Doubt–at one point or another, every entrepreneur has experienced the sinking feeling that his or her best work is just not good enough.
No matter how successful you feel you are, doubt has a way of seeping its way into your head. As your company matures, difficulties will change in shape and scope, but they will never stop coming. The key distinction between entrepreneurs who do succeed and those who don’t is their ability to train their minds to overcome the doubt that accompanies these challenges.
The first step is understanding the distinction between two types of doubt: Healthy doubt is constructive and destructive doubt is inhibitive. Entrepreneurs should always strive to cultivate and embrace healthy doubt, while minimizing the negative effects of destructive doubt.
Discerning the difference
Most entrepreneurs have a strategic yearly or quarterly plan that provides direction regarding the strategies, tactics, and goals of their companies. Healthy doubt allows them to look at their plan through the lens of reality and acknowledge the high probability that their strategy may not materialize as planned, in spite of their best efforts. Healthy doubt offers a realistic perspective of the plan’s ability–or inability–to predict a company’s future.
You are experiencing healthy doubt if you:
Challenge your assumptions
Are feeling driven
Are aware of the changing marketplace
Ask, “What’s our backup plan if we’re wrong?”
Accept the reality that sometimes you’ll miss the mark
Know that each stumble is just part of climbing the mountain
Destructive doubt takes hold when entrepreneurs allow their mindset and confidence to be shaken by the changes that are bound to happen. Destructive doubt overcomes the entrepreneur when they allow the ups and downs of the startup merry-go-round to negatively affect their commitment and confidence.
You are experiencing destructive doubt if you:
Question your abilities
Are feeling paralyzed
Are blind to opportunities
Say, “I’ll never try that again”
Look at failure as a negative feature of your personal self-worth
Think a stumble is the end of the world
Altering your thinking
Cultivating healthy doubt is an art form that is developed over time, and it requires mental discipline. By accepting your imperfections, being comfortable with failing fast, and by persevering when you stumble, entrepreneurs can build the mental fortitude that prevents destructive doubt from taking hold, and enables healthy doubt to flourish.
The more practice you get, the better you will be at harnessing the positive power of healthy doubt, which reinforces the reality that you can indeed build the company and lifestyle of your dreams.
The next time you face a challenge and hear your inner voice siding with destructive doubt, take a moment to stop, acknowledge what you’re feeling, and choose to view it through a different lens. A simple decision to modify your perspective can change destructive doubt into healthy doubt, turning a roadblock into a surge ahead.
In February 2014 Christy Wang, a student at MIT Sloan School of Management, interviewed Steven Cox, CEO and Founder of TakeLessons.com for her Entrepreneurship class. Here is the transcript of the interview.
4. What makes a good startup business partner? Where can you find them?
There’s a line that I read from Stephen Covey, who wrote many successful books, including the “The 7 Habits,” but he also wrote a few business books. One of those things he talked about was developing a world-class staff. When you build your business, this is the number one thing you’re looking for – building the right team. Even if it’s just a two-man operation, you look for people whose strengths offset your own weaknesses. If it’s a team environment, you look for the weaknesses, and say, “Where do I play so that the strengths of one person make the weaknesses of another obsolete?” If you can find that and keep building that sort of team, over time, it becomes easier and easier for you to solve the problems.
Now, along those lines, I would also add that, in addition to finding people who have offsetting strengths and weakness, you need to find people who have a shared value system. While you’re not looking for robots, you are looking for someone that, when push comes to shove, your values are aligned. Second of all, your work ethic needs to be aligned as well. I think those two keys are critical, specifically in a very young company. Otherwise, you’ll just run into more problems later on.
5. What is the best way to find investors, and what is the most valued lesson you’ve learned from successful pitches?
I would say that the best way to find investors is through a pecking order, if you will. The first place to look is yourself. There are many people who have taken out money on their house, credit cards, or savings and started investing in their own startup; I think that’s one of the best investments that one can make. It is risky, and there is a high probability of failure, so one has to take that into account in trying to figure out if they should be their own investor. I funded TakeLessons.com right out of the gate, and it was my money on the line. I think that entrepreneurs have a tendency to work a little bit harder when it’s all of their own money on the line at the beginning. That money should be used to get some traction within the business, and from there, the place you look is for people who believe in you.
