Chapter 3 continued
(Draft of John's new book: Your comments are welcome)
Risk triggers emotions that fuel people determined to build and ride their startup bicycle.
Startup people respond in special ways to emotions. Giant corporate managers differently to the same emotions. Understanding the differences is central to life or death of a startup leader.
Serendipity: “the faculty of making happy and unexpected discoveries by accident.” Coined in 1754 from a fairy tale about The Three Princes of Serendip.
I was speaking with Bill Mcaleer of Voyager Capital about what strong emotions he sees running in startups. I remember well him saying “And the excitement hits the ceiling when something great happens. Often that event creates a sense of serendipity in the people of the new enterprise. It is spawned from that bit of luck, the unexpected that happens, the special thing that makes the company. People are elated.”
Those special events are what the VC icon Dick Kramlich of New Enterprise Associates calls “company-makers”. That is the event that puts the company into a commanding competitive lead as it gains momentum and greatness at the expense of its competitors.
The good news is the company leaps ahead and into the lead. People leap and shout and are ecstatic.
The bad news is that often such people believe they deliberately caused this amazing event to happen. They actually think they can do it again and again. That is what psychologists call “magical thinking”. They believe they actually surfed a forty foot wave, standing all the way to the beach on their surfboard. But when they try to repeat the epic ride, they crash and burn. The first ride was just luck. Now sobered – if they survived – they go out to ride (mostly lesser waves) with more humility and respect for their limitations.
Serendipity is managed by startup veterans by letting the related joy and optimism run free while balancing those powerful emotions with realism: “Remember that we did not plan that amazing event, we just received amazing benefits from it. Now it’s up to us to take full advantage of those benefits. Now we can do amazing damage to our competitors and out-run them to dominate our market. It will still take a ton of additional hard work. But now we have gained a significant edge that our competitors do not have. Let’s make the most of it!”
Fear is good. It keeps children from touching red hot stoves. In startups it keeps people realistic. It causes action: it triggers adrenaline that triggers the emotional response “Fight or flight.” Sometimes it is wiser to retreat (and abandon a doomed business model). Sometimes it is better to dig in and fight (rallying the company to do amazing things).
Fear is bad. It can lead to paralysis (stick to the doomed marketing message; do not fire your incompetent vice president who is your best friend). It can push strong people over the brink of emotional control and into the pit of harmful behavioral compensation (marital affairs, drugs, gambling).
Managing fear and its related emotions begins with respecting what fear can do in a startup, the good and the bad. A good place to start is with yourself: acknowledging you feel fearful is a beginning. And then talk about how you feel to a close friend or mentor. Such people are highly recommended by serial entrepreneurs. Yet creative people have a pattern of solo behavior that lacks such ties. First-time entrepreneurs are wise to start their business plan drafting by finding a couple of people with whom they can share intimate emotions such as fear. Fearful people are not weak—the ones who do not admit they are fearful are the weak ones. Startup veterans are experts in managing the emotions triggered by fear.==========