When you think about Silicon Valley what comes to mind? Do you picture wealth and prosperity? Do you imagine trendy office buildings with lax dress codes and top-notch technology? Whatever your perception is of The Valley, it's probably skewed. While there certainly is wealth, prosperity, lax dress codes, and advanced technology in many of the flourishing startups in the area, it's not the standard or the norm.
For every startup success story, there are a dozen tales of demise. This isn't meant to disappoint or depress you--it's just the truth. The mainstream media has glamorized this country's startup culture, when in fact, it's a roll-your-sleeves-up kind of industry. And as a result of this bitter truth, there's something dark happening behind the scenes of America's entrepreneur culture.
9 Out of 10 Startups Fail
According to recent data, 90 percent of startups fail. That means your average entrepreneur will experience at least one business failure in their lifetime, and probably more. While few are willing to talk about it, these failures naturally fuel things like depression, addiction, and other struggles.
"Only recently, after the tragic suicide of Jody Sherman, CEO of a startup called Ecomom, did the technology community begin to publicly acknowledge the problems with its 'entrepreneur as hero' narrative," Erin Griffith of Fortune.com wrote in September 2014. "Publicly admitting to failure, and examining it, can take guts. It also distills the narrative to a case study from which other entrepreneurs can learn."
Griffith is referencing a case study conducted by CB Insights that looked at 101 post-mortem essays from startup founders whose ventures failed. According to the data, there are a handful of common reasons for why startups fail. A strong 42 percent say a lack of market need for their product is the number one reason, followed by a shortage of capital, having the wrong team, and getting out-competed.
The Depression, Addiction, and Struggle of Failure
The question of how to avoid startup failure is an entirely different topic. What is meant to be highlighted here are the negative side effects of failure and how entrepreneurs can free themselves from the shackles of depression that often lead to addiction and other struggles.
Take Bradley Smith, for example. He's the CEO and founder of Rescue One Financial, a California-based financial counseling company that's extremely successful. Before bringing in nearly $32 million in revenue in 2013, Smith's floundering company was losing money. In fact, it lost so much money that Smith found himself in heavy personal debt. Things ultimately turned around, but for months Smith wrestled with extreme anxiety, sleeplessness, depression, and fear. For entrepreneurs in similar situations, these feelings are all too familiar.
Our society idolizes successful entrepreneurs like Mark Zuckerberg and Elon Musk, as Jessica Bruder points out, but doesn't understand that these people are few and far between. "And we celebrate the blazing fast growth of the Inc. 500 companies," she writes. "But many of those entrepreneurs, like Smith, harbor secret demons: Before they made it big, they struggled through moments of near-debilitating anxiety and despair-times when it seemed everything might crumble."
While Smith was fortunate enough to escape before things got worse, not all entrepreneurs are so lucky. The pressure is often too much to handle.
According to a recent case designed to investigate the prevalence of mental health conditions among entrepreneurs, the rate of many health issues is higher than you'd think. In the report, the entrepreneurs were "significantly more likely" to report a history of depression (30 percent), ADHD (29 percent), substance abuse (12 percent), and bipolar diagnosis (11 percent) when compared to other participants.
Focusing in on substance abuse for a moment, it's important to understand that many entrepreneurs have addictive personalities to begin with. The traits of this personality can be positive when controlled in the confines of a business venture. It's why many entrepreneurs don't bat an eye at working 80-hour weeks. However, once a business fails and that structure is no longer there, many entrepreneurs find other ways to channel their addictive tendencies.
Findings from clinical psychology suggest that when people exhibit symptoms of behavioral addiction in one area they're at a higher risk of behavioral and substance addictions. You can see one example of this in a 2008 article by Tech Crunch's Michael Arrington. He highlighted a growing issue in which many Silicon Valley entrepreneurs were becoming increasingly dependent on a drug by the name of Provigil. The drug is designed to keep people awake and improve the ability to concentrate, but was instead being abused by startup owners wanting to work longer hours.
Dealing with Failure
"The ability to reframe failure and loss can also help leaders maintain good mental health," Bruder writes. As an entrepreneur, there are plenty of constructive ways to deal with failure and it's necessary for everyone to be aware of the right and wrong ways to deal with depression. Failure can come out of nowhere and it's important to be mentally prepared for what ensues.