I’ve been an entrepreneur for the last five years, during which we’ve bootstrapped our innovation management software company Viima to a good number of happy customers, including some from the Global Fortune 500, and achieved a solid growth rate. I’ve also followed the entrepreneurial journeys of a number of friends and acquaintances up close during these last few years.
While we’ve all had our fair share of challenges along the way, the most common, the most difficult, and the most frustrating ones always seem to be related to the way you and others on your team think.
Why your mindset matters more than you think
As long as you have a solid team in place, most practical challenges are often actually surprisingly straightforward to solve.
Do you need to acquire more leads? Build a new and improved version of your product? Perhaps sell more or optimize your cash flow?
All of these take work, and perhaps a bit of ingenuity here and there. However, there’s tons of information and guidance out there to help you achieve your goals.
On the other hand, there are some mental factors that can impact your success as an entrepreneur—but that’s much less talked about.
Starting from scratch and being responsible for everything is an incredibly humbling experience. It can feel overwhelming at times and there’s guaranteed to be plenty of times when you feel like giving up. And without the right mindset, you surely will.
What’s more, once your team grows, people will be looking to you, as the founder, for example on how to behave. Whether you want it or not, the mindset you have and the way you behave will largely determine the culture of your company, both for the better and for the worse.
As such, if you know yourself and are capable of managing your mindset and the behavior that results from it, you have the keys to mastering your own destiny.
7 lessons for mastering your mindset game
I was fortunate enough to have had the opportunity to study the topic during my master’s degree studies, as well as talk to a number of successful entrepreneurs at the beginning of my journey. Even so, as a first-time entrepreneur, I’ve had to learn many of the following lessons the hard way.
I’ll now share my thoughts and experiences so that you’ll hopefully be able to avoid many of the mistakes I, and many others before me, have made.
1. You can’t survive without a growth mindset
Our entire founding team was made up of first-time entrepreneurs. We knew we had no chance but to learn all the skills it would take to create and run a successful software business.
While we certainly did know a thing or two about software and business, it was still quite evident that there was way more we didn’t know. What’s more, we didn’t really have the resources to hire outside help to do things for us.
Since we knew what we needed to accomplish, we just had to figure out ways to accomplish those things by ourselves. This, fortunately, forced us to adopt a growth mindset and we gradually taught ourselves the skills we needed, such as marketing, design, and finance. The list just goes on.
If we’d simply stayed in our comfort zone and would’ve thought that “I’m just not that good at X, it’s best to leave it for those who are more gifted,” we likely would’ve never made it past our first year in business.
As our team has grown, we’ve also introduced a systematic framework that every employee follows to help them constantly get better at their work.
2. Ego is always your biggest enemy
Quite recently I read “Ego Is the Enemy” by Ryan Holiday. It’s a brilliantly written book that put into words many of the most common challenges people seem to have in business, and life in general.
We suffer from a huge number of cognitive biases, that affect the way we think unless we question our initial thoughts. For example, one study after another has confirmed the bias for illusory superiority by confirming that people tend to rate themselves as above average 90 percent of the time, which clearly can’t be true. An untamed ego hampers our ability to learn and develop, as well as clouds and impairs our judgment.
If you take the time to reflect and truly know yourself and battle vanity, you can avoid doing all the wrong things for the wrong reasons, which in turn allows you to focus on the big picture. While most certainly important for everyone, this is especially crucial for leaders and entrepreneurs.
3. Be brutally honest and realistic—both with yourself and your team
As an entrepreneur, you’re most likely spending a lot of time trying to convince others to believe in your vision, be they prospects, investors, or team members. It’s just a natural part of the job.
However, by repeating the same stories enough times, you can easily end up convincing yourself too, even if the vision you’re communicating wouldn’t be anywhere near a reality. And that’s a problem.
While you most certainly have to believe in your ability to achieve that vision and deliver on those promises, you and the rest of the team also have to be realistic about, and critical of, the progress you make in order to have a decent shot at actually achieving those goals.
I’ve too often seen founders and other leaders start living too much in a world filled with visions and strategies while detaching themselves from the real world. If this happens, the company is virtually guaranteed to fail to achieve those visions and strategic goals. Startups are, after all, primarily an execution game.
