CHAPTER EIGHT

Staying Power

Give Your Venture Time
to Take Flight

“It’s not that I’m so smart. It’s just that I stay with problems longer.”

—Albert Einstein

You can do everything well. You can prepare yourself as a founder, aim for a robust market, design an economically sound business model, move forward with flexibility, and surround yourself with straightforward truth-tellers. Still, getting your venture safely off the ground will likely take more of your time, money, and effort than you expect. Most great ideas require time to work, and it may take a long series of sparks to finally create a roaring fire. Just as overnight successes are often decades in the making, “home run” businesses are most often due to the accumulation of many swings at the plate, where founding teams persevere over time to seize opportunities that couldn’t have been scheduled, or even anticipated, in advance.

Unfortunately, one of the common side effects of falling in love with a business idea is the founder’s assumption that success will come quickly and easily. Due to the nearly universal tendency to over-project early sales and under-project costs, the startup runway can evaporate quickly and dangerously. This is the immediate reason why many ventures fail without ever turning a profit. But it also points to a significant opportunity: Entrepreneurs who do what is necessary to keep their business alive over time, treating time as a competitive advantage rather than a dwindling resource, can dramatically elevate their odds of venture survival and growth. “The first thing we know about being successful as an entrepreneur is: If you can make it through the early years, your odds of success will go way up,” writes Scott Shane, professor of entrepreneurial studies at Case Western Reserve University and author of The Illusions of Entrepreneurship. Shane cites more than twenty studies, showing that, when it comes to new ventures, “the odds of your new business failing are highest when you first start and decline in relation to the length of time you have been in business. And it isn’t just the chance of staying alive that increases over time. The data also show that the average start-up also becomes more profitable as it gets older.”¹

This final chapter will focus on strategies for strengthening your venture’s staying power, your ability to keep moving forward. The forces impacting staying power operate at two levels. The first level is that of the venture itself, where factors external to you as a founder will either lengthen your runway or cut it dangerously short. The second set of forces acts at the personal level, where your ability to perform with stamina and persevere over time will ultimately determine your success in building a thriving business over the long haul.

Venture-Level Strategies: Strengthening and
Lengthening Your Runway

The metaphor of the runway is widely used among entrepreneurs to represent both the excitement of speeding toward a successful liftoff and the risk of crashing into the heap of floundering ventures just beyond the end of the pavement. What follows are four strategies for building a long, strong runway for your venture.

1. Launch close to the customer.

2. Address your biggest risks early.

3. Raise more money than you think you will need.

4. Commit resources wisely.

LAUNCH CLOSE TO THE CUSTOMER

In every successful startup journey, there is a point of no return, where the aspiring founder moves from the idea stage to wholehearted commitment to the cause. This passage is always marked by a stepped-up investment of time and resources, and, in some cases, includes resigning from a job to plunge full-time into a new venture role. You are no longer contemplating whether to move forward. You are on the clock, with money falling through the hourglass.

Even after burning significant time and cash, however, many startups haven’t really started. They have yet to interact with paying customers. They understand very little about market demand. They may not have a ready-to-sell product or a workable channel for sales and distribution. Instead, they are engaged in pre-launch activities, such as conceiving the future business, developing products, building execution plans, recruiting partners, or putting supporting technology in place. These activities are typically necessary, and some types of ventures (life sciences ventures and speculative real estate development, for example) require long, heavily funded pre-launch periods. But pre-launch activities that are not directly aimed at acquiring clients are often several steps removed from the marketplace, the arena in which your venture’s viability will ultimately be tested.

Therefore, one of the keys to strengthening your runway is to move your effective starting point, the point at which you plunge in full-time and begin to burn significant resources, as close as possible to your point of revenue creation. This usually means incubating and gestating your idea as inexpensively as you can, while making a living through other means. How much of your idea can you develop and test in advance without a huge commitment of capital? How fully can you develop a working product before you make the full-time plunge? How well can you research and understand the market for your idea, even pre-selling customers, before you cross the point of no return?

