By Cynthia Mitchell
Being an entrepreneur is the modern day American dream. The potential to create your own destiny and to do the kind of work about which you are most passionate is alluring. The rewards are plenty for those who build a successful business, but while society elevates entrepreneurs to rockstar status, little is revealed about its personal toll.
According to Careercast.com, the job of being a senior executive is among the top ten most stressful jobs in 2017, right up there with police officer, airline pilot, firefighter and enlisted military personnel.
For starters, there’s a high risk of business failure. According to the U.S. Bureau of Labor Statistics, 50 percent of all new businesses make it to their fifth year and one-third make it to their tenth year. Other sources cite greater failure rates. The Small Business Administration states that 66 percent of businesses make it to two years. The Startup Genome Report Extra on Premature Scaling (a project coauthored by Berkeley & Stanford faculty members with Steve Blank and ten startup accelerators as contributors) reports 92% of startups fail within three years. One thing all of these statistics have in common — the odds are against startups.
Staying on course is as difficult as staying in business. More than 95% of startups fall short of their initial projections according to research by Shikhar Ghosh, a Harvard Business School lecturer and the founder and CEO or Chairman of eight technology-based companies.
Access to capital, decision-making, maintaining leadership, managing clients and investors, obtaining and retaining talent and delivering on promises are but a few more of the stresses that create seemingly unrelenting emotional turbulence for entrepreneurs.
Complicating matters, entrepreneurs tend to focus more so on business than quality of life. Entrepreneurs carry more responsibility with greater personal risk. They have lower initial wages, lower earnings growth and lower long-term earnings. They work crazy long hours, upwards of 60, and most working closer to 80 hours per week with fewer weekends and holidays off. They are sleep- deprived, fail to exercise and typically they don’t eat well. They neglect relationships outside of their business circle. There’s little natural harmony between work and life for entrepreneurs.
Marc Andreessen, co-founder of Netscape, wrote: “First and foremost, a start-up puts you on an emotional rollercoaster unlike anything you have ever experienced. You flip rapidly from day-to-day – one where you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined and back again. Over and over and over. . . The level of stress that you’re under generally will magnify things with incredible highs and unbelievable lows at whiplash speed and huge magnitude. ”
In 2015, Michael A. Freeman, a clinical professor of psychology at University of California, San Francisco School of Medicine and University of California, Berkeley psychology professor Sheri Johnson found a strong correlation between mental health conditions and entrepreneurs. Forty-nine percent of entrepreneurs surveyed reported at least one mental health condition. Nearly a third reported having two or more mental health issues, such as ADHD, bipolar disorder, depression, anxiety or substance use conditions. Half of entrepreneurs who reported no mental-health conditions identified themselves as coming from families with a history of mental illness. Ironically, Freeman points out that there’s a beneficial side to these mental health conditions. These weaknesses also come with corresponding strengths that the average healthy person doesn’t possess.
Given how much emphasis is placed on intelligence, creativity and mental fortitude, it’s surprising how startup culture does not embed mental health into the mix of success factors. Instead, workplace culture rewards long hours as a show of confidence and strength, while penalizing the outworking of stress as displays of vulnerability or weakness. The topic of mental wellness and work-life harmony is untaught in business schools and frankly rarely discussed between entrepreneurs and investors. In a fast-paced, competitive environment in which investments and jobs are at stake, transparency can be met with harsh judgment rather than empathy and solutions. Without a true partnership that embraces the human side of the business, stress can take a costly toll.
The Cost of Stress
While everyone has their own distinctive set of stress symptoms, the cost of stress impacts psychological, physical and behavioral well-being. While the latter two are more easily recognizable, mental health is not always as obvious, and therefore is one of the most overlooked and unattended aspects of entrepreneurship.
Anxiety is the foremost symptom of mental stress. The University of Notre Dame’s Mendoza College of Business finds that CEO anxiety has powerful influences on judgment and strategic decision-making. The study concluded anxious executives (a) create a social buffer against threats by surrounding themselves with supportive decision-making teams therefore risking the balance of diverse ideas and opinions, and (b) pursue lower-risk firm strategies critical to business success even though calculated risk taking is essential to startup leadership and innovation.
Depression is another cost of stress often triggered by the isolation that comes along with being at-the-top. Most entrepreneurs don’t want to take stress home to worry their loved ones; they don’t want to create uncertainty among the staff and they don’t want investors to lose confidence in them. Instead, they keep the pressure to themselves, enabling depression to flourish in the dark. Entrepreneurs are 30% more likely to experience depression than their non entrepreneurial counterparts.
Behavioral addictions such as obsessive thoughts, withdrawal-engagement cycles and negative emotional outcomes can accompany stress. Similar to other addictive behaviors like gambling, serial entrepreneurs suffer consequences that stem from their need to keep going. A 2014 study in the Journal of Business Venturing, found that habitual entrepreneurs may also be at an increased risk for other addictions. People with addiction in one area are more likely to have addictions in other areas. Even “entrepreneurship addiction,” the compulsion to create and grow new ventures, has been compared to other behavioral addictions such as workaholism.
Self-worth is also a companion of stress. CEO’s often tie their self-worth to their net worth. When business is on an upward swing, self-worth is high, and when business has inevitable setbacks, self- worth plummets. Business becomes who they are instead of what they do.
While CEOs are often thought of as unflappable captains of industry, entrepreneurs are simply high achievers with vulnerabilities like anyone else. But their natural optimism and confidence demonstrate a clear difference in their decision-making priorities than their employed peers.
Entrepreneurs Run Into the Fire
With such stress, why would anyone choose to be an entrepreneur? The truth is most would never want to be doing anything else. In a U.S. Trust survey of high net worth business owners and corporate executives, eight-in-ten prefer owning a business even though they believe it’s harder than working for someone else. The dream of building something remarkable is a catalyst to face the odds head-on. It’s an adrenaline-pumping extreme sport akin to climbing Mount Everest or running the New York City Marathon. It tests the mettle of even the most seasoned executive, and it breaks down every newbie into a thousand wonderful pieces. In the context of work, entrepreneurs learn who they really are and like an elite athlete, have opportunity to evolve into their best selves.
Starting a business is meaningful work. Venturing and innovation drive growth and create the vast number of new jobs. It’s personally satisfying to contribute to society and the economy at large. If you ask any entrepreneur who exits their business, what they remember most about their journey, often they harken back to the most pressure filled days — recounting the contagious team spirit and the somewhat dysfunctional family of talent who dreamed with them.
And the failures. . . well, entrepreneurs learn how to embrace them right along with the wins. It’s all part of the fragile entrepreneurial ecosystem — as natural and inevitable as life and death. It is a gut- wrenching blow that fires up all five stages of grief — denial, anger, bargaining, depression and finally — acceptance. But when the sun rises again, new opportunities emerge and life goes on with its full spectrum of possibilities. After all is said and done, experts agree, business failure forges valuable assets of contacts, knowledge and experience to carry into the next venture.
As for the relentless stress, it just keeps coming . . .