The Poisonous Myth of Hustle

We’ve all heard the story: two brilliant founders have an idea that will change the world. They gather a dedicated group of early employees/stock option holders around them and, through sheer grit, determination, and HUSTLE, they disrupt an industry and become billionaires in the process. The moral of the story: anyone with a good idea and the willingness to sacrifice everything on the altar of Hustle can become a success and the envy of their graduating class at the next reunion.

Except… that isn’t really true, is it? Every year, hundreds of thousands of technology startups fail, and of those that survive only a tiny percentage ever reach unicorn status. And those hustle-filled origin stories? Well, they’re not 100% factual, either: multiple studies and books have shown that luck plays a significant role in every company’s success, and while some founders are willing to acknowledge that fact, our cognitive biases push us toward crafting a narrative where our success was wholly due to our own hard work and perseverance in the face of adversity. So those founding myths skip the part where the brilliant youngsters met the right people or were born to the right parents and they focus instead on how they did it all themselves. “Luck is what happens when preparation meets opportunity!” they crow. But when that opportunity for the big pitch came, were they sharper for having averaged four hours of sleep a night for the past six months? Of course not.

According to myth, Sergey Brin and Larry Page started out manually answering search queries until they could automate the process (photo credit: William Mercer McLeod)

There’s no question that hard work plays a role in every success story. Otherwise, it would just be boring: “He was born rich, he took over the family business, and he coasted along until he grew bored and went sailing.” The Great Gatsby that isn’t. Entrepreneurs start companies because they’re passionate about their idea and they’re willing to do whatever it takes to bring it to life. We should rightly celebrate that and reward it when the idea is successful. This is the American Dream, that anyone can become a success if they work hard enough.

The problem with the Hustle Myth, though, is that it glorifies one element of the story and ignores the rest. Through the hero-making machines of Silicon Valley and social media, the Hustle Myth has weaponized deeply ingrained elements of American culture — the ideal of rugged individualism and the Protestant work ethic — to the point that the only measure of a human is how hard they work. The results are both insidious and poisonous.

The Hustle Myth has weaponized deeply ingrained elements of American culture… to the point that the only measure of a human is how hard they work.

We want to believe that our efforts matter, so it’s tempting to accept the lie that the harder we work the more our success is assured. The problem for a startup team is that the idea that they can win by hustling harder than the big guys is mathematically false. 100 Amazon employees, even giving a half-assed effort, are going to put out more work than the 20 “hustlers” at TinyCo. If competition heats up and both teams work 20% harder, the startup team burns out and Amazon still coasts to victory. Startup success doesn’t come from bulk effort.

It’s bad enough when founders fall prey to the Hustle Myth and work themselves into the ground. It’s worse, though, when unscrupulous leaders use it to exploit their employees. “Welcome to startup life” becomes the answer to long hours, 24/7 availability, and low salaries, all in service to a massive expected payout when the company becomes a unicorn. Anyone who resists these demands or, worse, tries to meet them until they burn out, “isn’t cut out for a startup” and should go back to a safe corporate job. The tech world is filled with stories of leadership teams churning through staff on an annual basis, pumping up each new hire with tales of the exciting opportunity before them while conveniently ignoring why their predecessor left. I’ve seen it in action and it’s sickening.

Leaders: if you’ve normalized weekend work or your team is fighting fires 24/7, that’s not “life in a startup.” That’s a leadership failure.

Don’t get me wrong: there are times when startup life means working some strange hours. That’s the nature of being on a small team and the price we pay in exchange for the outsized impact on a company that makes working for a startup so appealing. If you’re the only engineer who knows how to fix a production problem, then you’re going to need to work the occasional weekend to keep your product running. But that should be incentive to share your knowledge — and therefore the support load — not a weekly expectation. Leaders: if you’ve normalized weekend work or your team is fighting fires 24/7, that’s not “life in a startup.” That’s a leadership failure.

Perhaps worst of all, buying into the Hustle Myth leads to lazy thinking and, for most startups, failure. Here’s how that works:

1. In HustleLand, time is an infinite resource fueled by the twin magical essences of Passion and Desire. The more we want to succeed, the harder we hustle and the more time we have. Not getting things done in time? Hustle harder!

2. Since time is infinite in this magical place, false starts and wasted effort don’t matter. Planning is for the old-school competition: we’re nimble disruptors! We respond to the market! Hustle overcomes all errors!

3. … Profit?

Companies who buy into this mindset get stuck in a Hustle Loop, where they’re too busy to make good decisions so they just try something because Hustle values activity over outcome. When that doesn’t work, they try something else, then something else, and so on, each effort more desperate than the last. When a leadership team is committed to hustling over thinking, this compounds across the organization as every department and person bceomes so frantic to prove their hustle that they start working at cross-purposes, pulling the company in so many directions that it loses all forward progress.

And then the money runs out.

Here’s the problem: hustle can’t cure dumb, and dumb hustling just accelerates a startup’s death spiral.