The opportunity here is two-fold. First, you will hit your runway with much more than a raw idea, bringing a keener grasp of your concept and projected path to profitability. Second, the more inexpensively you can answer the above questions, the more capital will be preserved for the critical process of iterating your idea in the real world, allowing you to get your offering in the hands of paying customers, understand their experience, and use this knowledge to improve your fledgling business model. With this approach, you can accelerate down the runway efficiently and with greater focus, instead of spending precious on-the-clock time bouncing untested ideas back and forth.

The most desirable point from which to launch a business is with paying customers already in hand, generating cash from day one. DriveSavers, a $20 million data recovery company based in Novato, California, was pulled into existence by a growing computer-based problem in the mid-1980s. Founders Scott Gaidano and Jay Hagan worked for a company that sold computer hard drives when the firm went bankrupt and closed. Out of work, they began talking about launching a seafood business, but they soon received frantic calls from former customers whose hard drives had crashed. At the time, few people knew how to recover data from fried computers. “There was no manual. Nobody knew how to do it,” Gaidano says. As they began helping customers retrieve data, word spread quickly, and a solid business was born.²

My first consulting practice was the result of client requests. While working with First Union Corporation in the mid-1990s, I was considering a move to external consulting but needed a bridge, something to help me transition from the security of a regular paycheck to the freedom and uncertainty of self-employment. Late in 1997, I received inquiries from two outside organizations needing consulting help. The resulting projects promised to bring a healthy revenue stream over four to six months, enough time to build a healthy pipeline of future business. These first clients gave me a solid bridge to the outside world and allowed me to set up my consulting practice with confidence.³

Although he didn’t start with specific clients in hand, J.C. Faulkner serves as an exemplary model for how to study and scrutinize a market idea while working for someone else. In his sales management role with First Union, he developed close relationships with hundreds of entrepreneurs and salespeople throughout the mortgage industry. Before resigning from his job, he knew exactly what customer segments he would target with his new venture and how his early business model would work. Even with this preparation, he spent more than $600,000 in capital over a year’s time before breaking even, but because he had patiently allowed his concept to mature prior to launch, he moved his effective starting point much closer to the marketplace than most venture founders.

In contrast, consider the example of two corporate professionals who, talking over a beer on a Friday afternoon, hit upon an idea for providing an innovative information service to large corporations. Within a few weeks, they had resigned their well-paying jobs. They tapped into their personal savings to bring two more salaried team members on board, leased office space for the team, built a prototype of their technology, and began pitching their concept to senior buyers in target organizations. After six months of expenses, as their resources began to diminish, they were still in search of their first account. These founders continue to gamely press on, and their concept may yet catch fire, but their margin for error is now razor thin. Had they chosen to test and refine their concept prior to committing full resources to it, it’s likely that they would now enjoy a much lengthier startup runway.

ADDRESS YOUR BIGGEST RISKS EARLY

Venture capitalists call it the Valley of Death, the period after a founder has begun to spend capital but has yet to find a steady stream of revenues. A large percentage of new business attempts never make it through this first phase, which is why startups are known to be hazardous and the word “entrepreneur” conjures an image of a daring, swashbuckling gambler. But, as Matthew J. Eyring and Clark G. Gilbert note in the May 2010 issue of Harvard Business Review, the stereotype of the risk-loving entrepreneur is a myth, at least among those who are highly successful. Effective entrepreneurs recognize that some level of risk comes with the new venture territory and is necessary to create value, but they are not the bold risk-takers that they are made out to be. They are, instead, in the authors’ words, “relentless managers of risk.” They understand that not all risks are created equal, so they identify and prioritize threats that pose the greatest danger to their venture. Gilbert and Eyring call these “dealkiller risks,” and wise founders find ways to creatively address these early in the startup process.

Gilbert and Eyring observe that “when risks are overlooked, fewer than 15 percent of firms are still in operation three years after initial funding.”⁴ An important strategy for lengthening your venture runway is to identify, very early in your planning process, deal-killer risks that might stop you in your tracks. These risks usually correspond to fundamental assumptions and uncertainties that must play out in your favor for your concept to succeed—an expectation of strong market demand, for example, or the availability of key expertise, favorable regulatory changes, or well-functioning technology. Once you have identified the handful of key uncertainties to be addressed, you can then work to reduce the likelihood of their occurring and build contingency plans to deal with them if and when they do occur.

