Entrepreneurs, both immigrants and American-born, have built America from the ground up into the world economic power that it is today. We can all recall some of the names of our nation's greatest self-starters: Henry Ford, Bill Gates, John D. Rockefeller, Andrew Carnegie, Walt Disney, Oprah Winfrey, Steve Jobs and Rebecca Shanahan (Avella Specialty Pharmacy, 2014 revenue: $800 million), just to name a few.
From Henry Ford's assembly-line production, which transformed American life when he put a car in nearly every garage to Bill Gates who founded Microsoft, they all possess remarkable similarities: mental toughness, strong discipline, intelligence, perseverance, confidence, vision, creativity and a fierce drive to succeed. In fact, we tend to idolize these fiercely-driven individuals because they perpetuate the American ideal, which is that in America, anything is possible-with hard work.
But for all of the Elon Musks, and Lori Greiners of the world there are countless others that we never hear anything about who never make it. What happens to the tens of thousands of failed entrepreneurs who never get there? What types of people have the backbone for entering the world of entrepreneurship, where the risks are as great in number as are the sleepless nights?
Karen Gordon, CEO of 5 Dynamics, and Cynthia Scott, Ph.D. M.P.H. clinical psychologist, offer their expertise regarding the mindsets behind start up founders, and how the intense feelings of failure and success can exact a hefty toll on all parties involved in the physically, mentally and emotionally draining (and exhilarating) roller coaster ride that is entrepreneurship.
Rather then showing vulnerability, business leaders have practiced what social psychologists call “impression-management," also referred to as “fake it till you make it," what does this ultimately mean for the individual going it alone, as an entrepreneur often does?
Cynthia: In my work teaching leadership at Presidio Graduate School, I focus a lot on the development of the capacity to be authentic, which includes being vulnerable. Leaders have a hard time knowing when to be authentic because people want to see the real you, but if you show the real you, that makes you less of a leader. It's a catch 22, especially for women. There can be a downside to displaying that authentic self, and a downside to not displaying your vulnerability. Good leaders are able to balance authenticity with vulnerability to build trust and valuable relationships in their work. As for “faking it until you make it," there is nothing wrong with that and people do it constantly. It can also be called “rapidly prototyping," trying something out and learning from it. The act of trying something new (like starting a company or parenting your first child) makes it difficult to feel authentic in doing it, yet it is essential when going forth to launch a new idea you feel passionately about as an entrepreneur. Entrepreneurs can't fear failure or the act of trying something new to do what they do.
Karen: A common pitfall for entrepreneurs and leaders is that they think that they need to be an expert in everything. They don't. It is much better to recognize and be able to name your strengths and weaknesses. We all have them. If you understand where you prefer to spend or not spend your energy and your time and you have a growth mindset.
Brad Feld, prominent venture capitalist and Founder of the Foundry Group, shared that he has struggled with mood disorders throughout his adulthood, and started blogging about his depression and was surprised by the number of emails from other very charismatic and well-known entrepreneurs who voiced many similarities regarding emotional and psychological struggles. He reported that there was one common thread: "None of them felt that they could openly talk about their emotional struggles, as if it were akin to admitting a character flaw or weakness." Why is "talking about it," still so taboo?
Cynthia: In my early career I worked in employee assistance programs, and at that time the statistic that we used was that 15-20% of people who are able to get up and go to work have some kind of mood disorder, (depression, anxiety, etc.). Entrepreneurs and VCs put a great deal of pressure on themselves to succeed and perform to their own and industry standards. Paired with the misconception they can't be vulnerable or authentic while also being a leader, this can cause a lot of strain when the pressure builds up.. What if I don't get funding because someone knows about my mood disorder? What if it affects my business success or the careers of my employees? If the risk of those looming and seemingly detrimental factors are great enough, entrepreneurs or leaders will keep the anxiety or mood disorder quiet to protect themselves, their business and their employees.
