the hidden cost of being a founder
Were I to identify a single element that connects the worldwide technology community culturally, it would be the high esteem and admiration given to startup founders.
Establishing your own enterprise represents an aspiration held by many. It can offer exceptional autonomy, a lasting impact, recognition, financial prosperity, and the opportunity to contribute positively to society. Founders, both well-known and emerging, are consistently praised across various media platforms for their ingenuity. Numerous entrepreneurs actively demonstrate their dedicated effort and remarkable achievements. An observer might easily conclude that all founders are thriving due to their abilities and hard work.
However, as is often the case with perceptions presented online, the actual experience is considerably more nuanced. There’s a frequently overlooked downside to being a founder—the effect on one’s psychological well-being.
A recent investigation conducted by the National Institute of Mental Health revealed that 72% of entrepreneurs experience mental health challenges either directly or indirectly. This contrasts with 48% of the general populace. These difficulties can also extend to family members—23% of entrepreneurs report family members facing issues, a 7% increase compared to those associated with non-entrepreneurs.
I do not claim to be a mental health professional. However, from my personal observations and conversations with numerous business owners I collaborate with, I know that being a founder is inherently isolating. The pressure is substantial, and uncertainty accompanies every choice. The possibility of failure is a constant concern. If left unaddressed, these factors can have a significant negative impact.
Unfortunately, the situation seems to be worsening. A comparable study in 2015 by Dr. Michael A. Freeman indicated a lower rate of mental health issues among founders—at 50%. While comparing studies is not always precise, considering the impact of the global economic downturn on many businesses and the isolating effects of remote work, it’s clear that the startup environment has become more challenging this year. Furthermore, social media continues to promote an unhealthy obsession with relentless work and idealized founding narratives.
Several founders have shared with me their persistent feelings of inadequacy and guilt when comparing themselves to celebrated startup leaders who emphasize constant work, fundraising, or achieving financial success. They feel they should be working harder or achieving more—just like those they read about.
So, how can we address this issue? The initial step is to openly discuss it. This requires fostering an atmosphere where honesty about challenges is accepted. Sharing concerns with a fellow founder, beyond business matters, can be incredibly insightful. I’ve witnessed this within our community, creating a moment of collective realization.
The perception of the invincible, brilliant, and tirelessly driven founder can quickly dissolve as individuals recognize they are not alone. They discover that the anxieties, uncertainties, and concerns they experience are widespread.
Founders with experience can offer invaluable guidance to those new to the startup world. They can share their experiences, both successes and setbacks, and reveal strategies for coping with difficulties. I highly recommend that founders experiencing these challenges actively seek advice from peers and potential mentors, similar to how they would seek commercial guidance.
Next, we must address the prevailing culture and myths surrounding being a founder. Business owners need to understand that many of the extraordinary “success stories” highlighted online are exceptional cases.
Likewise, those who advocate for working excessive hours as the sole path to success are either describing their personal experience or, at worst, presenting a curated image to gain attention. We must carefully consider our response to such posts, recognizing the distinction between support and enabling unhealthy behaviors and philosophies.
Ultimately, success in the startup world is subjective. For some, it means owning a small business that provides a comfortable income and a healthy work-life balance. For others, it’s simply pursuing their passion in a way that aligns with their values. Few will achieve an exit that makes them millionaires, and an even smaller number will build the next major tech company. It’s crucial for founders to maintain realistic expectations and disregard the noise they encounter online.
On a broader scale, the industry, including the media, needs to adopt a more informed perspective on how it portrays founders. A common misconception is that major tech companies originated in garages with limited resources, growing into massive corporations solely through the founder’s brilliance and determination.
In reality, the majority of these companies benefited from significant initial funding from family or connections from the outset. These founders were also quickly supported by highly skilled individuals who contributed substantially, and, importantly, benefited from a considerable amount of luck. The notion of the superhuman founder often promoted within the industry is, in most instances, inaccurate.
Similarly, there are issues with how we define success and failure.
Success is frequently measured solely in numerical terms. The term “unicorn” is used so often that many overlook its meaning—simply a valuation assigned by investors, not necessarily an indication of genuine business success, such as profitability. The startup community often celebrates founders who achieve large exits or “unicorn status,” while overlooking the thousands of small and medium-sized enterprises that create jobs, develop new technologies, generate profits, and pay taxes.
Regarding failure, there’s a contrasting issue. The startup world often frames failure as a normal part of the process, encouraging risk-taking without fear of embarrassment. However, this can minimize the real-world consequences of failure, especially when years of effort, significant investment, and employees’ livelihoods are at stake. Simply viewing failure as part of the process prevents open discussion and addressing this genuine concern. “Fail fast” is only feasible for those who can afford it.
Individually, these issues may seem insignificant, and the solution for struggling founders might appear to be simply disconnecting from social media. However, it’s not that straightforward. Social and traditional media amplify existing startup culture rather than creating it. The same narratives are repeated at every tech conference and gathering. To integrate, founders are expected to embody the image of a fearless, ingenious visionary. Demonstrating vulnerability regarding mental health is, by implication, considered a failure.
Despite its shortcomings in terms of diversity, the startup scene is generally a progressive, collaborative, and open industry. These qualities are well-suited to addressing the reluctance to discuss mental health and establishing a support network that prevents individuals from suffering in isolation.
To achieve this, we must dispel the myths and idealized portrayals of being a founder and be more honest about the realities of running a business.