Here are some examples of how successful entrepreneurs have addressed early-stage risks to clear their runway of potentially venture-killing obstacles.

Market Risk. For enthusiastic founders, the most fundamental assumption of all is that an abundance of paying customers will be waiting to buy your product or service as soon as it is released. These expectations are often too rosy, which means that the existence of adequate market demand is almost always a pivotal area of uncertainty for the new venture. You can mitigate this risk through piloting, prototyping, and related approaches, as outlined in Chapters Four and Six.

A powerful approach for radically reducing market risk is to sell your product before you build it. Starting with $1,000 in funds in 1984, Michael Dell, founder of Dell Computer, launched a build-to-order computer business from his University of Texas dorm room at age 19. To avoid the cost and risks associated with holding an inventory of components and finished products, Dell got his orders from customers up front, and then he secured necessary components to create each customized computer. This approach brought advantages from a cash flow perspective, but its most fundamental value was that it directly tied his incremental investment of resources to the presence of validated customer demand, effectively eliminating market risk from the startup equation.⁵

Relationship Risk. In 2006 and 2007, Mark Williams and his Modality co-founders were developing a technology for delivering content to the Apple iPod that they felt was compatible and secure within the iPod’s architecture. Overcoming this technical barrier required them to continue to iterate their software solution, called Modality Manager, but also required Mark to convince key technologists and senior leaders within Apple that Modality’s solution was safe and effective. As he wrote in a planning brief in January of 2007, “Currently, Apple developers are uncomfortable with the Modality Manager solution because of potential to cause problems for consumers as the iPod platform evolves.”

The stakes attached to gaining Apple’s approval could not have been higher. Modality’s offerings were exclusively developed for Apple’s vast customer base and designed to fit within Apple’s products. Mark’s goal was to earn Apple’s full support so that the powerful company would embrace and champion Modality and its innovative solutions. But in terms of scale and clout, Modality was the proverbial flea riding on the back of a bear. At a minimum, Mark needed Apple leadership to tolerate his early attempts to integrate his technology with theirs. Anything less would amount to a deathblow.

Mark focused a great deal of time and energy into strengthening his relationships with key Apple leaders, working to understand their objectives and concerns, and developing solutions that worked for both companies. The approach paid off, as he noted in an e-mail to advisers in late February 2007. “A key development occurred yesterday,” he wrote. “Following a meeting between the Worldwide Developers Group and iPod Marketing, it appears that Apple is comfortable enough with our current software solution to work directly with us on distribution in the Apple Retail Stores and in their online channels.”⁶ Mark’s partnership with Apple would continue to improve and mature. Modality developed a reputation within Apple as a talented, trustworthy partner, leading to a host of opportunities over the next few years. Increasingly, Apple championed Modality and its products, and recommended the Modality team to its institutional and educational partners.

Operational Risk. Every entrepreneur’s plan contains assumptions about how the product or service will be created and delivered to customers. In the passion and haste of a launch, these assumptions are often untested or unexamined, although they are usually fraught with uncertainty and, in some cases, pose tremendous risks to the venture. Gilbert and Eyring note that these operational risks can often be evaluated in surprisingly simple ways. They cite the example of Reed Hastings, founder of Netflix, the movie-by-mail business, who conducted a simple, early test of his concept’s logistical viability: He mailed himself a CD in an envelope. “By the time it arrived undamaged,” the authors write, “he had spent 24 hours and the cost of postage to test one of the venture’s key operational risks.”⁷

Operational risks can also involve reliance on key personnel. One of my startup clients began as a spinoff from an existing company, having negotiated a deal that allowed it to transport nine major client accounts into the new venture. But until the new company could develop its own technology platform to service the accounts, a task requiring at least six months to complete, the original company’s operations team would continue to service the accounts. In my first meeting with the founders of the spinoff, we acknowledged that the dependency on the original company’s operation represented a significant area of risk. What if key team members in the original company favored their own client accounts over those that had been transferred? Worse yet, what if one or more key members of the operations team, already stretched to capacity and openly unhappy about the spinoff decision, decided to call it quits? Revenue from the inherited accounts would be important to the new company’s startup runway, so any major disruptions to client service could pose serious problems.

