Are you Burning Out? - The 6 Stages of Entrepreneurial Burnout

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Burnout is one of the top reasons for entrepreneurial failure, and for good reason.

When we embark on the journey of building a startup we are fueled by desire and creativity. We have a vision for how the world can be improved, and we gather the courage to take enormous risks to pursue our dreams.

We know going in that entrepreneurship is a rollercoaster of uncertainty and risk, yet we heed the advice of self help gurus who tell us “don’t let fear stop you, just do it anyway.”

The first several months of building our startup company are exciting and filled with possibility. We meet people who love our ideas and are willing to support our quest for disruption and change. Some are even willing to risk their own money to support our mission.

Then, as we dive into the nuts and bolts of execution, obstacles surface to challenge our vision, and we suddenly see the huge task ahead of us. This “holy s&*t” moment washes over us, and as Tony Robbins famously said:  “You are confident until you realize what needs to happen.”

In the blink of an eye, we are no longer running our company, our company is running us.

Then our fear-based mechanisms for survival kick in:

  • We begin to feel excessive and prolonged stress (a.k.a. anxiety)

  • We feel the heavy pressure to perform and meet the expectations that we set with our investors, team members, and possibly the press

  • Our emotional capacity is exceeded each day, and we have minimal psychological resources (and time) to cope

“Putting out fires” become the norm, and the burnout cycle begins, according to 20+ years of research by scientists like Christine Maslach at UC Berkeley.  

The good news is, there is a different entrepreneurial experience available to us, if we choose it, and it all starts with awareness.

Read on if you want to take the first steps to ending your burnout (and increase your chances of success).

When you commit to allocating a small chunk of time for burnout prevention, the result is sustained passion, increased motivation, better performance, and daily vitality with the pleasurable side effect of a healthier team culture. We can say this with confidence because science backs it up.

Signs of Burnout

Have you ever sat down in front of your laptop with a desire to produce quality work, and then simply stared at the laptop unable to type? If the answer is yes, you are not alone.

In today’s society, and especially in startup culture, many of us find ourselves wanting to work, but our exhaustion prevents us from doing so. The exhaustion can be physical (e.g. lack of sleep) or psychological (e.g. constant anxiety).

When signs of exhaustion present themselves, if you are like most people, you pick up a caffeinated beverage to keep going, thinking “I have too much to do; I cannot afford to rest right now.”

The problem with this strategy is it eventually leads to a lack of motivation, where you eventually sit in front of your computer, unable to type, not only because you are exhausted, but also because you no longer want to. As you begin exhibiting signs of burnout, that flame of desire and creativity that sparked your dream for world change is dwindling. Then your entire organization starts to suffer as your team members feel their leader’s loss of motivation. The world starts to look less friendly, and the company you once believed in wholeheartedly starts its downward trajectory.

When you eventually let go, your “failure” is rationalized and minimized to “we couldn’t find product/market fit,” or “the market timing wasn’t right.” However, what’s most often true is you could have found product/market fit, but you were just too burnt out to consider the possibility of going back into battle.      

So the big question becomes, what can you do to ensure you never reach a point where you are so drained that you no longer want to continue your mission?

As with everything in life, it starts with awareness. When you are able to recognize the signs, symptoms, and stages of burnout, you can take the necessary steps to refuel and regenerate your creative brilliance. In doing so, you just may solve those tricky problems and get you and your company back into a state of flow and expansion.   

The Six Stages of Burnout   

Here are some clear indicators that you are on the path of burnout, as studied by Dr. Christine Maslach and other incredible scientists across 30 years of research. One of the key differentiators in how leaders handled their stress was whether they were responding from fear or from a growth opportunity perspective.

Stage 1 - Compulsion to Prove Oneself by Working Harder  

The reality sets in that achieving your company’s mission is a bit more difficult than you originally anticipated. What do you do?

Fear-Based Solution

You refuse failure as an option and begin working harder. Psychological symptoms begin to appear, like chronic anxiety, and instead of developing a healthy relationship with your anxiety, you gulp the caffeine, act like your anxiety doesn’t exist, and start working 16 hour days. Sound familiar?

