3 Reasons Entrepreneurs Suffer
Abroad’s global research on 1,300+ entrepreneurs revealed three key reasons entrepreneurs struggle behind the scenes.
If you are an entrepreneur who wants to understand, at the deepest possible levels, why you are struggling behind the scenes, then this research-based article is for you. If you are an investor who wants to understand how to better support your entrepreneurs and reduce portfolio risk, then this article is also for you.
Our team conducted a 2-year global research study on how the mental health of entrepreneurs impacts their performance, decision-making, and team culture.
The goal of the study was to go beyond the high-level insights that entrepreneurs are stressed out, burned out, and having difficulty finding enough time to achieve business success. We wanted to look deeper to uncover the psychological patterns at the source of the personal challenges. By psychological patterns, we mean combinations of subconscious mindsets and behaviors that have the tendency to accelerate mental and emotional well-being challenges.
To do this required us to look at:
The mean scores of all categories and subcategories we measured using our psychometric assessment tool
A likert analysis of all subcategories measured
The scores of specific questions within each subcategory
A correlation analysis of subcategories
The qualitative insights generated through our interviews and executive coaching
After 1,300 entrepreneurs took our Awareness Assessment and our team synthesized hundreds of hours of conversations with our coaches, we identified a pattern of conduct and emotion that captures the experience of many entrepreneurs. That pattern is characterized by three recurring behaviors and assumptions:
“I AM MY COMPANY” – Entrepreneurs frequently identify as their company to everyone in their social sphere. Even if the entrepreneur does not identify as their company, society tends to do it for them.
CONTROLLING THE UNCONTROLLABLE – Entrepreneurs tend to push their anxieties aside and attempt to control reality, causing psychological stress when reality does not conform to their expectations.
BEATING UP ON SELF – Entrepreneurs are psychologically beating up on themselves at scale, because they experience their struggles as a reflection of their self worth.
1. “I Am My Company”
Entrepreneurs are significantly more likely than their management team members to identify themselves as the company or career, with entrepreneurs representing a .73 point deviation from the answers of their team members. Even if the entrepreneur does not believe they are their company, society often does it for them.
To illustrate this, let’s do some quick word association:
When I say Steve Jobs, you think _________________
When I say Jeff Bezos, you think __________________
If you answered Apple and Amazon, you are not alone. For most entrepreneurs who dedicate their lives to their professional missions, it is easy to become identified with that mission. Even if you don’t have a large public persona, the tendency to identify as your company is strong.
Here’s how it works. First comes a great idea. As excitement around the idea builds, the entrepreneur shares with their family, friends, and community their passion to spend the majority of their life pursuing the idea. Some of those family members, friends, and community members may invest in the idea that has a small chance of succeeding. As the idea becomes a tangible business, the next step is to put a product or service in the hands of customers. If the entrepreneur executes well, the press will write about the product and professional investors will fund the growth of the business. Now the entrepreneur has created expectations for success with their family members, friends, community, customers, partners, investors, and press that this idea will make a meaningful impact on society.
As the impact of the business continues to expand, so do the expectations for success for the entrepreneur. Elon Musk is a good example. As one of the most revered entrepreneurs of our time, the entire world - and the financial markets - are watching his every move as he looks to transform the automobile industry and put humans on Mars. When he decided to smoke a spliff - a cigarette that is a combination of tobacco and marijuana - on a podcast, Tesla’s stock went down 10% the following day. This highlights that even if the entrepreneur does not believe they are their company, society often does it for them.
What happens if the business struggles or fails? In a society that glorifies success and personalizes failure, failure becomes a reflection of the human being. This is what entrepreneurs are subconsciously afraid of - if the business they identify with fails, then that is a reflection of their failure as a human being.
On the brink of failure, we have found most entrepreneurs start to question their value and meaning in life. They face an emptiness within and a vast unknown that can be petrifying. They ask questions such as “Who am I if I am no longer running this company? Nobody is going to employ me.”
Another effect of the “I am my company pattern” is the feeling of being alone. Entrepreneurs often say things such as “I must do it or no one else will,” or “I’m the only one who can do it.” We asked the question in our research:
“When something goes wrong, I am always the one to fix it.”
Mean: 3.8
Likert: 58% of entrepreneurs mostly agreed with the statement (4-6 out of 6)
This is one of the questions entrepreneurs scored lowest on, and it had almost a full point deviation from the answers from their team members. The belief systems that “I am my company” and “it’s all up to me” stop the entrepreneur from seeing and receiving the support that is available, which creates further stress, burden and responsibility that accelerate their mental and emotional wellbeing challenges.
2. Controlling the Uncontrollable
The second key behavioral pattern that we identified is entrepreneurs tend to push their anxieties aside and attempt to control reality.
