Flint: One of the things that you describe in the book is the ability of founders to achieve this balance between a passion and analytical thinking. How is it that they managed to pull this off and what can we all learn from that example?
Wasserman: I remember observing when I was teaching in HBS’s first-year course in entrepreneurship, that we had, to paint it in broad strokes, two types of people in the room, two types of students.
One of them was the passionate blow-through-a-wall, dive into a pool and don’t even look whether there’s water there, whether they have a bathing suit on and whether they’ve learned how to swim. Those are the ones who we have to teach how to pull back on the reins and be able to look at whether there’s water in the pool and everything else that’s prepared for them to go and do it.
The other end of the extreme, we have the analytic and cautious. The ones who could be founders, could excel at that founding, but because of the unknown and because they have heard that this is something tough to go and do, that there’s a high rate of failure, they’re not willing to go and dive into there.
If we can have the passionate founders be able to have the analytic, be able to realize when to pull back on the reins and think, look, analyze first before they go and dive in—then once they’ve set the table for themselves, then harness the passion and be able to go and use the magic of that and that’s where they will be stronger for it.
If we can have the analytic ones be able to understand the path ahead, not have the fear of the unknown be the reason why they are not diving in. If we can educate them about it and make it a known and also be able to show them that these challenges that people typically face, we have real solutions to it. We have ways in which you’re going to be able to tackle this better. Then when the lightning bolt strikes, when the idea comes, when the passion comes along, they’ll be much better armed to take the passion and the analytics and be able to make lots of magic out of it in the same way that the passionate with a little bit of thought is able to also make that happen.
My favorite quote, I actually start the semester in my course on this, comes from Steve Jobs and is that, “Follow your heart, but check it with your head.” So take that passion, but make sure that you have the ability to pull back at the right points on the reigns to go and think and inject some head and thinking into it and then be able to then go and follow the heart once you’ve gone and assessed those types of things.
When I get calls from like venture capitalists or other people who might want to invest in some of my alumni, the easiest reference checks that I find that I can make, the easiest recommendations are where I have someone who is the passionate and can bring the analytic to it or the analytic who is able to harness that and be able to bring the passion in either direction that they’re going and having the two of them together. And then it is the easiest call for me to be able to paint this picture of how this ultimate of founders that we’ve been able to go and forge is someone you really want to bet on because they have both pieces of what it takes to be a successful founder.
Flint: It sounds like it requires a level of self awareness to achieve that balance, right?
Wasserman: Self awareness is a critical thing. It’s typically not thought of as being part of the founder DNA, but it is a critical one of for you to have as you’re grappling with this. There are at least two levels of the self awareness. One of them we already talked about a little bit where it’s the awareness of the road ahead of you. What are the points at which I’m going to face a key fork in the road, where defaulting to my gut might not be good, I have to go and pull back on the reins or where you think that there’s just a right fork at that point, but it turns out there’s a left fork that is actually a better one for you to be thinking about, and so a lot more of the idea of what is the road ahead of me and the awareness of that, but then there’s also the awareness of me. What are the ways in which I have to go and project myself into that road ahead? What are the motivations that I have that going to the left fork is actually going to be harming my ability to get to something I’m going to celebrate at the end and it’s going to spark a lesser regret, whereas taking the right fork might be able to go and enable something a lot better for me, given my motivations and my capabilities.
So being able to get both of those ideas of the road ahead, my awareness of it and then projecting myself into it is critical. A recurring theme within my course and the other things that I do with students is having them tune into their biases, tune into the way in which we have natural inclinations that we have be able to be much more cognizant of. That’s a key underlying theme of Life Is a Startup, of being able to go and identify where those are.
There’s a magnetic pull towards certain things. A pull toward what we in academia call homophily, birds of a feather flocking together. That can be death within a founding team. You’re stepping on each other’s toes because you’re all able to do the same things and want to do those same kinds of things. It actually causes major problems for founding teams, but it’s a magnetic pull that is so powerful that just about everyone succumbs to it. And in class I have to have some experiences and some exercises that have them realize this will be me. I can’t just shrug it off as a, “No, I’m not going to be susceptible to homophily.” There’s a magnetic pull towards equality, founding teams, the most common way that they’re going to split the equity is the equal split and that’s the most hazardous of the splits. That’s just in a microcosm of how we are trained since kindergarten, that a solution to a problem fairness, quote/unquote, will emerge when we go and split things equally. That turns out to be problems in personal life and all sorts of dimensions of other things like that. And so being able to tune into all of these biases, the bias towards the rosy thinking, towards the over-confident side of when we are passionate about things, towards not looking at the potential pitfalls.
Why is it that we all hear that there’s such a high rate of failure in marriages, but almost no one has the discussions about the pitfalls that might cause that high rate of failure? The ways in which we resist architecting prenuptial agreements or other ways that could be where we see a lot of analogs from founding teams, the founding teams that talk about the pitfalls, they go and craft their founder agreement, the equivalent of a prenuptial. It’s a much more robust team. They’ve been able to anticipate where there might be divergences and head them off at the pass.
So lots of echoes that we have across those two domains, and the more that we can have the self awareness about the ways in which we’re going to be avoiding the difficult conversations, that we’re going to be just looking at the rosy, that we’re going to be not going and dealing with the pitfalls until it’s too late, those are a lot of the things that are the ingredients of successful founding and successful life of being able to go and deal with those forks in the road.
Flint: You also write about how, as humans, we’re not very good at thinking constructively about either success or failure. In your book you quote Thomas Edison in his effort to build the light bulb and he says, “I haven’t failed. I’ve found a thousand ways that don’t work.” How are founders better at failing than the rest of us?