Growth-Based Solution

The rollercoaster ride of entrepreneurship is a bit bumpier than usual, and you notice you are experiencing anxiety. Instead of gulping the caffeine and acting like anxiety is not present, you begin to wonder about what changes need to be made to get back into flow. Maybe people don’t want this version of your product? Maybe that investor is not the perfect investor for your startup? Maybe you need to slow your team growth and get back to basics? Once you’ve listened to your anxiety and received its wisdom, you create a new action plan where focus and working smart becomes the strategy, not working 16 hour days.

Stage 2 - Neglecting Needs & Displacing Conflicts

Fear-Based Solution

Now you are working 16 hours per day and begin neglecting basic needs like food, water, and rest. Your lunches go from 1-hour of savoring each bite and taking an afternoon walk, to working from your desk and answering e-mails on your phone while you mindlessly inhale some food. You don’t even remember what it was.

Physical symptoms begin to appear, like weight gain, and it’s more difficult to get out of bed in the morning. You are “on” all day, and your daily challenges become ruminating thoughts that you cannot shut off when you rest your head on your pillow. These thoughts start clouding your judgment, and you start making mistakes that you normally would never make. A good night’s sleep seems to elude you.

Growth-Based Solution

You recommit to impeccable self-care. You realize that building an exceptional entrepreneurial company requires long-term thinking and resilience through the inevitable ups and downs of entrepreneurship. When you are properly nourished and well-rested, you can better meet the demands of your day and be a more inspirational leader. And importantly, you are not burning adrenaline and exhausting vital energy reserves.    

Stage 3 - Revision of Values and/or Denial of Problems

Fear-Based Solution

Your spouse, family, and friends begin to give you feedback about how you are operating each day. You seem irritable, deny that anything is wrong, and begin to generate a new system of values from quotes you heard on mainstream tech publications. Things like “If you are not working 16 hour days, know your competitors are.” Or, “This will be over in a few months. As soon as we close our A round, everything will settle down.” Then the A round comes, and the intensity only increases.

Growth-Based Solution

You open yourself to others’ feedback and get real about the problems occurring in your life. Instead of buying into some VC guru’s value system, you get curious about your own. You realize that you originally set out to build this company that you were uniquely designed to lead, and there is an opportunity to establish a new set of values that will support you and your team in meeting daily demands in a way that is smart and sustainable. Your thinking starts to clear and sharpen, and your decision making returns to high-performance.

Stage 4 - Withdrawal & Behavior Changes Begin

Fear-Based Solution

At this stage your personality begins to shift. You were once warm and compassionate to those around you, and now you are regularly irritable, lashing out at people you disagree with or those who cause “unnecessary challenges.”

When a “big win” occurs, you seem to get more high than usual. When a “big challenge” occurs, you seem to get more low than usual. The entrepreneurial roller coaster is taking its toll, and your mood swings are more pronounced. You start to push others away and spend more time by yourself.

Growth-Based Solution

You become aware that you are less warm and compassionate to those you care about. You find yourself wondering why you seem to be more reactionary at team meetings. You no longer want to apologize to team members on a regular basis for your reactions, and commit to a more conscious form of leadership.

You start by taking responsibility for the way you have been showing up, and you get real with everyone about the emotional and physical exhaustion you are experiencing. The time has come to let the team know that you need to take some time to refresh, rejuvenate, and reboot, and that you appreciate their leadership in creatively solving some of the current challenges the company is experiencing.  

Stage 5 - Depersonalization & Inner Emptiness

Fear-Based Solution

Now you begin to fully pull away from those around you. A feeling of “emptiness” begins to wash over you. You tell yourself it’s because your company’s growth rate is not where you’d like it to be, or that it’s everyone else’s fault - but what is really happening is you’ve been working at an inhuman pace trying to force the world to love your project through sheer willpower. Everyone who doesn’t get it like you do is stupid.

