COVID-19 killed your startup?
To many entrepreneurs the COVID-19 pandemic is as black swan an event as they come. No amount of strategizing or forecasting could have predicted the virus that has meant the abrupt end for many ventures. Yet even in normal times, most startups fail, and still culturally startup endings are ignored in favor of the excitement and potential of their beginnings. What are the implications for founders, the human beings behind the venture, when their startup faces an ending, abrupt or otherwise?
Ideally, entrepreneurs would be primed to learn important lessons from endings whether due to COVID-19 or the myriad other reasons startups fail. Founders would emerge from events like these better prepared and equipped as leaders, and would develop and hone practices to bulwark their mental, emotional and physical states against future adversity. But the reality is that many won’t because the psychologically-stressful combination of the emotionally-laden startup setting with humans’ struggles with coping with grief and endings make it particularly difficult to weather unexpected tragedy, much less learn from it.
As an executive coach for companies from Fortune 500s to fledgling founder teams and a rocket scientist turned founder-CEO at a venture-backed business, we have compiled the latest research and our own reflections on processes for acknowledging and overcoming the COVID-induced tragedies entrepreneurs everywhere are facing so that we can recover, learn, and grow. We also suggest exploring these practices throughout a business’s life, not just at its end, as a way to make sure you’re continually asking and answering the hard questions and making decisions that are consistent with your values and purpose.
Research by psychologists Fodor and Pintea [1] suggests entrepreneurs are at high risk of emotional problems when their company fails. Reasons for this vulnerability include the significant emotional connection the founder has with his or her idea. For many founders, their entire identity is the startup. A second reason is that the substantial resources, time, effort, and sacrifice made by these entrepreneurs mean the smallest of wins or the threat of loss can create an intense emotional response. The final vulnerability is caused by the nature of being an entrepreneur. Management scholar Robert Barron [2] proposes that, by definition, what entrepreneurs do is not routine, “their behavior is often innovative and involves either creating something entirely new or modifying what exists in unique ways”. This lack of ‘routine’, previous knowledge or experience he argues, makes founders more susceptible to higher levels of emotion when failure occurs.
Based on our experience we’d add two more vulnerabilities to Fodor and Pintea’s list: guilt and the relentless focus on success. Many founders feel guilt because they failed in their responsibility to ‘protect’ their employees, many of whom have been with the company from the start. Similarly, since so much emphasis is placed on founding the successful venture, its end signifies not just the failure of the startup but of the founder’s sense of purpose and collaterally the loss of their way of living and relationships.
Given these risks and the realities of starting a business the founder cares about, it’s no surprise that the end of a startup is an emotionally-saturated experience that can be experienced akin to a kind of death. Studies [3,4] suggest the way in which a founder makes sense of such loss can have lasting effects on their future ability to start new businesses. Psychologists have identified two significant ways people cope with endings. One technique is to manage the feelings accompanying loss, called emotional-focused coping. A second strategy, problem-focused coping, is to view the experience as a problem to be solved. Emotional-focused coping has traditionally been seen as the less effective of the two strategies; the common misconception is that trying to make sense of the negative emotions accompanying failure will prevent the founder being able to learn from his or her experience. That leaves founders with only problem-focused coping in their toolbox, needing to think their way out of feelings such as grief, loss, anger, and disappointment. However, recent studies have shown that emotional-focused and problem-focused coping are complementary, not mutually exclusive [5]. Experiencing negative emotions such as anger, anxiety, or grief motivated people to learn from their experiences, and in turn to take steps toward new opportunities.
Entrepreneur and inventor Alexander Graham Bell famously said “When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us”. The emotional impact of an ending — the grief, frustration, and feelings of loss — can trap entrepreneurs in the proverbial hallway of life rather than provide a rich learning environment and allow them to see the newly opened doors, or opportunities, in front of them. What follows are five emotional- and problem-focused recommendations designed to help you manage and learn from a very difficult experience, and to come through it wiser, and with greater insight about yourself and your future direction.
Understand your purpose outside of your business
Sociologically and psychologically, humans are hardwired to try to find meaning and order in life [6]. Inextricably associating your life’s purpose with your business can be a tremendous source of strength to draw from when times get tough. If your business goes under, however, the resulting loss of personal identity and purpose can unmoor an entrepreneur and exacerbate the grief, guilt, and shame the failure engenders.
