stockdale paradox startup

The Stockdale Paradox for startups

Tl;dr: Hope for the best, but prepare for the worst. Face reality. Do not have tragic optimism. Most startups are long on faith and short on reality. Many startups fail because they don’t take a true accounting of the facts of the market. Yeah, there is a chance you can win, but that’s because you fix your shite. You will not come out alive if you don’t make it happen. The most important thing is to understand the marathon and to get up each day with determination, not entrapped by the failures of the previous day. Having a value system, a sense of identity, a purpose for one’s existence increases the odds of survival and resiliency.

The big quote:

“You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

We can all endure anything if we know it is going to come to an end and when. But what if we don’t know it is going to come to an end? And you certainly don’t know when?

Startups technically don’t fail, they run out of money, and you run out of the hustle to keep it going by hook or crook. Thinking that startup will be easy is the first step down a path of giving up with a broken heart.

I’m going to share a stoic concept that will be helpful for you as a founder to internalize. It’s about an American sailor, the highest-ranking US military officer imprisoned in Vietnam.

General Stockdale

Stockdale was a former naval officer and vice-presidential candidate. Serving as a high-ranking officer during the Vietnam War, he was held as a prisoner of war for over seven years. While in captivity, Stockdale was repeatedly tortured, suffered constantly, and had little reason to believe he’d make it out alive.stockdale paradox medals

Ultimately, what saved Stockdale’s life was his ability to process the reality of his situation, while balancing that realism with a steadfast, optimistic belief that he would survive and return home.

Years later, Jim Collins interviewed Stockdale while researching the book Good to Great, Stockdale shared that he had decided while in captivity that he would turn the ordeal into “the defining event of his life that in retrospect he would not trade.”

This led Collins to ask who struggled the most with the mental burden of imprisonment. Stockdale replied “Oh, it’s easy. I can tell you who didn’t make it out. It was the optimists.”

When Collins expressed incredulousness at his answer, Stockdale continued:

They were the ones who always said, ‘We’re going to be out by Christmas.’ Christmas would come and it would go. And there would be another Christmas. And they died of a broken heart.”

What is the Stockdale paradox

The Stockdale Paradox is a concept that says productive change begins when you confront brutal facts.

This marvelous ability to combine faith and facts—unwavering faith in the end game, confront the brutal facts that are right in front of you—this is the Stockdale Paradox. Every one of our great leaders was incredibly comfortable with picking up the rock and looking at the ugly stuff underneath and saying, “What are those facts?” Because if we don’t confront the brutal facts, they will confront us. The greatest mistake in public leadership, as Winston Churchill put it, is to hold out false hopes that will soon be dashed by events.

The way Jim Collins explains it is:

The Stockdale Paradox is a concept, along with its companion concept Confront the Brutal Facts, developed in the book Good to Great. Productive change begins when you confront the brutal facts. Every good-to-great company embraced what we came to call the “Stockdale Paradox”: you must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time, have the discipline to confront the most brutal facts of your current reality, whatever they might be.

Collins and his research team discovered that each of the 11 companies they studied had survived an existential crisis. Collins found the leadership team in each case responded with a powerful psychological duality.

  • On the one hand, they stoically accepted the brutal facts of reality.
  • On the other hand, they maintained an unwavering faith in the endgame and a commitment to prevail as a great company, despite the enormous challenge.

Collins labeled this psychological duality the Stockdale Paradox. It has perhaps never been more relevant than it is today.

Many organizations won’t survive the COVID-19 crisis for reasons that are beyond their leaders’ control. However, I believe that when we look back on many business failures and missteps, we will see repeated leadership failures related to the Stockdale Paradox.

Here’s a cheeky video if you don’t like reading

What does this paradox mean?

The paradox has two parts (no shite):

1/ You must believe that you will win in the end, regardless of the difficulties.

AND at the same time…

2/ You must confront the most brutal facts of your current reality, whatever they might be.

BUT, I would also add:

3/ You have to take massive action as a founder to deal with your current reality, to control the outcome.

Do you know which founders I like the most? The ones that take feedback as a learning opportunity. Startup is about getting a little better each day and you can’t improve if you are not constantly learning. If you get the opportunity to get what seems like truly brutal feedback, you’re a fool for not embracing it with open arms.