Instead of going out and trying to convince someone that, not only that your idea is good, but also that you are investment-worthy, find people who already believe in you. Finding money becomes much easier because they already believe in you.. You’re a go-getter and a hustler. You’ve proven that you can turn a dollar into ten bucks. That’s the next set of people. From there, once they’ve invested, ask them who else they know and whom they vouch for that could also listen to your pitch. I find that that’s the next best group to go after. It’s all through referrals.
In this business, the people who invested early with me were people that I just knew personally. Some of them, I had never done business with before, but they knew my character. My very first investor’s name was Steve Martini, a San Diego commercial real estate broker, and I had bought a car off of him three or four years before he invested. We just kind of got to know each other and hung out and took a look at a couple of deals together, but we never ended up doing something together. But, when the time came for me to raise money, I told him that I had already put my money in, and I showed him what we were doing. His words were: “Well, listen, I have no idea what you’re doing, and I have no idea if it will work, but I believe in you, so here’s a check.”
That’s normally the best way to get the deal done; it’s through people that believe in you. I will also preface that by saying that, in order to get those people, you have to be the type of person that other people want to do business with. Your character has to precede you asking for the money. If you’re a crappy guy or girl or you shyster people or you’re dishonest, good luck. You shouldn’t be in business to start with. Integrity is the key. There are no promises in start-ups, but these investors think, “I know this a gamble, but I’m willing to gamble on this guy.”
[Have you ever encountered any investors who also wanted to take control and make decisions?]
There are two kinds of investors. The first are what we call “passive investors,” and those are people who simply put their money in and don’t have much input in the business. The second are people known as “active investors,” and those are people who truly do add value to the company. They have a wealth of knowledge within the space that you play in, and it would be a crime to not use them to try to grow the business. Sometimes, we add those people on purpose as an investor or an advisor in order to grow the business. They become very, very useful within the context of what the business needs.
The issue and pain comes from investors who should be passive, but try to become active. These sorts of investors do not have higher amounts of knowledge or skill than the entrepreneur and may get in the way. I find that if you are clear upfront with the investor about their role, it helps manage expectations of what you can expect from them, and they can expect from you.
6. What is the biggest challenge of being an entrepreneur, both in personal and business life?
I read somewhere that, unless you have a high threshold of pain and are comfortable knowing that there’s a 90% failure rate, don’t be an entrepreneur. In fact, go work for someone else because it’s much more safe and secure. I think that’s true. There is a high risk of failure. There is a lot of competition. You have to have an incredible amount of persistence, drive, and belief that you can add value in the world. It’s got to be something inside you that drives you because it’s extremely difficult; it’s tough.
There will probably be days when you don’t know if you’re going to make it, and there are days when you’re down to not knowing if you can pay the bills. There’s a lot of pressure to build something out of nothing. Some people are built for that. Some people get a high off of that, and some people don’t. People should be very honest with themselves; there is equal nobility in both building a company as an employee as well as a founder or entrepreneur. The key is finding out what is right for you.
For me, I had to learn balance. I have lost friends and girlfriends over my business. I did not balance my life correctly. I’ve gotten physically run down and sick from the stress and pressure. But I’ve decided not to do that anymore. I needed to make sure that I took care of myself – and those important to me – just as much as I took care of the business.
If you’re going to do a start-up, it is going to require a lot of time and a ton of effort. What you might learn over time is that your business is not you. It is a separate entity from you. That’s a key distinction. This allows you to tether the spikes and ride out the drops. It allows you to find a good balance so your personal life doesn’t experience the same torrid whipsaws of your business.
