Chronicles of a Dispassionate Founder
In the fall of 2020, I started a company. Not because there was a problem I desperately wanted to solve, or because I had some unfair advantage on which to capitalise. I just had the entrepreneurial itch and decided to scratch it. Worst case scenario, it would be a good learning experience. My father used to tell me that when applying for work, you don’t interview at your dream job first. You schedule a couple warm-up rounds beforehand. I rationalised that the same might apply here. As an aspiring founder, why wait for the million-dollar idea before training my entrepreneurship muscles?
Despite my dubious motives, motivation was not lacking. The idea that my cofounder Archy and I landed on seemed to have legs, so I was determined to push it as far as I could. I received multiple warnings that without passion I was destined to fail, but as a hardcore sceptic, I rejected the premature prognostic since no one could tell me why passion was a key ingredient to success. By substituting it with determination, grit, and a willingness to take risks, I could push through, right?
Wrong. After running into the proverbial wall, I can clearly see why. Since I love all things stats and maths (and making things more complex then they ought to be) let’s dive into the issue with a quantitative lens.
Starting a venture is a gamble. It’s uncertain, has multiple potential outcomes, and some theoretical expected return. The expression below is a distilled version of what this wager looks like. The expected utility of starting a venture is simply the value you gain from the venture if it is successful (S) weighted by the probability of success (p) after subtracting the cost of starting the venture (C).
As a rational entrepreneur, your goal isn’t to evaluate the expression as much as it is to maximise it. To do so, there are three levers at your disposal. Choosing a problem which inspires you has a huge effect on the last two.
- Increase the potential of the idea (S)
- Reduce the cost of the venture (C)
- Increase the probability of success (p)
I will ignore the first lever. After all, this post is meant to highlight the importance of tackling challenges you’re passionate about, not blindly chasing high potential ones. For those still tempted after you’re done reading, remember that in most situations the higher an idea’s potential, the more competitors you will face, lowering your probability of success.
Solving a problem you are passionate about decreases the cost of a venture immensely. Cost in its broadest context encompasses financial investment, opportunity cost, mental stress, and more. One idolised tactic to lower the financial investment for instance is the ramen noodle diet. Tackling a purposeful problem deals with the psychological burden. Starting a company is an overall very stressful experience and puts a strain on your mental and physical health. Without a higher purpose to follow, it’s closer to masochism. The pain just compounds over time, as does the amount of time you spend second guessing.
Personally, this meant newly found insomnia, creeping anxiety, and a damaged relationship just to name a few side effects. Of course starting a business is never smooth sailing. All founders have sleepless nights. However steering towards a galvanising destination can help weather the storm. Without an inspiring direction in mind, you might reconsider setting sail in the first place.
Most people won’t be surprised by the above effect. It’s obvious that it’s more fun to work on something you’re into. What is perhaps more surprising is how it directly impacts the third lever, the probability of success.
Entrepreneurs who don’t love working on their problem need constant gratification. Short term successes sit at the forefront of decision making. On the other hand, a passionate entrepreneur can delay rewards since the process brings joy in and of itself. The priority is the championship at the end of the season, not winning tomorrow’s game. They can focus on process, whereas I needed results. The impact of this frame of thinking is illustrated below.
In the race of entrepreneurship, the straight line is the dispassionate founder. Linear growth steadily improves, and in fact improves much faster than its counterpart for quite a while. But in the long run, exponential growth wins and it’s not even close. It only arises when one overlooks short term value and focuses on long term growth.
At Cholla, we built our MVP in less than 5 weeks. Less than 4 months after launch, we’d gotten to almost 40,000$ in revenue. Hitting those numbers was exhilarating, but that was the issue. The numbers were driving us. Long term success would have taken years of investing in our process, nurturing our team, learning about the industry, and listening to customers. But a dispassionate founder like myself can’t bear the painstakingly slow growth that initially comes with that.
There was no epiphany which led to the end. Rather than coming to a hard stop, the company decayed. Doubt slowly ate away at drive. My focus started slipping. Through a series of conversations with the team, it became apparent that I could no longer commit myself to leading the company. No one else was particularly interested in taking the helm.
Even through failure, starting a company was an amazing learning opportunity. I notably acquainted myself with accounting, incorporation, marketing, and customer support. But the most important lesson was that the first step to any startup is an honest conversation. A simple question should precede those around fundraising or product market fit: Can I happily invest the next few years of my life tackling this problem even if I don’t succeed? If not, success is already beyond reach.