The next day, the operations leader in the original company confirmed our fears and submitted her resignation. While not a deal-killing blow, this event required a lot of attention and problem solving from the new team and detracted from other priorities. Fortunately, the team had identified back-up plans for communicating with clients and serving their needs until an in-house platform was up and running.

These are just a few examples of areas of early-stage risk. Each venture will bring its own unique set of uncertainties that can lead to a fatal early blow. To address these, scrutinize and test key aspects of your concept sooner rather than later, even if your entrepreneurial passion and optimism tempt you to assume the best. Eyring and Gilbert note that many venture managers succumb to this temptation. “Instead of testing their assumptions,” they write, “they become more and more invested in confirming them. But successful entrepreneurs do the opposite: They devise low-cost experiments to disprove a concept before it’s too late.”⁸

RAISE MORE MONEY THAN YOU THINK YOU WILL NEED

This section expands upon a principle I shared near the end of Chapter Five, one that directly impacts your available runway and deserves emphasis. Human beings have always been poor predictors of the future. Highly passionate entrepreneurs represent a special case of this phenomenon, routinely favoring rose-colored views of the new venture path, especially when it comes to estimating capital needs. One of the simplest, most important strategies for ensuring that you make it through your earliest phase is to secure more than adequate funding to get your venture to the point where it is self-sustaining.

Even though J.C. Faulkner entered his startup launch with a highly refined understanding of his target market and a well-tuned business plan, he took no chances when it came to funding. “My philosophy,” he says, “was that you should raise two-and-a-half times more money than you think you’ll ever need in the worst case scenario. This was based on great advice from my dad, who saw a lot of businesses succeed and fail as an accountant.” Accordingly, the D1 business plan projected that the company would spend about $800,000 before becoming profitable, so J.C. secured access to $2.5 million before taking his idea to market. About one-fourth of this was in the form of his own career savings, while some money came from private investors (friends and business associates who trusted J.C. and knew his track record in the industry) and the rest came from loans and lines of credit, none of which he tapped.

Although having access to these funds cost him more in terms of interest and ownership, J.C. considered it well worth the price. “It was like paying an insurance premium. It cost a bit more but provided a safety net. Money was one less thing I had to worry about,” he says. “A lot of potentially good companies have died because they ran out of money. I looked at the things that could kill us, and I could control this one.” Moreover, he avoided the constraints that often come with outside investors by setting clear expectations with his investor group. He promised them a healthy return on their money on the condition that they would have no control over how he developed and managed the venture.

Some entrepreneurs and academics warn against the dangers of overfunding an early-stage business, arguing that too much capital can cause an entrepreneur to lose touch with market forces or become inflexible or undisciplined. My experience is that these dangers operate independently of a venture’s funding situation, biting poorly funded and well-funded businesses alike, and they are driven mostly by factors such as the founder’s preparation, personality, and expertise. In J.C. Faulkner’s case, the extra funding heightened his ability to focus and respond intelligently to market forces. “The fact that we had more money than we needed meant that we could go faster if we wanted, or we could slow things down,” he said, “depending on what the markets were doing.”

Bob Tucker, J.C. Faulkner’s attorney, believes that the principle of ample funding generalizes well to the many business owners with whom he has worked over the years. “I have advised dozens of different businesses to go borrow money,” he says. “If your business plan indicates you’re going to need a good bit of money down the road, go right now, even if it costs you more in interest to do so, because you don’t know what lies between here and there. It’s worth having the powder in the keg, because the consequence of not borrowing now may be that your business plan won’t get a chance because of future developments of some kind.”

COMMIT RESOURCES WISELY

Raising ample funds is one side of the financial equation that will determine the length of your startup runway. The other is your burn rate, the negative cash flow likely to be created during your launch. As you build your venture with an eye toward managing risk, preserving flexibility, and staying in the game, your rate of spending will be a critical lever for extending and stretching your time and cash.

Don’t confuse raising money with the need to spend it. Instill a disciplined process of managing your commitment of funds and monitoring projected cash levels. The more judiciously you manage expenses, the more you multiply the power and impact of whatever capital is available.