There will be days in business where it is incredibly horrible and other days where it is incredibly high. You learn over time not let the lows get you low and to not let the highs get you too high. You acclimate to both the struggles and victories, and you learn to move forward no matter what. I think there’s a peaceful understanding that comes over time with knowing how to achieve that balance of emotional security with the imbalance of entrepreneurship.
I learned from a good friend of mine when I was starting my business. I think we had raised maybe $1.5 million or something like that—just a small amount. His business had raised $80 million. It went bankrupt after about five or six years, and his dream ended. I called him on the phone and said, “Hey, I read about your business, and I’m sorry about that, man. How do you feel?” He said, “I feel fine.” I then asked, “What do you mean you feel fine?” He said, “We gave it our best shot. We knew there was big risk going in. I would have liked it to have worked, but it didn’t. I’ll move on.” I asked him, “Isn’t it your baby? Don’t you feel crushed by it?” He said, “No. I’m not defined by the success of my business. I am the same person with or without the success of my business. I wanted it to be a huge success, but I am not defined by that success.”
I would ask this simple question when looking back over life: if an entrepreneur has a very successful business, but his family falls apart and his kids won’t talk to him, is he or she a success?
That’s something that each person has to answer separately. That’s a question I’m not sure too many entrepreneurs ask, but it’s important.
For me, I ask, “How do I have a wonderful life that entrepreneurship is a part of?” There is a tradeoff in life. That tradeoff is this: how much money, satisfaction, or happiness are you willing to trade your life for? Because that is what you’re doing every single day that you go to work.
Entrepreneurship is one of the best ways to make a living and to make an impact on people. For me, that’s what the juice of life is about. How do I make a great living for my family as well as make a difference in the world? If it’s used as a tool to create a higher objective, it’s a wonderful experience. If you can combine your work into your mission and into your long term goals in each aspect of your life, then you’ve got an incredible formula for life.
7. Have you ever had a moment of self-doubt? If you did, what was it and how did you deal with it?
I can only speak for myself. I do have self-doubt, but here’s the key: I believe in my team. I believe that we’re making a difference. I believe in myself. In addition to that, I also have days where I doubt myself, and I wonder, “Am I growing as quickly as I want?” There are times when I screw up. Honestly, I screw up a lot, but I don’t mind it. I used to think, “Oh man, if I screw up then that’s the end of the world, and I’m a horrible person.” I used to think all of these things, but what I got very comfortable with was knowing that life and business is full of potholes. I got very comfortable with moving quickly and not making the right decisions all of the time. That’s called life. When I have those doubts and I don’t know for sure that I’m making the right decision, I am confident it’s the best with the information I have.
For me, I have confidence in knowing that I can improve, and that goes back to our core values. I know that I’m constantly getting better, and that we’re constantly improving. As long as we’re doing that, I feel like we’re being successful. When those moments of self-doubt come in, I’m able to see a bigger picture in knowing that we are making a difference and knowing that there are people out there who are able to make a better living because of what we do. That gives me a great sense of pride and a great sense of humility at the same time because I know that what we’re doing is working. A lot of it has to do with what you tend to focus on as well. Self-doubt comes from your current state of what you’re focusing on. If you focus on all of the negatives and what is going wrong, doubt will continue to grow. If you focus on asking yourself better questions, things can go right. For instance, instead of asking, “Why did this happen?” or “How can I be such an idiot?” I ask questions such as “What did I learn, and how can I become better and not make the same mistake anymore?” By simply focusing on a different set of questions, you get different outcomes in your life.
[Have you ever had a dilemma between making your own decision and listening to your team’s decision?]
Of course. I think that’s a key for good leadership—admitting that I don’t have all of the answers. I try to put a team around me that’s smarter I am in many areas. If that is so, I should not be coming up with all of the right decisions. If I can come up with all of the right decisions, I don’t have a strong enough team. That’s absolutely what I believe. To counter that, there’s also times that when push comes to shove, I make the call. With those calls, I don’t necessarily agree with my team, but I feel like we’re making the right decision for the business. It’s never about who comes forth with the idea; it’s about choosing the right idea.
