Published in the San Diego Union-Tribune, May 22, 2017
Consider your girlfriend. The relationship is not going as you hoped. There seems to be some disconnect, some awkward silences, a lack of spontaneous passion — and so to avoid being the one dumped, you pull the plug.
But it turns out that your darling Betty was only just getting over the death of her cat, her miserable boss yelling at her and her mother’s constant nagging about when she is ever going to get married.
Had you tried a novel technique — waiting and hoping — you might have avoided the loss of the woman of your dreams.
Now, this pull-the-plug syndrome operates perniciously in the startup world. In our desire for security, we often pre-emptively strike out against uncertain and unknown threats, even if in so doing we also hurt ourselves. One example is quitting in a huff three weeks before your options vest.
Two months ago, one of my little biotechs was on the ropes. Death and despair lurked, coupled with no money, no funding and no prospects — and so one of our most prized employees said goodbye. I understood but I told her that I “hoped” we would make it, although I privately “feared” we were dead meat. When is the right time to bail — and who should do the bailing first — employee leaves or CEO downsizes and asks you to walk the plank?
So let’s turn to Nir Halevy, professor at Stanford Business School, who has done some research in this area. His findings challenge the “common assumption that fear is the primary instigator of defensive aggression.” Instead he found that these pre-emptive strikes had more to do with lack of hope.
It is the problem of who pushes the red button first. It is the musical chairs syndrome. It is the lifeboat that holds 10, and there are 12 people on the ship — and the question is, when is the Coast Guard really coming? Halevy’s research comes down squarely on the side of lack of hope being the catalyst that motivates and causes us to bail out — not fear.
I am fascinated by decision-making. It absolutely thrills me on a daily basis. I live in a world of high uncertainty, and mostly I am comfortable in it — I think in part because I have the sense (sometimes unrealistically) that I can affect the outcome and that I am not just a pawn. Thinking you have some control over the play of the cards is the catalyst for hope — even though you know the odds favor the dealer.
Hope and the potential to control your own destiny are inextricably intertwined. (Novelist James Baldwin’s famous line is, “The most dangerous creation of any society is the man who has nothing to lose.”) Halevy says that one of the jobs of a CEO is to “increase hope, rather than decrease fear.” The threat still remains. You still have every reason to assume that you will go broke, but you have marginalized it a tiny bit by telling the team that the future is not fully writ yet — who knows for sure. Rock, scissors, paper, hope beats fear.
So, back to the little biotech. Last week, the CEO goes to his 127th pitch fest, which he knows is a total waste of time (see Rule No. 3 in my book), and hope shows up in spades. Someone in the audience goes all in for my boy — the money spigot opens (the round is suddenly oversubscribed, tell me how that happens) and with $19 in the bank account, hope wins in a photo finish.
Our story is not unique. It gets told numerous times. It is the story itself and the telling that fuels the hope in all the entrepreneurs who are also about to go broke with no revenue and no customers and an out-of-control burn rate and technology that doesn’t quite work. But it’s the story of those who have come before — who pulled the rabbit out of the hat — that is what instills the hope in all of the rest of us.
Rule No. 522: That’s why they call it magic.