The formula that explains why entrepreneurs are a grumpy bunch…

This week Steve Jobs makes the news headlines once again… “Dark Steve” that is, not “Steve the Messiah”.

Secret ‘no-hire emails’ sent by Steve Jobs were released in US Court as part of a lawsuit investigating  an alleged wage suppression tactic that fully stretched across Silicon Valley for years and ended up costing high-flyer employees millions of dollars in unrealised salary raises and hampering freedom to switch jobs in Tech companies.

Of course it is not the first time that “Dark Steve” makes an appearance on the media stage. Many will remember the unapologetic article published on Gawker in October 2011, in which Steve Jobs was portrayed as “rude, dismissive, hostile, and spiteful to Apple employees; […] bullying, manipulation and fear followed him around Apple”. Why did Steve Jobs have such a difficult personality?

An explanation occurred to me this week, as I was thinking about just how difficult entrepreneurs in general can be to work and live with. The idea comes from a simple formula that I first learned about during a “Change Management” lecture at Cambridge University, back in my student days.

This formula, first created in 1969 by Richard Beckhard and David Gleicher, provides a model to assess the relative strengths that affect the likely success (or failure) of organisational change programs.

The formula expresses a condition that needs to be met for change to happen:

D x V x F > R

The product of D, V and F must exceed R, where:

  • D is the Dissatisfaction with how things are now;
  • V is the Vision of what is possible;
  • F represent the First, concrete steps that can be taken towards the vision; and
  • R is the archenemy: the Resistance to change

It strikes me now that this formula seems as relevant and applicable in the context of entrepreneurship. Have a second look at it:

  • V: When you read biographies of revered and legendary entrepreneurs the word “visionary” is bound to come up a dozen times
  • F: Entrepreneurship is about doing. Trying something new, experimenting with new concepts/products/services are all first concrete steps that are like second nature to successful entrepreneurs
  • R: if changing HR processes or the culture of an organisation is met by significant Resistance to change then put yourself in the shoes of an entrepreneur. Think of the tremendous level of skepticism and apathy that you have to face to make your dream come true: this stellar CTO that you need to recruit when you have nothing to show for it other than your passion and your idea, this VC investor who is sitting on a mountain of dollars and is reluctant to loosen the purse strings, this first customer who is not sure about giving his bank details to a shabby-looking thirty-something dude in T-shirt and flip-flops, that dominant industry player who has the financial resources to put you out of business the minute he feels too threatened…

Now all of this leads us to the D-word: the answer to the question we’ve been trying to answer. One of the forces the entrepreneur needs on his side to make sure he can beat Resistance to change is “Dissatisfaction with how things are now”. There goes your difficult personality!

To support this argument, here is a story shared on Fred Wilson’s blog that comes from Don Valentine, the founder of Sequoia (one of the best venture capital firms in the business):

When one of the younger partners in the firm started, Don took him aside and drew a four square quadrant. Along one axis, he put “easy to get along with” on one end and “hard to get along with” on the other end. One the other axis, he put “normal” on one end and “brilliant” on the other end.

He then said, “sometimes we make money with brilliant people who are easy to get along with, most often we make money with brilliant people who are hard to get along with, but we rarely make money with normal people who are easy to get along with.” 

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