Ever wanted to know how to apply startup/technology know-how to your new company? My good friend and author, Brant Cooper, is releasing his second book, The Lean Entrepreneur on February 26.
Check out what people are saying:
“This fascinating new book shows that at the intersection of disruption and lean company thinking, there is a new world of: lean entrepreneurship — empowered individuals who bring the world kicking and screaming into the future. I can’t wait.”
— Paul Kedrosky, Kauffman Foundation Fellow
Read from Scott Case.
“The lean entrepreneur cruises at 50,000 feet with a view of the context we are operating in today’s economy. At the same time, it dives deep into key ways the new startup tools, frameworks and mechanisms can be leveraged to take advantage of a world filled with uncertainty and opportunity.”
– Scott Case, CEO Startup America Partnership
And here’s what Startup Superstar Brad Feld had to say:
“The Lean Startup methodology has become a fundamentally critical approach to creating and building a startup. Brant and Patrick explain in a very accessible way, with extended case studies from a variety of exciting, contemporary startups, with awesome bonus illustrations from everyone’s favorite robotic dinosaur, Fake Grimlock. If you are a startup entrepreneur, this is a must-read book for your startup journey.”
-Brad Feld, Managing Director, Foundry Group; co-founder, TechStars; and creator of the Startup Revolution series of books
Here is an email I sent this morning to my team. First, I wanted to have them see that most startups go through the same struggles that we go through. Second, I wanted them to know that I have full confidence, faith, and trust in their abilities and that I see them as leaders within our company.
Sometimes I get frustrated and I wonder if we’re the only company struggling to find market fit. Are we the only ones that got off track? Does anyone else have issues with hitting metrics? Why in Gods name can’t we get a teacher application that works better? How do I get the entire company to move faster?
The truth of the matter is that these things are fixable and will pass. Doing a startup is not glamorous – full of highs and lows, almost-wins, and busted quarterly plans.
However, what will see us through is that we, as a team, (a) never doubt our outcome (b) challenge each other to get better, (c) learn quickly and apply those learnings throughout the company, (d) have each other’s back (e) work towards truly creating value for the people we serve.
As you start prepping for next year, I want you to raise the bar – for yourself, your team, and each other.
Start thinking about what you want to get done next year. Design your life. Require more of yourself, and judge your own success based on how well you are helping your team succeed.
YOU are the leaders of this company; I want you to digest that – own it – let it settle in. When this company makes it, you will be the reason.
Today, ask yourself, “How do I raise my game next year?”, then take action to do it.
At TakeLessons, we’re in the process of working on a 2013 strategic plan. One thing I did this year was looked back and just wrote down some things that I’ve learned over the past few years on how to build a business. Here’s my short list.
As a company and personally, I’ve had a tendency to overestimate what we can get done. We also seem to be over confident in our ability to deliver revenues.
It is difficult to produce a sustainable competitive advantage.
Know what gives you the greatest chance of creating a space in the hearts and minds of those you serve.
As the company grows, the infrastructure of the company to support the growth has to be kept in check, lest it gets out of hand.
Always have faith, but never believe my own bullshit.
Any system we put in place when we were at 20 people broke by the time we were at 40 people. And the systems put in place at 40 broke again at 80. In other words, we should be ready to rethink our model, our systems, our people every time we double.
We cannot be reliant on investors. Our only safety net is that we produce enough value for a customer that we can make a profit.
We have a tendency to want to build everything. Normally, building it vs. buying it takes longer and is not necessarily better.
One great person takes the place of 3-4 mediocre people. The ratio may be even greater.
As we grow, it gets incrementally harder to acquire customers at an acceptable cost. This is why creating products and services that spread virally and through word-of-mouth become critical. And the best way to have people spread your product or service is to build something that REALLY adds value to their lives.
