The Psychology of Startup Founders

The Psychology of Founding a Startup

The concoction of skills and mindsets that help facilitate business success has always been a fascination of modern business psychology – what ingredients stratify and segment the world’s most successful businesspeople from everyone else?

What is the role of luck, of the environment, and of the individual’s own skillsets, knowledge, and background? And how can businesspeople invoke the markers of success, if there are any? And what about the psychology of startup founders?

The Psychology of Startup Founders: What are the Challenges?

CEOs and serial entrepreneurs often need to be highly autonomous to succeed. Yes, teamwork is also vital, but the ability to work with one’s own mind and convert thoughts into action is paramount.

After all, one of the driving forces behind creating a business or founding a startup in the first place is a desire for autonomy – people want to do something that they are accountable to as an individual whilst breaking free from typical employment relationships.

The need for autonomy is partly why CEOs and other major business figureheads are generally singular entities. There are some exceptions to the rule, such as the Larry Page and Sergey Brin, the duo that founded Google, but otherwise, we tend to think of truly massive businesses as being headed by one key individual.

Is it Lonely at the Top?

Loneliness and autonomy are synchronous in many ways – or to rephrase that – autonomy and being comfortable being alone are synchronous. The tricky thing is delineating being alone from loneliness, as many studies have found that autonomous people do not fully experience ‘loneliness’ despite ranking themselves as highly independent.

Fernet et al. (2016) found that SME founders were susceptible to loneliness and burnout if not left unmitigated but Wright (2011) found that managers were no less lonely than their non-manager team members. Waytz et al (2015) found that loneliness in business situations was mitigated, in some cases, by the acquisition of power and success.

Founding a startup provides a profound opportunity for becoming self-sufficient, autonomous, and independent, and this may complement the personalities of those who tend to found startups in the first place.

But, it’s still important to be aware of the risk of loneliness and to develop strategies for mitigating its effects.

Dealing With Vulnerability and the Fear of Self-Sabotage

Forming a startup can be an intrepid, risky and perilous experience. This is also part of the attraction – taking chances is fundamental to business, “you’ve got to speculate to accumulate”.

But that risk can be pervasive and damaging if left unchecked. Many people are worried about self-sabotage, over-committing, and having no way back to their former lives. It’s true that every entrepreneur needs to be conscious of their backup plans if everything goes against them, but successful entrepreneurs combat this fear with their own determination and resilience.

In this post, Capterra delved into the story of Hiroki Takeuchi who had previously raised $22.5 million in Series D funds for his startup GoCardless, putting its total funding at over $50 million back in 2017. It’s still going strong today.

Takeuchi has a skill set that many businesspeople envy – he is an Oxford grad and former McKinsey consultant. Both his credentials and his business success are the stuff of dreams for many budding entrepreneurs.

Whilst riding his bike near Regent’s Park, London, Takeuchi slammed into a car and was subsequently paralyzed from the waist down. Despite having his life turned upside down by an event that’s ramifications extend way beyond business, his personal resilience, autonomy, and determination saw him pick his business back up within mere weeks. What this demonstrates is that willpower and determination do not discriminate and vulnerability and risk are all around us – it’s an intrinsic component of our humanity. It’s how we deal with it that matters

In an interview with Stanford Business School, Hidehiko Yuzaki, the governor of Hiroshima Prefecture, summed this up perfectly:

“There are a lot of smart people out there with very good ideas, but persistent execution is very rare. You need to keep executing, making adjustments to what you do based on the results, and keep doing it again and again until eventually, you succeed.” – Hidehiko Yuzaki

What Can We Learn From Takeuchi?

This anecdote demonstrates that resilience and determination stand against even the harshest twists and turns of life. Cultivating these traits help entrepreneurs overcome adversity and reach their next goal or milestone.

It’s also well worth mentioning that Takeuchi got back up and running so determinedly with the assistance of his co-founder and his dedicated team. Whilst the psychology of startup founders might be one of autonomy and independence, this by no means insinuates that teamwork is unimportant.

As is often the way, success might be just over the crest of the hill – you just need to climb that little bit harder to see it.

 

My mother in law loves to sew.

A few years ago she asked me how to set up an online store.

She wanted to sell fancy throw pillows she was making.

I gave her very basic steps. Enough to get started (I don't know much about ecom).

A few weeks later she showed me her site. It

Everyone wants “yes.”

But they don’t wanna pay the price.

100 Nos is the price of one yes.

You can get as many as yeses as you damn well please as long as you’re willing to pay the price.

I was sad to learn that Charlie Munger died today at age 99.

What a life.

He would likely roll his eyes and argue that none of us should be too surprised, based on the actuarial tables, but we’ve lost one of the 20th century’s greatest investors and businessmen.

Chris and I

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