I don’t cheerlead founders. If they’re doing something amazing, I’ll tell them. But I’m more interested in sharing what they can improve. There are massage parlors that guarantee happy outcomes, but in startup, any kind of positive outcome is statistically as likely as that Nigerian prince getting you that cash his father the king has stashed away out of the country.

I’ve done many calls where I have convinced founders to quit their startup with a straight face more time than I should probably mention. Not everyone is getting out of the Hanoi Hilton with a golden payout, and most are not getting out alive, let alone before Christmas.

You have to believe that your vision will come to pass. You’ve got to do everything you can to make it happen. But, you can never let your belief and faith cloud your confrontation with reality.

You need to be the commander of your reality and future

Stockdale knew he was in hell, but, rather than bury his head in the sand, he stepped up and did everything he could to lift the morale and prolong the lives of his fellow prisoners.

  • He created a tapping code so they could communicate with each other.
  • He developed a milestone system that helped them deal with torture.
  • And he sent intelligence information to his wife, hidden in the seemingly innocent letters he wrote.

You too need to do whatever it takes to come out alive with your team. Here are some things not to do and some things to do.

Believing it will work itself out with no effort

No one is coming to save you.

You make things happen. You are the difference between and pass and fail. Here are three stories about founders imposing their will into making things happen. Inspirational stories of the founder struggle

Optimism on its own can be a dangerous thing:

There’s no difference between a pessimist who says, “Oh, it’s hopeless, so don’t bother doing anything,” and an optimist who says, “Don’t bother doing anything, it’s going to turn out fine anyway.” Either way, nothing happens. – Yvon Chouinard, founder of Patagonia, Inc.

This is the story of the drowning man.

  • A fellow was stuck on his rooftop in a flood. He was praying to God for help.
  • Soon a man in a rowboat came by and the fellow shouted to the man on the roof, “Jump in, I can save you.”
  • The stranded fellow shouted back, “No, it’s OK, I’m praying to God and he is going to save me.”
  • So the rowboat went on.
  • Then a motorboat came by. “The fellow in the motorboat shouted, “Jump in, I can save you.”
  • To this the stranded man said, “No thanks, I’m praying to God and he is going to save me. I have faith.”
  • So the motorboat went on.
  • Then a helicopter came by and the pilot shouted down, “Grab this rope and I will lift you to safety.”
  • To this the stranded man again replied, “No thanks, I’m praying to God and he is going to save me. I have faith.”
  • So the helicopter reluctantly flew away.
  • Soon the water rose above the rooftop and the man drowned. He went to Heaven. He finally got his chance to discuss this whole situation with God, at which point he exclaimed, “I had faith in you but you didn’t save me, you let me drown. I don’t understand why!”
  • To this God replied, “I sent you a rowboat and a motorboat and a helicopter, what more did you expect?”

You have to jump from the rooftop onto the mother f’n boat! Ya get me bruv?

Giving up too early

There is a reason that financial options have value. You buy the right to make a decision in the future when you have more data than you do now.

Making decisions can be difficult for merely the fact you know less now than you will in the future, and hindsight is always 20/20.

There will be cases where:

  • You see the writing on the wall and accept an acquisition offer and leave the buyer holding the bag! Nice.
  • Where you lose hope early, were too pessimistic, and were unable to rally their teams, and leave a golden opportunity to capitalise on turbulence.
  • Where you dig deep, make painful cuts, and come out of the situation smelling of cash beatches!

Making the right decision is why you make the big money. The critical difference here is to quit for smart reasons, not because you do not have the fortitude to put in herculean efforts to be a winner when all others give up.

Just saying, but to me, the best time to give up is when you genuinely have a better opportunity to get a better RoI on your time.

Read this blog to understand what I mean: Passion is over-rated. Build a better mousetrap instead

Not buckling down

Startups don’t die, they run out of money and will. The only thing that matters to a startup is your runway.

More commonly, we will see organizations who run out of runway or critical resources as a result of being too optimistic in their planning. Their misjudgment or unwillingness to acknowledge the deep downturn and extended timeframe of the crisis will impair their ability to adapt to rapidly changing conditions.

There are ways to make deep cuts to greatly extend your runway and prolong your chance of succeeding as an entity. Yes, this means firing staff you deeply care about.

Sequoia Capital published a note in 2020 advising founders to conserve cash and prepare for a difficult or impossible fundraising environment. Calling coronavirus the “Coronavirus: The Black Swan of 2020,” the gist of their letter was that we are likely headed into a recession and the companies that survive will be the ones that drastically reduce spending now to extend their runway.