Understanding your life’s purpose and values can help entrepreneurs develop an independent sense of self and provide a North Star to paddle the lifeboat towards, and eventually provide a framework for deciding what comes next. Our suggested approach is to identify your core set of values, what matters most to you, and to develop a high-level “mission statement” for your life. We suggest doing this work before disaster strikes, and to revisit it on an ongoing basis.
Brene Brown suggests you have only one set of values — not a personal and a professional set of values but a shared one. You can use her worksheet here, and write your own in if they’re not captured already until you’ve landed on a core set of three values.
To develop your mission statement, think about the main components of your life: family, work, health, hobbies and passions, and so on. These will be different for everyone, as well as for yourself at different stages of your life. Write down a high-level guiding goal or mission statement for yourself that encompasses each component, the goal here being that each of these important facets of your life, given this mission statement together with your values, could run autonomously according to what’s important to you and you could make important decisions pertaining to each by using the mission statement as a guide. This process is loosely based on Jordan Petersons’ work on hierarchical goals, so watch this video for inspiration.
Want an example? I (Natalya) worked through both exercises.
“I discovered my values are curiosity, love, and improving the human condition, and my life’s mission statement is to be a technology leader with a big “family”. I put ‘family’ in quotes because I come from a very small family by blood but have viewed and want to continue to view close relationships as family and to nurture them as such. From this exercise, I know, (i) I need to spend time and energy being curious about new technology, particularly technology in service of humanity, (ii) proactively find ways to grow as a leader, and (iii) prioritize friends and family. I can use these themes to guide future decisions and to maintain a fundamental sense of identity and purpose that withstands failure or change and isn’t dependent on any venture or job role”.
Nurture close connections
Building upon our tendency to search for meaning and order in life, we humans also like to divine higher reasons for significant events, like the failure of a startup. For centuries religion had provided an existentially-satisfactory reason for meaning in tragedy, but in recent years the atheist and agnostic population has dramatically increased in Western countries [7]. Thankfully, research by Southwick and Charney suggests that a sense of meaning in life that can come from deep connection with others can provide the emotional resiliency needed to survive and grow from trauma and that we used to get from religion [8].
Unsurprisingly, long work hours, travel, and other factors leading to loneliness and isolation can lead entrepreneurs to sacrifice their social and family time for their businesses despite the growing body of research that shows social interactions are critical for mental and physical wellbeing and longevity [9]. Making time to nurture close friendships and be with family (throughout the year and not just when adversity strikes would be ideal) can help entrepreneurs grieve, process, and recover more quickly. Whatever this means to you, be mindful to include some peers that can help normalize the experience you’re having, like those found in founder/entrepreneur peer groups, and spend time with sources of energy rather than drains. There’s a plethora of internet articles on how to create meaningful relationships; we liked this one and this one in particular.
Feel the emotions
We are culturally primed to pursue, allow, and enjoy emotions like ‘happiness’, but are much less adept at engaging with feelings like anger, jealousy, or sadness. Observing and allowing your emotional reactions to the end of something you truly cared about is a fundamental part of healing and can motivate learning. Psychiatrist and resilience expert Michael Rutter [10] calls this process ‘steeling’. Steeling occurs when you allow yourself to fully experience the loss. This process is similar to inoculation against disease: exposure to the emotions accompanying loss inoculates you against the more deleterious effects of the experience, providing a strategic benefit. The opposite of steeling is ‘scarring’. Founders who are scarred either get stuck in the feelings triggered by the end of their startup or decide to ignore the emotional aftermath and the opportunity to learn altogether. The longer-term consequence is that they carry the emotional scar throughout their career like a hangover, influencing how they think about their next venture.
In her book How Emotions are Made, emotion psychologist Lisa Feldman Barrett [11] reminds us that “we are architects of our own experience”, responsible for creating our emotional experiences. However, it can seem in the midst of grieving the loss of your startup, identity, and livelihood that you don’t have much choice over how you feel. What is important to recognize is that grieving is a natural human response to a significant loss. What’s equally important to know is that not all grief is created equal. Being able to accurately define how you are grieving is the first step in healing emotionally. Many founders will experience normal grief. You may feel confused, anxious, angry, frustrated, shameful, lonely, or a combination. The experience is different for different people. What is usually true for most is that with the support of friends, family, possibly a psychotherapist or coach, and your own resources you will come through it. However, there are other forms of grief that may need a different response. Chronic grief, delayed grief, and secondary loss are more persistent and far-reaching expressions of loss. Here’s a good summary of the different types of grief.
