Launching a business is riddled with stressful uncertainties. You worry about feeding your family, paying your employees, or investing your own money without a guarantee of success. As an entrepreneur, learning to manage that stress will make you a happier — and more successful — business leader.
Experienced entrepreneurs have a much easier time dealing with the stress of uncertainty, in part because they think and act in ways that virtually negate it.
“The expert entrepreneurs think in terms of control, not in terms of uncertainty,” says Saras Sarasvathy, associate professor at University of Virginia’s Darden School of Business, who studies how entrepreneurs cope with uncertainty.
Thinking in terms of control empowers you to focus on the actions you can take to minimize risk. “Great entrepreneurs get very good at shoring up the downside, but embrace products with uncertainty on the upside,” Sarasvathy says. That balance allows for both stability and freedom.
Here’s how great entrepreneurs achieve a sense of control:
1. Start by gathering stakeholders. Experienced entrepreneurs don’t act alone — they take control by getting others on board before they start a new project. They look for stakeholders in all areas of the business — potential employees, suppliers, investors, and customers — and ask them to make a small commitment to the project.
That buy in is essential. If experienced entrepreneurs can’t get a couple stakeholders in each category, they kill the project. “They almost define a great idea by whether they’re able to bring enough people together,” Sarasvathy says. “If not, then your idea probably isn’t that great.”
2. Place small bets at the beginning. Lower your stress and worry by starting with small investments — things that you’re willing to lose if the company fails. Maybe you’re willing to work nights and weekends, or pay to create a prototype. “You still don’t know if you’ll win, but if you lose, you’ll lose very little,” Sarasvathy says. “You have control over the downside.”
Approach your early stakeholders this way as well. Ask them to place small bets that they would be willing to lose. For example, when Richard Branson created Virgin Atlantic, he asked Boeing to loan him a used 747 for a few months to test the idea. If it worked, they’d have a new customer; if it didn’t, they lost very little. “Even a 747 is an affordable loss for someone,” Sarasvathy says.
3. Get early commitment from customers. As experienced entrepreneurs often say, fail early and fail often. That strategy lowers stress by giving you opportunities to improve your idea before you have too much in the game, and the best way to do it is to talk to your customers early. “Preselling an idea is the surest way you can make the idea fail or succeed earlier,” Sarasvathy says.
Pitch your idea and share rough prototypes as often as you can. You have to be prepared — even excited — for others to critique your product. If you keep it behind closed doors because you fear your customers’ response, you are doing yourself a disservice and adding unnecessary stress.
4. Work within constraints. Having unlimited time and money to start your company seems like a luxury, but it actually adds a ton of stress and pressure. Working within constraints, such as limited time or money, lowers your emotional investment without hurting your passion or commitment.
Constraints also make you more creative. “People who start with a lot of money can be much more likely to lose,” Sarasvathy says, in part because they have less impetus to innovate. For example, Pierre Omidyar created eBay on nights and weekends, which forced him to create a more ingenious system that would sustain itself with little central management. His constraints kept stress levels low and made eBay the success it is today.