Many people underestimate entrepreneurship. It seems glamorous and alluring to be your own boss and just a matter of getting your product out there. People read the Four-Hour Work Week, get delusions of grandeur and imagine their million dollar business (running on autopilot no less).
This simply is not the case most of the time. People underestimate the time-commitment, they don’t foresee challenges that can come up and they underestimate the emotional stress all of it can cause.
The CIO of Tulla Investment Group, Kevin O’Hara was recently on The Lead Investor Show and told stories of his friends surfing in Bali while he was working Saturday nights on his business. He told of challenges, emotional upheaval and having to fight through issues that came up. If further evidence were needed of entrepreneurship difficulty, here is a video of Elon Musk almost breaking into tears and here is an article by Neil Patel on why almost 90% of startups fail.
Entrepreneurship is hard, but the world needs people to step up to the plate - take the plunge, try to add value - and create a better world. Investors may not go through the blood, sweat and tears a founder does, but a good one will be more involved than simply writing a check.
So, how can investors put their money into the right enterprises or fund the right people? Well, this is complicated, and in prior articles, we’ve attempted to address this issue. But here we want to take yet another angle. One interesting lens through which to analyse is that of extreme sports.
The personality types that you see jumping out of planes, surfing huge waves or hanging off the side of a mountain are often perfectly geared to take on the rigours of starting and growing a business. That's not to say they are reckless adrenaline junkies with no respect for their own life. Conversely, they may be seen as extremely good risk-calculators who have developed the ability to focus and make quick decisions.
These types of people have developed a healthy respect for forces outside their control, they’ve learned how to get comfortable with fear and they know what it means to be committed. Extreme sports require so much effort to get to the end goal, the parallels with starting a business almost recite themselves.
William Trubridge holds the record for the deepest unassisted dive. When queried as to what his secret is, William responded that it's about being focused on the ‘right now’. He knows that if he gets ahead of himself he’ll get psyched out of going deeper. Entrepreneurs are constantly thinking, worrying and planning out the future - in a sense this is good. In another, it’s taking critical energy out of your output right now. Adopting the mentality of a free diver may prove useful for founders descending into battle and wanting to rise to the surface victorious.
Our guest, Kevin, has these type characteristics in spades - and he’s excelled as a technology investment portfolio manager, and had two successful exits as a CEO and co-founder. Entrepreneurs put themselves on the line every day: it’s a pressure cooker occupation - and there is much they can learn from the extreme athlete.
As an investor trying to size people up, using extreme sports or related aptitude assessments is another way to feel a person out, and ultimately make better decisions.