This episode of Dalton & Michael on Y Combinator’s YouTube channel continued the discussion from the previous episode called “How to Deal with Setbacks.” Dealing with setbacks can be likened to dealing with punches. In this episode, hosts Michael Seibel and Dalton Caldwell discussed “how to prevent these punches” and “how to take a punch and recover.”
Dealing with setbacks can be analogized with healthcare. In the same way that preventative and curative healthcare is available, there are also preventative measures for coping with setbacks as a founder.
Many times, founders are faced with setbacks (or punches), which are totally avoidable and sometimes even due to unforced errors. Some of these errors are due to magical thinking or failure to prepare ahead of time.
Facing setbacks is inevitable. There will always be high points in life, and there will also be low points in life. Instead of trying to craft a future where there are no punches, instead plan for the punches. According to Dalton, “put the infrastructure in place.”
Here is a list of things you can do to reduce the number of punches or reduce their intensity. In no particular order, the first on the list is “Adulting Harder.”
If you want to be a founder of a successful company, you have to “adult” harder than the people around you. To build a billion-dollar company, you may have to take growing up to a whole new level. In the words of Michael, if you want to achieve something extraordinary, you have to be better than the people around you.
This singular concept distances you from your peers. Adulting harder will make you isolated and different from your peers, and you will have to learn to love the process. You can’t afford to be sad when you’re developing a different lifestyle from your peers. For example, if your friends and roommates go out to pull off another all-night party, even during weekdays, you have to be cool with opting out. It’s almost impossible to have all the fun you want to have and still build a billion-dollar business. One crucial step in Adulting Harder is “Audit How You Live.”
How much sleep did you get the night before? Do you feel rested in the morning? What is the effect of your living space on your productivity?
Are you losing hit points at home? If you’re losing hit points at home, then that’s an unforced error. Who are you living with? What are you eating? Do you have easy access to exercise? For most people, the home brings zero points, but for most successful people, the home is an added advantage.
Many new founders don’t understand how many hit points they’re losing based on how they’re living. In healthcare, some clinicians start their diagnosis by observing basic factors like sleep disruption, diet, and exercise.
Without having your house in order concerning your sleep, diet, and exercise, you are setting yourself up for taking hard punches later on in life.
According to Michael, surviving his Ivy League school and his challenging High School didn’t require him to make intentional changes to his lifestyle, and he was able to scale through. Essentially, different strokes for different folks. However, starting with good habits doesn’t do you any bad. Michael further stated, “you can afford to sacrifice these things for five years, or maybe seven years, but the tricky thing is the best companies last multiple decades, and the [things] you can get away with in your 20s, you can’t get away with in your 30s.”
Another critical lifestyle habit for successful founders is their Information Diet.
The toxicity of social media can be a huge distraction.
Metaphorically, just as foods and drinks affect our physical well-being, so also information consumed has its effects. When a lot is going on in society, and you are caught up in the web of trying to catch up with everything going on in society, it’s likely to affect your state of mind.
When you are heavily invested in social media rhetoric to the extent of making you feel bad or compare yourself with others, it becomes very unhelpful and toxic. For example, if a young founder bombards their brain with the social media activity of a lot of investors who only talk about the investment markets or how much they’re making, it is not helpful in any way for their startup.
For most successful founders, aggressive steps were taken to limit the influence of social media over their thought processes. Many of them have a history of disabling notifications, screen time tracking, etc.
All in all, paying too much attention to social media as a founder doesn’t help you make better financial decisions.
Startup founders can benefit greatly from a small salary increase, which will improve their quality of life.
As a founder, if your startup salary is allowing you to save so much money, it’s probably not good. You cannot be a startup founder and have the savings level of a Google Employee. Having the means to afford the lifestyle that allows you to put all your efforts into your startup can make all the difference.
Essentially, small changes in salary can make a huge difference for a startup. Paying yourself enough can keep you out of debt and keep you properly motivated.
All in all, salary is for living, and equity is for the upside.
You should learn how to have hard conversations with your co-founders. Having these types of conversations can help you scale through phases of setbacks in the company.
Anxious Personality Type vs. Avoidant Personality Type: The anxious personality type simply describes people whose character tilts towards dealing with challenges immediately. Anxious people are more likely to spend hours trying to iron out issues, while avoidant people are more likely to interact less when dealing with challenges.
According to Michael, the root cause of most problems between co-founders is usually their style of dealing with their frustration.
Having a conflict with your co-founder is a setback that’s almost a surety in business. However, having hard conversations where you both ask questions like “how do you deal with conflict?” can help navigate phases of disagreements.
This is another preventive measure for dealing with setbacks.
Don’t be poor in judgment when setting expectations. It’s really helpful not to set unreal expectations for yourself or your workers. Setting unrealistic expectations is a way of knocking yourself out.
When setbacks occur, like really bad setbacks, don’t be pressured to do anything. The least you can do is sleep on it. According to Dalton, when you sleep and wake the next day, you have a new level of clarity on the entire situation.
Whenever there’s a scenario where the only options are Action 1 or Action 2, there’s a third option: not to act. For some of the best founders, no action has become one of their best plays in the game. However, when someone’s life is on the line, you should act.
Sometimes, rest.
In the event of a setback, rather than getting tense around employees or co-founders, sometimes take a day off, or take an early day off. At this stage, you should spend time with loved ones who can help you relax. A rest period can help you gain perspective and improve your ability to respond to challenges.
Be very conscious of the type of individuals you are interacting with and the kind of habits you are developing when dealing with punches. Your next step when dealing with a setback should never be to put yourself under undue pressure. Hanging out with celebrities or going to a poker club is not the best way to deal with a setback.
When things go bad, you know the type of friends that can help you stay relaxed, and you know the type of friends whose remedy to every bad situation is an all-nighter at the club.
You need to pay attention to every facet of your health. Your physiological well-being, as well as your mental healthcare, are important. If necessary, opt for therapy, and when prescribed, use medication.
Many founders have faced issues with sleep disruption and stress, and if you have issues with them, look for an appropriate remedy. The reality is when people refuse to find the appropriate remedy for some of their mental health issues, they often fall victim to harmful and inappropriate methods such as drug abuse or drunkenness.
Sometimes, some punches are fatal.
Inasmuch, people will like to be positive and try to encourage you to rise from the setbacks, sometimes, you don’t need to keep going.
Trying to keep a business afloat at the expense of your family, friends, and savings isn’t worth it most of the time. Don’t mess up your life to try to keep a failing business afloat.
You should be able to know in clear, objective ways when it’s not working. If you’re in a situation where you owe suppliers and owe debts on multiple fronts, you’re hurting more people than just yourself.