Karen: The old adage is true. It is lonely at the top. When you are a leader, people expect you to have all of the answers and to be steadfast and strong. We all have self-doubt, but as a leader, you cannot express that to your team, and so you internalize everything. That is why it is important to connect with other CEOs, but even there, initially, people will posture because they feel that they are held to a higher standard. It's wise for leaders to hang in with a like-minded group for an extended period of time to allow for trust to build. Having a safe place to share your fears and doubt is important, even for CEOs.
The Founder of the e-commerce site Ecomom, Jody Sherman, 47, took his own life, in 2013; Sherman's not alone, as there were others before and since. What resources would you recommend for entrepreneurs to access before they reach the point of desperation?
Cynthia: For entrepreneurs, the perceived (and sometimes actual) stakes are higher if failure occurs, and so exposure to the thought of suicide is greater. Failure for them is much more public than failure for others. If there's a chance an entrepreneur could lose their job, company or funding, it creates greater pressure for success. Society can do much better about disseminating and making available helpful resources before people reach the point of desperation, as Jody did. Feelings for suicide are overwhelming and sometimes frequent, but temporary, so if you call or talk to someone on a hotline (National Suicide Prevention Hotline: 1-800-273-8255) or someone you know who you feel comfortable with, it can mitigate those temporary feelings. Suicide Prevention hotlines are valuable resources now available across the globe. The Internet is good for these resources as well, allowing people to talk to someone, either by phone or email, creating a safe space for anyone to tell the truth. Entrepreneurs may prefer these types of resources that are private and not privy to people in their lives or networks.
Does a certain type of person become an entrepreneur?
Karen: To become a first-time entrepreneur you either have a high tolerance for risk or you have someone in your network who has a high tolerance for risk who encourages you to move forward with your idea. People who exhibit high levels of risk tolerance are future-oriented thinkers. They love living in the world of ideas and possibilities. They ask the question “What if?" and you need to pair that ideation energy with a drive for getting things done (executing, not sitting on ideas with no sense of urgency or direction).
Why are there so many more entrepreneurs today?
Karen: People have become disenchanted with the idea of working for a company for their entire career, and they are looking for freedom and flexibility in their lives. Work is no longer the most important thing in people's lives. They are looking for experiences, and want flexibility to enjoy life. The internet has played a role in the upswing of entrepreneurs as it has shown people what is possible.
What should new entrepreneurs know about the unspoken risks of the going “all-in" career path?
Karen: The entrepreneurial path is not for the faint of heart. It is tough! It can be all consuming. You never completely walk away from it. You wake up in the middle of the night thinking about challenges that you face in the business. Even if you take time off, which you definitely should, you can't stop thinking about your next moves. The good news is, once you build a strong team around you, that burdens is lighter, as you recognize your team will manage the day-to-day while you are away and you are able to move back into the world of possibilities.
What are some of the common misconceptions about the character traits of entrepreneurs?
Karen: The most common misconception I see regarding entrepreneur character traits is that entrepreneurs have to be competitive, have a high tolerance for risk, and have a relentless ability to ideate and execute in order to be successful. But as I said before, stereotyping anyone is dangerous. Many entrepreneurs may have these traits, but they also have unique traits that aren't stereotypically associated with go-getter entrepreneurs. Some are very focused on people and tend to build happy and productive teams. Others are focused on data and keep a close eye on metrics. All need to understand their unique gifts and how to lead from those gifts, but there is no one-size-fits-all entrepreneur profile that people can compare themselves to.
Though launching a company will always be a wild ride, full of ups and downs, there are things entrepreneurs can do to help keep their lives from spiraling out of control. Most importantly, making time for friends and loved ones is paramount. Don't let your business squeeze out your connections with actual people; they will, oftentimes, help to keep you grounded when it's needed most. Never be afraid to ask for help, and see a mental health professional if you are experiencing symptoms of significant anxiety, post traumatic stress disorder, suicidal thoughts or any degree of depression.