Wasserman: What Edison was doing was reframing each a failure as a positive, as a way to go and get stronger. In class, the last day of the semester I actually tapped some ancient wisdom, that we then have some echoes in the current day, in terms of the entrepreneurial thinking. That ancient wisdom comes from the Talmud, and in the Talmud it’s phrased as “Gam zu l’tovah,” this will also be for the best. We have to go and understand how we can retrain ourselves that when we see a set back, we have to turn it into a plus.
In terms of the modern framing of it, there’s a golden book that I love, by the author of the Black Swan. It’s called Antifragile. And if you think about the usual way that we go and deal with these setbacks in life, it’s fragile. Essentially, we put something in place, that, when we hit a bump in the road it comes crashing down. And what we usually aspire to, is we aspire to be neutral. And that we can go and persist, in the entrepreneurial sector, we talk about the persistence piece of what founders go and do. You get a bump in the road and you were able to continue on it. What antifragile is, is essentially a modern reframing of Gam zu l’tovah, let me make this for the best. How do I design a system that can actually gain strength from the bumps in the road? And an example is that he goes and draws on, in terms of the human body: You go and think about when we’re going and assaulting our immune system by getting vaccinated. Well, that’s forging a stronger body for having that brief setback from the vaccination. If you think about our muscles when we’re exercising, what are doing to our muscles? We’re ripping them. Well, it’s because they are designed to get stronger from the bumps in the road, and from the setbacks.
And if we can find ways to go and retrain ourselves to be antifragile, to be able to gain strength for it, that’s where it’s going to be a lot more of a plus for how we can go and deal with the setbacks, get stronger from them, get a different perspective and be able to be a lot more of the friend with failure, rather than the recoiling from failure.
Flint: Another area where we could learn from founders is the way in which they avoid setbacks altogether. Talk about this idea of the handcuffs of life, and how we can better avoid them.
Wasserman: Absolutely, the handcuffs of life are things that we accumulate without realizing it. I think that just about everyone accumulates them in some ways, because we make incremental decisions that in the short-term make all the sense in the world, but then in the long run are going to keep us from being able to do some of the things that we want.
A lot of people who are graduating from business school, they might dream about making an impact on the world through working for a nonprofit, like the social enterprise side of them, or that they want to go and found. Those are some options that you have as that dream and how you want to go and impact the world, that you go and push to the side initially when you’re coming out of school. Maybe you have student debt or maybe finally after promising the spouse that we’ll finally be able to move out of a dorm room and be able to buy a house. We’ll put down the down payment, we’ll start a family and bring on the nanny. We’re going to spend my bonus on the down payment for that house. All of those decisions are all making sense in the short term.
It’s what everyone else is doing, but then it comes five years later: You want to pursue that dream of now being able to take that non-paying founding job or that low-paying social enterprise and non-profit job, and you find that there’s all sorts of handcuffs of life that are preventing you from being able to go and do it. You’ve taken on a high-priced lifestyle. In the entrepreneurial realm, when we talk about in startups, the burn rate that they have. The amount that they’re burning cash. This is the personal burn rates that we go and take on for ourselves. How much are we burning cash in our personal lives?
That’s on the financial side, but then there’s all sorts of psychic handcuffs that we have. When you can go and tell your mother really easily what you do. You can go and tell her a company that she’s heard of the name. You can talk about the kind of role that you’re having there, there’s a lot of reward and psychic ways that we like being able to do that. Or the prestige of a company that we can go and be able to tell anyone, or we’re at our HBS reunions.
We like to brag at a five-year reunion, a ten-year reunion, what we are going and doing. If, in the first 10 seconds you can go and get a lit up set of eyes from the person you’re telling what you do, then that’s where you’re finding, Ah! This is why I came back to the reunion. This is the reward that I have for going and doing that. Versus you tell them something that they’ve never heard of. That they can’t relate to. You’re going to have a lot more of the prestige that you’re going to be aspiring to. Giving that up for a no-name, for something that doesn’t pass the mom test, all of that is part of the handcuffs that prevent us from being able to go and be able to do it. There’s the financial and tangible, but there’s also the psychic and intangible of the handcuffs that prevent us from being able to do that.
Several of the things that come out as implications for that: If you have this dream of being able to go and make the mark on the world in this way, that’s going to be social enterprise or low paying and things like that, live the life of a founder before you’re going to go and found. Live the life of a non-profit employee before you’re going to go and become that person. Take all that money that you are making now, and sock away everything else. Also, don’t get used to the high-priced lifestyle that you’re going to have to scale back from. Living the life of that person that you’re aspiring to be before you become that person is one of the key things.
One of the other things that we have to understand is, what are the things that we can hit the undo key on? Decisions we’re making now that are going to be easy to then go and reverse, and what are the things are going to be really hard to hit the undo key on? The ones that are hard to hit the undo key on are typically the ones that are going to turn into handcuffs for us.
For instance, if you have a brand new job, don’t completely dive into the pool if you really don’t understand whether it’s going to be great for you. Don’t go and uproot the family. Don’t do something that’s going to be really hard to then reverse without wading into those waters and dating it first before you go and make that kind of a commitment.
Flint: It’s partly making a longer term plan.
Wasserman: This is something founders typically are very good at once they see the need for it, but we have to go and develop it ourselves outside of the founding arena, is going and having that long-term plan, but being open to the opportunistic. That makes it even more critical for us to be good at being able to shift gears, being able to plan around, being able to hit the undo key, being able to have the handcuffs not become problems for us, and be able to reach our aspirations. If you can find a higher impact way to go and change the world, those are all the ways that we can go and take these principles and then be able to apply it in these walks of life.
Skydeck is produced by the External Relations department at Harvard Business School and edited by Craig McDonald. It is available at iTunes or wherever you get your favorite podcasts. For more information or to find archived episodes, visit alumni.hbs.edu/skydeck.