Rein Lemberpuu at TechChill – 31 Investments, 6 Burnouts: The Pressure Cooker Effect
Rein Lemberpuu, the CEO of .Contriber gave a talk at startup festival TechChill 2020 that took place on February 20-21, in Riga, Latvia. Witnessing first hand a concerning ratio of 6 burnouts to 31 investments, Rein explains the pressure cooker effect and its many spheres of influence. This is the 1st part of the talk.
I have been leading very different teams, 26 to be more exact. I've put a lot of energy and understanding of how teams and leadership work and how people as beings operate.
How do you start your journey as a startup founder? You will start with speed because that's what's expected. A startup is one of the fastest ways to bring new products to the market. You will start running and if you are crazy enough you will reach a cliff, jump over it and then hope to build a plane while falling. This inherently means that it’s a journey of challenges. But what is a challenge?
If you want to accomplish something, then there is a goal that you want to achieve, and you have limited resources, your first attempts have failed – then we can say this is a challenge. When you want to get something done, it means you are taking action to achieve the desired result. When you fail, this means the actions you chose did not get you to the desired result. There are many ways to tackle a challenge.
Let’s look at an iceberg. Most of the iceberg is invisible - 87 % is underwater and so is with our challenges. You can take different actions, but the choices are limited. They are limited by what I call the underwater part of the challenge, which is very personal. It's not the same for all of us. Something that is challenging for me is not challenging for you.
This underwater part includes all our biases, blind spots, shortcomings, and also strengths. We can say that any business challenge is connected to a very particular personal challenge. These underwater parts form our perception which determines what are the potential actions that the person can take to solve the challenge.
In Estonia, there was a time when we didn’t mobile phones. We didn't even have fixed phones in homes. One day I got a chance to use the phone and I wanted to call a girl I liked. I was trying to dial the number but couldn't make myself do it. After standing there for 10 minutes I gave up. Clearly, my underwater configuration at that time didn’t allow me to take the action that was necessary to get to the result.
It also means when I'm able to change some components in this underwater part of myself, it opens up new potential actions that allow me to get to the desired goal.
Remember the crazy startup guy jumping off the cliff, hoping to build up a plane while landing? He had many challenges at the same time. This is not necessarily a bad thing but a good thing in some sense. This is a constructive pressure which is also called eustress. It brings out the resources you didn't know you have but if it becomes too much then you will feel overwhelmed.
You were sprinting, and if you were crazy enough, this sprint ended with jumping over the cliff. Even if it didn't, then burnout is something we feel when we understand that what we thought is a sprint, turned out to be a marathon. We burn the resources, mostly these which are the underwater resources and we're bust. What was constructive pressure has become a destructive pressure, distress.
In .Contriber’s portfolio, we have already faced six burnouts and I could even say five are on the edge. That means every third one is facing similar challenges. You don't lose only time, you also damage the relationships. You might even lose your co-founders, team, investor relationships, and also trust.
Just to have a positive side of this thing – this could also be very beneficial in terms of your side of the story. It's not good for the business, but it can be good for your personal growth. That’s the time when we can modify these underwater parts and have upgrades that were not possible otherwise.
When we talk about mental health it means that we are talking about this part when things are already out of hand. I'm not a big fan of the mental health topic, but I’m a big fan of using the unfair advantage of working with the challenges on a personal level. Understanding how by changing some components of your perception you can achieve different results.
But why is it so difficult to solve a challenge? We all have a different kind of laziness and we have to optimize the resources. My lesson of understanding hard and easy ways was when I was building and scaling Playtech. In one year, we hired 76 people in Tartu, which is a small city in Estonia. It was a crazy scaling period, but that was not enough. Next year we had to decide where to build our next R&D unit outside of Estonia.
Bulgaria was chosen. I took five of the best specialists from my team and we flew over to Sofia. We interviewed a company we wanted to acquire for their human talent. It took us one week to interview everyone and adjust the strategy of what kind of R&D center we can build there.
After the week we had a dinner organized by the host. We were waiting for the food, all the hard work had been done and then I got a call from our co-founder, Teddy. He said: “We have a challenge. The seller side has changed the price tag. Now, just take the team, stand up, and walk away from the restaurant and don't even explain anything.” I thought he is crazy. I'm sure there's a way we can negotiate and then he said: “Hard way is in the end, the easy way.”
If the trust is already broken, the further you go along, the more resources and time you will spend, and it becomes more difficult and costly in the end.
In business, you have three options. If you are considering high loads, you can either put more bricks on your head until your neck breaks. Or you can reduce the load by removing some of the bricks and be slower in achieving what you want. It's one of the possible actions to choose from, but not for everyone. There's also a third option called support.
In physics, we know that if you want to have more loads then you need to put more pillars for support. In that sense, we are not limited to what kind of pressures we can stand. It is a question of what kind of support mechanism we are using to support those pressures.
Let's take a look at how it’s done in sports. It is enormously high pressure for one athlete to compete in the Olympic Games. When we see a person getting a gold medal, we see this one person. What is not so known is the team – the support – it’s standing behind that one top-performing athlete.
Estonia does not have too many gold medalists but there's one you might have heard of – discus thrower Gerd Kanter who won the Olympics in 2008. What is less known is that he had a support team of 76 people. That's an enormous support to stand the loads and the pressure you need to go through while training for the competition. The question is – how can a founder get a similar level of support?
As we see on this journey part of the challenge, which I call a business challenge, is visible for us to work with. But be aware that sometimes even the business challenges are not visible.
The support we get on the business level is the first of all co-founders. It is much easier to go on the journey of building a startup while you have co-founder instead of being a solo founder. If I'm looking at these burnouts we’ve had in .Contriber, then four of them were solo founders. That's a huge difference whether you go alone, or you are together with your co-founders. The team is the next big block in achieving great success and standing the load.
In general, the startup ecosystem is pretty good in terms of having different levels of expertise, support, accelerators, and the business side of the equation. There is very little done on these underwater parts of challenges which are very personal to us.
This is my passion – bringing a change on this submarine level. It’s called psychological mentoring which cannot be done by just one person. There is another myth – if I find the perfect mentor, things will be much better for me. In reality, no person can help us with all of those challenges that we have in our underwaters.
My aim is to build the .Cocoon – this is a team of experts in different areas of tackling the underwater compartment. It’s a support team you can leverage, not to avoid burnouts, but to gain more speed by solving the challenges faster.
Get yourself a super-charged underwater team!