MONEY TALKS by Andrew Waitman

Empirically we recognize failure is far more common than success. The doubt disease exists because of this overwhelming and obvious statistical observation..

WaitmanHighEdit-111X196.jpgDoubt disease leads to failure by instilling fear of the future
From SCAN's Print Edition

The disease is rampant in Canadian venture. It's highly infectious. It does not kill its host. Rather, it actively works to infect all who come in contact with the host. It does this when the host speaks. It works by corroding the fabric of ambition and accomplishment. If someone with the disease comes in contact with your start-up, quarantine, a perimeter and ultimately removal is absolutely necessary. It has killed many start-ups (but more on this later). The host, of course, is a human being. And the disease is projected doubt. Doubt about direction, decisions, delivery. Doubt about doing. Doubt about the future.
Of course there are some who are entirely immune with a very low probability of infection. Then there are those who are entirely infected and essentially incurable. Finally, there are those who are susceptible to the disease and can be infected at any time and whose degree of infection depends upon the circumstances in which they are exposed.

Entrepreneurs are typically immune. Their protection, of course, is confidence. It’s unlikely that Steve Jobs would ever contract the disease, though he has been exposed to it many times during his early tumultuous career at Apple. Though infected people can be dangerous, as they were at Apple when they ousted him as CEO, he learned that immunity can be improved with sufficient distance and by avoiding those with the disease, as he demonstrated at Pixar and Next.

There are no clear tests that can be taken to diagnose an infection. However, conversations with the infected host may reveal, at different rates, the nature of their infection. The symptoms include preoccupation with negative or failed outcomes. Vocalized cynicism or skepticism based on little knowledge, experience or context. Individuals infected rarely identify opportunities or solutions. They fixate on problems and cast opinions with little or no appreciation of the complexity of the context. They typically have experienced few successes in their lives or careers and are encouraged by the failure of others. Many people who are classified as cynics or skeptics may be correctly diagnosed as suffering from the doubt disease. It depends on how vociferously they try to convince others of impending doom and disaster that will give away the severity of their affliction. Some professions have higher rates of infections than others.

Lawyers, for example, are a population disproportionally affected. I am not sure why this is. I speculate that many are infected at an early age and seek out this career. For some with weak immune systems, a legal education ensures they have a full blown case of doubt disease by the time they are facing their first legal case. I mean no offense by this observation, for to raise doubt is the primary tool in a defence lawyer’s arsenal. They are in fact inculcated with the doubt disease during training. Those already infected or with weak immune systems will be the most vulnerable to this type of infection. Another group with a high rate of affliction is bankers, though their infection rates have less to do with their training and more to do with the cycles of irrational exuberance leading to widespread financial disasters they constantly inflict upon themselves. These wounds of credulity expose them to the doubt disease where they go on to rapidly infect many others.

Why does the doubt disease exist and how dangerous is it? The disease is a symptom of both fear and failure. Fear is a natural evolutionary survival trait yet unconquered by our rational brain. Failure, on the other hand, is an interpreted state of our chaotic environment. Failure is simply an unintended consequence, so to speak. Failure is the opposite of success. Success is relative and defined as achieving ends that we desire or attempt to intended consequence. Our hubris assumes that we have far more control of the outcomes than we actually have. In the business vernacular we strive for success and seek to avoid failure with its assumed penalties of economic loss and potential negative impact on one’s status or position in society. However, empirically we recognize failure is far more common than success. The doubt disease exists because of this overwhelming and obvious statistical observation.

So why is it so dangerous? The doubt disease is dangerous for two primary reasons. First, if it infected the entire population, there would be no attempts at success. Stasis, stagnation with resulting decay will ensue. If the disease destroys ambition, hope and idealism it destroys everything that has advanced mankind thus far.

Aspiration, ambition and hope ─ driven by confidence ─ is necessary for exploration, advancement and progress.\
Secondly, the disease is dangerous because it often feeds on false context, information or understanding. In other words it can defeat sound business judgments for no other reason than its infection veracity. For example a vocal but infected board member or investor can spread fear rapidly through an investor group or community causing panic-driven decisions that contribute to a company’s demise. If more rational, thoughtful, insightful heads prevailed the company would weather the crisis and move on. The panic that flowed through global financial markets in the first quarter of 2008 demonstrated the dangers of the disease at a global scale. Irrational fear infects everyone simultaneously and an irrational panic ensues about the future.

How to avoid the disease in your start-up? Everyone interviewed should be examined for the disease. This can be accomplished in conversation with them about their past accomplishments, goals and ambitions for themselves and their contribution and aspirations for your start-up.

Those who show full blown infections should not be hired. You should limit as much as possible any contact with your organization once the infected individual has been identified. Any investors or board members exhibiting the disease should be isolated at all cost since they have a much higher infection vector that those lower in the organization. The higher up a negative influence is in the organization the more dangerous to the company's health. That is not to say you do not want investors asking tough questions about your tactics and strategy. You do. However, those who clearly are predisposed to cynicism, doom and negativism should be avoided. Once you bring someone into your community with the disease they will infect others and that will begin to zap the strength out of your organization until your key people succumb to the disease and everyone second guesses everyone else.
The corrosive nature of the disease is so dangerous that many companies have failed from loss of faith in the future, rather than loss of opportunity. It can afflict both small and large organizations. Apple nearly died from this disease until Steve Jobs returned and conquered the infection with optimism, insight and confidence in himself and the company.

There is no absolute cure. The organizational immune system can, however, be strengthened through ongoing success. Celebrating individual, departmental and organizational successes, no matter how small, helps to build confidence in your people and the organization. This will limit the spread of the doubt disease even if you are inadvertently exposed by a rogue employee, investor or board member.

My conviction is that start-ups that avoid the disease are already on the way toward building success in today’s chaotic environment.

Andrew Waitman is managing partner of Celtic House Venture Partners, specializing in early stage investments in high technology companies.

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