Harnessing Entrepreneurial Manic-Depression: Making the Rollercoaster Work for You

The sky is falling!

Ever since the media’s Chicken Little response to the tremors in the financial markets, I’ve felt like shouting from the rooftops “now you know how it feels to be an entrepreneur!”

I just lost 9% overnight?! Fill a bathtub and get the toaster. I’ve had enough.

Wait… I actually gained 13% while in the bathroom? I’m f**king Superman!

This is a guest post on capitalizing on — vs. countering — the “entrepreneur’s disease” (manic depression) through 4 cyclical stages. This is done by pairing appropriate activities to specific — though not necessarily positive — emotional states…

The author is Cameron Herold, former COO of 1-800-GOT-JUNK, whose professional resume includes:

-Helping build revenues from $2 Million to $105 Million in 6 years (no debt or outside shareholders)

-Building a PR team that landed more than 5,000 stories in those same 6 years

-Hiring 220 people in 4 months

-Leading the sale, branding, and integration of 450+ franchise locations.

-Teaching his psychological theories at the Entrepreneurial Masters Program at MIT.

I first saw this presentation at an Entepreneurs’ Organization (EO) event in Omaha prior to my successful Warren Buffett quest at the annual Berkshire Hathaway shareholders meeting.

I encourage you all to read this, especially with the fear mongering that is just getting started.

Skip CNN and just watch 4:08 – 5:00 over and over.


Marc Andreessen, co-founder of Netscape, once wrote:

“First and foremost, a start-up puts you on an emotional rollercoaster unlike anything you have ever experienced. You flip rapidly from day-to-day – one where you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. Over and over and over. And I’m talking about what happens to stable entrepreneurs. There is so much uncertainty and so much risk around practically everything you are doing. The level of stress that you’re under generally will magnify things incredible highs and unbelievable lows at whiplash speed and huge magnitude. Sound like fun?”

Many ultra-successful entrepreneurs are even clinically diagnosed as manic-depressive or bi-polar. Francis Ford Coppola has it. So does Ted Turner.

This article is about the emotional intricacies of being an entrepreneur – about what you’re going to feel during the journey.

The concept that we’re going to examine is called the Transition Curve. It resembles a rollercoaster.

Regardless of whether or not you believe you will ride an emotional rollercoaster running a business, you will. You have two fundamental choices: you can hold on and scream, or you can wave your hands in the air and have some fun.

I’m going to walk you through these different analogies, but let’s first look at the various stages of this process, which repeat.

* Stage 1: The first stage of the concept is called “Uninformed Optimism”. At this stage on a rollercoaster, just getting to the top of the rollercoaster, you experience feelings of an adrenalin rush, characterized by excitement and nervous energy.

* Stage 2: The second stage is called “Informed Pessimism”. As you ride over the top of the curve you now have a bit more information. Feelings of fear, nervousness, and frustration begin to set in. Perhaps you even want to get off of it.

* Stage 3 – The third stage is called “Crisis of Meaning”. You’re past scared. You feel despair. It’s as if you’re standing on the edge of a cliff ready to jump, and you begin to think “Today the rollercoaster’s going off the bottom of the track for the very first time.” You feel helpless and you’re both terrified and frozen.

* At this point, you face a critical juncture. You can come off the bottom of the curve and crash and burn, which is when your business goes bankrupt, you lose your marriage, you start drinking, or you end up in a doctor’s office because of stress. Or you can come around the corner because you’re getting support at “Crisis of Meaning” and you can enter an upward swing call “Informed Optimism”.

* Stage 4 – Informed Optimism. You’re calm. You’re informed. You might even say you are cautiously optimistic.

Capitalizing on All Emotional Phases — Activity Pairing

Here is the critical point – at each stage of the curve, you can do things to leverage the feelings and energy — positive or negative — that you have at that moment. Fighting against these phases is like working against a natural force.

Stage 1 – Uninformed Optimism

As an example – at Stage 1 – Uninformed Optimism – it’s both a great place and a dangerous place to be for your business, depending on what you are working on or in at that time.

When you’re starting your business, you have seed financing, some friend and family money, or you’ve just started the business with $50 in your pocket. You can start a business without a lot of money directly because you’re benefiting from uninformed optimism. You can take risks when you’re feeling like this. Because you’re so full of excitement you don’t really know what’s coming yet. So you’re uninformed and your fully optimistic – or you wouldn’t have started.

When you’re at Uninformed Optimism you should be doing things like:

* Talking to the media. Imagine if a newspaper calls you when you’re at that stage of uninformed optimism. How’s your media interview going to go? It’s going to go amazing because you have unbridled excitement and big thinking.

* Talking to potential investors. That’s why everyone was investing through the 90s with the dotcom bubble. The entrepreneurs were so full of uninformed optimism and enthusiasm.

* Doing speeches in public – the audience will love you.

* Recruiting new employees – they’ll all want to work for you.

* Networking for new clients – who wouldn’t want to buy from you?

When you’re at Uninformed Optimism there are also some things you should avoid doing:

* Spending money is a bad thing to be doing at this point. Because when you are really excited and full of optimism you think nothing will go wrong. The last thing you want to be doing is spending all this money because the reality is – at some point, you’ll cross the curve and discover harsher realities.

