

Entrepreneurs, does it help to be desperate? - sivers
http://sivers.org/desperate

======
thetrumanshow
Yes, it matters.

An entrepreneur friend of mine sold his first company during the dot com years
and made a mountain of cash in the deal. He then went on a spending spree
(trying to build new, ultimately unsuccessful companies) that very nearly
bankrupted him.

With his savings dwindling and the looming prospect of having to go back to
work for someone else, he locked himself in the basement (so to speak) and, in
a last-ditch effort, built a profitable company in a few months time. AND,
here's the part that gets me, he made this product successful, nearly single-
handedly in a market that was already crowded with competitors.

He tells me now that its harder for him to have success in business (5 failed
in the last 2 years), primarily because there is no real sense of urgency to
drive him to succeed anymore, what with the checks still rolling in. This is
despite the fact that he is amazingly talented, both in software development
and in business development.

Since meeting him and learning his story, I have been looking for ways to make
myself as determined/desperate as he was when he built his company.

~~~
saurabh
What was the product?

~~~
thetrumanshow
I would LOVE to tell that, but unfortunately, I don't have the leave to do so.

Edit: "Pics, or it didn't happen" eh? I see how you are.

------
spolsky
This is the kind of faulty reasoning that might be caused by looking at
anecdotes (e.g. the exceptional story of Richard Branson) and assuming that a
single anecdote tells you something about the world, when actually you are
ignoring the other 1,000,000 over-extended, Richard Branson-wannabees who went
broke and never had books written about them.

~~~
fallentimes
But I think he's asking, not telling.

------
keeptrying
If you read his autobiography, you'll see how much encouragement his parents
gave Branson. Infact they even mortgaged their house a second time to pay for
his first publication "Student".

This is a guy who has been told all his life that he can do whatever he puts
his mind to.

So when he's backed up against a wall, he doesnt see the wall. He just keeps
trying till he succeeds.

If you dont have this kind of mindset then I think desperation will kill you.

Essentially (IMHO) you have to put yourself in a position where you have the
time and emotional strength to devote to a startup.

For me, this is to have a day job and work during the weekends and during the
nighttime.

I used play a lot of sports and go out a lot. I just stopped doing that and
put more time into my startup when I realised

A - "If I dont do this I'll ALWAYS be working for someone else". (That really
really really scares me.)

B- Worse "I never put in a SERIOUS EFFORT to start my own company".

Just imagining myself thinking these thoughts when I'm 40 is a HUGE motivating
factor.

Its the equivalent of the Samurai contemplating their death. "Your going to be
40 in 10 years. Now what are you going to do tonite?"

~~~
anigbrowl
I am 40 (well 39). It's pretty disheartening; I have a bunch of
things-I'd-like-to-do but no money, and have never been good at talking up
money or even asking for it. Indeed, part of the problem is an excess of
belief in the 'do what you love and the money will come' ethic. It might, but
you've got to be good at marketing, plus there are times when you will simply
get ripped off.

Not blaming the system or anything like that, but if you start out from the
wrong place or make a few bad decisions at non-obvious but critical turning
points, burning desire isn't always enough. EDIT: I don't mean in the sense of
I'm going to lie down and die now, but that effort + ambition doesn't always
translate to a successful payoff.

~~~
keeptrying
Thank you for sharing that.

The way I look at it is that its a long journey where the biggest problem is
basically the beliefs that you have. I think you have to really grow out of
the beliefs that are holding you back. (By "you" I mean everyone ... not
specifically you :) ...

Ie you have to have the mental courage to call yourself out and change to have
success. For eg: I've always said that I can never play politics but I realise
that when I start my own firm, I will probably have to at some point. So I
study how the guys at work do that.

I've abhorred schmoozing to get anything but at some point I might have to do
that to land a big client.

If you realise this is the kind of commitment its going to take, I think
you'll have better success.

Essentially some particular thing is stopping you from making money. This
could range from: 1\. Your product is not useful 2\. Your bliefs arent
congruent to what is real in the world 3\. Your relationship with your
business partner isnt helping. 4\. etc.

IF you think about it, it really could be anything. And running a business is
a process of finding whats wrong and fixing it.

So you basically have to keep realising whats working and whats not. This
becomes really hard when it comes down to your beliefs. And I think thats what
holds back a fair number of entrepreneurs. They are unwilling to change their
beliefs.

Eg: They see no one is using their product but they still believe it will work
out. They see no revenue from their keywords and still they use the same ones.

Anyway I hope this process is what will make me sucessful. But even this could
be wrong :) ...

~~~
anigbrowl
Bookmarked. Thank you very much!

------
matt1
Like Joel said, this is largely a product of variance.

Imagine a million monkeys in a coin flipping tournament where only the monkeys
that flip heads move forward. Eventually there will be a handfull of uber-
successful coin flipping monkeys. You could say, "Wow, look how talented they
are" but you'd be overlooking the fact that their success a product of chance.

Luck, I'm sure, was not the only thing--he's no doubt talented. But even if
you're flipping a coin that falls 4:1 on heads, you still need to be
incredibly lucky never to hit tails in the long run.

The poker players among you know this all too well ;)

Also, the greater the chances you take the greater the payoff. He's taken a
lot of huge chances and has been lucky enough to come out ahead... way ahead.
I've read that VCs like to choose riskier companies for this very reason--I
think Matt Maroon, PG, and others have written about this. Good if you're a
VC, maybe not as much if you're the one they're gambling on.