Mark Williams gives much credit for Modality’s early staying power to the role of Nancy Owens, who first came on board in a part-time accounting and finance role but soon became his CFO and chief administrator. “Nancy, along with great financial advisers around us, helped us manage cash and operate with a high level of capital efficiency,” he says. “You want to raise as much capital as you can, but you have to be extremely careful in how you utilize those resources.”

Keep in mind that committing resources wisely is not the same thing as minimizing all costs. Once you have chosen the right starting point, you will enable your venture’s growth by making targeted investments, not by completely avoiding them. Bob Tucker remembers that J.C. Faulkner’s approach to spending money during D1’s launch was well planned, focused, and confident. “Something that J.C. did that I believe is an earmark of success: Focus more on what you want to spend and what you want to spend it for, than on trying to curb the expense,” he said. “In other words, make the expenditures well thought-out, prudent, and necessary in support of the business plan, as opposed to thinking ‘let’s save everything we can.’ That’s not your objective. Your objective is to enable and support the business plan.”

A key factor determining where and how you commit your early-stage resources will be the pace with which you intend to launch and grow your venture. The right pace for your particular business will, in turn, be driven by many factors, including your purpose as an entrepreneur (What pace will best align with your personal goals?), the nature of your market opportunity (How robust is market demand for your offering?), related competitive forces (Is your window of opportunity narrow or wide?), and your business model and strategy (What rate of growth will best position you to create value in proportion to the opportunity?).

By mid-2010, Mark Williams and his team faced a set of divergent opportunities for growth. Their research and development efforts continued to generate potentially game-changing innovations for Apple’s iPhone and iPad products, as well as enterprise-wide learning solutions for educational institutions, healthcare systems, and large corporations. Focusing on innovation would call for a deep investment of time and capital with uncertain returns. At the same time, Modality’s steady investment in its catalog of licensed educational and reference products for mobile devices had led to a library of nearly 150 products and a reliable revenue stream. The company had also begun to generate fees for providing digital publishing services for major publishers. Each of these areas of opportunity brought a unique set of risks and requirements, and Mark and his team faced tough choices regarding where to invest limited resources.

As a general rule of thumb, I have found that most startup founders, driven by their enthusiasm and commitment, attempt to do too much, too fast. Successful entrepreneurs often look back on their path to value creation as less like a sprint than a marathon, one that balances urgency and desire with watchfulness, patience, and good judgment. As Amar Bhide, visiting scholar at Harvard University’s Kennedy School of Government, wrote in his classic piece on bootstrap finance in the November-December 1992 Harvard Business Review, “Start-ups that failed because they could not fund their growth are legion. Successful bootstrappers take special care to expand only at the rate they can afford and control.”⁹

Founder-Level Strategies: Performing and
Persevering over Time

During 2008, as it became increasingly clear that the market for upscale adult daycare services in Charlotte was not going to materialize any time soon, Lynn Ivey continued to doggedly pursue her dream. She brought on a temporary sales team to generate and follow through on leads. She continued to network with enthusiasm throughout the community, seeking client referrals and new financial partners. But privately, Lynn wrestled with despair and depression. Fatigued by financial crises, she searched for pockets of cash and juggled vendor and bank payments to generate another month’s payroll. It had been more than a year since her mother had passed away, and her lingering grief was now deepened by the growing realization that her business, a monument launched in her mother’s memory, was itself in the process of dying.

The birth of a business idea brings hope, jubilation, and intensity. Aspiring entrepreneurs feed off of this energy and spread it to others as they race forward. Friends and colleagues admire and congratulate new founders on their bravery and creativity. But it is further along the venture road, beyond the honeymoon’s promise, in times of strife and stress and inescapable responsibility, where many businesses are made or broken. Your entrepreneurial stamina and determination will occasionally seem like the only thread holding your venture together. In these times, the most vital questions have little to do with your business model and everything to do with you: How much gas is left in your tank? How do you refuel and recover? Are you moving with enthusiasm and a sense of purpose or with growing weight on your shoulders?

