Friday, October 03, 2014

The Manic Side of Entrepreneurship

One of my long-term projects is to write a book about the psychology of entrepreneurship.  One of the issues I want to write about is what I call the manic side of entrepreneurship.

Entrepreneurs are innately optimistic; otherwise, they wouldn't jump into a field of endeavor that has a 90%+ failure rate.  I can assure you that every company I've started or invested in, I've felt had a better than average chance of succeeding...and despite that certainty, plenty of them have failed.

HBS professor Howard Stevenson famously defined entrepreneurship as, "The pursuit of opportunity without regard to resources currently controlled."  And therein lies the wonder and danger of entrepreneurship.

Being willing to pursue a goal whose achievement depends on resources beyond your current control is a massive leap of faith.  Yet it is precisely this leap of faith which helps change the world.  In the words of George Bernard Shaw, "The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

Entrepreneurs are unreasonable.  They start sprinting as fast as they can, convinced they'll figure out how to fly before they run out of runway.

I'm not going to argue against optimism or risk-taking; these are essential ingredients for success.  What I am going to warn you about is the danger of manic overcommitment.

One entrepreneur whom I work with has an issue with chronic overcommitment.  The instant he has things under control, he starts taking on more commitments.  I joke that like the late Warren Harding, he simply can't say no (I bear more than a passing resemblance to the former President myself, having someone contrived to be a startup executive, venture investor, social entrepreneurship mentor, and author, all at the same time).  He sometimes dreams of the day when he'll be so successful, that he won't have to worry about how to meet all his commitments.

Well, I hate to break it to him, but that day will never come.  Not because he won't be successful (he almost certainly will), but because an entrepreneur's ability to make commitments will always exceed his or her ability to deliver on them comfortably.

Tony Hsieh is an enormous success.  While still in his twenties, he founded LinkExchange and became fabulously wealthy.  Then, he somehow exceeded that wild success when he founded Zappos.  As his third act, he plowed $350 million of his own money into turning Las Vegas into a startup hub.

While he's been able to generate enormous change, he also overcommitted, and recently stepped down as head of Project Downtown, and laid off 30% of his staff.  Even someone as rich and successful as Tony saw his ambitions outstrip his resources.

The manic side of entrepreneurship has its uses, but by making yourself aware of it, and taking steps to avoid overcommitment, you can tap its wild energy without plunging yourself into the depression that seems to be its unavoidable doppleganger.

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