PREPARE FOR HELL Dr Adir Schiffman is brutally honest about what’s involved in growing a startup: endless problems, endless disasters, endless catastrophes. But, if you are able to solve most of them effectively, you end up with a high-quality company. By Dr Adir Schiffman
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nnovating is, mostly, not fun. Except in the most financially reckless of times, the idea of the startup as a resource-rich juggernaut is entirely fictional. In reality, embarking on a disruptive, innovative endeavour means creating something previously untried that will likely fail, or trying again where others have failed. The best word association for “startup” is not “fun” but “failure”. Consequently, founders and early-stage startup employees experience a tremendous amount of stress. Work life is a rollercoaster of emotions where victories feel small and transient, while defeats are frequent and often feel terminal, particularly in the early stages. This daily dose of relentless anxiety severely degrades happiness, damages health and strains relationships inside and outside work. My consistent advice to potential founders is to run a mile from startups if they can find happiness in any other field of endeavour. Startups should be the exclusive domain of those helplessly addicted to innovating and creating. That said, the preparedness of these innovators to embrace the risk of failure is vital for any country seeking to sustain a prosperous and happy society. In the current information age, technology companies simply deliver more – more jobs growth, better quality jobs and higher value exports – than any other industry. Given that almost every successful technology company began as a fragile startup, it is vital that government supports these early-stage businesses to give founders the best shot of beating the odds and succeeding. The corollary, of course, is that founders must also help themselves by developing a high degree of resilience and perspective. Over
the past 20 years I’ve founded a dozen companies and many have made pleasing exits. Some have even grown beyond $100m of revenue and listed on public markets. In the process I’ve learned that a key determinant of startup success is how well founders learn to make critical decisions in a high-stress environment. The first lesson for founders is how to face reality. Founders are, by nature, optimists – no one realistic about probabilities would launch a startup – and thus acknowledging problems can be difficult for them. Indeed, this was my biggest mistake during the 2009 Global Financial Crisis. On the eve of the crisis our company had grown for seven straight years, had never fired anyone except for performance reasons, and continually moved to larger and nicer offices. We were not emotionally primed to accept anything but growth, and my personal sense of self-worth was inextricably tied to this success. Founders are often counselled to surround themselves with experienced advisors, but my wrong choices during this time were not for a lack of good advice. I had a very experienced and wise board of directors, several of whom had early warning of the impending disaster via their own businesses. Rich, smart and successful, they repeatedly implored me to cut costs and fire staff well before the worst set in. Yet I thought they were all pessimists who didn’t understand our business. The result of this self-delusion was terrible. Many people suffered huge stress and turmoil that would have been lessened significantly had I listened to my board and acted early. No doubt this same scenario will play out many times over during the COVID-19 crisis.
Australia’s Nobel Laureates VOL III
