Beware the Entrepreneur’s Recoil

Scroll down ↓

I was recently giving a keynote before a room full of entrepreneurs and from the audience a voice yelled, “why are you telling this to us? We’re not the people who need to hear this. This is a waste of time.”

Pin drop…

Beyond the fact that a good percentage of the eyeballs in the rows in front were rolling, it was my first official keynote heckle. I was talking about mindset and entrepreneurship. More specifically, how we need to embrace uncertainty and recognize the creeping emergence of decision-making based not on optimism and opportunity, but on fear and the desire to prevent loss.

My friend in the audience was bothered because he’d assumed that, in a room full of successful entrepreneurs, this simply wasn’t an issue. They all got where they got by taking risks. They were the ones without fear. The idea marauders, innovators and envelope pushers.

And, indeed, when they started, nearly every person there was. But what about now? What about a few years into their ventures?

One of the biggest misses in the entrepreneurial process and mind is the assumption that mindset and willingness to embrace risk and creativity are fixed traits. In fact, the more successful most people become, the more they abandon the very mindset that fueled their success.

I call this the Entrepreneur’s recoil. Here’s how it works…

When you are just starting out, especially if you’re earlier in life and you don’t yet have significant responsibilities, it’s much easier to be hyper-creative, to innovate, put everything you have on the line and take risks. Because you have very little to lose. At least very little that isn’t fairly easily recoverable.

So when you start a business, you adopt a do or die, all-in mindset. You come up with and are open to crazy ideas in the name of creating breakout businesses. And you’re willing to act on them. Because, beyond ego, even if you fail, the fall really won’t cause that much pain.

But, then something happens. You succeed.

You begin to build a real business. You have offices, assets, overhead, inventory and employees. People, families, are counting on you to pay their rent and send their kids to school. Your own family begins to expect a certain lifestyle. And so do you. You get comfortable. And, along with your success, you now have the perception of so much more to lose if you fail.

So, instead of continuing to take risks, your mindset begins to shift into what famed psychologist and winner of the Nobel Prize for behavioral psychology, Daniel Kahneman, calls loss aversion mode.

Rather than being driven by what you can build, create and have, you are overwhelmed by  a fear of losing what you’ve already amassed. Being an entrepreneur, and innovator, an artist or a creator does not make you immune to the often irrational pull of loss aversion. Because, as Kahneman’s research points out, it’s simply a part of human nature.

Two problems with this when it comes to creators and entrepreneurs…

One – The switch from seeking gain to loss avoidance cultivates a strong negative creativity bias that makes us say no to innovative ideas. Ones that come from our own minds, as well as from those around us. And ones that, embraced, could have been key drivers of innovation and growth.

Two – Because we set the tone as entrepreneurs, when we pull back, stop innovating ourselves and rebuff innovation and creativity from employees, we create an idea-killer emotional virus that destroys the very culture that got us where we are. It breeds loss-aversion, fear and scarcity, which is death to innovation and expansion.

So, what do we do about it?

If you’re an entrepreneur, or you work with an entrepreneur or a team charged with innovation, create a monthly mindset circuit-breaker check-up. Take a step back, preferably leave the office and take a few key creators with you. Maybe get out into nature and ask a big question –

“Am I operating from a place of creative opportunity or loss aversion?”

Be honest, and task your team with a “no-repercussion” opportunity to call you out on a shift to a prevent-offense when they see it. Because very often the person least well equipped to notice this shift is you.

Most important, never assume that the mindset that got you here is the same as the mindset that guides your efforts today. It may be. But, for many, once you’re sitting atop a mountain of success, possibility long ago morphed into fear.

When you see that, own it. Then do something about it.

+++

P.S. – I survived the heckling, shared the concept of the recoil, moved on and, after the keynote, spent nearly an hour fielding questions from a healthy crowd of attendees who thanked me for “opening their eyes” to this and other creative mindset phenomena and myths.

Then, I promptly went home, hugged my wife and daughter, meditated…and took a foam Kaboom bat to my couch.

Kidding…kinda!

 

Join our Email List for Weekly Updates

And join this amazing community of makers and doers. You know you wanna...

39 responses

39 responses to “Beware the Entrepreneur’s Recoil”

  1. David Krug says:

    Let’s say you have success and then take risks and lose everything. Your next success will be that much more sweet. The concept of avoiding loss is like trying to not die. It’s pointless. Just live, risk, love, and build the amazing. It’s all their is in life.

