July 21, 2024

When Etsy paid $1.6bn to buy Depop in 2021, it was more than just a big payday for the London-based fashion app’s founder, Simon Beckerman.

It also marked the culmination of a decade of stress, sleep deprivation and, at times, physical pain, he recalls. As the nine-month sale process reached its conclusion, “I went through a week where randomly during the day, every couple of hours I would start crying,” Beckerman says.

“I think it was relief — we went through this black hole and made it [out] the other side.”

That “black hole” included stepping back from the company for a year in 2015, after intensifying stomach pain eventually became too agonising for him to work.

“It was so painful, one day I woke up and I said, ‘If I go into the office for one more day I am going to die’,” Beckerman adds. He was later diagnosed with chronic gastritis that he attributes to the stress of running a start-up.

Most successful tech entrepreneurs would acknowledge the long hours spent away from their families. Some might brag about how little sleep they got during crunch times. Few would talk as frankly as Beckerman about the strains of the job, even as a global start-up funding crunch has increased their stress levels.

But in the past couple of years some have begun to open up about their mental health. Former Monzo chief Tom Blomfield admitted to stress, anxiety and sleep loss when he left the neobank in 2021, attacking the “myth of the superhero founder”.

Some tech investors are now realising that putting entrepreneurs under too much pressure can be bad for business, as well as the founders themselves. Many executives admit that sleeping and eating poorly, as well as neglecting physical exercise, can lead to poor decision making.

Balderton, the London-based venture capital firm and an early Depop backer, is about to try a more interventionist approach. It is one of the first VC firms in the world to launch a wellbeing programme for the founders it has invested in.

“If you don’t tend to the fact that you are burning the candle more brightly than you should be and never do anything to recoup, at some point you walk off the edge,” says Suranga Chandratillake, a partner at the firm.

The current tech downturn has only amplified the need for such a scheme. “There’s no doubt that you’re seeing people under extra strain at the moment,” he adds.

Chandratillake admits the firm hopes that attending to its founders’ wellbeing will help it win more deals, as well as improve its portfolio’s chances of success.

“We are being quite selfish long term,” he says. “We think it’s in their interest but it’s also in our interest — it’s how we make money.”

Balderton’s scheme aims to treat founders like high-performance athletes. It is working with WellFounded, which initially developed its programme with tech investor Mosaic Ventures, to offer six-month personalised courses for CEOs encompassing nutrition, fitness, sleep and mental health. Balderton has also hired an executive coach and is running events to encourage CEOs to share their experiences. Most of this is paid for by Balderton, although founders are asked to contribute to the WellFounded programme.

“Founders, like elite athletes, are expected to manage stress and anxiety under pressure . . . while mitigating the risk of burnout, exhaustion and failure,” says Simon Marshall, a former professor of performance psychology and resilience at the University of California San Diego who advised Balderton on the programme. “Professional athletes do this by training their brain . . . to manage stress more effectively . . . and prioritising self-care”.

Chandratillake, who joined Balderton in 2014 after an “exhausting” decade running Blinkx, a Cambridge-based video search engine, concedes that a certain amount of pressure and suffering is inevitable for founders.

“Venture-backed businesses are about inhuman crazy acceleration for a short period of time that allows you to grow at scale,” he says. “It’s never going to be easy, it’s never going to be 9 to 5. But it’s about lasting 10 or 20 years, not burning out in five.”

Beckerman admits that — in the end — he was well rewarded for his “terrible” time at Depop. But his experience of founder burnout is at odds with the macho caricature of a tech entrepreneur, exemplified by personalities such as Elon Musk, who has boasted about sleeping on the floor of Tesla’s factories as he juggles duties at several multibillion-dollar companies.

Musk’s often erratic behaviour is a “good indicator of what stress does to you — it impairs your decision making”, says Ute Stephan, professor of entrepreneurship at King’s Business School, King’s College London. “There is broad evidence that you can be a better entrepreneur — be more productive, creative, and ultimately your businesses will perform better — if you look after your wellbeing.”

Stephan’s research suggests that while stress is hard for entrepreneurs to avoid, it does not need to cause ill health or affect their performance. Getting more than seven hours’ sleep and a balanced diet are key. The more difficult part is identifying when you are starting to burn out.

“The uniqueness of entrepreneurship is you have individuals who are achievement oriented and have no boundaries,” Stephan says.

Taking less pride in achievements, a feeling of not getting anything done or lacking energy are early signs of burnout, she warns. “Once you realise you are exploiting yourself, you can do something about it . . . Looking after yourself doesn’t come at a cost to the business, it reinforces the business and makes it more successful.”

But stigmas around discussing mental health persist, particularly in the tech sector. Janos Barberis and Annabelle Cameron are trying to change that with their company, FoundersTaboo, which runs events and online courses focused on tech entrepreneurs’ wellbeing.

Barberis, who has worked at start-ups, cites two problems: a “don’t fix what works” mentality during the decade-long bull market in tech, which ended last year, and, more broadly, the “start-up grind” psychology that made burnout a “badge of honour” among founders.

The collapse of Silicon Valley Bank and the broader pullback in tech funding over the past 12 months has been a “shock to the system”, Barberis believes. “All those founders who are no longer able to raise easy money are starting to realise the importance of thinking clearly, which is impossible if your mental health is not sharp,” he says.

Cameron, whose background is in psychology, concedes that academic research on entrepreneurial wellbeing and its link to productivity and performance has been “lacking” — a factor that has made it harder to convince many tech investors to reinvest their fees in their founders’ mental health. “On a human level, on a personal level, it makes sense,” says Cameron, “but if we want to drive it through on a larger scale we need to have some concrete data to back it up.”

FoundersTaboo is working with Stephan at King’s to gather more data on causation.

Barberis puts it in terms start-ups would understand. “I don’t think we are at the tipping point yet,” he says of founders recognising the need to invest in their own mental health. “We only have early adopters.”

Beckerman has already launched his next start-up, Delli — an online marketplace for independent food producers: a kind of Etsy for food, full of artisanal pickles and chutneys, hot pepper sauces and vegan nduja pizza toppings. But this time he is taking a different approach.

At Depop, “I never went to the gym and I drank a lot of wine” after work with colleagues, he admits. “That was my therapy — a glass of wine in the evening.”

With Delli, he has brought in a co-founder who he worked with at Depop, Marie Petrovicka, to ameliorate the loneliness he felt as a sole founder. He has cut back on the wine and, at returning investor Balderton’s suggestion, taken on a personal trainer, a performance coach and a health coach.

He says he still suffers stomach-crunching anxiety sometimes. But thanks to his coaching and fitness programmes, he is handling it better. “I pedal [on an exercise bike] very fast every morning to let go,” he says, “and sometimes I even cry when I do it.”

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