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Although not a medical condition, founder burnout is a serious issue in the startup ecosystem that can cause companies to fail
It may be hard to fathom how a successful entrepreneur can be unhappy, and feel desolate and helpless, especially if their startup has just received funding or hit sky high valuations. While it is easy to imagine the wealth they may be accumulating and the luxuries they can afford, few people consider the extreme stress involved with being an entrepreneur.
The startup world exacts every pound of sweat, passion, energy, and strength from founders, who, with their noses against the grindstone, often handle the workload of three or more people every day. Due to this high-intensity lifestyle, founders often end up experiencing burnout.
Definition, Meaning and Symptoms
In May 2019, the World Health Organization (WHO) included burnout in the 11th Revision of the International Classification of Diseases, as an occupational phenomenon, but not a medical condition.
The WHO defines burnout as “a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed.” Some characteristics common to this condition include fatigue and exhaustion, a feeling of dissociation or negativity toward one’s job, and lower rates of success and efficiency in the workplace.
Martin Berry is an investor and the Founding Partner and CEO of DTribe Capital, a Singapore-based, Asia-focused Venture Capital (VC) firm. He describes founder burnout as a feeling of being overwhelmed, where founders feel huge responsibility to multiple constituents within their business, including employees and investors. He admits that burnout is a common issue among the hundreds of founders he has come across over his years of experience.
Entrepreneur-turned-CEO Coach Matt Munson, who is the CEO of SanityLabs, and spends his days coaching entrepreneurs and CEOs, believes the same.
Munson co-founded Twenty20 in 2014 and was the CEO from inception through the company’s exit in 2019. In his blog, Munson argues that founder burnout is rampant in the startup community, and lists a few things he claims to have heard from four different founders in a single day:
- My company just raised $100 million, and I want to quit. What do I do?
- We’ve launched in two countries. I want out but don’t want to leave the team unemployed.
- I’ve been at this six years. I’m tired. But I don’t think we can sell.
- I know I need to grind, but I can’t find my way back to the focus I used to have.
Recounting his own story, Munson says, “it felt a little bit like being in a bad relationship, where if it’s a small thing, you can, you know, talk through it and fix it. But it got to a point where I felt like I needed to go through a divorce from the business in order to move forward with my life.”
Joel Gascoigne, CEO and Co-founder of Buffer, a social media engagement tools startup, describes his burnout experience in his blog as:
“I lost motivation. I just didn’t care. I knew I cared deeply, but I had nothing left. I couldn’t get up in the morning. I felt very sensitive and emotional. It was like anything could set me off, and make me well up. I cried a lot, by myself and with people close to me.”
One of his journal entries from that time reads, “I’m feeling this general dull sadness or struggle in me,” while another one reads, “Everything feels harder, and I’m generally feeling a cloud over me and more low in energy and pessimistic than usual.”
These anecdotes offer a rough idea of how neglected this issue is. While there is no data relating specifically to the SME sector, burnout generally costs the U.S. economy an estimated $300 billion annually.
According to a survey of 272 entrepreneurs in 2015, 72% of entrepreneurs reported mental health concerns, while 49% reported having one or more lifetime mental health conditions, with 30% reporting depression and 29% reporting anxiety problems.
The term “burnout” was coined in the 1970s by American psychologist Herbert Freudenberger, who used it to describe the emotional toll faced by those in “helping” professions like doctors and nurses, who are often burned out because of the high stress-situations they face.
Today, research and examples indicate that burnout has grown beyond these kinds of professions. It can now indiscriminately affect everyone, from founders to employees, and homemakers to celebrities.
According to Munson, the manifestations of burnout vary from founder to founder. Common symptoms of burnout include depression, anxiety, exhaustion, escapism (or the urge to be anywhere else except work), isolation, and more.
All investors need the skills to determine character and personality, to assess entrepreneurs that lead the startups they want to invest in. However, the same trained eyes of an investor can also very clearly see signs of burnout, according to Berry.
