Preparing to be a founder
It’s about six weeks until the fifth EF programme begins. On Friday, I gave a talk for some of the incoming cohort that I thought might be useful for a broader audience, so I’ve adapted it into this post. The key question is, what can you do in seven weeks to be more “ready” to start a startup?
Mindsets trump skills
It’s very hard to materially improve your hard skills in seven weeks. But that doesn’t matter. Marginal improvements in skill are totally eclipsed by marginal improvements in mindset. Mindset appears to be almost totally dominant in determining outcomes.
This is good news for aspiring founders because you can develop new mindsets more quickly than you can develop (high levels of) new skills. I think there are five mindsets in particular that entrepreneurs need to develop: long-termism, growth mindset, competitiveness, personal exceptionalism and honey badger-ness.
Long-termism
It’s taking longer and longer for startups to exit. If it takes 10 years to IPO (or equivalent), you need to ask what you can do for that length of time and stay excited — or least sane.
Realistically, that means you need to be driven by a mission. This idea — “you need to be a missionary, not a mercenary” — is perhaps a cliche in Silicon Valley, but not repeated anything like often enough in Europe. Almost all the breakout companies have missionary founders.
So, what could you spend a decade on? I don’t think you can answer that in terms of product (too much will change), but you can in terms of a problem you want to solve; perhaps a technology you want to bring to the world; or a group of customers you want to serve.
It amazes me how many founders don’t spend a long time thinking about this, or at least don’t commit to their answers, before they start a company. This is an area where you can’t be willing to compromise.
Our alumni who have been most willing to commit to the long run have been among our most successful. We have a poster on our wall with a quote from one of my favourite EF alumni: “I mean, I figure I’ll just build a $1bn dollar company first. That way, it’ll be easier to build the $100 billion company I’ve been thinking about”.
Growth mindset
My co-founder Alice has written an excellent post about growth mindset, so I’ll touch on it only briefly here, but it is undoubtedly one of the most important mindsets for founders. In the words of its most prominent proponent, Carol Dweck, growth mindset is the “people believe that their most basic abilities can be developed through dedication and hard work — brains and talent are just the starting point” (Its opposite, fixed mindset, believes that ability is largely set and can’t be changed through effort).
There are two reasons why this matters so much for entrepreneurs. First, a growth mindset allows founders to take more risk. If you have a fixed mindset, you end up interpreting failure (or even wobbles along the journey) as an indictment of your abilities and so your sense of self-worth. This makes it hard to take risk: the costs of failure as so much psychologically higher than if you see working harder as the appropriate response to failure, which is what a growth mindset suggests. Second, founders with a growth mindset learn faster — not least because they value learning more. If you know that you will not only know more, but actually become better when you iterate, you’re likely to iterate faster.
Competitiveness
Great founders are highly competitive — and they have to be. Startups are a battle for survival from day one; none has a right to exist. Some founders would be more successful if they realised just what a fight they were in: they’d work harder, they’d be more relentless, they’d be more creative. The problem is that most of the competition you face is unseen.
By that I don’t just mean the classic, “we have no competitors” line.[1] There probably is someone, somewhere trying to do what you do.. But that’s not the bad news. The real competition that you’re in is a race against time — to prove that you’re creating something valuable before you run out of money or willpower.
The trouble is, seen competition is really easy to respond to — and it fires founders up — but unseen competition is far more dangerous. If you don’t behave as though you had a well funded competitor sitting right next to you, you’ll find it difficult to struggle hard enough. You have to work as determinedly and relentlessly as though they were based in the very next office and you caught sight of them every day, looking smug, in the local cafe. That’s the reality that you’re in and believing it is a mindset you need to develop.
Personal exceptionalism
I love Michael Dearing’s notes on The Five Cognitive Distortions of People Who Get Things Done. It’s not a scientific study (and doesn’t claim to be), but it’s an excellent qualitative summary of the mindsets of successful people. First among them is “personal exceptionalism”. A good definition is the mindset where you know the odds of success are extraordinarily low, but you believe that they don’t apply to you. Or, rather, you believe that conditional on being you, the odds are much better.
Working closely with over 160 founders over the last three years, I’ve reached the conclusion that you’ll never be surprised if you believe you cannot do it. Never. (Unfortunately, you might be surprised if you think you can, which is what makes it hard). That doesn’t mean that you won’t or shouldn’t experience self-doubt. Personal exceptionalism isn’t insanity or even arrogance. It’s a deep belief that you will find a way.
Even more, it’s a mindset that allows you to process the inevitable negative feedback you’ll get as a founder. Throughout the entrepreneurial journey, you will have meetings with people who think you are crazy and that you are wasting your time (and possibly other people’s money). It’s normal to walk out of those meetings and worry that they’re right. What a mindset of personal exceptionalism allows you to do is take the feedback and iterate, again and again, without losing faith that you’re going to succeed.
Honey badger-ness
The honey badger is EF’s internal mascot. (They’ve been my favourite animal for 25 years; yes, I liked honey badgers before they were cool…) Honey badgers are the most tenacious, fearless and relentless animals. They’re impossible to cage; they kill lions by running under them and biting their testicles off; and — yes — they eat cobras.
Entrepreneurs have to be honey badgers. Honey badgers are the opposite of excuse makers. If you find yourself reaching for an excuse, you’re doomed to fail. If you tell yourself that something’s impossible because “the key guy is on holiday until next week”, “I couldn’t get hold of anyone”, “no one replied to my email”, etc, well — you need to be more of a honey badger. When people say, “it’s impossible”, I now usually think, “Yes, it probably is impossible for you”.
It’s striking to me how much “honey badger”-ness explains the difference in outcomes among EF companies. In practice, this means that you have to find a way to expand your comfort zone. Small comfort zones are fatal for founders. If you’ve never made a cold call; if you’ve never tried to get someone to do something they weren’t inclined to do; if you’ve never tried to sell anything, now is the time. If you have tried all those things, what makes you uncomfortable? That’s what you should be working on.
When people take this to heart, the results can be extraordinary. One favourite example is a startup whose founders hung around outside their (enterprise) customer’s offices until they figured out which pub the key decision maker went to after work, and then cold approached him in the pub, bought him a drink and convinced him to trial the product. It was a breakthrough for them. Without it, they’d have been months and months behind. Another startup with better product, better tech or a better story would have lost out to them, simply because they were great honey badgers.
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As a founder, you have more control over your mindsets than you do over almost any other variable that will have a big impact on your outcome. Time spent in developing the right ones is the best investment you can make as you prepare to get started. Time to get started.
[1] It’s worth saying that “we have no competitors” is not the badge of honour that founders often think: if literally no one else wants to touch this space in a world where everyone and her dog is starting a company, is that a good thing?
