Resilience as an entrepreneurial skill
How resilience – which is better than persistence – can be worked on.
Some entrepreneurs are innately more resilient than others. Resilience largely comes from our life experiences – an entrepreneur who’s overcome hardship in their life is likely to have more innate resilience than an entrepreneur who’s never faced hardship.
But resilience isn’t just an innate quality based on previous experience – it’s a skill that can be developed.
Founders often conflate persistence with resilience. Persistence is the ability to continue something despite difficult challenges. Resilience is the ability to quickly recovery from difficulties and keep moving forward. Alternatively, I defined it in a previous post as “the ability to start new things, work hard on them, and kill them – without burning out.”
Persistence exists within the scope of a single venture — founders who are persistent don’t give up and keep pushing. Sometimes, persistence can look like stubbornness and inflexibility. This illustrates the way that persistence and resilience differ the most — in their relationship to failure. Resilience is embracing failure, quickly recovering from it, and moving forward. Persistence is trying to evade failure by continuing to push forward.
If I had to choose, it’s better to have resilience than persistence as a founder. Both qualities represent the glamorized entrepreneur quality of relentlessness, but by being more comfortable with failure, resilient founders are more adaptive and intellectually honest.
In my first startup, I had more persistence than resilience. No matter how challenging the path was to raising money or growing sales month-over-month, I kept pushing. I told myself everything would keep working if I kept pushing. I felt like persistence was my superpower, and that by pressing forward despite big obstacles, I would eventually will my way to success. I was so blinded by my incessant need to push forward and avoid even the smallest failures (e.g. a single month of no growth), that I didn’t take a close enough of a look at the things that weren’t working – the small failures. Had I been more open to failure, I would have embraced the small failures, addressed the things that weren’t working, and course corrected. Instead, I remained hell-bent on a path of pushing a boulder up a hill, and that inflexibility was a large part of the reason things didn’t work out.
But here’s the thing about resilience: when you zoom out and look at the career of an entrepreneur, it becomes even more important.
Founders are rarely successful on their first venture. It’s actually the subsequent ventures they start that end up being the successful ones. Over the course of a career, even if a founder has failed spectacularly, the overall output of their career will be determined by if they are able to recover and try again. This quote from Super Founders by Ali Tamaseb shows how resilience literally increases the odds of creating a billion dollar company.
Those with past failure were 1.6 times more likely and those with even a modest exit, oftentimes considered a failure int he world of venture capital, were 3.3 times more likely to build a billion-dollar startup in their next try. Let's take Paul Davison and Rohan Seth, the co-founders of Clubhouse as an example….Started in 2020, the company got millions of users and a billion-dollar valuation in less than a year. It looks like an overnight success, but Davison and Seth had launched various consumer social apps over the previous ten years, and had nine failed startups between themselves before finally cracking the code.
Resilient entrepreneurs are willing to take big risks in their careers because they know they can handle the failure, can acknowledge failures when they happen and therefore course correct faster, and know they can recover from their failures quickly and try again. An entrepreneur improving their resilience can be the difference between having 3 launched startups throughout their career and 5 launched startups throughout their career, which can make a massive difference in overall career output.
So how can entrepreneurs improve their resilience?
It boils down to three things: (1) building durable self-worth, (2) being good at getting past failures, and (3) building financial resilience.
Building durable self-worth
I wrote about durable self-worth in my post on being mentally ready to start a company.
Having a strong sense of self-worth is a foundational part of our well-being. It’s natural for founders to source some of their self-worth and identity from their startup.
But if you start a company, the most probable outcome is failure.
Needing your startup to be successful to give you self-worth is like playing blackjack with your life savings – while it can sometimes work, it’s highly likely that you’ll lose part of your financial foundation.
Survivorship-bias-fueled stories of famous entrepreneurs tell us that we have to pour every ounce of our identities into our startups. A lot of first-time founders (including my former self) make this mistake.
Diversifying sources of self-worth outside of work and your startup ensures that if things aren’t going well with your startup, your self-worth can remain high. In other words, your self-worth is durable and can withstand failures, long periods of delayed gratification, and high levels of ambiguity. On the other hand, if your self-worth is over-leveraged in your startup, then these things which are inevitable – failures, delayed gratification, and ambiguity – can cause your self-worth and identity to erode quickly, in turn making you a worse founder.