In this section, I will offer a few final thoughts on how to perform and persevere through good times and bad in pursuit of your venture-level goals. While we know that certain entrepreneurs are more hardwired for persistence than others (see personality dimensions covered in Chapter Three), I will focus here on strategies available to all founders, regardless of core personality. Healthy entrepreneurial stamina is not just about the refusal to quit, an attitude that can cause stubbornness and attachment to nonviable concepts, but is grounded in ongoing learning and improvement. Four principles can help you to increase your own staying power for the good of yourself and your venture:

1. Feed your fire.

2. Focus on achievable goals.

3. Balance performance with recovery.

4. Persevere without attaching.

FEED YOUR FIRE

As a kid, I loved waking up to the sound of distant lawn mowers drifting through my window, a signal that the weekend had arrived. Saturdays were packed with possibility. I would hop out of bed and spend whole days in pursuit of activities of my own choosing, playing “homerun derby” with my buddies, teaching myself to high-jump at a nearby athletic field, or listening to my older brothers’ record collections while studying album art and memorizing lyrics. Every few months, I rotated to a newly immersive activity. One season it was basketball, the next music, then reading, fishing, or golf. In every case, I loved what I was doing. I loved the exploration, the striving, and the opportunity to learn and master new things. Passion and joy drove me, not fear or obligation. I was free.

Forty years later, I still seek and enjoy that Saturday morning feeling, the “fire in the belly” that pulls me out of bed as I look forward to the activities of the day ahead. I seek it out in my relationships, in my work, and in my personal pursuits. I believe all of us yearn for the moments when we feel on course, called and driven by a sense of purpose, focused on what we are moving toward rather than what we are hoping to escape. This is the essence of entrepreneurial passion, a self-evident compulsion driven by instinct, needing no explanation.

Most of us, too, can identify with another feeling, more like a “weight on the shoulders,” a feeling of resignation and compliance, of doing a job because we seem to have no choice. It’s the hit-the-snooze-button syndrome, where we most look forward to the end of the day. When it comes to personal energy and stamina, the difference between these two states is like the difference between the Saturdays and Mondays of my youth.

A key strategy for building your own perseverance and performance as an entrepreneur is to know what activates the fire in your belly. As your startup road becomes more challenging: Why do you continue to care? What are your compelling reasons for persevering? What is it about your business that most energizes you? In what ways are your expertise and passion best utilized? On the other side of the coin: What issues and activities provoke frustration or fear? Where are your feet stuck in mud because of a lack of desire, skill, or confidence? How can you better align the goals of your venture, and your role in leading it, with your natural motivation and capabilities?

As I wrote in Chapter Three, founder readiness is more than a prelaunch issue. Your level of preparation and performance will continue to determine your venture’s health long after the launch button is activated. To ensure the best fit between your role and the needs of your venture, periodically revisit the questions provided in Chapter Three related to your purpose and goals, skills and experience, relationships and resources, and personal capacity. How are these factors playing out along your venture path? How can you maximize the fit and alignment between your goals, skills, and the needs for your new business?

FOCUS ON ACHIEVABLE GOALS

One of the challenges for passionate founders with ambitious ideas is to not be overwhelmed and stymied by the size and complexity of the venture opportunity. The old axiom about how to eat an elephant—one bite at a time—will serve you well as you seek to accelerate down your startup runway. Break your grand vision into shorter-term, readily achievable goals to encourage clear progress and rapid iteration. From a motivational perspective, the achievement of each step brings its own psychological reward, a dose of satisfaction, and a sense that your venture is gaining ground.

In an article summarizing a longitudinal study of nascent entrepreneurs, Sibin Wu, Linda Matthews, and Grace Dagher of the University of Texas (Pan American) observe that achievement-oriented entrepreneurs tend to do best with a measured approach to goal setting. “For highly complex tasks, such as the entrepreneurial process, difficult goals are not as effective as simple goals,” they write. “Entrepreneurs tend to be overconfident and overestimate their abilities and their business goals. They may overconfidently set their goals too high . . . and hence experience dissatisfaction instead of satisfaction.”¹⁰ It’s important to emphasize here that setting achievable goals does not equate to shrinking from adversity or ignoring challenging tasks. The lesson is not to abandon your ultimate vision but to keep your eyes focused on the difficult but achievable steps that will get you there.