  2. yishun lai says:

    But Jonathan–
    What did you do in the immediate aftermath of the heckling?
    Did you address it, or did you ignore it and move on?
    Awesome post, honestly–but I’m curious to see how you handled it. Anyone who speaks publicly will get heckled at some point!

    Cheers–

  3. What a timely read! This is exactly the message I needed to hear today. I’ve been feeling swamped the last couple of weeks and overly concerned about ensuring I was in a position to have money coming in a couple months from now, instead of focusing on following my creative energies and passions. I’m in a scary place right now, but I’m excited too for the next phase in my journey. Back to creative opportunity and poo-poo on loss aversion.

    Thank you Jonathan!

  4. What an awesome wake up call! I’ve been thinking a lot about what changes when you’re no longer in the “Start up” phase of your business. Like you mentioned there are different responsibilities and considerations.

    It’s clear that getting sucked into fear-based thinking isn’t the way to go. I love how to talked about having people call you out. Super refreshing!

  5. Lissa says:

    Oh, do I resemble this. I’ve been calling it The Flinch Factor or the Playin’ Not To Loose Lock-Up.

    Surprised the hell outta me – and gave me much richer respect for the continuously renewing, innovative and thought-leading folks – cause till my business took off like a wild thing a couple of years back, the seductive tug of this (and how tricky it can be) was mostly unknown to me.

    It’s what now urges me to edge-walk as often as I can, despite the sometimes roiling stomach. And hang with other edge-walkers so when I come close to loosing my nerve, I can tap my team for an good dose of action-encouraging antidote. Om+

    I doubly appreciate this cause it’s clicked in place a puzzle piece I’ve been turning round in my mind as I’ve watched some brilliant, edge-walkers wobble, weave & back away from what made them great.

  6. Jonathan, I like mindset circuit-breaker check-up. And I like that you suggest to do it monthly. A broader term to call would be conscious living vs autopilot living.

  7. Curt Finch says:

    I think it is very important to reexamine strategy, and make calculated risks that offer the opportunity for great benefits while minimizing the opportunity for losses. Have you read “Little Bets?” I found it very insightful. The key seems to be, as with most things in life, moderation. Don’t bet the farm every time, but don’t paralyze yourself through analysis when it would be easier and more effective to just take a risk and see what happens, tweaking as you go along.

  8. Vi says:

    Great story! And great recovery as a professional speaker! I was chuckling as I read the accounts of this experience since most folks are risk adverse to begin with, even those that manage to become entrepreneurs. I don’t think that innate fear every leaves us – at least not 100%. I am glad to hear that there were people in the audience who were interested in your topic. More than likely, the heckler -after listening to your presentation, learned a few things as well even though he may never admit it.

  9. Terrific post, and I thank you for your humorous honesty in the last line. Taking a foam bat to the couch is understandable. At the end of the day – and certainly at the end of life – we are all human.

  10. Jonathan:
    You are just a blessing! So much of the business world likes to artifically make itself immune from being human. The heckler’s reaction to you was solely based on the “this is business, let’s get beyond that icky human stuff nonsense” that is so prevalent our culture. No body wants to be the guy who actually needs to work on their issues, and don’t you dare bring it up around them. It’s too easy to use “business reality” to cover up our uncomfortable “human reality.” Entrepreneurs are just as guilty of this as any board member in an ivory tower.

    Thanks for bringing the oxygen back into the room. Taking a stand for human reality and addressing it from what’s so, not just what we are comfortable with, is what creates change…especially in those willing to listen. Bravo!

  11. Good stuff, Jonathan. I can definitely relate to this – particularly the part about feeling responsible for keeping people employed and having that impact business decisions (and unconsciously, creativity and innovation).

    Now the question that I can’t get out of my mind is that when you took the Kaboom bat to the couch, were you beating up on yourself or the heckler in the crowd? 😉

  12. Tolle says:

    Hecklers? “Flipswitchers” always work for me: http://FunnyOrDie.com/m/6hrn

  13. Jonathan, maybe next time you speak you should bring the foam bat with you.

  14. Jonathan, I experienced this while facilitating a Board Retreat to build consensus for a destination Vision Statement to which all the organization’s goals, strategies and tactics would be aligned. This successful man called such a Vision a ridiculous waste of time for the organization because no one is going to pay any attention to it anyway. So, I listened carefully to what he was saying and then asked him: Why are you in business? To which he responded: To make money and have fun. Then I asked him how he makes his money and he responds: people who stay in my hotels and eat and drink in my restauarants etc. Sounds like he depends upon customers to me!!! And then I knew that I had the turning point for the purpose and value of a Vision Statement. Hecklers can be such wonderful opportunities!

