In Over Your Head - The Life of an Entrepreneur

Being an entrepreneur means figuring out how to survive and thrive when you often find yourself in way over your head.  An ambitious entrepreneur is always pushing and stretching beyond their comfort zone -- creating a company from scratch, evangelizing a new category, taking risks way out of any rational person's comfort zone.  They rarely want to admit vulnerability, particularly to their management team or board, and so sometimes cover up their anxiety with bravado.  This is the exact wrong way to approach this common situation.

Believe me, I know the feeling.  In my late 20s, I was promoted to the executive team at Open Market -- a billion-dollar market capitalization, publicly traded company -- and found myself in way over my head.  I would come home at night, shake my head as I recounted to my wife the decisions I was responsible for making, and reflect that I really had no idea what I was doing.

But after a few years, I started to get the hang of it, gaining comfort and confidence in my position.  What happens to a passionate, ambitious entrepreneur who gets the hang of something?  They get bored.  They seek out the next big challenge.  I was fortunate to find it at Upromise, where I was asked to help start the company and serve as president and chief operating officer.  In our first 18 months, we raised $90 million in venture capital, hired over 100 employees, signed up partners and launched the service into the market.  During that period, I again often felt way over my head.  But that’s what made the experience so thrilling.  Whether it was pitching Citigroup’s chairman Bob Rubin to join our service (we were still operating the business out of my partner's house at the time – talk about “punching above your weight”!) or negotiating a board compensation package with former presidential candidate Senator Bill Bradley, being in over my head was one of the scariest and most fun parts of being an entrepreneur.

How do you know if you're in over your head in a healthy way as compared to an unhealthy one?  One entrepreneur gave me a good rule of thumb for this just yesterday.  He suggested that entrepreneurs follow an 80/20 rule - they should always feel in command of 80% of the business, but feel way over their head 20% of the time.  It's that 20% stretch that makes it fun and challenging.  But if an entrepreneur is on the wrong side of the 80/20 rule (i.e., are stretching 80% of the time and in command only 20%), then there is a deeper issue.

Here are a few recommendations for those who find themselves in that situation:

1) Be self-aware.  It's ok to feel as if you are in over your head as an entrepreneur.  In fact, it's natural.  Don't be afraid to recognize it, admit it, and talk openly about it with your board and management team.  Figure out which side of the 80/20 rule you find yourself.

2) Learn your way out...with help.  Seek the advice of the wise men and women around you to learn how to step up and grow into the situation you find yourself in.  Don't close yourself off to outside advice for fear of appearing weak.  Instead, embrace smart, diverse opinions to help shape your own.

3) Accept life preservers.  Many entrepereneurs are terrible at accepting help.  After all, the reason they're entrepreneurs is that they enjoy being their own boss and are passionate and often stubborn about following their vision.  It's hard for them to admit they need help and, sometimes, need a life preserver to pull them out of the situation.  It may mean hiring a COO, hiring a CEO and moving into a chairman role, or other big moves that risk giving up control.

When entrepreneurs are in over their head, it can be awkward.  But it doesn't need to be.  Be honest and open with those around you and keep an eye out to make sure you're not on the wrong end of the 80/20 rule!

Comments

[Matt Douglas]

Jeff -- This post really struck a chord with me. See http://www.mypunchbowl.com/blog/2008/05/08/feeling-in-over-my-head/

[Ian Lamont]

Nice. I think a lot of entrepreneurs have a tough time with point #2 ... but overcoming that barrier can really make a difference. I know an entrepreneur who has recently opened up in this way, by turning to a trusted and wise group for advice and opinion. In one recent crisis, he had to decide whether or not to concede an important point in negotiations with a partner -- after hearing from the group, he stood his ground. It wasn't his first instinct, but it turned out to be the right choice in terms of preserving the long-term viability of his vision.

[Mike Dee]

I have thought about entrepreneurship for a while. See this article: http://mdichi.wordpress.com/2008/05/09/where-is-the-modern-day-entrepreneur/.

As it relates to your comments, I have a few thoughts. First, I ask myself, are you an entrepreneur and thus able to make these comments from that perspective. At this point, I don't know, since I don't know you or your situation(s). Second, I believe if one does feel "over his head" the vast majority of the time there is a problem that may be one of the following: i) poor business plan, ii) lack of understanding of market (and product positioning), iii) inability to understand the business and its market.

I believe a true entrepreneur does not feel over his head for much of the time. If he lacks an understanding of his business, he works tirelessly (with his team) and comes to a resolution. It may be difficult to do so in the situations described above.

[Sam]

Nice piece Jeff. I agree with your points. I might add one more tip: always present yourself in a positive, professional and courteous manner. Facing huge obstacles/challenges will confront every entrepreneur. But, the ones that can meet these challenges with a calm, professional demeanor will be respected by peers, subordinates and customers.

[Matt Stocking]

Jeff, I agree with you 100%. The 80/20 rule, as you've defined it, is a great barometer for measuring one's effectiveness as an entrepreneur and/or company leader. You have to stretch to grow while ensuring your roots are firm. Nice piece!

[Debbie W]

Jeff, Definitely can relate to the "over your head" feeling. Not sure how easy it is to measure the 80/20 ratio and I suspect most of us only really get a sense for how over our heads we were long afterwards in retrospect... but it's probably not a bad thing to give some serious thought to. Interesting to note that those of us that are enterpreneurs at heart even seek out that same feeling in traditional corporate structures. Guess we get a charge out of knowing that success depends on "figuring it out" and quickly.

[Waqas]

This is a great article. As someone who worked and then went on to start a new business I can really connect with what you have stated!

[Susan]

I agree with a lot of what you have said. One comment - most entrepreneurs would never admit that. They believe that they must do it all and are afraid to ask for help. I work with many entrepreneurs and I work so much harder (& get much more accomplished)with the ones who are open to suggestion and are willing to do new things & grow. This, as opposed to the ones who are closed minded and usually either suffer that burnout or simply fail. Good rule of thumb!

[Paul Murphy]

You hit the nail on the head.

[hamad]

very nice and constructive piece!

[Paul Germo]

Jeff

Thank you so much for this article. I grew up in a family of Entrepreneurs - my Dad, his Dad, his Dad, my uncles, Aunts and My Siblings.

As I am in the Start-up faze of my newest bisiness I am there in the feeling over my head position in certain situations. I do have a couple of great advisors to turn to (one I will call as soon as I post this)I am grateful for that.

I guess as akid I never realized that my family members probably felt in over their heads at times - but I am SURE now that they did.

Cheers

paul www.zit-kicker.com

[Andrew Deal]

How do you know if you're in over your head in a healthy way as compared to an unhealthy one?
I think the question itself is helpful just to ask out loud.

- I am probably past the 20% max at this point, partially because it is hard to know how to even measure this.

My problem is I have a new advisor that although having great credentials, has been shooting from the hip with less than all the facts, and creating more work for me when I need him to lighten the burden instead. This has been communicated, but the jockeying is indeed a new burden.

[john]

Fascinating site and well worth the visit. I will be back

[Mark Lopes]

Excellent article, I really agree with you, an entrepreneur's life isn't easy. If you want to share ideas, check my site at: http://www.entrepreneuradvice.org

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