  1. Cash runway. Do you really have as much runway as you think? Could you withstand a few poor quarters if the economy sputters? Have you made contingency plans? Where could you trim expenses without fundamentally hurting the business? Ask these questions now to avoid potentially painful future consequences.
  2. Fundraising. Private financings could soften significantly, as happened in 2001 and 2009. What would you do if fundraising on attractive terms proves difficult in 2020 and 2021? Could you turn a challenging situation into an opportunity to set yourself up for enduring success? Many of the most iconic companies were forged and shaped during difficult times. We partnered with Cisco shortly after Black Monday in 1987. Google and PayPal soldiered through the aftermath of the dot-com bust. More recently, Airbnb, Square, and Stripe were founded in the midst of the Global Financial Crisis. Constraints focus the mind and provide fertile ground for creativity.
  3. Sales forecasts. Even if you don’t see any direct or immediate exposure for your company, anticipate that your customers may revise their spending habits. Deals that seemed certain may not close. The key is to not be caught flat-footed.
  4. Marketing. With softening sales, you might find that your customer lifetime values have declined, in turn suggesting the need to rein in customer acquisition spending to maintain consistent returns on marketing spending. With greater economic and fundraising uncertainty, you might even want to consider raising the bar on ROI for marketing spend.
  5. Headcount. Given all of the above stress points on your finances, this might be a time to evaluate critically whether you can do more with less and raise productivity.
  6. Capital spending. Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment. Perhaps there is no reason to change plans and, for all you know, changing circumstances may even present opportunities to accelerate. But these are decisions that should be deliberate.

Communicating with your team

You’re not Jesus. Your startup is just a team of people with a common cause. Never believe you have to bear the cross alone.

Instead, it’s crucial for you to calmly tell your team what they need to know, and help them understand their role in being part of the solution.

This is the time to inspire. Believe you will prevail over this crisis, without letting optimism and long-term vision obfuscate the brutal facts. Accept this reality, commit to being resilient and develop a plan for you, your family, and your organization to live to fight another day.

There is little chance you can do this alone, so up your EQ, be vulnerable and inspire the team to step up.

It’s so funny how management treat staff as kids. I’ve worked with so many talented kids that whilst I tried to give them space to step up, they didn’t reach their full potential (I don’t pretend to be a perfect manager and leader). I know this because a few years later they would go on to be founders and CEOs of funded startups.

It just makes me laugh to think they’re working in pricing and then they are a CEO kicking ass. Why are you not capitalizing on them? You just need to keep your ego in check and let allow them to make mistakes without being judged. Unless they have full control, they’ll never really take ownership if they feel you will check them or come in to save them.

If you have tips to do this better, sound it out in the comments, please. I’d love to learn from you! Just because you are reading my blog doesn’t mean you don’t know better than I do.

Admit when you’re wrong

Stockdale was vehement on the need to acknowledge your errors, to yourself and your team:

“If you realize fear and guilt are your enemies, and not pain, then you’ve got a ticket to self-respect and certainly to friendship and support of your fellows. I’m not just telling you how to behave in prison, I’m telling you how to stay out of the grips of bureaucratic or any kind of extortion, how to avoid being used, how to rely on your conscience, how to keep your self-respect. You’ve got to start right off by unloading to and confiding in and trusting your fellow officers and your men.”

This isn’t mutually exclusive to the point I just made on communication.

The only thing I will add is to get off your fecking pedestal and be vulnerable to your team. Allow them to propose what needs to be done. It’s far easier to make harder decisions when your staff propose them.

I’ve read blogs over the past ten years where there are decisions where either:

  1. Half the staff need to be fired
  2. Everyone takes a pay cut

In the environments where I presume staff care about each other, they propose salary cuts so no one loses their job.

Regrettably, I’ve only been in situations where the only course was to mass fire staff (and I mean hundreds… it sucked). I can’t pretend to know how to manage the salary cut/fire conversation, I’ve just read that people have done it. I also have to presume it was in startups that had a great culture.

On the culture bit, here are two blogs I just wrote:

COSHITE (COVID) example to what the Stockdale Paradox actually means

Stockdale himself was a follower of the ancient Greek Stoic philosophers, who were noted for their concern with understanding reality correctly and shaping one’s response to it optimally. The maxim of Epictetus, “What, then, is to be done?