To boost the positive effect of your short-term goal setting, create regular points of accountability at which you will share results with others. Paul Graham, founder of Y Combinator, a seed-stage technology venture capital fund, has wryly observed that perhaps the biggest differentiator between successful and failing startup teams funded by Y Combinator is how consistently these founding teams attend Tuesday night dinners hosted by him and his colleagues. In a talk to his founders entitled “How Not to Die,” Graham said, “You’ve probably noticed that having dinners every Tuesday with us and the other founders causes you to get more done than you would otherwise, because every dinner is a mini Demo Day. Every dinner is a kind of a deadline. So the mere constraint of staying in regular contact with us will push you to make things happen . . . It would be pretty cool if merely by staying in regular contact with us, you could get rich. It sounds crazy, but there’s a good chance that would work.”¹¹

BALANCE PERFORMANCE WITH RECOVERY

Sustained, world-class performance in any field requires what Jim Loehr, renowned performance psychologist and co-founder of the Human Performance Institute, calls oscillation, the balancing of intense periods of focus and effort with intermittent periods of recovery and development. Over several decades, Dr. Loehr and his partners have closely examined the behavior of peak performers across sports, business, medicine, law enforcement, and other fields.¹² Virtuoso musicians, champion tennis players, and high-performing technologists all display a similar back-and-forth pattern of intense effort and recovery. The same is true of the best entrepreneurs. Any talented founder can run hard and bring his or her “A” game for a few weeks or a few months, but leaders who display strong venture leadership over the longer term find ways to care for themselves and their loved ones, recharge their batteries, and sharpen their skills and knowledge.

Sustaining your effectiveness as a founder will require punctuating your work with adequate time for recovery, practice, and play. A simple (but often ignored) example is in the area of self-care. Many frazzled entrepreneurs don’t allow themselves enough sleep, exercise, or nutrition. They envision themselves as tough, stoic warriors, whereas, in fact, their health and intellect are fading fast. Personally, I have yet to find a more reliable way to replenish my strength, mind, and mood than to engage in regular exercise, but each founder will need to find his or her own rhythm and approach for staying sharp and increasing capacity.

If you don’t take time for recovery, chances are good that your mind and body will do it for you. In early 2010, Mark Williams noticed that Modality’s top software developer, a brilliant technologist and the indispensable backbone of the firm’s innovation and development efforts, was not performing up to his own historical standards. The behavior was extremely uncharacteristic, and when Mark directly shared his concerns, he learned that his colleague was on the verge of burning out. “He said he had hit a wall, to the point where he hadn’t wanted to look at another line of code,” Mark said. “We encouraged him to take more personal downtime and he began to work his way back into a groove.” Interestingly, Mark Williams himself, one of the most steadily energetic founders I’ve ever known, someone who could work for months on end with as little as four to five hours of sleep each night, seems to hit his own wall every six months or so, going down for days at a time with a severe intestinal bug or a high-fever strain of the flu.

Another form of this physical and emotional rebellion comes in the form of weak focus, wandering attention, and unclear thinking. It has become fashionable among entrepreneurs to claim to suffer from some version of Adult Attention Deficit Disorder, and no doubt some of us do, but most of us are victims of an unrelenting overload of sensory stimulation and emotional strain. Too many founders allow their focus to be diluted and washed away by incessant interruptions and distractions, whether they are by emails, advertisements, or random insignificant tasks.

Two books have recently contributed to the growing body of evidence that cultural and technological forces are shrinking our attention spans and diminishing our productivity and effectiveness. In The Myth of Multitasking, author and consultant Dave Crenshaw explains how the modern tendency to wear many hats and juggle tasks leads to huge drains on productivity and efficiency.¹³ And in The Shallows: What the Internet Is Doing to Our Brains, journalist Nicholas Carr offers the well-formulated thesis that our 24/7 information age is robbing us of nothing less than our ability to think deeply.¹⁴

The solution is to prioritize and focus the largest chunks of your time on opportunities and problems that require deep attention and effort. Go for depth over breadth. Devote your best thinking and action to a few essential challenges each week, or even each month, to avoid being pulled by the tide of a hundred superficial distractions, drifting like a boat without a sail. Determine what initiatives are most essential to propel your venture forward over a given period of time, and then shut everything else out. Turn off the screens and get back to a college-ruled note pad if necessary.

