Yesterday I read a posting in Facebook that was extremely critical of a local entrepreneur CEO who had committed to spend four hours a week acting as a mentor for other entrepreneurs. The commentator was hard on the CEO, suggesting that a CEO who did something like this would not be backed by investors. As I read this post, I was dismayed for a few reasons. First, I like the CEO personally and think he is a solid guy. Second, I thought that the commentary was just wrong. As an investor, I thought that it was timely for me to weigh in on the big issue that lurked behind the commentary -- how committed should an entrepreneur be to his startup?
The place to begin is to acknowledge a few home truths. The first is that entrepreneurship, particularly, startup entrepreneurship is a 24/7 job. It is not something that should be done lightly or without passion. Successful entrepreneurs make their startup business their number one priority. This happens because of some of the key behavioral aspects of entrepreneurial behavior: passion for the entrepreneurial journey, optimism and a belief that an entrepreneur's own efforts can change the surrounding world in a material way. The net result of this is that successful entrepreneurs tend to give the appearance of monomania and single mindedness.
There is another aspect of entrepreneurial behavior that is not as widely discussed, and frankly should be. Successful entrepreneurship also requires mental health. It is extremely stressful to live on the edge, and manage the ambiguity of entrepreneurship. Balancing this is the particular rush that comes with the journey, its highs and lows, and not knowing how it will turn out. The very nature of the startup journey -- its inherent instability -- may be its most intoxicating characteristic. This explains why when entrepreneurs achieve an exit (or a failure) they tend not to retire to the beach, but find another startup.
The dark side of entrepreneurship, however, is that it also attracts personalities that are dysfunctional. The rush of entrepreneurship, and its intoxication, can fuel the flames of personality types that are ultimately fundamentally unsuited for business success. Risk taking for its own stake, constant challenging of authority, a need for complete control, and the riding the highs and lows, may be examples of behaviors that manifest from dysfunctional and self-destructive personality flaws. This is the largest challenge that investors face -- determining the difference between someone who is drawn to the flame of startup life, but is able to manage not to be burned by it, and someone who will ultimately be consumed by the flame.
Personality is complex, and it eventually provides the template for how we deal with stress and challenges. Individuals have something I call their "winning strategy" -- the behavior pattern they utilize when they have their backs to the wall. For example, people who are introverted tend to take challenges on by closing themselves in dark rooms and thinking. People who are extroverted tend to want to talk things out. For individuals under stress the largest issue to address is whether their winning strategy is in fact the best strategy for dealing with a challenge.
My experience with the startup CEOs that I have backed (and the many others I know well through FounderCorps and elsewhere) is that the most important characteristic that the successful ones all share is self-awareness. This allows them to moderate and modify their personal winning strategy, or surround themselves with people who are able to work with the entrepreneur's winning strategy appropriately. In other words, functional entrepreneurs tend to be better able to see how their behavior patterns work with and affect their surroundings.
In my experience, self-aware people share another characteristic -- they understand what steps they must take to nourish themselves. The same way that we all need to eat, we all need to do things that allow our minds to rest and revive. Successful entrepreneurs can identify the limitations of their personality, and find ways to take care of themselves for the long-term. Because entrepreneurship is a long-term, life long journey. It is a marathon, not a race. Simply put, entrepreneurship is a 24/7 job, but entrepreneurs need to find ways to manage the stress and nourish themselves.
I am not suggesting that a startup entrepreneur shouldn't have as his number one priority the success of his business. Nor am I ascribing to the view that an entrepreneur's life should be in balance the way that an employee's should. A true entrepreneur is 100 percent committed. But, that is different from saying that an entrepreneur has to work on his startup every waking moment. When I work with entrepreneurs I find that they are much more likely to be successful if they have some outlets and opportunities to refresh themselves. The important thing is that they have sufficient perspective and self-awareness to take care of themselves.
In answer to the question, what do investors require from their founders I say that we look for, and require, a healthy and consistent commitment to the startup. We look for perspective and self-awareness. We are wary of compulsive people that are unaware of their behavior patterns and how it affects their surroundings. In short, if a startup entrepreneur wants to spend four hours being a mentor, or four hours on a golf course, or four hours in a Church it is up to them. All I care about is the success of the business that I invest in. And, I want the entrepreneur to be fresh, motivated and committed 100 percent. How the entrepreneur accomplishes this task, is ultimately within their control. Because that my friends, is the most important lesson of all. Entrepreneurs become entrepreneurs because they want to be in charge of their lives. To suggest that they should confirm to a blanket truism or approach completely misses the point.
This post has been cross-posted from here.