In Berry’s experience, burnout can be easily detected in the behavior and mannerism of founders – burnt out founders, who used to be passionate and driven, clearly indicate their lack of energy and interest in their body language.
Causes of founder burnout
Founders carry a heavy burden. They are hounded by investors to generate more revenue and profits, they stand to lose a lot if they’re unable to keep their business alive, and they have to bargain with suppliers, hunt down manufacturers, pay salaries to employees, attend meetings with clients, and more.
Although this is enough for anyone to feel overwhelmed, anxious, and burned out, the sedentary lifestyle, dearth of social life, and the inability to truly disconnect from work experienced by many founders compound the problem. However, there are several other factors that contribute to this condition.
Lack of passion
“People just fall in love with this idea of being a founder or an entrepreneur. And it hasn’t come from a deep connection with some problem that they want to solve,” Berry says.
In cases like this, Berry says founders are likely to lose steam in the long run.
“When you’re not really passionate about something, then clearly, the chances for burnout are a lot higher, because you don’t feel so strongly about the problem that you’re trying to solve,” he explains.
Misalignment of expectations from work and life
Munson has firsthand experience with this. He started Twenty20 with high expectations, dreams of living near the beach and working with good friends on something that he cared about. But soon enough, he lost the alignment between his expectations and the trajectory that his business took as it grew and attracted outside capital.
“One mistake that I made was not taking enough time to ensure that I personally had a lot of alignment between the business I was running and the life that I wanted,” says Munson.
Munson started Twenty20 with a mission around education, but because of outside capital, he also faced a mandate to keep the business growing. The startup ended up becoming a crowd-sourced stock photography marketplace.
“We went through several pivots to get [to digital stock photography], which kept the business alive, but left me, as a Founder and CEO, feeling quite a disconnect between the mission of the business and what I really care about in life myself,” says Munson.
The pivots had been necessary, but the eventual endpoint caused a pronounced misalignment between Munson’s business and his personal goals.
“I found that extremely challenging and I think, looking back, that was probably the biggest source of the burnout for me,” he adds.
Have a finger in every pie
When a founder has raised a business from the ground up, it can be hard for them to let go and allow others to make big decisions. Some founders try to continually handle everything, even as the business grows, which can rapidly become unsustainable.
“They’re not good at delegating, trusting, and empowering their teams around them to do the heavy lifting with them,” says Berry.
For the first few years, Munson ran Twenty20 with a top-down decision-making approach, where he assumed that it was a leader’s job to have everything figured out before issuing instructions.
“And so I had built this culture, where people brought up problems, and I felt very alone trying to figure out the solutions,” he says. “It’s very destructive as a leader, but it’s also just very destructive as a human, to be that tied in with something.”
With the help of an executive coach, Munson worked on changing his leadership style, and made efforts to transform Twenty20 into a firm with a more open culture, where conversations about both personal and professional struggles could take place.
Founders who do not know self-care
“A lot of people who look high functioning from the outside are under resourced on the inside,” says Munson.
He explains that high achieving individuals, straight-A students, usually end up in leadership roles. Many of those most susceptible to burnout are those who are used to taking care of others, at the risk of forgetting to take care of themselves.
“I see leaders who are kind of walking into the furnace for the sake of their business. They’ll do anything to make the business work, to make sure the team is okay to keep things stable and growing,” Munson adds.
These founders are so busy ensuring that everything else is taken care of that they can’t spare time to think about aligning the business with their passions, or give themselves space to evaluate everything.
“They’re not thinking a lot about how to create emotional and psychological stability for themselves in the midst of all the crazy ups and downs of running a startup,” says Munson.
Poor selection of co-founder
Founders do not often spend enough time establishing a work code sometimes end up with “dead wood” co-founders. These co-founders want to go along for the ride, but do not contribute any value to the company – they are either not good with tech, don’t understand the business, or aren’t connected to the company vision.
According to Berry, if a founder feels that they have to not only carry the weight of all the employees on their shoulders, but also the weight of co-founders who are on the same incentive structure as them, burnout can easily ensue.