PERSEVERE WITHOUT ATTACHING

The deepest form of entrepreneurial commitment acknowledges and accepts that there are forces in the marketplace that are beyond the founder’s control, forces that will impact the venture’s destiny for better or worse. Rather than causing a resilient founder to give up, this realization highlights for them the fact that every route to venture success will deviate in some way from early expectations. Persevering over time requires that the entrepreneur commit to the path forward without knowing exactly where it will lead.

On a bright spring morning at The Ivey in May of 2010, twenty elderly clients sat around a children’s choir, visiting from a local middle school. Lynn Ivey’s dog Lacy rested in the lap of a contented woman. Staff members tried to coax people to sing along, and many did. Others tapped a hand against a leg or a foot on the floor. Lynn noticed her grumpiest member, a man who usually protested every staff request, sitting with his eyes raised upward, smiling and singing to the lofted ceiling. Soon another more powerful voice began to lift above the crowd. Heads turned to see one of the center’s newest members, a woman of stately bearing, standing on the outer edge of the group. This former professional opera singer had returned to her stage.

Six years after she left her bank job to care for her ailing mother, Lynn Ivey was beginning to taste her vision in real terms. This was the kind of personal impact she imagined: a home-away-from-home for people who desperately needed it, a community full of life, and a cast of characters bringing plenty of challenge and humor. Lynn couldn’t help but smile in describing the staff member who raced to intercept a man trying to relieve himself in a trashcan or the pleasant woman who seemed to be an aspiring thief, slipping the occasional vase or photo frame into her purse on the way out the door.

The fact that Lynn Ivey has been able to keep the center operating into 2010 is a testament to the sheer power of her personal will. When asked about what has kept her going, she talked of several factors. “I’ve never been a person who gives up on things,” she said. “I completely invested myself in this, financially, emotionally, and in every other way.” She was also driven, she said, by the public visibility and her responsibility to deliver on her promise to The Ivey’s many stakeholders. She credited her own spiritual outlook as well, a steadfast belief that something bigger was at work. And she still believed that The Ivey was on the front lines in an effort to address a growing societal problem. “A wave is coming,” she said. “We are meeting a core need that will only continue to grow.”

Just as critical for Lynn’s survival to this point was her late-blooming ability to let go of cherished ideas. Chief among them was her belief that The Ivey could thrive as a for-profit business. In 2009 she came full circle, finally accepting an idea that a few colleagues had advocated early in her planning process: to operate as a nonprofit organization. As her funds had continued to dwindle, this became the best option for keeping her fledgling service alive. “We needed money, and we needed more clients,” she says. “The nonprofit approach helped us make gains in both areas.” It allowed her to begin raising funds in the form of charitable donations, still a challenging task in a tough economy but also a great fit for her skills, enthusiasm, and sense of vision. Operationally, the nonprofit status has allowed her to lower her fees and offer her services to a much wider audience. As a result, she had acquired forty full-time members by May of 2010, a number climbing steadily month after month.

Heading into the summer of 2010, great challenges remained for The Ivey. Lynn was increasingly focused on fund-raising opportunities and continued to think big, promoting a vision for extending her model to the national level. In June, she entertained a week-long visit from the founder of an upscale adult daycare center planned in the Pacific Northwest region of the United States. “You should see her business plan,” Lynn said, “It’s almost exactly like the one I wrote.” Lynn was eager to share her lessons learned with this founder and continued to look for opportunities to forge mutually beneficial partnerships.

The only thing certain about The Ivey’s future is that it would bring plenty of new and unpredictable hurdles. Lynn felt up to the challenge, encouraged by the people being served right in front of her. She was beginning to make peace with the shape that her vision was taking. A few weeks after the middle school choir had visited her center, she told me of a brief conversation just after the choir had left the building. As she made her way back to her office in a hallway just off of the lobby, a frail eighty-year-old woman touched her elbow. “She said that she needed for me to know what a special place this was for her,” Lynn remembered, “and how grateful she was to be here.”

“I thought, in that moment,” she finished, “that my mom was talking to me.”