Fear and anxiety are fundamentally different. Fear is a response to a present moment threat, and anxiety is the fear of future fear. With anxiety we worry about things that may or may not happen in the future. Most often, the reasons entrepreneurs worry is they are trying to control uncontrollable future outcomes. As human beings, it is natural for us to have desires for how we want the world to unfold. Psychological suffering occurs, however, when we attach ourselves to those desires and require the world to be a certain way.
“My expectations for how things are supposed to run at my company are rarely met.”
Mean: 3.7
Likert: 55% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“I get anxious when situations don’t turn out the way they should.”
Mean: 3.7
Likert: 55% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“I push my fears and anxieties away so I can continue performing optimally.”
Mean: 3.5
Likert: 52% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
For example, let’s say an entrepreneur has a desire for a successful product launch in six months that they believe will attract a multi-million-dollar round of financing. In the entrepreneur’s excited mind they can already see happy customers, a flush bank account, and a growing team of happy employees. Then reality happens.
As they build the product they recognize the technical challenges are greater than they anticipated, and it becomes clear the launch date is unrealistic. This is when the entrepreneur starts cracking the whip on team members and begins using inspirational quotes like “if we are not working 16 hours per day, then we are falling behind our competitors.” At this point, time scarcity issues and patterns start to emerge.
“There is plenty of time for me to get things done during the day.”
Mean: 3.1
Likert: 62% of entrepreneurs mostly disagreed with the statement (selecting 1-3 out of 6)
Note: This is another question where the difference between entrepreneurs and their team members was significant
“If I’m not pushing my breaking point, I’m probably not working hard enough.”
Mean: 3.7
Likert: 56% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“Most of the time I feel rushed to meet deadlines.”
Mean: 3.7
Likert: 54% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“Our team tends to underestimate the time and resources it takes to get projects done.”
Mean: 3.6
Likert: 52% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
Now the product launch arrives, and the customers don’t respond as expected. Few people buy the product, and the people who do aren’t impressed. The entrepreneur is now faced with not living up to the expectations they set with team members, investors, families, friends, community, the press, and perhaps most importantly, themselves. As the entrepreneur resists reality (53% mostly agreed with “It seems like my efforts are constantly being blocked”) and recognizes the big funding round is further off than expected, they see the company struggles as a reflection of them (since they are the company) and experience further psychological suffering.
With the struggles and potential for failure, the entrepreneur then shifts into a scarcity mindset where they believe there is not enough time, money, bandwidth, and support. The subconscious scarcity often leads to hoarding, contraction, and self-centered behaviors.
“I worry there isn’t enough time, money, or support available to me.”
Mean: 3.7
Likert: 55% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
3. Beating Up on Self
Experienced entrepreneurs recognize that mistakes, setbacks, and failures are part of the innovation process. This is why we hear mantras in Silicon Valley like “fail fast, fail often, and fail cheap.”
However, based on the results of our global dataset, it appears the saying “much easier said than done” applies here. The conscious mind may agree with “fail fast, fail often, and fail cheap,” but the subconscious mind indicates a different experience.
The number one blind spot from our global research, regardless of geographic location and stage of company, was related to Self-Compassion, which measures how entrepreneurs treat themselves when they make a mistake or fail.
“When I fail at something important, I tend to be hard on myself.”
Mean: 4.5
Likert: 77% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“I can be impatient with myself when I make a mistake.”
Mean: 3.7
Likert: 55% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“There are many times when I feel like I’m not good enough.”
Mean: 3.8
Likert: 56% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
In our work with entrepreneurs and executives, we have found a dominant belief system where leaders believe that in order to motivate themselves to greatness, they must be hard on themselves. Many are not aware of other ways to motivate. The challenge is that self beat up drains our psychological and emotional energy.
The other challenge is how we motivate ourselves is how we motivate others, impacting how effective we are as leaders in our capacity to support and empower others -- to celebrate and reward people for their contributions. Meanwhile, the data reliably shows that recognition and appreciation are two of the greatest contributors to employee motivation and morale.
The emotions fueling self beat up are pride and fear - emotions that normally surface when someone has low self-confidence or deep-rooted feelings of unworthiness. Low self-confidence often leads to loneliness, unexpressed hurt, and powerlessness behind the scenes that no one wants to talk about, especially with their investors and team members.
This subconscious unworthiness then leads to prideful behaviors, where entrepreneurs tend to step on others, enforce strict hierarchies, and falsely inflate themselves to feel powerful. In simplest terms, we resort to prideful behaviors when there's a lack of inner abundance and unconditional self-acceptance.