I read a lot of blogs on the Stockdale Paradox to get all the learnings from you, but do you know what? No one really spells out the point ;). It’s like a Don at Oxford making an academic joke and you sort of laugh, but you look around a bit to see if everyone gets it, but you laugh and pretend like you actually understand too.

I found myself thinking “this sounds like a smart blog to share, but like, I don’t really get WTF the point is?” So I was like, right, let’s add in a section to make the point 50Folds style.

“God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference”

I wrote this blog during COVID (2021, year two). Look, I’m not going to opine on whether I think this whole thing is a joke- everyone has charged views. Let’s just pretend it’s 1660 in London and there is a genuine fecking plague going down. This shite is serious! Doors are boarded up, bodies are being dumped into carts on the street.

All disasters have in common phases of pre-impact, impact, and recoil, with typical behaviors occurring during each. In short-term disasters, these three phases are followed by rescue and post-traumatic adjustment. This is what is happening in many countries now, where the virus is being contained and normal activities are resuming, with some modifications. In long-term disasters, rescue does not come, or comes long after expected.

What do the optimist think?

It will all work out fine. It’s just the plebs eating their vegetables- let them eat cake!

You go to the team, no worries guys, come to the office. Forget about that Harry Potter Owl post shite- let’s face it we don’t pay enough to pay for parchment and quills and you can’t write anyway. Gosh knows how that Shakespeare weirdo has such a large vocabulary.

Everyone just needs to keep calm and carry on.

No one does anything and one of two outcomes happen:

  • Everyone fecking dies, so like, no stress
  • A 3 Sigma event called The great fire of London happens

The latter is survivorship bias, and the founder attributes it to them being a mutha fecking BOSS. They also call everyone who failed losers for not being so visionary, but well, they’re literally on a cart on the way to a mass grave.

But statistically, you are the former and you’re covered in buboes, only there is no Youtube to pivot to spot popping (grim).

In the words of Marsha Linehan, the founder of radical acceptance:

“Radical acceptance doesn’t mean you don’t try to change things … You can’t change anything if you don’t accept it, because if you don’t accept it, you’ll try to change something else that you think is reality.”

What do realists think (the point of this blog)

Ok, so, like, plague. Shite really is super bad in London, but we have 40% of our readership in Surrey (One of the most expensive retirement places in the UK).

  • Hey guys, let’s move to Surrey. Fresh air, am I right?
  • I’m going to have to fire 10 of you to cut our burn rate so I can add another 6 months so I can try save the other 90 jobs
  • There’s no more gruel in the panty, and I’m sorry Oliver, no you can’t have any more
  • We’re going to have to change our advertisers to the Punch and Judy show- Mary you’re stepping up – figure it out. I trust you

You get the idea…

You believe you can get out, but you are realistic about what it will take to make that feasibly, to make it borderline possible if we pull in together.

But then Sharon is like feck this, I’m not going to Surrey, I want to remote work.

Stripe example

stripe issues

A developer Mark McGranaghan wrote on his blog “in a few respects though Stripe totally changed my outlook”. One of Stripe’s value is:

We believe that Stripe will be far better in the future than it is today. When considering ideas, we think “how might it work?” is more interesting than “why will it fail?”

“That sounds reasonable, but is hard to do in practice. When you’re trying to transform the global payments system with a staff of 200 people, a) things are constantly on fire, and b) there are lots of good reasons to believe you’ll fail. Stripe’s optimism meant not letting those negative thoughts drag down the team.

We wanted to be optimistic because it’s mostly a self-fulling prophecy:”

And we think that ambitious, energetic, and deliberate efforts directed towards progress are surprisingly effective in improving the state of the world around us.

But, as we’ve learned, optimism alone won’t get you very far.

To embody the Stockdale Paradox, you must also confront the brutal facts of your reality.

In the early days of Stripe, reality was brutal indeed.

The renowned Paul Graham touches on the complexity of the problem the company was trying to solve:

Though the idea of fixing payments was right there in plain sight, [most startups] never saw it, because their unconscious mind shrank from the complications involved. You’d have to make deals with banks. How do you do that? Plus you’re moving money, so you’re going to have to deal with fraud, and people trying to break into your servers. Plus there are probably all sorts of regulations to comply with.

Stripe founders John and Patrick Collison were both in their early 20’s when they started Stripe, and admit that the work was extremely difficult early on:

“It has taken a ton of work and there’s a good reason that no one has done this before.”