At an even deeper psychological level, as you face the possibility that you may be one of the 90% of startups that “fails,” you start to wonder what that says about you as a person. Are you still worthy and meaningful if you are not the next Elon Musk or Steve Jobs?

Growth-Based Solution

You are aware that you are experiencing a sense of inner emptiness, that your company is just not working as planned, or that you cannot continue managing the company at this pace. It’s time for major changes to be made.

You are honest with your board and investors that you need a break, or that you need to step into a different role in the company. Even though you are afraid to make this change, it is inevitable on your current path, so it’s important you choose integrity and the wellbeing of the organization ahead of your personal interests.

And most importantly, no matter what the outcome, your worthiness as a human being is never in question.   

Stage 6 - Trait Depression Anxiety & Stress

Fear-Based Solution

At this stage full burnout occurs with physical and emotional collapse. You feel depressed, and the only option is to end the project or your role in it. You see failure as inevitable, and you need to go on leave to completely unplug from the daily “fires” and constant stress of entrepreneurial life.

Growth-Based Solution

If you have reached this stage, you recognize that it’s essential to take a sabbatical or get professional help from a skilled therapist. You look for creative ways for the company to sustain in your absence, and if those options are not available, then you do the honorable thing and shut the doors to pave the way for the next opportunity. Failure happens; it’s what we learn from the experience that allows us to navigate the next one with more awareness and skill.

This Will Never Happen to Me

Let’s take a breath. Some of those stages are heavy, yet it’s important to acknowledge that these stages do occur in entrepreneurship, more than anyone would like to admit.

I imagine as you progressed through the stages, you experienced a little voice saying “none of that will ever happen to me.” This is a natural response, and it’s one of the reasons we find ourselves in the later stages in the blink of an eye.

These stages are not figments of our imagination. They have been determined by rigorous scientific research by some of the most brilliant scientists in the world, and we’ve lived them ourselves.

Want more proof? One of the most read articles in the history of Inc. Magazine is called “The Psychological Price of Entrepreneurship.” The article discusses the rampant depression and anxiety that many founders face. One of the most well-respected VCs, Brad Feld from Foundry Fund, admitted to his own battles with depression in the article and received thousands of e-mails from entrepreneurs resonating with his experience. Some of the entrepreneurs were the most “successful” entrepreneurs of our time.

At Good Startups, one of our venture capital partners completed a study on their top 100 portfolio companies to discover how they could better support their entrepreneurs. The number one need that rose to the surface was “Sunday Night.” Founders and CEO’s expressed the loneliness and anxiety they feel on Sunday nights as they face the uncertainty of the week ahead.

This constant anxiety is one of the key ingredients for burnout. Anxiety starts the burnout train of working harder, pushing aside our human needs, and disconnecting from ourselves and the people we love.

The good news is that with awareness and new habits, you can continually operate from the growth-based solutions side of the spectrum. You don’t need to fall into the burnout trap that most entrepreneurs find themselves in.

Here is a simple assessment you can take right now to determine if you are at risk of burning out. The assessment is seven questions and only take two minutes.  

If you are at risk of burning out, or notice yourself dwelling in any of the six stages of burnout above, reach out to an executive coach for support. We have some coaches who specialize in this area, and there are so many other great startup and business coaches who can also support. It’s amazing what a few shifts in approach and lifestyle can do to put you on the path of vitality, wellbeing, and entrepreneurial success.

Justin Milano & Dr. Daniel Cordaro - Co-Founders & Executive Coaches @ Good Startups

Justin Milano helps exceptional entrepreneurs build thriving companies. As a serial entrepreneur and executive coach, Justin uses a unique blend of business coaching and leadership psychology to help entrepreneurs create breakthroughs and fulfill their maximum potential.

Dr. Daniel Cordaro is an emotion psychologist from UC Berkeley and Yale University who coaches leaders using his unique domain expertise in psychology, emotional intelligence, unconditional acceptance, and sustainable wellbeing philosophies.