A few years ago, I became interested in the philosophy of stoicism. These days, calling someone stoic means that they appear cold and emotionless. The original meaning of stoicism was more about being calm and tranquil in the face of trials and tribulations. The goal wasn't to eliminate all emotions, but to eliminate negative feelings like jealousy or anger or sadness. Many of of stoicism's principles and practices can be applied to building and investing in startups.
One of the main observations of stoicism is that many sources of unhappiness originate from within ourselves. A friend forgets to invite us to a party, so we become upset. A driver cuts us off, so we become angry. A high school classmate wins the lottery, so we become jealous. These are natural responses, but also unproductive ones. Becoming upset doesn't fix our problems, it only exacerbates them. Stoicism's key insight is our unhappiness doesn't come from external events like someone winning the lottery or cutting us off, but from our reactions to those events. If we can better control our reactions, we can achieve greater tranquility (and thus greater happiness).
This is all great, but what does it mean in practice? It means: 1) you should be aware of your attachments and try to let go of them, 2) you should practice negative visualization, and 3) you should be mindful of the dichotomy of control.
Letting Go of Attachments
Many people are attached to their egos, or to winning, or to being in charge. These attachments are huge impediments to success. There are many founders who can't delegate anything because they want to be in complete control, many investors who follow the crowd because they're too attached to not looking dumb, and many companies that die because they're more focused on winning against competitors than on building valuable businesses.
It's important to be self-aware and to understand your motivations. If you're afraid of something, ask yourself why you're afraid of it. If you're going all in on a course of action, ask yourself if it's the best course, or merely the one that is easier or less uncomfortable. The better you understand why you're doing something or why you're feeling a certain way, the easier it is to see if you're making a good decision or if your decision is only based on pride/ego/jealousy/comfort/etc. Your decisions should be made because you're doing what's best for your fund or your company, not because you can look smart or feel comfortable. If you're motivated by comfort and ego then you shouldn't be an investor or a founder.
People are frequently attached to their egos or to being in control. We're afraid of looking foolish or losing our colleagues' respect or delegating work to someone who might do a worse job than us. Frequently, these fears are irrational, but because we don't explore them, they just grow and grow in our minds.
Even if you're aware of your attachments, you still run into the problem of how to face them. You might realize you're taking Plan B because you're afraid of Plan A, but how does that help you get over your fear? This is where negative visualization comes in.
Negative visualization is imagining the adversities that you might eventually face. What if Google launches a competing product? What if you can only raise half the amount you want to raise? What if the product you're building isn't really needed by anyone? What if your cofounder quits?
These are uncomfortable questions, so it's tempting to avoid them. However, really thinking about them — in spite of the discomfort — has several advantages:
- By thinking about all of the bad things that might happen, you'll appreciate the status quo much more. This is a great way to avoid hedonic treadmills.
- You'll realize that most worst-case scenarios aren't that bad. Losing a cofounder sounds scary, but maybe you'll see that you can work around it with the team you've assembled.
- You'll inoculate yourself emotionally in case your worst-case scenarios do materialize. You won't be happy when Google launches a competitor, but because you've imagined the scenario many times, you'll know it's not the end of the world (or your startup). On the other hand, if you've always been afraid to imagine what it would be like to have a powerful competitor and then one day that competitor pops up, you're going to really freak out and be caught off guard.
- You'll be better prepared for worst-case scenarios. Because you've thought about bad things that could happen and how you might address them, you'll be able to spring into action instead of drowning in fear or sadness.
Negative visualization is an effective way to let go of attachments. If imagining something you're afraid of reveals that your fears are overblown, then those fears will diminish.
Dichotomy of Control
An important concept in stoicism is the dichotomy of control. There are things you can control and things you cannot control, and it's a complete waste of time and energy to focus on the latter.
Can you control if someone cuts you off on the highway? No, so don't worry about it. Can you control your reaction to being cut off? Yes!
Can you control if Facebook wants to start competing with you? No. Can you control how you and your company will respond? Yes!
There's no point in being anxious about Facebook as a competitor: either they'll compete with you or they won't, and there's nothing you can do to change that. Once you internalize the understanding that focusing on things outside of your control is a waste of time, you can spend less time being anxious and spend more time being productive and effective. (That said, being more effective might mean laying the groundwork to prepare for a few worst-case scenarios.)
Examples for Founders
- You can't control a customer's decision. If you lose a key deal to a competitor, don't waste time being angry or upset; instead, spend your time improving what you can control: your product, your presentation, and the types of customers you're approaching.
- You can't control whether other companies decide to enter your market — but you can make it hard for them (by working to build a great competitive advantage) and you can anticipate competition (by preparing messaging, finding a specific customer niche to dominate, etc).
- If you're a previously successful serial founder, taking risks is scary because you don't want to ruin your reputation as someone with the golden touch. If you're aware of the bias and are able to let go of it, you'll be much more likely to repeat your early successes.
Examples for Investors
- If you're afraid to look dumb, you'll only invest in proven founders or along with famous co-investors — a very limited investing strategy. If you recognize this fear, you might realize that: 1) you can't control whether other people think you're dumb and 2) your fear will prevent you from being a great investor yourself. Also, many famous investors occasionally invest in terrible companies and they are still considered great.
- If you're afraid to miss out on good companies, you end up investing in things you know very little about. This is bad for your investment returns and also bad for the founders you work with (because being clueless means you won't be able to help and will often just get in the way). Becoming comfortable with the knowledge that you won't be able to identify every huge success when it's a 3-person startup will help you focus on the companies you do understand well — which is great for the founders you'll work with and for your ROI.
- You can't control if a founder has many investment offers, or likes another VC more than you. If your offer is rejected, there's no point in lamenting it. Instead, focus on the areas within your control: how you present yourself, how you interact with founders, what kind of value-adds you offer, and so on. Learn from the experience so that it's less likely to repeat in the future.
Whether you're an investor or a founder or an employee — or just trying to live life more effectively — stoicism is a useful personal philosophy to explore. If you're aware of your attachments, willing to thoroughly contemplate worst-case scenarios, and limit your focus to things that are within your sphere of control, you'll be a better founder and a happier human being.