Technology writer Ashlee Vance notes that the company continues to fight tough battles despite being well established at this point:

Stripe is in a vicious universe dominated by banks and credit card companies and larded with regulations.

Stripe’s willingness to confront those brutal realities, combined with their relentless optimism, surely plays no small part in their success.

The story behind the Stockdale Paradox

Admiral Jim Stockdale was the highest-ranking military officer in the Hanoi Hilton. He was there from 1968 to 1974. He was tortured over twenty times. And by his own account, Stockdale came out of the prison camp even stronger than he went in.stockdale paradox plane

Jim writes: in preparation for a day I got to spend with Jim Stockdale, I read his book In Love and War. As I read this book, I found myself getting depressed because it seemed like his systemic constraints were so severe, and there was never going to be any end to it. His captors could come in any day and torture him. He had no sense of whether, or if, he would ever get out of the prison camp. Absolutely depressing situation. It’s like we can all survive anything as long as we know it will come to an end, we know when, and we have a sense of control. He had none of that.

Then all of a sudden it dawned on me, “Wait a minute, I’m getting depressed reading this book, and I know the end of the story. I know he gets out. I know he reunites with his family. I know he becomes a national hero. And I even know that we’re going to have lunch on the beautiful Stanford campus on Monday. How did he not let those oppressive circumstances beat him down? How did he not get depressed?” And I asked him.

He said, “Well, you have to understand, it was never depressing. Because despite all those circumstances, I never ever wavered in my absolute faith that not only would I prevail—get out of this—but I would also prevail by turning it into the defining event of my life that would make me a stronger and better person. Not only that, Jim, you realize I’m the lucky one.”

I said, “No, I don’t.”

He said, “Yes, because I know the answer to how I would do, and you never will.”

A little later in the conversation, after I’d absorbed that and said nothing for about five minutes because I was just stunned, I asked him who didn’t make it out of those systemic circumstances as well as he had.

He said, “Oh, it’s easy. I can tell you who didn’t make it out. It was the optimists.”

And I said, “I’m really confused, Admiral Stockdale.”

He said, “The optimists. Yes. They were the ones who always said, ‘We’re going to be out by Christmas.’ Christmas would come and it would go. And there would be another Christmas. And they died of a broken heart.” Then he grabbed me by the shoulders and he said, “This is what I learned from those years in the prison camp, where all those constraints just were oppressive. You must never ever ever confuse, on the one hand, the need for absolute, unwavering faith that you can prevail despite those constraints with, on the other hand, the need for the discipline to begin by confronting the brutal facts, whatever they are. We’re not getting out of here by Christmas.

How Good to Great explains it

Every good-to-great company faced significant adversity along the way to greatness, of one sort or another. … In every case, the management team responded with a powerful psychological duality. On the one hand, they stoically accepted the brutal facts of reality. On the other hand, they maintained an unwavering faith in the endgame, and a commitment to prevail as a great company despite the brutal facts. We came to call this duality the Stockdale Paradox.

The name refers to Admiral Jim Stockdale, who was the highest-ranking United States military officer in the “Hanoi Hilton” prisoner-of-war camp during the height of the Vietnam War. Tortured over twenty times during his eight-year imprisonment from 1965 to 1973, Stockdale lived out the war without any prisoner’s rights, no set release date, and no certainty as to whether he would even survive to see his family again. …

You can understand, then, my anticipation at the prospect of spending part of an afternoon with Stockdale. One of my students had written his paper on Stockdale, who happened to be a senior research fellow studying the Stoic philosophers at the Hoover Institution right across the street from my office, and Stockdale invited the two of us for lunch. In preparation, I read In Love and War, the book Stockdale and his wife had written in alternating chapters, chronicling their experiences during those eight years.

As I moved through the book, I found myself getting depressed. It just seemed so bleak—the uncertainty of his fate, the brutality of his captors, and so forth. And then, it dawned on me: “Here I am sitting in my warm and comfortable office, looking out over the beautiful Stanford campus on a beautiful Saturday afternoon. I’m getting depressed reading this, and I know the end of the story! I know that he gets out, reunites with his family, becomes a national hero, and gets to spend the later years of his life studying philosophy on this same beautiful campus. If it feels depressing for me, how on earth did he deal with it when he was actually there and did not know the end of the story?”