One way to help founders weather the emotional storm of grief, anger, or loss is to use a technique called ‘dropping anchor’. There are two ways to practice this exercise on your own: a visualization technique and a reality technique. The visualization technique requires you to imagine the emotions you are feeling as waves in the ocean. You are a boat being buffeted by these waves. Imagine throwing a heavy anchor over the side of your boat. It hits the ocean floor and steadies the boat. No matter the size or power of the waves your boat remains steady on top of the waves beneath. The reality technique means getting out of your head. Dropping anchor in these circumstances means finding somewhere comfortable to sit and then become aware of the difficult emotions you are dealing with. As you notice your feelings become aware of three or four ‘anchors’ around the room. These might be a photo or image, something on a desk or chair: anything that draws your attention. As you become aware of these anchors you will separate from your feelings. This exercise is powerful as it involves noticing a feeling but then taking steps to separate from it.
Make a choice
Your values, sense of purpose, and identity are critical components in engaging with and learning from disappointment and difficulty. They also set you up to realize that how you decide to engage with the end of your startup is a choice you can make. Acceptance and Commitment Therapist Russ Harris [12] counsels his clients to see decisions as a choice-point. After the abrupt end of your startup, as you face an uncertain future, go through a stressful situation, or make a plan for what comes next, you have a choice to make: you can make decisions that take you toward the person you want to be, the person who realizes that success and failure identities are both imposters, who lives life according to a set of meaningful values and who is able to unhook him or herself from the feelings of guilt, shame or grief; or you can make choices that take you away from the person you want to be, ignoring your values, avoiding accountability for the failure of your startup, blaming others and getting hooked by your negative emotions.
As you wrap up your venture, use this exercise to evaluate your current behaviors and the upcoming moves you’re contemplating in this context of ‘toward’ and ‘away’; these could be decisions such as your current strategy of isolating yourself from friends, evaluating a new job opportunity, or the overall utility of immersing yourself in various online courses. On a piece of paper, draw a large ‘V’ shape, and on the left hand side of the ‘V’ write ‘Away’ and on the right side ‘Toward’. At the bottom of the ‘V’ write ‘Choice Point’. Assess your decisions in terms of those that will move you toward your values and sense of purpose, and those that will move you away from the kind of person or future you want and deserve, and write the decisions on the appropriate side of the choice point. To wrap up the exercise, write ‘Today’ under ‘Choice Point’, and commit to making decisions that you marked as ‘Toward’.
Tell your story
Following the end of a startup founders have two significant stories to tell: the one they share with other people and the one they share with themselves. Any ending facilitates questions from others, such as “What happened?” and “How are you coping?”. When you meet someone for the first time, there’s the inevitable “What do you do?”. When your startup is no longer the central feature of your life, what story do you tell?
The tendency of many founders is to see the end of their startup as the dominant narrative, ignoring or marginalizing the other successes and achievements they and their business may have had. Framed, recited, and remembered in this way, this story robs them of the opportunity to learn from and make sense of their experience because of the tremendous power of language and narratives. Writer, historian, and activist Rebecca Solnit [13] writes that “stories are compasses and architecture; we navigate by them, we build our sanctuaries and our prisons out of them”.
The dot exercise used by narrative therapists is a useful way to illustrate the difference between a ‘failure story’ and one rich with possibility. Image 1 below describes what a ‘failure story’ looks like. Despite all the different life experiences available (the dots in the image), the founder uses very few and concentrates on those describing the end of the venture. Image 2 represents a story that draws on multiple life experiences. It’s a richer, more realistic narrative of the founder’s experience and doesn’t belittle the entire journey in favor of the end.
Having read through our other suggestions about how to cope with an unexpected crisis like COVID-19 you are in a good position to write your story in a way that makes sense of not just the end of your startup but the experience of founding and leading it over time. Writing your story through the following journaling exercise will serve four purposes: It will (i) help you make sense of and learn from the entire experience, (ii) elucidate your understanding of your relationship with failure, (iii) provide a narrative you can share with others, and (iv) be therapeutic [14].
With your pencil or computer in hand and your suddenly-open schedule, write the story of your startup. It may take the form of a long-form narrative that follows your entire experience, capturing moments of pride and situations where in hindsight you might have made a different decision. It could be a series of shorter stories that help you capture the headlines of your experience. (These thin slices of memory can be useful when people ask you to share what happened.) A third technique is to capture fleeting thoughts and feelings without worrying about an exact chronology. Wherever your writing takes you, keep the following techniques and tips in mind:
- The push to rush: It’s a natural inclination to push through strong emotions and rush to find the next opportunity. However, this kind of hurry-sickness will make it hard to learn and take meaning from the experience. Creating a reliable narrative is time consuming and does mean spending time with uncomfortable thoughts and feelings but the stillness will bring insight, and insight provides learning.