There is a natural affinity we have towards doing what we’ve done in the past and not being open to risk. We need to risk and try more (seed planting). We need to build a culture of quick trial and plenty of error.
In order to win, it’s not enough to create ‘enough’ value. We have to ‘create incredibleness’ – so much that our users couldn’t imagine going anywhere else – so much that they talk about us and share the service with others.
Always be crystal clear on what is considered a ‘win’ – weather it be for a single call, a monthly goal, a strategy, or even an exit. In the words of Stephen Covey, begin with the end in mind.
Questions we asked ourselves
What is our definition of “Win”?
What gives us the highest chances to win?
What are our assets? What can we do better than anyone else?
Does the customer value what you can do better than anyone else?
Can we do it profitably?
What produces the most value for the customer we serve? Are we doing that?
John Assaraf sat down with Steven Cox, CEO of TakeLessons.com, to discuss what it means to create and maintain a thriving corporate culture. In this interview, Cox defines corporate culture, outlines steps entrepreneurs can take to define their company’s culture and shows how a strong culture can translate into other great gains for any organization.
Cox: A lot of times what we hear is talk about, how do we go about designing culture? I want to walk you through it a little bit. This is an interesting concept that came over me about two or three months ago when I was looking at it. Today, a lot of culture has been created by actually caring about people. If you take a look at what’s happened in corporate America… Where I come from, we have about 300, 350 employees within the organization, about 100 here based in San Diego. Our big focus is on the people. That is the core of what we do. There is a fundamental change that I think is happening today in corporate America and I want to walk you through to how we got here.
Assaraf: Absolutely. Probably 75% of the people watching have a small business and the rest want to be entrepreneurs so this is critical stuff for you to know, because not knowing this is detrimental to your growth and to having people who are champions of your cause and your values. This is brilliant, brilliant stuff. Trust me on that one.
C: Back in the ‘80’s, we all are familiar with the movie Wall Street, and the line, “Greed is good”. That’s a certain type of culture, but basically what happened is no matter if you have a giant company or you are a five man or two man operation, the idea was just get as greedy as you can. We saw it happen in the stock market with irrational exuberance but what comes up must come down. Then everyone started feeding into the internet craze. Things were going nuts. People thought they could make money by doing nothing and raise funding like crazy. And you were in that phase as well.
A: But we have a real business!
C: And that’s the key. Folks focused not necessarily on building a real business. What they focused on was developing sock puppets, like Pets.com. What happened at that point, is people became emotionally bankrupt. Corporations, businesses in general became bankrupt. You had everything from MCI Worldcom to Enron that not only stole from investors, but they stole from their own people. These sorts of things left companies emotionally bankrupt and people got a really nasty taste of business; if you’re in “business”, you’re a bad dude. That was a horrible thing that happened. Tack along with that the perils of 9/11 and now you have corporations that starting waking up, saying wait a second, this is not the type of company that we want to run. And you had folks who were 16, 18, 20, 25 years old then, who looked at this and said, I don’t want to run a company like that. I want to build a company that’s focused on people, that’s focused on making a difference, that is focused on making a lot of money as well as making a difference. You can do both. At first this seemed antithetical, but the idea that corporations make a difference that’s focused on not just you making money, but it’s also, what can you contribute. Very simply, even what you’re doing right here, right now. We were talking a little bit earlier, it’s not only do I want to run a business, but you want to contribute to people’s lives.
A: That’s one of my highest values.
C: We see that sea change happening. What will happen, and why it’s important for your business, as your business continues to grow, I believe over the next ten, fifteen years this new generation of people who are currently in high school and college, they’re going to get out of high school and college and they’re going to look for a great company to work for. The greed, the old way of doing business is going to go out of style. They are going to be looking for people who run companies that focus on people and that actually add value to people’s lives. That’s why it’s directly applicable to every single person in the audience today. Understand as you grow your business, the next generation of people coming up will be looking at you as leaders and saying, do I want to work for this person or not? Do I want to build a business with this person? Do they share the same values as me?