Why a 'growth mindset' is important for dealing with stress and mental health

From co-founder break-ups to startup burn-out, the path of the founder can be fraught with stress.

A study conducted by American researcher Michael Freeman suggests that even before founders set-up shop they have a pre-existing vulnerability to stress. His 2015 study of 242 entrepreneurs found that a higher proportion of founders reported a lifetime history of mental health conditions than corresponding statistics for the general population.

This raises an interesting question – why would people with a history of mental health issues such as depression or anxiety choose to embark on the difficult path of starting their own business?

They are a couple of hypotheses. It may be that founders choose to be the master of their own destiny in order to gain control and reduce tension in their lives. Or perhaps these difficulties and struggles have been fertile ground for creativity and building a business that innovatively solves a problem.

Regardless of the reasons, the majority of founders will then face a different set of challenges that will further test their mental strength. I’m yet to meet a founder who thinks running their own business is easy. It is highly stressful, overwhelmingly busy and the failure statistics are alarming.

Summing up these challenges in the ASX’s Entrepreneur’s Guide tech founder Elias Bizannes said, “Burnout is like depression; you don’t have energy or motivation… When you burn out your capacity to work is so greatly reduced that you are best not working at all.”

High rates of burnout are no surprise when we review KPMG High Growth Ventures’ founder wellness survey which found that the average founder works 64 hours a week.

The stigma around mental health is lessening, however it is still very hard for people to admit that they are failing.

KPMG’s survey found that three-quarters of VC-backed startups fail to return investor capital, 95% fail to meet initial projections and 40% fail completely.

But failing doesn’t necessarily mean failing in business, it could mean failing to cope with the demands of startup life. In fact, it is particularly hard for a founder to admit they are struggling when the business is going from strength to strength. What is there to complain about?

Founders, we have a problem

We have a problem. Our brightest and most creative minds can easily find themselves on the brink of collapse – burnt out and overwhelmed.

With research such as the KPMG survey shining a light on founder wellbeing, there are now a number of organisations, such as the Founder Institute, focused on improving the mental health of founders.

In the US the Founder Institute’s in-person events are proving popular and Australian entrepreneurs can access the Founder Institute’s Mindstorm Podcast. This introduces the concept of “awake and aware entrepreneurship” – a process of aligning personal growth with business growth to improve wellbeing.

These podcasts help founders to understand the importance of mindfulness in overcoming seemingly insurmountable obstacles.

On the podcast I discussed how founders can balance their mental health and wellbeing with the stresses of being an entrepreneur.

The importance of a growth mindset

We agreed that one thing we can do to ensure that founders maintain a healthy mind is encourage a growth mindset. This means helping the founder think big about their opportunity and assisting them to overcome their own limiting beliefs that will stop them achieving this big opportunity. Part of this process requires founders to identify the areas where they need help and them to find best people to help them.

Challenges can be addressed by using setbacks to grow and learn with their team or alternatively a founder might completely remove themselves from the business to take the time to recalibrate, refresh and consider possible solutions to problems.

In our musings we also encourage founders to recognise the signs that they are in trouble or burning out. The concept of “aware entrepreneurship” requires founders to identify the signs that they are not coping or in control – this might be failing to return calls, keeping on top of board reporting or other areas that are slipping. It might also be changes in personal habits such as losing sleep, excessive drinking or problems in family relationships.

If founders can recognise the problem, then they will be better placed to call on the relationships they have within and outside their business to solve the problem.

As investors, VCs also have an opportunity to play a key role in helping founders to maintain good mental health. Founders can work with investors and use their expertise to help overcome challenges they are facing.

The same applies for all other mentors and advisers who work with founders. Founder wellbeing is essential to the success of a start-up so it is in everyone’s interest to work towards achieving this.