In reality, every startup brings extremely limited resources into a market already occupied by well-funded competitors. Even if you have an idea that no one has ever seen before — and therefore no competition — I guarantee that the moment you show any success you’ll see five copycats pop up carrying bags of VC money. Every moment is a precious resource in a startup.

Hustle can’t cure dumb, and dumb hustling just accelerates a startup’s death spiral.

A startup team is like an action hero with only a few bullets. If our hero “sprays and prays” when he faces off against the villains with their magically infinite ammo clips, he’ll be slaughtered. End of movie. Fin. He has to be smarter than his opponents, not louder.

(photo credit: Ilya Varlamov)

To survive, a startup must be efficient above all. Every decision must be treated as though the survival of the company depends upon it, because in some ways it does. Rather than asking, “am I hustling enough?” every team member should be asking, “Is this the best thing that I can be doing right now?” They have to make each shot count, because they might not get any more.

So what can we do?

First, don’t buy into the Hustle Myth and don’t peddle that poison to your team.

• Stop saying, “We’ll win because we want it more than they do!” and start saying, “We’ll win because we understand our market better than anyone else and we know where the pressure points are.”

• Stop glamorizing late nights and 24-hour Slack debates and start making room for rest and refreshment. Value outcomes over effort and quality over quantity.

• If you’re a leader and you just love work and don’t know how to turn it off, it’s time for you to recognize that that’s your problem, not your team’s. Schedule those emails and Slack messages for tomorrow morning and give everyone else a break.

Value outcomes over effort and quality over quantity.

Next, stop hustling and start thinking.

• What’s the highest and best use of your company’s time today? Every company has things that it must do, things it should do, and things it could do. Do you know the difference? If you look at the opportunities in front of you and only see “must dos,” then you aren’t thinking hard enough.

• Where is your company going? It’s almost childishly easy to get lost when you’re only thinking about the next turn. You had an idea once for the company you wanted to build. Is that dream still alive, and is it the right one?

• How do you respond when things go wrong? Even a brilliant plan can be overturned by changing circumstances, so do you keep trying harder or do you pause to reconsider your course? What metrics will you use to validate or invalidate a decision, and do you actually check them? The longer you’re on a false trail, the more precious resources you waste, so check your business map regularly.

Finally, we all need to recognize that we work better when work isn’t the only thing we do. We make better decisions when we’re refreshed and able to think clearly. When we stop living an adrenaline-soaked, lizard-brained, Hustle-bound existence, we’ll build better companies. And survive the process.

Do You Really Want to Be CTO?

"If you could just build the product, hire the team, and prepare an investor presentation by Monday, that'd be great...."

You finally did it: after years of building software for someone else, you took the leap and joined a startup. Now you’re building software for yourself. All the risk (and a 30% stake in the rewards) is yours. Then comes the day when your co-founders ask that fateful question: “What title do you want?”

You’ll be tempted, my friend, to reach for that brass ring, to claim the right of First Techie, to confidently say, “Why, CTO, of course!”

Hold on there, Tiger.

Sure, it looks great on a business card and your mom will be impressed, just as soon as you explain to her, for the hundredth time, what you do. And it will be nice to go to the next tech meetup and tell strangers that you’re the CTO for that tech company that they haven’t heard of (yet). And for a while those will be the only changes. But wait, there’s more.

Do you like meetings? Because you’re going to be attending a lot of them (and even hosting a few yourself!). Investor meetings, strategy meetings, planning sessions, interviews – your day is going to be chock-full of talking, so go buy a notebook and prepare to sit there pretending to take notes just like all the other senior leaders.  You can try to get out of them by being cranky every time someone wants to talk to you or by claiming to be too busy writing code – and I'm sure that’s what you’d rather be doing – but it won’t work. You’re in charge of a whole chunk of the company now, so get ready to represent.

I’m sure that you love problem-solving – you wouldn’t have gone into engineering if you didn't – but how do you feel about people problems? You don’t have to worry about that too much when the development team is you and maybe one other person, but what about after that Series A round? You’re in charge now, so you get to build a team! Interviews, coding tests, career discussions, mediating personal disputes… Remember looking at your Director of Engineering at your old workplace and thinking, “I am so glad that I don’t have her job”? Guess what, now you do, plus your own!

As CTO, you’re in charge of the whole thing: people, processes, and technology! And while code might be complex, at least it’s consistent: the same command will behave the same way today and tomorrow as is did yesterday. People, on the other hand, are messy. They have moods, frustrations, and personal lives that impact how they feel when they come to work. Your best engineer today could be a hot mess tomorrow, and it’s your job to straighten them out. Forget about writing code: you’re a bio-hacker now.

Some people like this kind of thing. They even see it as the next challenge in their careers, an opportunity to step up from “just an engineer” to “an engineering leader.” They don’t mind getting messy and maybe even get excited about measuring their output in terms of the work they do through others rather than what they deliver on their own. They’re ready to stop building code and start building companies. Others, though, fall for the title and look back a year later thinking, “Dear God, what have I done?” They self-destruct.

Are you longing yet for those quiet days where you could just put on your headphones and code? It’s not too late to avoid this trap. This time, when your co-founders come around handing out titles, look at them calmly and say:

“How about Chief Scientist?”

