Why Founder Fitness Is Crucial To Startup Success
Approximately 3 startups are founded every minute - “startup” is definitely the new black. The barriers to entry are low - pretty much anyone with a laptop and an idea can start a business. This democratisation of entrepreneurship has produced some amazing results - everything from ride sharing, food delivery to electric cars - and our society and our economy are better for it. Yet, increasingly we are seeing a darker side - with entrepreneurs being unprepared for the physical, mental and emotional stresses of putting it all on the line for their business.
Whilst it may look like it from the outside, founding a startup isn’t an easy task. Failure rates for startups are extremely high - as many as 92% of startups fail within the first three years. This is a natural part of the process - yet these failure rates are not only having an impact on investors, they are having an impact on the entrepreneurs themselves. According to a UC Berkley study, entrepreneurs are twice as likely to suffer depression than the general population. Drugs and alcohol are a reality, with 12% of founders self reporting some kind of substance abuse condition. The unfortunate reality is that entrepreneurs are twice as likely to be hospitalised for a mental health condition and twice as likely to consider or attempt suicide. Entrepreneurs are numbing out, burning out and checking out. In Australia we have seen a number of high profile entrepreneurs step down from their companies due to mental health concerns, and it is likely to get worse if the core issues aren’t addressed.
Entrepreneurial education has come a long way over the last decade - with most major universities and TAFE’s offering entrepreneurial and small business courses. Yet the predominant focus of these courses remains skills development. Whist building capability is important, and goes a long way to improving success, it doesn’t address the big issue facing startup founders - how to build resilience in order to deal with a highly volatile business environment. Founders need to be physically, mentally and emotionally fit in order to successfully lead their businesses - yet most founders neglect their physical and mental health as a matter of routine.
It is widely acknowledged that founders have a disproportionate impact on the success or failure of their startups - yet there has not been a lot of work done on determining what makes one founder more successful than another. Yet most successful founders exhibit three strong behavioural characteristics - being able to adapt to change - strong self awareness - and an ability to bounce back and be resilient after a setback.
Founders who are more resilient and self aware are better placed to deal with the health impacts and stresses placed on them. Not only that, but there is a corresponding commercial impact to their businesses. These founders attract talent more readily and build stronger, more healthy relationships with their teams and their boards. Not only that, but because these founders are more “coachable” they are more investible and attract capital more readily. These leaders exhibit a sense of calm in the often chaotic world of getting startup off the ground. By taking care of themselves first, they set an example to the rest of their team that it is important - and this underpins the company culture - making the business far more sustainable.
Innovation, technology and entrepreneurship are making up a greater part of our economic engine. If it is to succeed, then we need to provide more support for founders and prioritise a sustainable long term approach. The alternative is that we will drain the talent pool as these founders burn out, never to return to innovate again another day.