After more than two decades in the German startup world, and head of one of the country’s most powerful accelerators, Jörg Rheinboldt has seen his fair share of founders collapse under the mental pressure of starting a company.
The managing director of the Axel Springer and Porsche’s accelerator “APX” in Berlin — who is also a powerful angel investor with stakes in companies such as N26, Zizoo and Blogfoster — says that founders suffer from "reality distortion", burnout is all too common and "every [startup] team needs therapy".
This is one of the reasons why the APX accelerator has developed a new mental health strategy called “mental mining”, which includes monthly programmes to help deal with anxiety, stress, bipolar disorder and depression.
Sifted met up with Jörg Rheinboldt in Berlin to talk about what founders worry and fight about, how APX now approaches mental health and why yoga, massages and mindfulness are not enough to help founders.
As head of Axel Springer Plug and Play, and APX you invested in more than 122 companies. What mental challenges do founders mostly deal with?
Founders and their teams have a tendency to overwork themselves for their dreams and are at a much higher risk of burnout than others. Many founders also suffer from reality distortion. They live in a world which has yet to be created by them. Of course, it is important to have a strong vision, but it can be a backlash when reality behaves differently than you imagined, when you realise that your idea isn’t as popular with customers as you thought it would be or that your business model needs to change radically.
You say that “every team needs therapy”. Why?
As soon as people come together to work together, they will experience psychological challenges and differences. To build a sustainable company it is as important to invest in the people running it as it is to invest in the product. No matter whether you call it “therapy”, “mentoring” or “coaching”, every team needs to focus on its well-being to achieve high performance in the long-run.
Some founders do couples therapy before getting started with their business. Do you think that’s necessary or taking it too far?
Sure, couples therapy is great, but in the end, founders need to have the same values. If they don’t, this is the main reason why startups fail early. During my 15 years as an investor, I have seen over and over again how most startups radically change what they are doing within the first six months. This is a lot of stress and can only be dealt with when the team's fundamental values are aligned.
What do founder teams fight about most?
We often see the same kinds of conflicts of one founder wanting to test out things quick and dirty and the other preferring to take time to develop something with more time and depth. Their ideas of how to run a business clash. Again, it all comes down to values.
What do you do to help resolve these fights?
When we select startups for the accelerator, we start by looking at how well the team functions together. Not only in the initial pitching session but also with weekly venture development sessions, in which we get founders to talk about team dynamics, challenges and vision.
When you see a founder working 24/7, do you tell him or her to work less?
Not necessarily. We tell them that we notice they’re not getting any rest. They might have a strategy to power through for three weeks and then relax. We tell them that from experience we know that overworking yourself does not bring the big improvements you hope for. When I ran my first business in the 90s, it was normal for the team to do night shifts to finish projects. At some point, we realised that more work does not mean better output, so we changed our processes to make them less intensive and get more sleep and exercise in.
Many tech companies like Google or Zalando offer employees free yoga, massages or mindfulness meditation. Do you think that’s enough and what mental health resources do you offer founders at APX?
I think these are all great but much more is needed to support people in the very stressful endeavour of founding a startup. At APX, we developed a comprehensive mental health strategy we call “mental mining”. It includes monthly mental health lunches where we have an expert come in to talk about a topic the founders have voted for, such as burnout, depression or the stigma behind mental health. The expert dives into the topic and gives them advice, support and answer any questions. Before any meeting, we take two minutes in silence and anyone who wants to can spontaneously say what is on their mind, a practice we adopted from a two-day workshop on non-violent communication.
Some investors may consider some of this as a waste of money. What would you say to them?
I believe that you can build a high performing business because of and not despite focusing on the people running it. There is a greater understanding for this now than in the past and even traditional companies such as our mother company Porsche agrees that investing in people’s personal development is as important as investing in their business. If people are obsessed with the money part, think about it like this: in a team of six, when two get a burnout, the profitability of the whole team goes down.
In the US, people have long been talking about the great stress situations that founders are exposed to. Google and SAP offer their employees self-awareness therapy. Why does that not happen more in Europe?
It is not in our culture. When people go to therapy, they keep quiet about it because society would think you were sick. In the angel and venture capital world, we are only starting to pay attention to the individual people in a business instead of the performance of a unit.
Do you also invest in mental health startups?
Yes, we recently invested in “Sharpist” which offers personal and regular online coaching.
Would you say that the profession of the founder is romanticised?
Yes. You have no security and all the responsibility. You can do what you want but you must do what you can. You have to look hard for good people you want to build your company with. You have to manage the money of people who believe in you and are always under pressure not to mess it up. All of these circumstances can be a burden as much as an inspiration. But starting a company is certainly not a pure joy ride.
What is your ultimate tip for founders to protect themselves from burnout?
Everyone has a different approach to having good mental health, but it is often the simple things like balancing work with exercise, sleep and socialising. In short: don’t be one-dimensional.