The growing funding gap

“Pre-seed is the new seed.”

“We need to see traction before we can write a check. Come back when you have a product and customers.”

“We don’t do sub-500K rounds anymore. If you want less than that, talk to your friends and family.”

There’s a growing gap in the funding market, and early-stage companies are finding it more and more difficult to raise the money they need to get their products off the ground. Those that do spark investor interest face constant pressure to think bigger, ask for more money than they need, and commit to accelerating their company’s growth before they’re ready. None of this is healthy.

I’ve seen this trend in the Boulder/Denver market over the past couple of years and I’ve confirmed it with friends and peers in Boston and the Bay Area: VCs and angel investors are moving up-market, de-risking their investments by waiting until a company has already proven its viability by releasing a product and winning its first few customers. Meanwhile, most entrepreneurs’ friends and family haven’t gotten any richer, leaving a growing gap between “I have a great idea” and first launch of a product. What’s an entrepreneur to do?

Traditionally, entrepreneurs have filled this gap with individual equity transactions — “sweat equity” for early employees— or by building the first version of a product themselves. As engineering salaries continue to go up, though, fewer engineers are willing to work for equity alone or for a reduced salary with a large equity component. And why would you, if you can make $150K or more working at a slightly larger startup or get Silicon Valley salaries and all the perks by joining the Googlesoftazon development office that just opened down the street? The competition for engineering talent keeps heating up, and there’s no end in sight. Again, this leaves many entrepreneurs at a disadvantage as the price tag for getting to Minimum Viable Product continues to rise.

“So go find a technical cofounder,” reply the Silicon Valley traditionalists. “Investors won’t talk to anyone who doesn’t have a technical expert on the founding team.” Interestingly, this traditional approach has a curious side effect: it decidedly tilts the playing field for early-stage companies in favor of engineers. If you’re an engineer who has an idea for a new product or technology-enabled service — and aren’t all services tech-enabled at this point? — then you can start building tonight. If you’re a business person with a great idea and a deep understanding of the market opportunity, you’re still crippled until you can find an engineer to build the tech. Hence the roving bands of business people roaming from technical meetup to technical meetup searching for a “technical cofounder,” when what they really need is any engineer who believes enough in their idea to work for free until they can raise enough funds to pay them. Even companies who have their first engineer struggle to find the second and the third, unless they have friends willing to moonlight.

There’s a hidden bias here, too: despite the “diversity initiative” whitewashing in the VC market, minority and women-owned businesses are still getting the short end of the stick from investors, meaning that the playing field isn’t just tilted in favor of engineers: it’s tilted in favor of white, male engineers. And within my admittedly small sample size of the 5–10 women-owned companies that I’ve mentored this year, women in particular are offered extortionary terms from the engineers they ask for help.

I’ve already talked about the risks to your company of seeking a technical cofounder when you really need an engineer, but what about the risks to the market? How many great business ideas are dying on the vine because their owners don’t know how to code? How many engineering-led companies are hammering the market with brilliant solutions to the wrong problems? We need a better solution.

One solution would be for investors to stop swinging for the fences with every investment. Instead of asking how this new company can be a unicorn in three years — and potentially forcing a healthy young company to accept an unhealthy amount of risk in exchange for your money — how about looking for investments that return 5X returns with lower risk, or investing in companies that provide a healthy cash return with greater potential upside than your average index fund? What if we treated startup investments with the same diversification strategy that we apply to the rest of our investment portfolio?

Of course, if you’re already diversified elsewhere, then your startup investments start to feel like house money, where high risk/high return is the most reasonable investment strategy, so maybe we can’t look to investors to close this gap. Maybe we need to look around, instead.

Why does an early-stage company need money? To get that elusive traction: to build a product and get people to buy it. So what if we cut out the middle man? What if you could find a group of development shops, designers, and sales firms who were willing to invest some of their idle capacity in getting young companies off the ground? Idle capacity — “bench time” — is the bane of every consultant’s existence, and we always struggle to make it worth the money we’re spending. What if these companies and freelancers could put that time toward building and selling a company’s first product, in return for reduced rates and a piece of equity in the company? Could we make that work?

I see a lot of benefits in this approach, as well as some complications:

1. It invests idle capacity in something other than busywork.
2. It creates an early relationship between entrepreneurs and service providers, which becomes more profitable as the company grows and gets funding.
3. It lets non-technical founders separate “I need a cofounder” from “I need something built,” giving them the time to find a real technical leader for their company rather than hiring the first engineer who will work for free.
4. It builds a community around these young companiess.

The challenges are:

1. Securities law limits how equity is granted, sometimes in challenging ways.
2. Many helpers = many names on the cap table, a negative for investors.
3. Cash is always less risky than equity, so a service provider has to have a higher risk tolerance if they want to sign up to help early-stage companies.

I don’t have all the answers for this one, but we have a gnarly problem that needs to be solved if our entrepreneurial ecosystem is going to stay healthy. Fortunately, solving problems is what we do best. What do you think, intelligent reader? How do we close this gap?