Don’t overestimate the downside of risk

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We humans are scared little creatures.

Thin skin and brittle bones, no match for a lion, tiger, shark, or even snake. Not to mention the bees, sun, and freezing weather — journey enders all, if we’re not careful!

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Our big brains have pushed us in a few short centuries, from living long enough to procreate, to old enough to watch our reproductive systems and various organs shut down. We live longer than our hardware was ever designed to, which is an achievement to be lauded on so many levels (soap, seat belts & penicillin).

What bizarre dissonance our fragile nature and extended life span creates. How can we be taken out so easily, yet dominate the planet so clearly?

I’ve thought about this a lot, not out of some morbid death obsession, but out of the fear I’ve felt at times in my life. There are times when my terror was justified, like missing the runway in Telluride and feeling the plane gentle dive backwards as we stalled and watched the plane drift into the valley below. Or when the towers fell and we didn’t know where Josh was.

From time to time I’ve felt panic and fear as an entrepreneur as well. The morning of that first pitch conference — would anyone show up?! The days when I had to lay off all those people and kill SAR because the dotcom crash happened. Was I a fraud?! Did I just get lucky!?

Here’s the thing, the panic of death and panic of failure feel the same. Your body and mind — when untrained — reacts exactly the same to the plane going down as to the magazine shutting down. Ostensibly, a loved one missing on 9/11 is more terrorizing than the fear of people not showing up for your conference — but the body and mind react similarly.

And this is where the Jedi training comes in for founders: unlearn what you have learned, must you.

Yesterday I had coffee with a founder who reached out to me two years after I offered to invest in his company (he declined back then — he was bootstrapping). During those two years he’s diligently grown his startup, with a product I loved in its infancy, to $1,000,000 in yearly revenue.

Or as some VCs in the Valley call it, “who cares?”

[ Note: I love a business like this, it’s primed for greatness. ]

He’s been at it for three years, and he’s wondering — like many of the founders I meet with — what it will be like if he raises money.

“Will I have a board?” he asked.

“How often will we meet? What will their expectations be?” he quickly followed.

“How will things change?”

I thought for a minute before answering — something I’ve added to my Jedi skill set later in life — and told him “It will change.”

He looked at me and I realized he wanted the details. Was he ready for it, I wondered. Yes, he’s ready for it.

“You are going to have to learn to take bigger risks and get comfortable with failing more. You got one of those kids who has worked for you since the beginning, who has been super loyal and does anything you ask him to?”

“Yeah actually, we do” he replied.

“Well, you’re going to take the three jobs he’s doing poorly and hire three people to do them right — and there is a 50-50 chance there won’t be a place for him when you do.” I told him candidly.

“Hmmm… ” he replied. I could see it sinking in — things change.

“And you’re going to have to take $500,000 and come up with 10 really good ideas to try, knowing that eight of them are gonna fail. You’re gonna burn $400,000 big ones in a pile of ash — so that one or two ideas might transform the business. Those ideas will take you from $1m this year to $3m the next year — and $10m the year after. How many $50,000 crazy bets have you made in the last three years?” I asked.

Zero.

Of course, you can’t make crazy bets when you haven’t learned to turn off your fear. Just like Luke needed to face Vader in the cave trial and then in person, founders must face their fears … without feeling fear.

It takes time, and there is no silver bullet, but as my pal E told me once, “people overestimate the downside of risk, Jason.”

You have to be able to feel the fear as it crawls up inside you and be with it. “OK, I’m scared right now … why?” List the words the voices in your head are saying: ‘I’ll fail in front of my peers,’ ‘my investors will think I’m an idiot,’ and ‘my dad will be proven right — I will never amount to anything!’

Listen to those voices. Breathe. Then imagine the words are written in the sand and are washed away by steady ocean waves. They’re just words spewing out of your primitive mind — they will pass. And, here’s the secret: you can replace them.

Our brains have really good intentions … from two million years ago.

Back then our brains were 70% as large as they are now and their goal was to not get eaten by a saber-toothed lion.

None of what we do as founders is saber-toothed-lion scary.

Take the time to understand your mind and how it processes fear. Anxiety is constant at a startup, because we’ve designed our lives to be challenging. We don’t simply find the solution for a problem and stop, we are greedy little bastards we founders — we keep looking for more tigers to take on.

best @jason

PS – This blogging every day is killing me, but I love it. I’m in shock by how impactful just eight days of this has been and inspired at the prospect of doing this for a bit more. If I could do it again I would have promised 25 or 50 days of blogging — not 365 days.

PPS – The CNBC thing went well, but they don’t put their clips anywhere. Clearly they should be publishing the technology-related ones to Twitter so that folks who go on CNBC can have their @handles mentioned on air and with the clips. If CNBC starts using Twitter’s native video platform I think they will a) double their revenue, and b) double the audience on their actual channel (as people don’t know how many cool leaders are actually on CNBC every week).

PPPS – CNBC asked me to come on for the Twitter earnings call, so I told them I would do that. Feels weird being back on TV news after taking 10+ years off. It’s so short and fast compared to my podcast.

PPPPS – I got this email forwarded to me by one of the big banks. Folks have been saying my comments moved Twitter’s stock 4-5%, which was never my intention when I wrote the piece. I don’t own or trade stocks — I only angel invest. Please do not, as some folks have said on Twitter, trade stocks based on what I’m writing. Or do, just know I’m not even aware of anyone’s actual stock price!

calacanis morgan stanley trade
Don’t trade stocks based on what I write–please.

 

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