Believe in Your Hockey-Stick
You’re going to investor meeting after investor meeting and find people aren’t buying. When you ask for peer feedback, you’re told that you’re simply not “selling hard enough” — your projections are too low, you talk too much of your risks and too little about the opportunity, you lack confidence.
You are about to launch your product and find reasons to delay, to put an extra touch on it, you know it’s supposed to be an MVP, but you’re going for “Minimum” with a capital M, not just a minimum viable product. So you wait.
It’s time to reach out to that big customer, but you need just a little more extra oomph in proof, more salient product marketing slogans, a better designed presentation, the right alignment of Mars and Venus in the evening sky…
You go to your board meetings and spend most of the time on risks and complications. You feel your investors are starting to doubt their bet on you. The board is more focused on preservation than growth, and the doom-and-gloom permeates your executive team. You’re wondering who’s working, and who’s actually working on her resume.
In short, you are doubting yourself.
Optimism Is The First Line In Your Job Description
I am a critical person. I can see the hole in every plot and the crack in every wall. I believe in paranoia. I challenge the CEOs I work with consistently. You know what scares me even more than market and engineering risk? Psychological risk. CEOs whose spirit was broken, who take “no” from investors as a judgement on their value or a verdict on their plan, who fear criticism from board members, who cower when not everyone is in their corner.
Startups have to be run from a place of optimism. Not pie-in-the-sky optimism, not rushing forward blindly, but a focus on the prospects and a belief that if you execute well against a series of bets, some of these bets will come out in your favor, and your execution will enable them to pay off in a way that offsets the ones that don’t.
Therefore, at any given time, the real questions are:
- Do you still believe in your market — is it growing / big already?
- Are you solving a real problem / meeting a real need?
- Are you and your team the right people?
Assuming the answers are the same as they were when you started the company, there is a case for optimism, and it is your job to base your perspective on it.
Projections and Objectives — Best Case Scenario and Average Case Scenario
When setting objectives for you and your team, they have to lie somewhere in between these two. A key reason to set goals in the first place is for people to have something to aspire to and believe they will be rewarded if they hit them. What’s the point in aspiring to mediocrity?
This is even more pertinent when you’re pitching investors. If your numbers are not exciting, then why should they risk their fund? Investors assume you are optimistic, they will apply a multiplier to the numbers you show them, and it’s going to be lower than 1.0 anyway.
And guess what? It’s common sense. Even if the market, the product and the team enable you to beat your goals, even if the numbers can be higher than what you project — they won’t be if you, the CEO, don’t aspire to that. It’s not the investors’ / customers’ / partners’ / employees’ job to be more optimistic than you are.
You miss 100% of the shots you don’t take.
The business of startups is based on the assumption that going to zero is not a possibility, it is the default. 90% of startups fail is not just a cliche, it is the foundation of the VC business model. If you’re early stage, everyone realizes you may fail.
So let’s discuss what happens if you don’t — how big can you be, and what you need in order to get there. Your job is to talk about two situations — a plan (that is somewhere between best-case and average-case), and about a best-case scenario, which is where you get to if you’re both excellent and lucky. Your backers are more likely to assume you excel at execution when you talk about excellent outcomes.
And yes — they also believe they are lucky, and some of that will rub on you.
So Why Does Your Heart Feel So Bad?
If you have even an inkling of a pang of a notion that you are being too pessimistic, it is 99% likely that you are. Between the pressures of startup grind, the undermining effects of hearing “No” from dozens of investors and customers, and your likely personality structure - you are probably suffering from some measure of Impostor Syndrome, a common psychological pattern in which one doubts one’s accomplishments and has a persistent internalized fear of being exposed as a “fraud”.
Look at the types of people who are most likely to suffer from it. What do you think is the overlap with startup entrepreneurs?
- The perfectionist
- The superwoman/man
- The natural genius
- The soloist
- The expert
Once you realize that may be the case, it is your duty to your company to do something about it. Your professional duty is to take care of yourself.
Some possibilities:
- A coach / mentor / advisor who understands the dynamics of the CEO position, the business of startups and its psychology.
- A therapist — especially if you feel there is spillover from / into other aspects of your life.
- A support group of like-minded individuals.
- A vacation.
- All / some of the above.
What often doesn’t work, unfortunately, are conversations with board members and co-founders. Both groups get spooked easily and often don’t have the patience or tools to help you. Yes, I know you VC partners and CTOs are shocked and appalled by this statement. But ask yourself honestly— are you really equipped to help? Do you really want to? Do you have the time and inclination? Can you do so non-judgmentally? Without thinking about your vested interests all the time? How likely are you to actually be counter-productive?
When Hope IS a Strategy
In these days of global pandemic and imminent recession, virtually everyone has an extra measure of psychological stress. Many, even the ones who are doing well, have this gnawing feeling like the floor might drop from under them any moment.
Well guess what? It may — but that’s beyond your control. What is in your control is how well you lead while things are going well, or OK, or likely to get there eventually. And startup leadership is about optimism, hope and risk-taking.
Your job is to help your extended team feel hopeful. That includes your employees, customers, partners and investors.
Startup leadership is about optimism, hope and risk-taking.