Cultivating diverse sources of self-worth outside of work not only prepares you for the inevitable adversity of building a company, it makes you a better founder.
It follows that one of the things entrepreneurs can take action on that will make them more resilient is to cultivate sources of self-worth outside of work and being an entrepreneur.
Being good at shaking off failures
Even if you’re resilient, failures both big and small aren’t very fun. To be resilient, entrepreneurs need to be able to get past them quickly and prevent them from continuing to haunt them. As Ted Lasso puts it – to be a goldfish.
The first way I’ve seen entrepreneurs get good at shaking off failure is by acknowledging that it isn’t just a possible outcome, but that it’s a necessary part of the process of building anything meaningful. Reframing failures as growth opportunities enables entrepreneurs to more quickly call something a failure so they can work on getting past it, and reduces the mental stigma of failure. Pioneer Square Labs - a venture studio in Seattle – talks about their failures and killed projects openly. On their website, they show metrics on the ideas they’ve killed because they weren’t viable, right alongside the number of successful spinouts. Embracing failure as part of the process makes it something easier to get past.
Entrepreneurs can become more resilient by acting more like venture studios and framing failure as part of their process. This means adopting your own mental models or frameworks for how you decide if something has failed, making you more comfortable with failure as part of how you operate.
But failure does hurt. Unlike an organization like a venture studio, we are humans with real emotions.
After my first startup, I wondered when I would be emotionally ready to start another company. I thought that I would need to fully heal before I could give it another go. In a conversation with Noah Shanok, the founder of Stitcher, I learned that if you wait until you’re fully healed, you may never start something again. He explained that even though it’s been five years since he sold Stitcher, he would still likely find things that hadn’t fully healed once he decides to give it another go.
I think dealing with burnout just takes a while. You get through different pieces of it at different times. It's been five years and I haven't started another company yet. My guess is I will, and my guess is when I do there'll be a set of things that get unearthed that I still haven't dealt with. My experience was not like: “Okay, I'm over this, everything's good now I'm ready to move on.” I think that it's an ongoing process. That was part of me for a pretty long time. We're also resilient folks, entrepreneurs. We're used to getting knocked down. Our job is basically to get knocked down and get up every day.
Therefore, to be good at shaking off failure, entrepreneurs need to embrace their scar tissue. There’s a point of diminishing returns when when taking time to heal. Sometimes we just need to acknowledge that we have scar tissue and move forward despite it. Building things and failing (or succeeding) changes us. I’m forever a different person because of my first startup failure. Acknowledging that helps us get better at shaking off failure and moving forward, rather than trying to restore ourselves to the person we were before our failure.
Building financial resilience
Building durable self-worth and being good at shaking off failures help with us being able to “afford” to fail mentally. But of course, there’s a big advantage in being able to afford to fail in a literal sense.
Even if you’re incredibly mentally resilient, if you have massive student debt or maxed out credit cards and no savings, you’re not going to be able to get back up after a failure and quickly give something another try.
This is where building an entrepreneurial career can become counterintuitive. Getting to a place if financial security and comfort can enable you to be more resilient and get more shots on goal throughout your career. Depending on where you are in your life and career, this may require that you do something less entrepreneurial, like work at a bigger company. Continuing with the venture studio analogy, these parts of our career are like fundraising. We spend these parts of our careers build capital, connections, competencies which we can then apply to our ventures in the future.
One of the big traps to avoid is getting too financially comfortable and falling off the entrepreneurial career path. It’s important for lifelong entrepreneurs to stay “in the game” even if they’re working for a bigger company. Advising startups on the side and working on side projects can help prevent the entrepreneurial muscles and desire from atrophying. It’s one thing to be able to afford to take shots on goal, but you need to avoid losing the desire to take those shots.
Resilient entrepreneurs can afford to fail a lot, and they recover quickly and move on. Entrepreneurs who improve their resilience will be better operators and increase the long-term output of their careers.