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Fear: The Startup Serial Killer Which Must Not Be Named

Fear: The Startup Serial Killer Which Must Not Be Named

We don’t talk about fears in startups often, or well. But the unexamined and unreconciled fears of the entrepreneur (not to mention the leadership team and the board) are among the most common causes of a company underperforming or going out of business. It might look like founder infighting or capital inefficiency, but behind all those easier to swallow explanations, more often than not, lies fear. Raw and thick.

This is uncomfortable to write, but that’s the problem. Our industry’s inability to talk about fear directly has instead led it to fester in the background, the root cause of symptoms we spend so much time addressing.

I want to talk about fear because I learned the hard way that to move past your fears, to be free of them and gain back the autonomy that will allow you to make your best decisions, you must bring them into the light of day.

"The first step in solving a problem is recognizing there is one."
— Will McAvoy

So let’s do this. 

My parents got divorced when I was fifteen, and fifteen years later it almost killed my business.

I was blindsided when my dad told me, driving me home from school, that he was moving out. In hindsight I can now see the signals, but as a kid all I saw was my mom and dad, and their unceasing parentness. And then, out of nowhere, I saw my mom. And then, separately, my dad. At the time I played it off as though it didn’t phase me. People got divorced all the time. No big deal. But I can see now just how thoroughly that event shaped my view on life. On relationships, on business. On people leaving me.

Fifteen years after my dad moved out I was running a high growth, venture-backed rocketship. We were 9 months removed from raising our Series A round, and we were flying high. In those nine months we had scaled from 15 to 75 people, we were hitting all our numbers, and everything was shaping up well to raise our series B.

I remember the specific brown of the boardroom chair in which I sat, when one of my investors told me that the investor presentation I had spent weeks on was garbage. He said nobody would buy it, and instructed me angrily to take an entirely different angle.

In that situation it’s the CEO’s job to push back. The board needs the CEO to manage investors as much as employees to keep the company on the right path, no matter the aggressiveness of the tone. Investors should challenge the CEO to ensure he’s considered everything, but they should not dictate strategy.

I knew this even then, but I didn’t push back, because fear took over.

I remember the wave of shame hitting me. A bodily rush of heat and pressure that hit my chest and turned me from a competent CEO to a defensive little boy, scared that his father would leave him if he didn’t do what was asked. That fear, triggered without warning, whiplashed me into a 180-degree turn in the way we were going to market. Regardless of our momentum and all the reasons to stay the course, my investor’s directive triggered my (at that point unexamined) fear of my father leaving me, and that fear overrode my fiduciary responsibility with a compulsion to do what was asked.

None of this happened at the level of conscious awareness. Consciously I simply found myself executing a new plan that I supposed was the right one because the investor was so convinced. I was blind to the fear driving the decision until much later.

So I changed the pitch to what the investor wanted. And, naturally, because I didn’t believe in the pitch and it didn’t fit our business, the investors I pitched didn’t believe it either. Our raise failed, and we ended up closing a bridge-round with our tails between our legs. It took us years to recover.

We can call this poor leadership. Bad board management. But those are just the symptoms of unexamined fear.

“When an inner situation is not made conscious, it appears outside, as fate.”
— C.G. Jung

Although we rarely talk about it, I’ve learned from working with entrepreneurs that I’m far from alone. We all have a topology of fears in our psyche, little landmines that when triggered throw us into reactive, fight or flight mode, causing us to make bad decisions in an effort to stay “safe”. You see this all the time. Think of how many times you’ve seen someone exhibit one of the following:

  1. Flinching in a negotiation

  2. Flat investor pitches

  3. Perfectionism, or failure to ship

  4. Defensiveness, or blaming

  5. A need to be “right”

  6. Taking credit or sharing blame

  7. Being uncoachable

  8. Underhiring key direct reports

  9. Burnout

  10. You can come up with so many more.

All fear based. Mostly unexamined.

We can see it in others easily (why can’t they just be honest with themselves and deal with it, we wonder) but we struggle to see the same thing in ourselves. This is a problem, because if we won’t look at our fears, we can’t manage them.

It’s one thing to ignore or try to push down your fears in daily life. The worst that can happen is you mess up your own life. But for founders, ignoring this risk can mean the difference between successful outcomes and failures, not only for us but for all the people counting on us. Once we’re aware of this, like any other risk we have a fiduciary responsibility to do the inner work to mitigate it.

So what do we do? In short, we look at the fear directly and talk about it openly. In this way we can learn the texture of our own personal fears and manage them consciously.

First we look at it. By understanding our own topology of fear we know our likely triggers, so when we find ourselves suddenly overwhelmed by a rush of dread when we find out our runway has been shortened by half, we can develop the skill of seeing the fear, experiencing it fully, and letting it go.

This skill alone — sitting with discomfort until you can respond rather than react — is a superpower.

Then we talk about it — as fear itself, the cause, not as one of the many symptoms listed above, more palatable though they may be. Through extensive work with my own coach, I’ve learned that simply talking objectively about my fears goes a long way. Unexamined, fears take over at the worst moments and we say we “had a bad day,” or that we were “off our game,” but under a microscope we can see that fears are just predictable, cause/effect processes. Fear is a reflex. Seeing this demystifies them and lessens their influence.

For those brave enough to do the work, the best bet is to do this with a trained professional, which is one reason why so many venture funds are funding mental health programs and coaches for their founders. As in my case, oftentimes we’re too close to see the way our decisions are being made so it’s helpful to have an outside perspective to help us see what’s going on. Doing this, helping founders navigate their fears consciously to enable authentic leadership and great decision making is one reason why I coach.

It’s uncomfortable, but we need to begin to talk about fear as an industry, openly and without stigma. We need to treat it as a business risk to be managed, rather than a weakness to be shunned. “Ignoring it and hoping it goes away” is not an acceptable strategy for competition or technical debt, nor should it be for fear.

Until we begin to talk about fear for what it is, and work to proactively manage the risk that it poses to our companies, founders will continue to struggle silently. Companies will fail unnecessarily. And we will call it lack of innovation or bad board management.


About Ryan Vaughn:

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Ryan is a leadership coach to entrepreneurs, the founder of Inside Out Leadership, and a serial entrepreneur.  He has helped leaders from dozens of companies design a more conscious life, and make key changes to improve their performance and satisfaction. 

Previously, as a 3x founder/CEO, Ryan scaled companies to over 11-million users across 45 states, raised over $20m from leading VCs, built teams of nearly 100 world-class employees, and acquired or partnered with nearly a dozen companies.

If you are interested in accelerating your growth as a leader, reach out to Ryan here. And if you liked this article, you can find more of Ryan's work at Second Mountain Startup, the popular weekly newsletter for purpose-driven entrepreneurs.