“I never lost faith in the end of the story,” he said, when I asked him. “I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

I didn’t say anything for many minutes, and we continued the slow walk toward the faculty club, Stockdale limping and arc-swinging his stiff leg that had never fully recovered from repeated torture. Finally, after about a hundred meters of silence, I asked, “Who didn’t make it out?”

“Oh, that’s easy,” he said. “The optimists.”

“The optimists? I don’t understand,” I said, now completely confused, given what he’d said a hundred meters earlier.

“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”

Another long pause, and more walking. Then he turned to me and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

To this day, I carry a mental image of Stockdale admonishing the optimists: “We’re not getting out by Christmas; deal with it!”

The Stockdale Paradox explained as Tragic Optimism

Yet, we’ll find again and again that it is this line of thought that fosters success even in the direst and inhumane of situations. Viktor Frankl, psychotherapy and holocaust survivor, wrote in his book Man’s Search for Meaning that prisoners within Nazi concentration camps usually died around Christmas time. He believed that they had such a strong hope they’d be out by Christmas that they simply died of hopelessness when that didn’t turn out to be true.

Here is a passage from his book regarding this thought:

The death rate in the week between Christmas, 1944, and New Year’s, 1945, increased in camp beyond all previous experience. In his opinion, the explanation for this increase did not lie in the harder working conditions or the deterioration of our food supplies or a change of wealth or new epidemics. It was simply that the majority of the prisoners had lived in the naive hope that they would be home again by Christmas. As the time drew near and there was no encouraging news, the prisoners lost courage and disappointment overcame them. This had a dangerous influence on their powers of resistance and a great number of them died.

Frankl developed a concept he called “tragic optimism,” that is, an optimism in the face of tragedy. This idea has gone through many names and iterations throughout the years. In the Nietzschean worldview, it’s the idea that whatever doesn’t kill you makes you stronger. Tragic optimism is similar to the Stockdale Paradox, as they both express a paradoxical idea about acknowledging your current difficulties intermixed with a positive belief that in the end you will still triumph.

Stockdale’s ending

Stockdale was released as a prisoner of war on February 12, 1973, during Operation Homecoming.stockdale paradox medal

In 1976, Stockdale received the Medal of Honor. Stockdale filed charges against two other officers (Marine Corps Lieutenant Colonel Edison W. Miller and Navy Captain Walter E. “Gene” Wilber) who, he felt, had given aid and comfort to the enemy. The dude definitely had no chill.

Debilitated by his captivity and mistreatment, Stockdale could not stand upright and could barely walk upon his return to the United States, which prevented his return to active flying status. In deference to his previous service, the Navy kept him on active duty, steadily promoting him over the next few years before he retired as a vice admiral on September 1, 1979. He completed his career by serving as the president of the Naval War College at Newport, Rhode Island.

What you should do next

Until you have exited, you are just waiting for some random crazy fecking thing to happen to kill you. Even if the deal is proposed and signed, it’s not over till you are wired money (even then you have MAC clauses, just saying).

So lean into the Stockdale Paradox now. It won’t take a lot to get your thinker ticking.

  1. Get pen and paper (or iPad)
  2. Write the trends that are coming- what might kill you?
  3. Map out each and every brutal fact of your current situation. This might be pages of boogymen not only under the bed, but tap dancing on your head
  4. Cut out the bullshite so you focus on what is reasonable
  5. Make a 3 column table of the issue and possible ways to ameliorate them. In the second column set what is a god killer? What is painful? What is normal startup BS?
  6. In the second column set out what you can control and what you can’t control
  7. Review the situation and map out buckets of the next steps. Risk weight them
  8. Live in the real world and know you stopped what I said a while ago and realize if you spend the time thinking you will start seeing answers pop up. They could literally be “I don’t know but x knows- I should ask”.
  9. Decide on a plan. Execute. Communicate to the team. Adjust as you have more inputs.


Entrepreneurs are wired for optimism. But, in Stockdale’s story, it was the optimists who died. Don’t forget to balance optimism with fact and belief with reality. If that can get someone through 8 years of being a prisoner of war, it certainly can get anyone through a (trivially compared) startup.

Emily Esfahani Smith writes “In general, resilient people have intensely negative reactions to trauma. They experience despair and stress, and acknowledge the horror of what’s happening. But even in the darkest of places, they see glimmers of light, and this ultimately sustains them.”

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