4. Have a company-first mindset and be transparent about it
It’s generally accepted that the purpose of a company is to generate profit.
As a founder, there will most certainly be times when your, or someone else’s, best interests and those of the company will be opposed to each other. Usually, these are quite minor, often times even insignificant occasions.
In these situations, it can at times be tempting to rationalize to yourself that by putting your own interests first, the company will also benefit, when in reality this is never optimal for the company. These situations often form a slippery slope where the effects can eventually start to cumulate.
However, the real problem isn’t even financial, it’s about the culture. This kind of behavior is likely to spread and once that happens, you’re no longer a team where each member is willing to make sacrifices for the greater good, but are more like a ragtag group of bandits out in it for themselves.
So, in these situations, you always need to make the rational long-term decision of putting the company first. In practice, this means that for every decision you make, you should be able to, clearly, rationally and without ambiguity, establish how that decision will help the company’s business in the long run.
If you do this, you shouldn’t have any qualms about being transparent with the employees about the decisions being made. Transparency enables everyone to be on the same page and empowers employees to make the same kind of company-first decisions themselves, setting you up for long-term success.
5. People look to you for example—and usually focus on the parts you wouldn’t like them to focus on
As a leader, but especially as the founder of a company, people look up to you for example, whether you like it or not. Leading by example is very much a cliché, but it really does matter.
If you’re emphasizing the importance of working hard but are always the first one to leave the office to play tennis, why would your employees stay any longer?
If you’re rooting your team to come up with new ideas and innovate, but keep shooting down all the ideas they come up with, how long do you think they’re going to continue that?
If you’re always telling people how important quality is but are cutting corners and being sloppy yourself, where do you think your employees will then draw the line of “good enough”?
You can certainly argue that after years of hard work that got the company to where it is, you would have earned the right to take certain freedoms for yourself.
However, as the company and team grows, your example becomes even more important.
If you’re no longer willing to put in the hours or live up to your own standards, it sends a strong message for your team and will without a doubt affect the way they behave, undermining much of what you’ve spent years building.
6. Owners need to have a shared set of values and expectations
When you’re first setting up the company, probably the single biggest mistake you can make is to choose the wrong co-founders.
I’ve been fortunate to be a part of a great founding team where our values and expectations for the future have been very much in sync since the beginning, which has made things easy for us, even during some of the tough times we’ve had.
However, I’ve seen companies where this most certainly hasn’t been the case.
If one founder is simply passionate about the idea that they’re working on, one is looking to learn as much as possible, and the third is just looking for a nice exit in the very near future, the team is almost guaranteed to break apart as soon as they hit a speed bump that forces them to make significant changes to their initial shared vision.
This is why values and expectations matter; they change infrequently, but still underlie virtually every major decision you make. As long as your values and expectations are aligned, it’s easy to simply change direction and pick the option that makes the most sense at the time.
There is a plethora of different motivations for becoming an entrepreneur, but you’re much more likely to persist and stay in the game long enough to succeed if you’re motivated by things other than simply money, such as learning or making an impact with your business.
7. It’s important to find ways to be optimistic and positive
If you’re a would-be entrepreneur but haven’t taken the leap yet, you might be slightly intimidated by some of these lessons, and you should. Being an entrepreneur most certainly isn’t easy, and more than 90 percent will fail.
However, at the same time, it can be incredibly rewarding. Building something from nothing that can make the world a better place, offer people meaningful jobs, and learning to do whatever it takes to get there is an experience that I most certainly wouldn’t change for anything.
These aspects, along with the great culture and atmosphere we have with our team, have kept us going even when things haven’t always gone according to our plans.
So, while you must be very critical of yourself and realistic in your planning, you should also find ways to be optimistic about your future and have a positive outlook on life. This will help you get through the tough times on your entrepreneurial journey.
Even though I’ve learned the importance of these lessons and am certainly trying my best to follow them, it doesn’t mean that I’d always be able to do so.
Self-reflection is an essential part of the process of getting better and I’ve found reading to be a tremendously helpful tool for that.
A regular reading habit helps widen my perspective, allows me to keep learning, and provides me with a great way to reflect on the journey.