A Vicious Cycle
By now we are hoping it’s becoming clear how entrepreneurs get swept into a vicious cycle that impacts their mental health, sense of self, and the cultures they create for their teams.
When entrepreneurs identify as their company to everyone in their social sphere and things don’t go as planned (they rarely do), the entrepreneur beats themselves up internally because the struggles are a reflection of their self worth.
The result is immense psychological suffering behind the scenes and unhealthy coping mechanisms. Here are some examples of behaviors that stem from these mindsets that impact leadership, decision-making, and team culture.
Cracking the whip on team members
Shaming team members
Pushing your breaking point
Looking for short-term wins and gratification
Setting unrealistic goals
False bravado and grandiose sense of self
Impatience and reactivity
Lack of sleep
Big ups and downs
Scarcity mindsets
Mental and emotional exhaustion
Psychological burnout
Questioning significance of work
The most extreme outcome is an entrepreneur taking their own life due to a startup failure
With entrepreneurship posing a deluge of daily challenges, few entrepreneurs can maintain this internal psychological roller coaster for years, especially those with pre-existing mental health conditions. Eventually, entrepreneurs burn out and/or become depressed.
“At the end of the day, I feel mentally and emotionally exhausted.”
Mean: 3.6
Likert: 53% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“I’ve started to question the significance of my work.”
Mean: 3.6
Likert: 53% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“Honestly, I’ve become less enthusiastic about my work compared to when I first started.”
Mean: 3.5
Likert: 52% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“My work is making me feel completely drained.”
Mean: 3.5
Likert: 51% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
“It’s hard for me to get out of the bed in the morning to go to work.”
Mean: 3.5
Likert: 51% of entrepreneurs mostly agreed with the statement (selecting 4-6 out of 6)
Without awareness of the subconscious psychological patterns around anxiety, burnout and depression, the entrepreneurs shift from internal bullying to a victim mindset where they blame their failures on:
Inability to find product/market fit
We had the wrong team
The market timing wasn’t right
While these business rationales may in many cases be valid, the entrepreneur’s resistance to acknowledging their psychological and emotional challenges to their investors and the general public keeps the wellbeing epidemic going. One of our recent clients who was battling depression shifted this pattern and offered us the following feedback:
"The reason why my last company failed wasn't because I couldn't manage competition, my product, or my team, it was because I couldn't manage my own psychology."
Research conducted by Michael Freeman and his associates revealed that entrepreneurs are 50% more likely to experience mental health challenges such as bipolarity (10X more likely), ADHD (6X more likely), addiction (2X more likely), and depression (2X more likely). From our experience supporting entrepreneurs on a global scale, the three patterns identified in our research only accelerate the pre-existing conditions. When someone is navigating bipolarity and things are going well for the company they are identified with, they experience great highs. Alternatively, when things are not going as planned, the lows can be quite significant.
Each of the behavioral patterns and coping mechanisms contributes to and exacerbates each other in a vicious cycle, thus revealing how imbalances in bipolarity can be made exponentially worse. And it’s important to note that these challenges are difficult for any human being, even those who are asymptomatic with no pre-existing mental health conditions.
While these patterns feel like a bleak portrait of entrepreneurship, the good news is our research and interventions also revealed that entrepreneurs who are willing to do the courageous work to work on themselves with the support of their investors can experience an entirely different reality.
Below is a snapshot of the evidence-based impact of a community-based coaching and education program for founders to address the findings of the research. Significant gains were experienced in all 18 categories we measured, and as a result of this work, nations such as New Zealand and cities like Chicago are systemizing this type of development for the leaders of our future.
Key Takeaways
If you are an entrepreneur, here are some key takeaways:
All transformation begins with awareness
You are not alone in these challenges
If your company fails, you are not a failure
If you are having mental health challenges, know that there is nothing wrong with you. In fact, research shows those same mental health challenges are correlated with key traits of an entrepreneur including creativity, innovation, grit, etc.
If you are having these struggles, you can do something about it. By simply surrounding yourself with the right support system, whether that be coaching, therapy, or a community, you can achieve a meaningful difference in your experience of being an entrepreneur. All great leaders ask for help and support.
To scale your company, you must scale yourself. By doing the difficult inner work, you can liberate yourself at the deepest levels and unlock the full potential of you and your company.
If you are an investor, normalizing your entrepreneur’s challenges and blessing the budget for them to surround themselves with the proper support system is not just the right thing to do, it’s good business.
To listen to to Abroad’s full research study on Spotify, click here.
Justin Milano is the Founder & CEO of Abroad, an organization on a mission to develop the leaders our world needs. As a serial entrepreneur and executive coach, Justin is passionate about helping visionary executives, founders, and people leaders navigate our ever-changing world with greater purpose, balance, and wisdom.
