The Transition Curve

An Emotional Rollercoaster

We’ve all had that feeling, flying high with a great business idea and then coming down to earth with a painful bump when things don’t go exactly the way we planned them. So why do we get up, dust ourselves off and start all over again? Friends and family think we are crazy, but the emotional intricacies of being an entrepreneur are complex. Many ultra-successful entrepreneurs are even clinically diagnosed as manic-depressive or bi-polar, like Francis Ford Coppola or Ted Turner.

But instead of treating or trying to cure the “entrepreneurs’ disease” (manic depression), why not capitalise on it?  Canadian entrepreneur Cameron Herold identified five cyclical stages on the entrepreneurial rollercoaster, and highlighted key actions you can take at each stage of the curve to leverage your feelings and energy, whether negative or positive, to help you ride the storm.

This clever model – The Transition Curve – explains the journey quite simply.

It begins with “uninformed optimism”, both a great place and a dangerous place to be for your business. You are excited, ambitious, full of adrenalin and prone to taking risks when you don’t really know what lies ahead.

“Informed pessimism” follows soon after, just after the rollercoaster tips over the topmost curve. At this stage you have more information but find yourself somewhere between scared and excited. You might just want to get off the rollercoaster at this point. Quickly.

The third stage is the “crisis of meaning”, where it feels as if all the odds are stacked against you, everything is going horribly wrong, and you are plunging down the curve heading well off track.

At this point there are two options; “crash and burn” or “informed optimism”. While it’s not pleasant to dwell on what happens if you slide off the curve, it happens, and this is where you have to decide to learn from failure and do it all over again, or walk away and find sanity elsewhere.

“Informed optimism” brings with it excitement and positive energy again. It’s a bit like the point where “the little engine that could” turned the corner and realised “he did”.  Confidence begins to grow, momentum starts to build and you realise you have a lot more insight and experiential learning to draw from.

The timescale of this transition curve will depend on the individual entrepreneur, but there are some key actions you can take that may smooth the ride:

Marc Andreessen, co-founder of Netscape, once wrote: “First and foremost, a start-up puts you on an emotional rollercoaster unlike anything you have ever experienced. You flip rapidly from day-to-day – one where you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. Over and over and over. And I’m talking about what happens to stable entrepreneurs. There is so much uncertainty and so much risk around practically everything you are doing. The level of stress that you’re under generally will magnify things incredible highs and unbelievable lows at whiplash speed and huge magnitude. Sound like fun?

Uninformed Optimism:
Do’s
Talk to the media, plan what you will say; talk to potential investors and bring them on board with your enthusiasm; make speeches in public; recruit new employees – they will all want to work for you – and network for new clients.

Don’ts

Spending lots of money is a bad idea at this point; fired up with ambition and adrenalin you may think nothing can go wrong but the reality is – at some point – you will cross the curve and discover harsher realities.

Anything that requires you to be making financial decisions shouldn’t be done when you’re at the manic energy stage.

Informed Pessimism:
Do’s

Plan the next phase of your growth, working on intermediate-term strategic planning and budgeting as you will be more realistic. At this stage you will be more careful where you spend your money.

Don’ts

Don’t make hiring decisions, talk to the media or do speaking events. Wait until things turn around emotionally for you, since people will be able to pick up on your pessimistic approach.

Crisis of Meaning
Do’s

Reach out to your support groups, whether that’s friends, family or entrepreneurial networks. Ask for advice, help, or just a shoulder to lean on. Prioritise strictly; focus on working on the most important tasks each day.

And remember many others have been in the same place and usually turn the corner.

Don’ts

Don’t talk to others who are depressed – it’s horribly contagious. Don’t take any major Vegas-style gambles and throw it all in hoping for a big win.  Don’t try to rally your troops; employees, the media, investors will all smell the fear.

And don’t think you can handle it all on your own.

Crash and Burn

What can we say? At this point it’s all over. Do the right thing by your employees, your suppliers and your investors. Say sorry. Face up to the facts. And learn from your mistakes.

Informed Optimism
Do’s

Start hiring again, re-organise your team and work on strategic planning. In short, do everything it takes to really start growing again.

Don’ts

Don’t lose focus, don’t let your confidence slip – but don’t get too cocky or you might find yourself slipping backwards down that curve.

Finally, remember that the cycle repeats itself – so enjoy the ride!

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