Based on research with startup founders, Dan Bradley and Gareth Joe put forward a new approach to start up culture that prioritises health and wellbeing and could benefit VCs too.
In the startup world, there has long been the assumption that sacrificing your health is the only route to success.
It’s all about the hustle and grind and this mentality feeds into the culture with startup founders and entrepreneurs over-indexing on depression, ADHD, substance abuse or other mental health conditions.
But it doesn’t have to be this way.
Systems can be put in place to ensure people aren’t burning out and that everyone is performing at their best.
Not only is this having dire consequences for the health and wellbeing of startup founders, it’s also negatively impacting the outlook of their businesses.
CEO coach Matt Munson cites examples of founders who have raised millions of dollars but want to quit. There are also those who have seen success but are now burned out. Not wanting to leave people in the lurch, they stay on to the detriment of their wellbeing.
In recent months, we have been interviewing startup leaders to develop an understanding of how they can work smarter not harder. Here’s what we propose:
Changing the startup narrative
When many people hear the term startup, their minds go straight to the unicorns: those businesses that seemingly appear out of nowhere and take the world by storm. The media is particularly obsessed with this narrative and it’s one that needs to shift.
The reality is, by their very nature, unicorns are rare. Rather than focusing on that top 1% of businesses, instead, we need to foster a more inclusive entrepreneurial mindset. Let’s stop putting entrepreneurs on a pedestal and support them better instead.
Shift the startup mindset
Eric Wilson, founder of defunct neobank startup Xinja once said that in the startup business sometimes you don’t really know what you’re doing.
His belief is that accepting this mindset is incredibly important for startups that are constantly under enormous pressure.
The mindset needs to shift from founders who “know it all” to founders who are vulnerable. They’re not gods, they’re human.
Moving from “I” to “We”
For many startup founders, it’s hard to divorce yourself from the business. Take the examples of Elon Musk or Mark Zuckerberg. They have become the embodiment of the brand with the work completely taking over their personal lives. Closer to home, we have the examples of Mel Perkins at Canva, and Scott Farquhar and Mike Cannon-Brookes at Atlassian.
Increased interest from the media and the public in these ventures ladders up to further internal and external pressures. And the reality is, one person cannot take it all on.
To fix this, we need to move the idea of startups being led by individual geniuses to being more about teams.
It’s a marathon, not a sprint
In 2008, Medibank estimated that stress and burnout are costing Australian businesses up to $14 billion dollars a year. It would be safe to say that following COVID, this figure has only increased. The research outlined the difference between “good” stress and “bad” stress with the latter leading to significant health issues and ultimately breakdown.
Running a startup needs to be viewed as a marathon rather than a sprint; less a breathless rush to an IPO and more planting the seeds of tomorrow.
One of the lovely quotes from our research was, “Everyone could probably do with a dose of patience.”
A shift from venture capital to venture health
Just asking founders to make time to take care of themselves or providing more access to care won’t necessarily shift the needle. We need to think about harvesting, supporting, nourishing, and enriching them so they can go the distance.
That’s why venture capitalists need to take on a role in this process.
VCs must to view the wellbeing of founders as key to their investment. How can they support the founder holistically so that it’s less about return and more about the health of the organisation? And that “health” must mean more than simply financial growth. Equally, the emphasis needs to shift from accelerated growth to sustained growth.
Let’s celebrate VCs that make this possible perhaps through a ‘Venture Health Index’ that ranks the healthiest VCs and the startups they support.
Rather than focusing on the top toxic cultures that have made headlines such as Uber or WeWork, let’s highlight the ones that excel at looking after their people.
For VCs wondering where to start creating such a program, we’ve found using lean, human-centred design is most effective to ‘design the design’ of startups. This ensures wellbeing is part of the business DNA. Businesses that are just getting started have the advantage of being able to bake these principles in from day one.
This impact will be tremendous as the startups of tomorrow see the return on investment from building lasting resilience, high performance and holistic founder health.