  15. Dear Jonathan, i love reading your postings. You’re one of those marketing guys that I feel comes from a heart centerd space, which seems so rare in the hypey world of who’s out there trying to sell what. I always make a point of reading what you have to say.

  16. Jonathan – when someone steps into a place of being able to ask themselves “Am I operating from a place of creative opportunity or loss aversion?”” what you are describing is LEADERSHIP. Businesses can survive without this kind of thinking, but to really thrive the entrepreneur has to practice standing in the belief that in life and business it is always about creating an outcome – moving towards a vision – crafting the undefined future.

    Great post. Loved to see this from your perspective.

    Laura

  17. “With fame I become more and more stupid, which of course is a very common phenomenon.” Albert Einstein

  18. Mias Muller says:

    So true Jonathan

    You see this all over the place.
    Look at large companies and how the fear of failure kills R&D and almost vilifies risk taking. Sometimes looking in the mirror is just not good enough, if you don’t know why your looking in the mirror.

    Thanks for sharing…

  19. Heman Smith says:

    Jonathan, I’ve experienced a similar thing, laying a foundation for further discussion and teaching by sharing a principle I passionately believe is true – and that I ‘assumed’ all in the audience would as well, when someone yelled out: “that is flat out not true”. I nearly died in my tracks. But then asked the question: “what do you believe is an alternate truth?” And the discussion opened back up and moved ahead.

    Thanks for sharing the experience, and the point of the post. I’m enjoying and learning from the book. Well done.

    Heman

  20. Deb Nystrom says:

    Great post. Emotions draw us to good learning. It strike me that your story of the heckling, and your humorous response, is exactly the kind of healthy yin/yang tension that bespeaks of the creative, then even tougher risk-taking failure succeed risk-taking cycles that mirror organic, positive growth.

    In short, ‘why are you telling this to us” sounds like a person who was willing to risk all the eyeballs rolling. It’s the eyeballs rolling that’s the real issue, not his challenging question.

    Sitting in a room to hear a lecture, in and of itself is a more traditional mindset. Bringing up what is underneath, the entrepreneur’s recoil, is the gift, even if it takes a foam bat to get at it.

  21. Fiona says:

    Well, I found your points interesting! Geez. I was in a lecture the other day that I found absolutely useless, but I’d never dream of yelling that out. I could sit there or I could (discreetly) leave. I stayed, and finally, there was a nugget of something useful. But other people seemed to be loving the lecture, so 1) why would I be rude? and 2) maybe it’s not useful to me, but it’s useful to others and I just didn’t choose well!

  22. Momekh says:

    This recoil is, I swear, something very real… I stare it in the eyes nowadays, almost on a daily friggin basis. The tactics to overcome this, as you mention, may be different. But the realization of stagnation, recoil, is golden! It is necessary.
    Thank you.

    P.S. And a foam bat!? To a couch. Let’s get some hostility up in here!!! hahahaha…

    Wish you all the best man 🙂

  23. That’s why success is a much bigger challenge than any other on the way to reaching our goals.

    The ‘loss aversion’ mentality is so dangerous, yes and mostly because it’s so hard to become aware of it by ourselves.

    I would bring the Kaboom foam bat to the next talk 🙂

  24. Tony Noland says:

    This was a great way of framing something I’ve been experiencing in my own life. Thanks for this post!

  25. Tarryl M says:

    I was just forwarded this blog post and I have to say how much it resonated with me and the way I have been thinking/feeling about my businesses these days.

    I find it’s very tough to be creative when your worried (money, rent, family, etc) however it is very easy to get worried in the midst of being creative. “Logical” thought processes take over and spin a web of ‘buts’, ‘what ifs’, and ‘good enoughs?’ and before you know it all your creative drive has been drained akin to what you termed an “idea-killer emotional virus”.

    It’s one of the hardest and most previlent paralyses I have found among artists. Thank you for writing about this with another perspective.

  26. Aaron says:

    Jonathan:

    This is another great post which resonated with me. I particularly like your use of Daniel Kahneman’s “loss aversion” mindset.

