How Starting My First Business Helped Me Sober Up
You can’t sleep. Every waking moment of the day you are filled with energy focusing every ounce of attention on your business. Making sure your product is coming together, your customers are being delighted, your interns are on task and your new employees are unleashing their potential. You are fully immersed in the marathon of building a business. Have you ever been happier or felt more alive?
Gone are the days where you are waiting for the clock to hit 5pm. Instead, you find yourself often asking, “Where did today go?” You’re tired, but too absorbed in your work to even notice. You are in flow; the complete immersion into an activity where every action and decision stems from the one before. You’re at peak performance…or at least think you are.
It’s time to put down the bottle and sober up.
No, I’m not suggesting that you have a hidden stash to keep you fired up through the day… your drink of choice is raw emotion. You’re craving this bottle day after day.
The challenge is that when you are starting a new business or a new relationship, this ‘honeymoon stage’ is a result of abnormal emotions influencing your mood, performance, and decision-making. Sure, leveraging your emotions can help you achieve a state of flow, but this liquid courage can also leave amateur entrepreneurs prone to error and poor decision-making, increasing the chance of failure. These errors are known as biases and heuristics: simple errors and short-cuts our brains take to make decisions more efficiently. Unfortunately, we are all subject to falling for these biases and heuristics when we’ve been drinking from that bottle of emotion.
You are unconsciously falling for these bias now – or if you’re a seasoned entrepreneur and you’ve been there-done that, you can empathize with this realization. However, regardless of how long you’ve been stumbling, the best first step is to admit you have a problem. Challenging yourself to be mindful and aware of these natural pitfalls is an essential step to reaching entrepreneurial sobriety.
Common Stumbling Blocks
The confirmation bias is one of the most common errors I see many of our early stage companies fall for, especially during the early stages of customer discovery. The confirmation bias occurs when we unconsciously filter out any new information that contradicts our existing views, or interpret new information so that it is compatible with our existing beliefs.
Avoid falling for this bias by articulating your proposed business model on a business model canvas. The canvas acts as a great accountability tool to evaluate new market intelligence and facts from your customer discovery and market research efforts against your initial assumptions.
An effective solution to avoid confirmation bias is to build falsifiable experiments to validate each area of your business model. Forcing yourself to find information to prove your initial assumptions wrong is a great stress test and forces you to look for information to challenge your views; the exact opposite of confirmation bias.
Yes, the overconfidence effect is exactly what it sounds like: it is the difference between what people think they know, and what they actually know.
When I started my first company out of school, The Concussion Toolbox, the overconfidence effect put me flat on my face. After conducting 3 years of concussion research during my University studies, I graduated thinking I knew just about everything relevant to the concussion industry and that my company was destined for success. After coming to the realization that we weren’t achieving solid product-market fit, our team went back to square one to conduct more customer discovery interviews.
After doing this, it didn’t take long for us to realize that we were far too overconfident with our perceived understanding of the market, and so we needed to pivot. This mistake cost us thousands of dollars and weeks of valuable development time. For months I was furious at the opportunity cost we paid for this mistake.
The overconfidence effect can also creep up during delegation. Any founder of an early-stage company can relate to the challenge of assigning tasks to interns/team members to increase your productivity capacity. I caution you to avoid taking on projects and tasks that are not within your core competencies. Albeit sometimes you have to roll-up the sleeves and get things done, don’t be overconfident in your skills and assign yourself responsibilities and tasks better suited for someone else.
Committing to regular self-assessment is a great strategy for keeping an accurate gauge of what you know, and most importantly what you do NOT know. I’m not suggesting you check your confidence at the door every morning, but challenge yourself to build products to solve problems your customers have expressed themselves.
Beginner’s luck is simply defined as creating a (false) link with the past. Rolf Dobelli, author of The Art of Thinking Clearly poses a great question, “But how do you tell the difference between beginner’s luck and the first signs of real talent?”
When our team first created Concussion Toolbox, I was certain that our early success was a result of talent. After winning the first two big pitch competitions we entered, quickly landing a development team, and acquiring our first customers for a pilot project, how could it not be talent?
Retrospectively, we did not prove to be superior to our competition over a long period of time. How could we when we were in business for all of 4 months? The emotional high, increased confidence, and positive perception of our company following these early successes were unjustified, inaccurate, and a result drinking too much emotion. In fact, I think this example demonstrates confirmation bias, the overconfidence effect, and beginner’s luck all in one.
Take home message.
Educate yourself on common errors in decision-making.
Leverage these insights to develop an objective view on yourself, your business, and the decisions you make going forward to avoid these errors.
Data first, then emotion.
It doesn’t matter if you’re starting your first venture, acquiring a round of VC funding, or are a serial entrepreneur. We can all benefit from sobering up. The great thing is that with consistent effort the benefits from achieving this state of mindfulness improve both your professional and personal life. Trust me, this is coming from a recovering entrepreneur.
I’ve now been sober for 77 days.
** If you’re interested in learning more about these topics, two outstanding books covering these in greater detail are: Thinking Fast and Slow by Daniel Kahneman & The Art of Thinking Clearly by Rolf Dobelli **
Entrepreneurship Community Coordinator & LaunchPad Instructor