How can founder burnout affect a startup and its employees?
“It’s a lot like in a family, if the parents are not getting along and are no longer in love, they may not tell the kids that, but the kids kind of feel it,” says Munson.
When a leader is deeply motivated and connected to the mission of the company, employees draw motivation and energy from the leader. Conversely, when a leader has lost their passion, employees can sense it through non-verbal cues like negligence, attitude, lethargy, and lack of interest.
Dealing with founder burnout
Case study: Matt Munson
Munson took some time away from his business in October 2016 to attend a CEO bootcamp in Colorado. During the bootcamp, Munson had the space to process the experiences that he was having with Twenty20, and realized that he was not happy.
Once the realization of unhappiness dawned on him, Munson began an intentional exploration of why he was not happy. He realized that in his personal life, he was a connected and trusting person with close friends, but was always aloof and distant in the office.
“I would walk through the front door of the office, put a mask on and think, Okay, now I’m a CEO, which means I need to show up differently,” says Munson. “I can’t share all my vulnerabilities, I can’t share my pain or my questions. I need to show up like I have it pulled together and figured out.”
The realization that he was showing up at work every day with a mask helped Munson understand that he needed to make changes in order to stop the ordeal.
After a significant change in company culture, Munson, who was also going through a personal loss at the time, began sharing his thoughts and feelings with his employees. This transformed the office culture, helping Munson align his business with his personal goals, and allowing him to somewhat overcome his burnout.
He says he also learned to manage his psychology, developed a robust morning routine of exercise and meditation, worked with a coach and a therapist, and worked only between 9 am and 5 pm.
Despite the changes, Munson still felt burned out: he did not feel a deep connection with his work, which he believes was “the core instigator of the burnout” for him.
“As I look backward now, and as I’ve stepped into a different type of work, I realized that I actually have a lot of energy if I’m working on something that I feel a connection with,” he adds.
Therefore, Munson suggests exploring the source of the misalignment and considering ways to introduce better synergy, even including leaving the startup as a last resort.
“I think the misalignment is a little bit of a cancer where either you fix it or else you just bandage it, and it’s going to show up again 12 months down the road,” he says.
For Munson, the relief came almost three years after realizing he was burnt out. He exited the company in April 2019, when Twenty20 got acquired by Envato. Cutting off ties with his business was the cure for Munson.
When Munson coaches founders, he takes a comprehensive look at his clients’ lives, both personal and professional.
“We look at whether they’re really willing to commit to having space for themselves, apart from the business, and if so, how to get that space. And then we’ll look at what their personal practices are, what do their mornings look like? What do their weekends look like? What does their social support look like outside of the business?” he explains.
Rely on co-founders
Munson also emphasizes the importance of co-founder relationships, having experienced a bad relationship with his counterpart during his tenure at Twenty20.
“We look at how [co-founder] relationships are maintained, apart from the business, much like how a couple with kids might go on date nights,” he says.
According to Berry, co-founders are responsible and obligated to provide each other with support, help keep each other’s spirits up, and share the workload. As a VC, the co-founders’ wellbeing is equally important to him, fundamental as it is to running the business. He says having a solid and functioning relationship with a co-founder could be the solution for many burned-out business leaders.
Take time off
Though it seems like a no-brainer, founders often have trouble detaching from their businesses, and taking time off can be a daunting prospect. However, making the tough call to take a step back can have an invaluable effect on attitude and emotional wellbeing – and carrying on is very likely to negatively impact the business.
“I knew I needed to do something, because in my burnt-out state, I couldn’t lead the company,” Gascoigne wrote in his blog. “I wrote a memo to the team sharing my plans and delegating responsibilities, then I signed out of Slack and almost immediately started taking leave.”
Although he had no specific plans, rest, leisure, and exercise lifted his spirits within a few weeks, until he went on to learn kitesurfing during a weeklong trip to the Dominican Republic. Within four weeks, Gascoigne regained his energy and motivation.
