Entrepreneurs, who have seemingly boundless energy early in a business’s development, do not necessarily retain the same levels of leadership, productivity, decisiveness, and enthusiasm as the company reaches more mature stage of development. In fact, many entrepreneurs of growing businesses become depressed after a few years.
The entrepreneur’s depression seems to come at an illogical time — at least it can seem that way to the managers who work for the individual. Just as sales are being made at a steady rate, as the company finally has managers in place, and they need not worry about mere survival, the entrepreneur becomes depressed.
Oddly enough, this would seem like the time for the entrepreneur to feel relieved, proud, free, and excited. The hard work has paid off. The business is doing well. The weight of the world no longer falls on the entrepreneur’s shoulders. The company made it through the toughest time in its history — start-up. It should be time to celebrate.
So, why do many entrepreneurs become depressed?
For some, start-up of the business was exciting. Many entrepreneurs need to be needed. To them it’s a real high knowing the business depends on them. Now that the burden is to be shared with others, the entrepreneur may feel less important, less valued, less excited.
For others, the challenge of the start-up is valued because it demands a constant generation of ideas. If the entrepreneur thrives on generating new ideas, subsequent phases of business development can seem boring and more oriented to maintenance and procedures.
Still other entrepreneurs enjoyed the pace associated with the start-up; certainly the days aren’t boring at a new company. Though there is a great deal of work to be done as a business grows, the pace seems to slow for the founder. The entrepreneur can become impatient and frustrated with the company because he or she is ready to move on to the next idea and the employees can’t assimilate the changes introduced by the entrepreneur as quickly as before.
Some entrepreneurs seem depressed because they have become tired. They’ve worked long hours; they’ve gone without sleep to grow the business. They are legitimately pooped.
Many entrepreneurs can expect to hit a period of depression following the start-up of their businesses, so they should schedule long vacations when depression hit and they’ll recover. Right? Wrong.
Just as the founding entrepreneur hits depression, the business hits a period when it needs a surge of leadership, energy, clear direction, and resolution to conflicts that emerge from within. Just as the entrepreneur needs a break from it all, the business demands continuity and sustained involvement.
The entrepreneur who can anticipate this demanding phase of the business’s life hangs in there and is more likely to succeed than the one who lets the depression hurt the business. Some successful entrepreneurs have sold their businesses rather than struggle through this tough period. Others hire strong managers to take their place. Some of these entrepreneurs succeed because they get outside help when depression hits.
Left unmanaged, entrepreneurial depression can have a terrible effect on a business. It can scare the employees. If the founding entrepreneur is so depressed, employees worry that maybe he or she knows something terrible that they do not know. If the leader cannot lead, what will happen to them? When will the boss pull out of this? Will the boss pull out of this? It’s distracting and costly.
Entrepreneurs need to be aware that depression is possible and need to make choices based on the admission that they are indeed, depressed.
What should managers do if or when they are faced with the challenge of working for or with a depressed founding entrepreneur? Most importantly, the entrepreneur needs assurances the managers are not out to steal the company from him or her. Often, managers who work for depressed entrepreneurs start demanding equity, criticize the boss, and threaten to leave. These approaches typically keep the entrepreneurs depressed and unwilling to let go.
Managers, who see long-term roles for themselves in a business, have a greater chance of getting a piece of the action later on if they have helped the entrepreneur get through this tough period. Think about it; would you want to give anything to someone who beat on you while you were down?
The cause of the depression needs to be identified so an appropriate solution can be generated. Was the depression caused by the entrepreneur’s feeling of unimportance? Was the boredom cued by a change of pace? Was the boredom caused by lack of pressure for new ideas? Is the entrepreneur just tired?
Whether the entrepreneur should be encouraged to go on a vacation, start a second venture, hang on, get out, or let go will depend on the answers to these questions.