Something as simple as a brisk 20-minute walk each day will go a long way to help clear the mind of nagging thoughts while getting much-needed exercise, which can also boost your mood. Though sleepless nights are often an entrepreneur's reality, set aside at least seven hours, for sleep, each night. Lastly, make the effort to eat a well-balanced meal, every day. Adequate nutrition, rest and exercise can significantly enhance one's mindset and help to maintain a healthy balance that will be needed to endure those particularly trying moments when they surface.
Three years ago, I made a deal with myself - I wanted to have $100,000 saved when I'm 25. But I didn't mind if it didn't happen until the day before my 26th birthday.
One of my biggest priorities in life has always been to save as much money as possible — and I owe much of that to my parents, who made sure I had a strong financial education at a young age.
My dad even helped me start a vending machine business when I was nine. The experience taught me essential skills like how to pitch a business, cope with rejection and open a checking and savings account.
For the past three years, I've never made more than $80,000. About a year ago, I reviewed my rate of savings and investments and realized that I was on track to save $100,000. With only a car loan away from being debt free, I've got another year and $10K to go!
I want to acknowledge that privilege is a key part of my story. I'm white, I come from a middle-class family, and I was able to graduate college without any debt. All these things helped a great deal.
But my parents didn't raise me with a silver spoon. Paying for college was a collaborative process. We'd sit down at least twice a year to discuss how we were going to pay for the next semester. The first question they'd always ask me was: "How much can you contribute?"
I've been fortunate. But it also takes a lot of hard work, sacrifice, and responsibility to save and maximize your earnings. Feeling motivated and knowing that I'll be prepared for whatever life throws my way fuels my drive to keep making smart financial decisions. Here's how I'm getting to $100K.
- I side-hustled
This kick-started my journey towards six-figures. In addition to saving the majority of my 9-5 salary, my first year of freelance social media marketing made me quite a bit of cash that I could immediately save. I was able to establish both a SEP IRA and a fully-funded emergency fund with my earnings.
2. I started investing early
Knowing that compound interest is so important, I wanted to start investing early to have my money work for me. Once I started my first big-girl job, I opened my first Roth IRA. Starting to save for retirement at age 22, I was able to max out my Roth each year and also contribute to aSEP IRA and a non-retirement investment account. My first job out of school had a 401(k), but you couldn't contribute until you were there at least a year. Knowing I wasn't planning on staying long — I was at that job for a year and a few months — I opened a Roth 401(k) and then rolled my earnings to my Roth IRA.
3. I negotiated salary offers and raises
Negotiating should be a collaboration, not a confrontation. Growing up, I watched my father sit on hold, patiently waiting to negotiate our cable and phone bills. Negotiation was always part of my life, and I grew up with parents who knew how to do it. So when I was offered my first social media freelance gig, I negotiated over $10k more than they offered. And after achieving a 20% bump at my first 9-5, I negotiated $20k more than what was offered at my next job. And $10k more at the next job. If negotiating for raises freaks you out, here's a guide that can help.
4. I've automated my savings
Automating your money not only makes your life easier, but it makes you feel like the percentage you're saving just doesn't exist. I have 26% of each paycheck automatically deposited into a high-yield savings account. This savings account is purposefully at a different bank than my day-to-day checking account, so I'm less likely to withdraw from it and less likely to think about it. This "set it and forget it" level of financial freedom was something I worked hard for -- through money diarying, budgeting, and conscious spending. So now, my savings amount is completely on autopilot.
At the age of 24, I know that I am on the right track to make my goal a reality. Inspired by my own journey, I wanted to help women everywhere to have that same feeling of confidence that financial education gives — and get information from someone who isn't an old, rich white dude. As a money speaker and coach, I run Her First $100K, a financial literacy platform for millennial women on the path to get their first $100K too.
It's possible to achieve your first $100K — whether that's debt paid off, earned, saved, invested, or something else. With intentional strategies and focus, you've got this!