Invest in mentoring, coaching, or therapy
Having a coach, therapist, or mentor, to help you guide through things is a “no regrets move,” according to Berry. He adds that all these processes have proven benefits, and that “you’re an idiot if you’re not leveraging them to help you perform better.”
Both Munson and Gascoigne underwent therapy to recover from burnout. In both cases, they were able to work out their challenges, shift their perspectives, re-evaluate their priorities, and set off on the path to recovery.
Preventing founder burnout
Have a strong foundation
According to Munson, the ideal scenario is when a founder or group of founders who have a clear mission and vision for the world, start a company, non-profit, or any project to make the change that they want to see in the world. Having a strong foundation like this, he says, reduces the chances of burnout.
Berry also suggests that in order to have a strong foundation, founders must also seek validation early for their ideas, outside of friends and family, in order to determine the potential of their projects.
Start a company with two or more co-founders
When considering a potential investment as a VC, Berry gives more weightage to startups with two or more co-founders, since having more than one co-founder de-risks his investment.
“If the founder is not there, then the business is never going to work out,” says Berry. A strong founder who is deeply connected to the company’s cause, can help lead companies to success, but without the founders, companies rarely thrive, says Berry.
According to him, having two co-founders helps reduce workload and stress, and consequently burnout. In addition, when the stress grows too much for one founder, the others can offer support and shoulder the burden in order to allow their co-founder to recover.
Find investors who will actively engage and give feedback
Berry believes that VCs can also play a role in preventing burnout, by providing candid feedback to startups in their portfolios.
“We live in a society where people will not give real, tangible, valuable feedback to a founder to say, ‘Hey, you seem really smart, driven, and passionate, but the idea you’re doing, is a cut-and-paste of a startup that already exists in Asia. Why do you think you’re gonna be better than them, when they’ve been going for five years?‘” says Berry.
Berry has come across cases where an idea was driven by passion for a subject, but there was no clear path to profitability, no way to monetize it and make it sustainable. While Berry sometimes feels that he’s been unkind – akin to Simon Cowell in American Idol – he believes providing valuable feedback early can help build sustainable companies and reduce the chances of burnout.
Holding off-the-record conversations about personal struggles and challenges with founders can help VCs offer more support and guidance, and steer founders away from burnout, or provide them with necessary help if they experience burnout.
“We try and step in and have an off the record conversation with them to say, ‘Let’s not talk about the business right now. How are you doing? What’s keeping you up at night? What are you worried about?’ … and try to help them with the human side of things,” says Berry.
Disconnect from work
No matter how passionate you are about your work, it cannot be the only thing you do. In Berry’s experience, investors often put pressure on founders and are ever-demanding. However, to avoid burnout, it is important to be able to truly disconnect from your work, with no emails, Slack messages, or meetings intruding upon your personal time.
“The idea of a bit of fun is not to go to a startup hackathon weekend or a demo day; you need to get out of the [startup] ecosystem. And so, having a side interest, art, exercise, whatever it might be, is a very important balancer,” says Berry.
A lot of founders find an outlet for stress in yoga, meditation, and mindfulness, while others play sports or partake in other hobbies. When your work is all-consuming, your hobbies and interests are easily given up, but you need to have a balanced life to avoid burnout.
“At least do something two to three times a week, that gives you that outlet, and recharges your batteries to go back into things again,” Berry urges.
Founder burnout, while hard to take seriously, can have long-reaching implications both for the personal health of the founder, and the company’s health – which in turn can affect dozens or even hundreds of people through employees and their families. Burnout can lead to medical complications like hypertension, anxiety, panic attacks, diabetes, stress, depression, and insomnia. However, in the startup ecosystem, the discussion surrounding the mental health and well-being of founders often takes a backseat.
Following a balanced life, where your interests align with your business, is key to avoiding burnout. If you’re experiencing burnout, reach out for help: with the proper support, guidance, and rest, you can soon regain the passion, energy, and strength needed to drive your business forward.
Header Image by Christian Erfurt on Unsplash