. Who could I? My high school friends? My girlfriend? I think the loneliness is inherent to being an entrepreneur. You have an ego and think you can solve problems on your own.” This is the famous roller coaster of entrepreneurship (or, as one entrepreneur put it to me, “riding a roller coaster after eating a burrito and drinking four beers”), and every single entrepreneur straps themselves in to ride it, whether they want to or not.

“The amplitude and frequency of the roller-coaster ride is more intense when you attach your sense of self-esteem to the outcome, but that is a troubling character trait for most entrepreneurs,” said Jerry Colonna, an executive coach who founded the firm Reboot, which works with many entrepreneurs and CEOs from the technology industry (Kanarick put us in touch). Colonna had spent the earlier part of his career as a venture capitalist, but when he faced a midlife depression, he realized that he not only wanted to change his own relationship to work but help others change theirs too. Silicon Valley’s startup myth glamorized an entrepreneur’s worst habits. “One of the challenges that come from the [startup] archetype is this bullshit belief system that you have to ‘leave it all on the field,’ bleed to be successful, deplete and exhaust yourself, and that anything less is a source of shame and humiliation. If you do that and fail (like 89 percent of all startups in the first two years), you see it as evidence of your own failings as a person,” Colonna said. “Then you sit there and say, ‘Who am I?'”

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Colonna rightly diagnosed that this false narrative was something I had lured myself into many times over my own career. “If you only judge yourself as a human being based on whether or not your latest book sells, you are doomed,” he said. “You ride the roller coaster. ‘I’m shit. Who am I kidding? I knew you were never really good. I was just pretending, and now the world is starting to figure this out.’ And yet, you’re sophisticated enough to know it’s not your fault, but it’s a tender sore spot. Is that your ego at work? Absolutely. But don’t follow the trap of beating yourself up because it’s your ego at work.”

That was certainly true today, as I release a book into the black hole of a pandemic, as bookstores remain shuttered, and consumer spending plummets. But Colonna’s observation was equally relevant over all my past publishing ventures, as I nurtured my idea over years, researching, writing, hustling and hoping, but ultimately with little I could do to change whether it became a hit or a failure.

Failure is a remarkably common truth for entrepreneurs. According to US government statistics, only two-thirds of businesses survive their first two years, and half survive to five years (pre-Covid, of course). The businesses that last decades or longer are the outliers, not the norm, and the odds are the same regardless of the industry, whether the entrepreneur has a one-man shop or leads a company employing hundreds. But failure is something that has been particularly romanticized by the startup myth of Silicon Valley, where embracing failure is projected as a badge of honor, a right of passage, and a prerequisite to eventual success. Venture capitalists and revered startup figures confidently tell those hoping to learn from them not to fear failure, to actively and openly and enthusiastically embrace it. To fail fast. To fail forward. To fail upward. To fail until success rises from the ashes.

The Soul of an Entrepreneur: Work and Life Beyond the Startup Myth by David Sax

But out in the real world, failure for an entrepreneur is a horrible, life-altering experience, bereft of glory. An entrepreneur risks their money and their home, their health and their family, their pride and identity, and ultimately, their lives when they venture into business. When that business fails, all of that can be impacted. “It really does seem to be a life-changing event for a lot of entrepreneurs,” said Ute Stephan, a professor of entrepreneurship at King’s College, London, who studied failure’s effects on the health of entrepreneurs. “People who say failure is good make the implicit assumption that you can learn from failure and improve the next time. But what if there’s a tsunami and your business is swept away? What can you learn from that?”  What if the tsunami is a war? Or an industrial shift you cannot control? Or a pandemic? No one saw this coming. This is a black swan.

Even within the technology industry, glamorizing failure has taken a toll. “I think the mythology around failure is completely unhelpful in this stage,” said Brad Feld, a well-known venture capitalist who has written extensively about mental health issues that entrepreneurs deal with over the years, including his own. “Failure is a significant component of entrepreneurship. Failure sucks. It’s hard to fail. But acknowledging that it’s part of entrepreneurship is key. Romanticizing that it’s good to fail isn’t helpful.”

So how can entrepreneurs deal with failure, even if it is inescapable? Jerry Colonna told me that the emotional toll of failure is something all entrepreneurs underappreciate. To protect against the inevitable emotional challenges of their careers, including failure, an entrepreneur needs to cultivate a healthy relationship with their business and their life. Entrepreneurs need sleep, exercise, good diets, and other healthy habits, but more than anything, they need community. Entrepreneurship is a lonely endeavor. It isolates the mind and often the soul, in ways that can be liberating, but also dangerous. Entrepreneurs need to know they are not alone. They need a community to share their fears and experiences and problems with. For some, that community came from social groups, a church, or other safe spaces. For entrepreneurs in the technology business, the community was the “ecosystem” of other entrepreneurs, advisors, and mentors and, if they were lucky, investors who actually cared about the people behind their investments.

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That is what we all have to work on as we come out of this medical and economic crisis, and rebuild our world, our businesses, and our communities. First, we need to make sure that entrepreneurship is open to all, and something that people still perceive as accessible and desirable. That means promoting models of entrepreneurs who are more diverse than those we typically revere (young, white, male, cocky), and putting in place the education, funding mechanisms, and supports to make sure that entrepreneurs of every age, economic or cultural background, geography and industry have a chance to go out, take a risk, and build something new.

There’s good examples of this to follow. While many universities and colleges are teaching entrepreneurship almost exclusively through the lens of venture funded startups, schools such as Babson College offer a broader approach, including specialties, for example, on working with your family-run businesses to renew its legacy. Another great initiative is One Million Cups, launched by the entrepreneurial nonprofit Kauffman Foundation, which hosts weekly support meetings for entrepreneurs of all stripes all over America.  And in the technology sector, change is being pioneered by collectives of founders like Zebras Unite, a rallying point for entrepreneurs (such as women and people of color), who want alternatives to the orthodoxy of the VC backed startup myth.

And if they can do that, we need to stand with them, not just when they get the next big round of funding, or hit the curve of that hockey stick, but when things are tough, and when the challenges seem insurmountable. We need to build a community of entrepreneurs who can lean on each other, learn from each other, and let one another know that while they may feel as though they are facing the world alone, their experience is shared, and in some way, they burden is too.

David Sax is the author of The Soul of an Entrepreneur, published in April by PublicAffairs, an imprint of Perseus Books, LLC, a subsidiary of Hachette Book Group Inc, New York, NY.

This story has been updated.

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