What a Prisoner of War Can Teach Us About Startups

The first reason I deplore the Reality Distortion Field – Steve Jobs' famous ability to seemingly bend reality by command – is that it makes me jealous. The second is that it’s complete nonsense.


It teaches us to disrespect reality – a slippery slope that can destroy any good endeavor. I would go as far as theorizing that scandals like Theranos are at their core caused by disregard for reality rather than pure evil intentions.


But there’s a but. Achieving something hard and improbable requires faith. Faith in yourself, faith in an ambitious vision, and faith that you might just bend reality.


This never-ending tension between faith and reality is called the Stockdale paradox. To succeed, one must accept the brutal facts of reality while maintaining faith in the end game. It was coined by Jim Collins in Good to Great and is based on the story of Admiral Jim Stockdale.

Admiral Jim Stockdale


Admiral Jim Stockdale was imprisoned and tortured, for no less than 8 years, in the Vietnam War. In his astounding feat of survival, Stockdale watched many of his optimist comrades die. Taken from Collins:

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.

How did Stockdale himself survive?

“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.”

He goes on to summarize:

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.

Stockdale did prevail, and became the first three-star officer in the history of the navy to wear both aviator wings and the Congressional Medal of Honor.


Life doesn’t seem that hard anymore, eh?


Stockdale For Startups


Startups are slightly easier than war, but nonetheless require a delicate combination of faith and the ability to confront the brutal reality.


At times when I overlooked reality, bad things happened: building the wrong product for 2 years, failing to raise money by ignoring the signs, and losing great people for not seeing their own reality.


At times where I lost my faith I got as close as it gets to quitting, only to be pulled above water by my co-founder.


So you definitely need both. Yet reality tends to erode our faith and faith tends to obscure reality. And that is exactly the Stockdale paradox.


To handle this tension we need to identify 3 founder types:

  • The Faithful Founder has lots of faith in what they do but would allow this faith to obscure reality. They ultimately fail for not dealing with their problems

  • The Realistic Founder sees reality very clearly but allows this reality to erode their faith. They ultimately fail by giving up too early or not getting started in the first place

  • The Stoic Founder calmly sees reality clearly while maintaining their core faith. This founder is rare and the most likely to succeed. You can see this in the best founders. I think of Jack Dorsey as the archetypal example

As most founders I started off as a Faithful Founder. I vividly remember an early employee asking “how many organizations even have this problem?” The honest answer was very few, and I knew it deep inside. But my faith kept the truth buried deep for another 2 years. Crazy how delusional I was.


I then slowly got better at facing reality, but overcorrected. I became a Realistic Founder by despising faith and obsessing with reality. Without faith I became too pessimistic, and not once got very close to quitting.


Today I aspire to be a Stoic Founder, having both deep faith and respect for reality, as Stockdale himself demonstrates. I’m not quite there (gotta be realistic after all) but here’s what got me closer.


Becoming a Stoic Founder


Being a stoic founder is neither getting good at seeing reality nor deepening your faith. It is the delicate art of making space in your mind for both.


You begin the journey by becoming aware of the paradox and your founder type, next accepting it, and eventually moving to action.


Action 1: Ground your faith in reality-based truths

Faith arises from believing in something that is unshakeable. To have faith while respecting reality, find your small set of unshakeable truths.


My faith in our startup is grounded on these absolute truths:

  • We are aiming to solve a fundamental problem of government operations

  • The potential impact is massive and so is the market opportunity

  • We have a team that can execute and that I enjoy working with

  • Our product solves the problem

  • If we fail, then my 2nd, 3rd, or 10th startup will succeed

Action 2: Distinguish between faith and reality based on the time horizon

Time horizon is often the only difference between delusion and realism. Can we fix global warming in 100 years? Hell yea. Will we fix it tomorrow morning? Sadly no.


Here’s how time horizon maps to reality and faith:

  • The present is the reality. There is no room for faith and “I believe” when speaking about the present. “Our customers are happy” or “We have product-market fit” are factual statements that should be objectively proven

  • Short-term is mainly reality. In the short-term you want to confront reality and solve your real challenges. A small amount of faith is useful here, faith that you can occasionally solve big and improbable challenges with logic, creativity, hard work, and zero miracles

  • Long-term is the place for faith. You can achieve great things given enough time and enough persistence. Make sure to ground this faith in reality-based truths

Action 3: People can strengthen faith, kill faith, and help you see reality

When around a pessimistic person you can hear faith being slaughtered. People influence our faith and perspective of reality tremendously. Do this:

  • Make sure that you and your co-founders complement each other well in this regard. If all of you are either pessimistic or delusional together, then your startup is doomed

  • Hire people that are both intelligent and believe in the long term vision. Use these people to help you see reality, and watch as their belief spreads to others

  • Distinguish between pessimism and realism. Cut the pessimists from your team as soon as you notice it. Pro tip: do the same in your personal life

  • Remember that faith or lack thereof is contagious. Make sure to address faith problems within yourself or team members before they spread

Action 4: Design faith-inducing and reality-revealing mechanisms

There are many possible mechanisms. Here are mine:

  • Design goals that automatically surface problems. More here

  • Build time to discuss challenges. Gather the reality from your team by asking questions while resisting the temptation to answer back or explain

  • Celebrate (real) successes to fuel faith and excitement

  • Write the truths that spur your faith in the first place in a visible place

Action 5: Meditate


Conclusion


Achieving something great can only happen when we do two things:

  1. Endure for a very long time without losing faith

  2. Face the brutal reality every day

Faith and reality are not friends. The more we believe in a bright future, the more we ignore the reality of the moment. And the better we face the darkness of the moment, the less bright that future seems.


This tension is the Stocksdale paradox. Different founder types face it differently:

  • The Wishful Founder has lots of faith but disregards reality

  • The Realistic Founder sees reality clearly but allows it to erode their faith

  • The Stoic Founder calmly holds faith and reality in their head simultaneously

Most founders are blind to this and will naturally fall into the wishful or realistic category. They ultimately fail by not dealing with reality or losing their faith, respectively.


The best founders are Stoic Founders. They anchor their faith on solid facts. They know that to change reality they must face it first. They know that today's reality is a fact, but in 20 years it can be (almost) anything they want. They bring logical people who share a core reality-based belief together for the ride. And they design mechanisms that ensure that both faith and reality are maintained.


As the distinguished war hero said:

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.