------
randallsquared
As someone who wasn't especially successful at business in an eight-year run,
I'd say that desperation mostly hurt me. Worry destroys my ability to work, so
unless I can convince myself that my life isn't tanking, it's really hard to
actually get anything done. Having a stable job has done wonders for my
productivity. :)

------
pg
It may help gamblers like Richard Branson, but I think few technology startup
founders are that type of person. Most technology startup founders would find
this kind of pressure a distraction.

Maybe desperation inspires dealmakers, but distracts makers.

------
jakarta
One of the things to keep in mind is the kind of leverage Branson employs and
how he uses it to reduce his own capital investments in the businesses. If the
businesses go belly up, the damage to Brason's wealth for his Virgin start ups
are actually quite minimal.

Virgin Atlantic was started with virtually no capital up front, the outlay was
small -- something like $500K with a low-cost lease on one airplane.

There are a few other businessmen who take a similar approach. Sam Zell is
probably one of the most famous, his Tribune buyout was largely regarded as a
failure but even so, the actual impact to his own personal wealth was minimal.

Deal structure is really key in these situations.

------
jeromec
I think the source of the author's confusion is the mixed bag that comes along
with desperation. On one hand desperation can incentivise you to act and spur
you to try things you probably wouldn't have, but which may turn out
brilliantly. On the other hand I think it can pressure you to the point of
making unwise decisions or possibly folding altogether. I don't think it's
desperation which helps as much as it is taking risks or doing _something_ to
change your situation, but one doesn't need to be desperate for that. As far
as the success of Richard Branson's ventures it reminds me of Donald Trump
saying he always found it easier to raise money for larger more ambitious
projects than smaller ones, so there may again be some correlation favoring
higher risk taking - at least if you have nothing really to lose. I would
never advise over extending or self-inflicted monetary desperation.

------
ankeshk
Desperation makes you paint awesome paintings. And desperation makes you cut
your own ear.

Really desperation is like cocaine. Will give you a short term boost to get
things done. But is dangerous.

There are other better and safer tools of motivation out there.

~~~
sid
Yes thats true, but if (through no fault of your own) circumstance puts in you
desperate situations you have to do what you must. And if it means making bold
steps then as an entrepreneur you have to do what you have to do.

------
DenisM
Determination matters.

If desperation is how you get it, fine. PG will tell you that you need to be
hungry, but it's just one of the ways to get determination (also one such way
that makes you more likely to be seek YC funding).

------
rick888
Here is my take on it (from personal experience with a couple of failed
products):

Desperation forces you to concentrate on short-term goals rather than long-
term growth. When you are always worried about where you are going to get your
next paycheck, you have a different mindset.

In the end, I want a company that will allow me to never have to work for
another company again (which I am working on now..at the same time as my FT
job).

I suppose, if you are just looking to pump something out in a few months to
get purchased by a larger company, it may work.

------
iamelgringo
I've worked as an ER/Trauma/Critical Care nurse for 15 years, and, the first
thing I teach young ER nurses is this: The first pulse that you check when you
walk into a Code Blue is your own pulse.

Translation: You can't do shit for a patient when you're panic stricken. Panic
is normal in life/death situations, but when you need to routinely function in
those situations, you have to learn to deal with the stress and adrenalin.

So, with some experience, training, and conscious effort to push back the
panic, an ER nurse can channel the rush of adrenalin into a zen/flow
experience. Time slows to a crawl, you notice anything and everything, and you
move like the wind.

But, you can't exist in those panic/flow states all the time. You have to
learn how to come down and burn up the extra adrenalin. When people don't
learn how to deal with those situations they end up with Post Traumatic Stress
Disorder.

The stress of building startups feels very similar. As PG says, the default
for a startup is to die. As a founder, I fight for the life of my startup each
day. And, I'm still learning how to channel all that adrenalin effectively.

------
sachinag
Two words: survivorship bias.

------
Mz
I doubt the world even knows enough about Richard Branson's personal
subjective world and internal wiring to know if "desperation" is even the
right descriptor. (I certainly don't.) Whether that kind of pressure motivates
or demoralizes a particular person depends in part on the person. In my own
case, I am very risk averse and only take risks when that is the conservative
answer. My oldest son loves it when we have some crisis because he knows I
will rise to the occasion and find some creative solution I would never try if
a more conservative option were viable. I hate, hate, hate it and feel
tortured by such situations. But I am trying to make my peace with it because
it is obvious that some of my best ideas come out of gambles made when there
was no sure thing available. Other people seem to perceive me as combative,
risk-taking, and so on. I don't. I see myself as forced into such choices at
gun-point and someone who would far prefer to NOT have to make such choices.

Another thought: If you are dramatically more competent than almost everyone
you meet at some things, no one can realistically tell you what you can or
cannot do. You have probably been told a jillion times "you can't do that!"
when you already had done it. I know I tend to find my limits by falling on my
face because failure is the only sure measure of what I genuinely cannot do. I
have been told so many times that I could not do something when, in fact, I
absolutely could do it that I just can't take the word of other people
concerning what is a reasonable goal. I also loathe this aspect of my life.
This is not how I want it to be. But it would be insane to behave more
"conservatively" when there is a mountain of evidence showing that what other
people believe is "impossible" is often just difficult for me but not
impossible. This gives other people a certain perception about me reminiscent
of what I am hearing about Richard Branson but the public feedback I get about
how people see me is very different from my own view of myself. So just
because outsiders look at Branson and view his life as lived in a "desperate"
state does not mean that is how he experienced it.

PS -- My computer is back from the shop. Woot! :)