    I am currently in a place where I am “suffering” (?) from loss aversion thinking. I am currently employed with a non profit health insurer and I am looking to become an entrepreneur by buying a small business like a dry cleaner or laundromat.

    On one hand, I don’t enjoy the work I do despite my success in the job I hold while, on the other hand, I cannot relish the thought of losing benefits which I’ve earned with my employer such as my 401 k.

    I guess what I’m trying to ask is, how does someone challenge their own mindset which prevents them from becoming an entrepreneur and for the right reasons?

    Looking forward to your response, and thanks.

  27. Christopher says:

    Thank you Jonathan.

  28. Sanjiv says:

    Great reminder Jonathan … glad you had an hour of Q&A post talk … did the heckler come up & apologize re his obvious “being in the recoil ?”

  29. Good point about the mindset shift once you become successful. It makes sense that there would be the temptation to go safe after having achieved financial stability. But there really is no true stability is there? Only peace of mind.

    Well done, Jonathan!

  30. jared says:

    Good lesson here. Mainly, “Then, I promptly went home, hugged my wife and daughter, meditated.”

    Seriously, getting out in nature or having the openness and security to allow different perspectives is always powerful.

    I believe having the emotional maturity to communicate with your team is important. Let them know that you’re feeling this loss aversion mode, allow them to be part of the process. I’d imagine (if you’ve surrounded yourself with the right team) they’ll make you feel better about moving forward and taking risks together.

  31. […] Beware the Entrepreneur’s Recoil If you succeed at something, you tend to become more risk-averse and that often leads to undoing what made you succeed in the first place. (@ jonathan fields) […]

  32. […] Beware the Entrepreneur’s Recoil If you succeed at something, you tend to become more risk-averse and that often leads to undoing what made you succeed in the first place. (@ jonathan fields) […]

  33. Elaine says:

    Very well-written and something I haven’t heard of before. I guess I always over-simplified that entrepreneurs are also risk-tolerant or even risk-seeking….your arguments show how that’s not always the case. Thanks for the new insight.

  34. Hollie Flynn says:

    Jonathan, man oh man.

    At 26 yrs old I opened 3 fitness centers. I remember saying this of the borrowed money if I should fail, “If I have to work at McDonalds to pay it back I will!”

    Today at 40, with a house I love, couple of more businesses, 14 employees, a solo Mom to a 7 year old, and a lifestlye I love, I have definitely become more aware and practiced in loss avoidance! Because I sooooo do not NOT want to work at McDonalds!!! 🙂

    In the last 5 years, I’ve found I’m more conservative, and I weigh things more. I’ve spent more energy than needed trying to “protect” instead of continuing to create and grow.

    My mantra of the last year has been, “expand, don’t contract. expand.”

    Be smart about things…but keep going for it. Afterall, I’d say we’re entrepreneurs because we value freedom. And being fearful sure doesn’t feel free!

    Thank you! Excellent to bring awareness to this!

  35. alex says:

    I came back to re-read this again today. These are great thoughts for those of us who have already leaped into business. The leaping never ends!

  36. alex says:

    PS I’m off to download your book. Of all of the blogs I subscribe to, you are among my favorites. Your voice is always authentic and your humility appreciated. I read several of your colleagues’ blogs daily, but I find the quietness and humanity that underlies your message of bravery and risk to be refreshing and comforting. You seem youthful AND wise at the same time. Keep on keeping on!

  37. […] Beware the Entrepreneur’s Recoil If you succeed at something, you tend to become more risk-averse and that often leads to undoing what made you succeed in the first place. (@ jonathan fields) […]

  38. Post: Good point. Don’t chicken out along the way. I also like Curt Finch’s comment, probably because it’s about how I do it or, it felt familiar anyway.
    I did a new thing in my practice recently—never done before by anyone, as far as I know. Dove in,”tweaked” it as I went along, and it’s working out great. It’s getting a little harder for me to take risks because—not that I have tons of money like the successful entrepreneurs you mentioned—but, because I am not at the beginning of my career and I’m not a kid anymore. (I think this could be different at different stages of life-what do you think?).
    However! What DOES keep me occasionally garnering the courage to try something new, to innovate, or, even to take a personal risk, is the self-rewarding feeling of being in that creative flow zone. So, I might be scared when I 1st think of it, or, scared when it’s time to manifest it, but during the designing time, I’m good.