- Escape the problem story: Endings are emotionally sticky and it’s easy to create a narrative that describes you or others as the problem. If you find yourself creating a story around “I should have”, or “I wish I’d”, or if you blame co-founders, colleagues or investors for the demise of your venture you are perpetuating a ‘problem’ story. This kind of story traps you in the confined space of the end of your startup. What other possible stories are available to you if you step out of the narrative of the end?
- Perspective: There is a tendency for highly-driven, ambitious people to be very self-critical. If this describes you then be careful not to see your entire startup as a litany of errors and no matter what happened you were doomed to fail. This ‘failure-identity’ robs your narrative of the true nature of what you accomplished. If you’re stuck in a self-critical groove think about what Narrative therapists call ‘exceptions’ or ‘sparkling moments’. These are times when the startup was successful and you felt capable, in control and self-confident. Exceptions provide perspective on the entire landscape of your venture not just the thin-slice of the ending.
- Self-Disclosure: When it comes to telling your story you control how much or how little you want to share. Your narrative can be a version of a short story or ‘War and Peace’. The important factor is your level of comfort with your amount of self-disclosure.
Just like the economy, an entrepreneur’s recovery from COVID likely won’t be ‘V’-shaped. As with recovery from many other types of serious losses, entrepreneurs will be susceptible to highs and lows as they cope with, heal from, make sense of, and share their experience. The ultimate opportunity provided by COVID or any unexpected loss is to pause, learn and make sense of the end. Our suggestions should smooth the transition from the shock of the ending to sense-making and moving forward, permitting you to linger in the hallway and make a truly informed choice about which opportunity you want to pursue that reflects what you care about and stand for.
References:
[1] Fodor, O., Pintea, S. (2017). The “Emotional Side” of entrepreneurship: A meta-analysis of the relation between positive and negative affect and entrepreneurial performance frontiers. Psychology 8, 310. https://dx.doi.org/10.3389/fpsyg.2017.00310
[2] Baron, R. (1998). Cognitive mechanisms in entrepreneurship Why and when entrepreneurs think differently than other people. Journal of Business Venturing. 13 (4), 275–294. https://dx.doi.org/10.1016/s0883-9026(97)00031-1
[3] Shephard, D. A. (2003). Learning from business failure: Propositions of grief recovery for the self employed. Academy of Management Review. 28. 318–328.
[4] Singh, S., Corner, P., Pavlovich, K. (2007). Coping with entrepreneurial failure. Journal of Management & Organization. 13 (4), 331–344. https://dx.doi.org/10.5172/jmo.2007.13.4.331
[5] Byrne, O. & Shephard, D.A. (2015). Different strokes for different folks: Entrepreneurial narratives of emotion, cognition, and making sense of business failure. Entrepreneurship Theory and Practice, 39. 375–405.
[6] Speed, D., Coleman, T.J. & Langston, J. (2018). What do you mean, “What Does It All Mean?” Atheism, nonreligion, and life meaning. Sage Open, https://doi.org/10.1177/2158244017754238.
[7] Pew Research Center. (2015) America’s Changing Religious Landscape. Retrieved from, https://www.pewforum.org/2015/05/12/americas-changing-religious-landscape/
[8] Southwark, S.M. & Charney, D.S. (2012). Resilience: The science of mastering life’s greatest challenges. Cambridge University Press. https://doi.org/10.1017/CBO9781139013857
[9] Chopik, W.J. (2017). Associations among relational values, support, health, and well-being across the adult lifespan. Personal Relationships, DOI: 10.1111/pere.12187.
[10] Rutter, M. (2015). Resilience as a dynamic concept. Development and Psychopathology. 24. 335–344.
[11] Barrett, L. F. (2017). How emotions are made: The secret life of the brain. Mariner Books.
[12] Harris, R. (2018). ACT questions and answers. A practitioner’s guide to 150 common sticking points in Acceptance and Commitment Therapy. Oakland: Harbinger Publications.
[13] Solnit, R. (2014). The Faraway Nearby. New York: Penguin Books.
[14] Baikie, K.A. & Wilhelm, K. (2005). Emotional and physical health benefits of expressive writing. Advances in Psychiatric Treatment. https://dx.doi.org/doi:10.1192/apt.11.5.338
