If you own a business, you’ve probably compared running your company to being on a roller coaster.
You may not know — or readily admit — that it actually has more to do with you than it does with the business.
That’s because most entrepreneurs exhibit at least some traits of bipolar disorder: they are prone to seductive highs, crushing lows and everything in between.
I experienced it while growing 1-800-GOT-JUNK from $2 million to $106 million in revenue over six years and in the years since I left.
Many entrepreneurs — two of the co-founders of Netscape, for example — have been medically diagnosed with the condition.
We call it a disorder — some even say it’s the CEO disease — but that’s not how we have to view it. In fact, based on my experience, I know that these patterns of behavior can be leveraged as a superpower.
The mania, the excitement, the high energy — that’s why people follow you and support your big ideas. The stress and depression that follow are there to help you correct the course, muscle through the difficult things and meet crazy goals. Those lows are usually a signal to rest and recharge (so that we can summon the energy to build and inspire again).
If you learn to recognize your emotional highs and lows, you can harness them so that you know where to put your focus and when.
Think about a world-class athlete operating at peak performance. We do not expect them to function at that level for weeks or months on end without a break. We totally get that they need time off to maintain that level of performance. Why don’t we apply the same standard to entrepreneurs?
We should.
To do that, you have to understand the Transition Curve. No surprises here — it resembles a roller coaster. There are four distinct stages that I detailed in an interview on Jordan Harbinger’s podcast.
I’m going to outline them here so that you can know how to anticipate the emotional intricacies of entrepreneurship and use them to fuel your success.
Stage 1 — Uninformed Optimism
The first stage of the entrepreneurial transition curve is characterized by excitement and passion. It can last anywhere from a week to a full year.
Back to the roller coaster. Think of the feeling when you’re heading up the steep slope before the drop — you’re pretty damn excited just before you hit the top. You might not know exactly what’s coming next, but you can’t wait to experience it. That’s uninformed optimism in a nutshell. It’s the thrill of landing a massive new client even though you’re not exactly sure the business can accommodate it.
You’re manic and exuberant. It’s a great time to talk to investors, do recruiting and focus on marketing. Use your voice to capitalize on the optimism and excitement. You’re at your most magnetic and people will want to join you.
But you’ll definitely want to avoid stuff like purchasing decisions, hiring and bookkeeping. This isn’t a season for major decision making.
Stage 2 — Informed Pessimism
This is when you’re over the top of the curve and you’re having an “oh shit” realization. You get more information and the optimism goes right out the window. The reality of what’s ahead comes into full view, and you’re wondering how you’re actually going to pull it off. You start seeing what might go wrong or you start noticing stuff that you hadn’t clearly anticipated. This stage moves you toward careful action.
For example, you’ve hired an amazing new VP. The “oh shit” moment comes when you start thinking about the salary you offered and now you’re wondering how you’re going to pay him $20k per month.
Here’s a major “oh shit” moment from my own life: I got a tax bill for $420,000 more than I thought I owed. Not fun. I realized there was all this revenue that I hadn’t fully thought through. I started to freak out and panic.
But then I moved into planning mode. I went on a hike with a few entrepreneur friends who helped me figure out what to do next. I went home and made a list of all the expenses that could be cut and the options for increasing revenue and gross margin. There were about 80 things that I had to do. Within three months, they were done and I’d paid my bill.
Stage 3 — Crisis of Meaning
Crisis of meaning is when you’re completely panicked and unable to do anything. You feel paralyzed. It’s scary.
I remember a time when my good friend Brian Scudamore, founder of 1-800-GOT-JUNK, was in this stage. It was almost 20 years ago. The company was still relatively small at the time. One morning, he called me and told me he wasn’t coming in. He wanted me to assure the leadership team that he was fine and that he’d just be out for the day, but the fact is he was on lying on the floor in the dark in his basement. He needed to detach.
That’s a crisis of meaning.
Stage 4 — Crash and Burn
This is a very low point, where you’ve plunged off the curve. Not everyone gets here. Hopefully, you don’t, but it can happen.
At this stage, you’re either filing for bankruptcy or forced out of your leadership role. It’s game over for now.
Stage 5 — Informed Optimism/Hopeful Realization
This final stage is when you start to feel energized and excited again. You’re sort of like The Little Engine That Could. You’re getting your confidence back.
The danger lies in becoming too optimistic too quickly. You’re about to start the Transition Curve again. But if you don’t recognize that and realize that the pessimism and crisis of meaning are going to creep in as well, you risk unconsciously sprinting towards a major crash and burn.
The key to understanding the Transition Curve is to realize it’s like gravity. You can’t fight it. Go with it and use it to your advantage. It’s your superpower.
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