* You don’t want to be doing business planning

* You don’t want to be working on your budget

* You don’t want to be making buying decisions

* You don’t want to be making hiring decisions

* You don’t want to be doing your accounting, or your bookkeeping.

* Anything that requires you to be making financial decisions or planning logical shouldn’t be done when you’re at the manic energy or uninformed optimism stage.

Remember that when you’re at that uninformed optimism stage, anything that’s outward facing — talking about your company, selling the story, raising money — is well-matched. Simultaneously, at that stage, you don’t want to make buying decisions, or hiring decisions, or planning decisions, or budgeting decisions.


Stage 2 – Informed Pessimism

At Stage 2 – Informed Pessimism – you have more information now. You’re not as excited as you once were. Coffee is helpful to get you started. You are worrying at times. You aren’t depressed or scared – but you’re somewhere in between scared and excited. You’re just a little bit pessimistic now. The great aspect of this stage is that it prevents you from making careless mistakes due to overly optimistic thinking.

When you’re at Informed Pessimism you should be doing things like:

* Planning the next phase of your growth

* Intermediate-term strategic planning

* Budgeting, as you’ll be more realistic

* Purchasing things like advertising – you’ll be careful with where you spend your money and will not over-purchase advertising based on exuberant pie-in-the-sky sales forecasts.

When you’re at Informed Pessimism, there are also a few things you should absolutely avoid doing.

Do not:

* make hiring decisions.

* talk to the media or do speaking events.

* work in roles where being excited would help you get a better result – wait until things turn around emotionally for you.

Stage 3 – Crisis of Meaning

This is a scary stage and can feel like you’re standing on the edge of a building needing to jump. It will feel like all the odds are stacked against you and that everything is going wrong. It will be hard to get out of bed in the morning. Sleeping at night will be close to impossible due to worries and fear. You’ll feel like you’re paralyzed and can do little more than clean your filing cabinet drawers successfully.

When you’re at Crisis of Meaning you should be doing things like:

* Cleaning your filing cabinet drawers – seriously. Doing a few little things can often perk people up.

* Reaching out to your support groups like friends, family, your church, groups like the Entrepreneurs Organization etc. to ask them for help, advice or to just lend an ear.

* Trying to set your TOP 5 daily and only work on the most important items each day.

* Taking breaks and going for walks, getting exercise, getting outdoors.

* Writing lists – lists about what you are strong at, lists about what you love – make lists that, when you read them, will help rebuild your confidence.

* Realizing that many others have been in this exact same place and usually turn the corner, just like you will.

* Remembering “The Little Engine That Could” – I think I can, I think I can – it can take time, but things will rebound.

When you’re at Crisis of Meaning there are also some things you should absolutely avoid doing:

* Don’t talk to others who are depressed.

* Don’t talk to others who are “half empty” types

* Don’t take any “all-in” Vegas poker type risks where you put everything on the line hoping for a big win.

* Don’t try to “rally the troops.” Your employees, the media ,etc. will all smell fear. And your fear will lead to making things worse

* Don’t turn to the bottle. Vices during stages of depression will lead to you spiraling out of control.

* Don’t think that you can “handle it” all on your own. You can’t. And when people “need” others, your true friends really will be there to support you.

* Don’t try to learn more. Reading books and magazines about how to be successful or how to grow your company will only make you feel worse about your current situation. They’ll just make you feel even more bogged down. Reading stuff like this is great when you round the corner though.

Stage 4 – Crash & Burn

I don’t really waste any time explaining this stage or what to do here – because if you slide off the curve, here it really is over – the company is done and/or so are you in the role leading it. Usually this is bankruptcy or forced sale, etc..

Stage 5 – Informed Optimism (or Hopeful Realization)

This last stage is much like when the little engine that could turned the corner – and realized “he did”. You’ll start feeling excited and energized again. You’ll start rebuilding your confidence. And you’ll start to feel momentum working in your favor again. You’ll also have a lot more insights and experiential learning to draw from. You’ll realize you have more competence and confidence than before and everything will start to go your way again.

When you’re at Informed Optimism you should be doing things like:

· Hiring

· Strategic Planning

· Reorganization of your team – putting the right people in the right seats

· Cutting the wrong people

· Generally getting everything in order to really start growing again.

When you’re at Informed Optimism there are also things you should avoid doing:

· Don’t lose focus.

· Don’t let your confidence slip.

· Don’t get cocky or you’ll fall backwards off the curve.


This cycle repeats itself. Enjoy the ride instead of fighting it.

Guest author Cameron Herold’s training modules are used by CEOs and companies in more than 15 countries.

The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.

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273 Replies to “Harnessing Entrepreneurial Manic-Depression: Making the Rollercoaster Work for You”

    1. I think you can’t actually find balance during these stages…. that’s the point in knowing what to expect because that’s what the entrepreneurial journey requires. One phrase that helps me take the edge off a little is this: If you are going through hell… keep going…

  1. Totally awesome read. I feel that this curve applies equally to any type of emotional/intellectual growth; not just entrepreneurial endeavors.

    (Errata: In Step 5, you wrote “Uniformed Optimism”, possibly in error.)

  2. Nice points in there. I especially like these, mentioned during the ‘Crisis of Meaning’ section:

    * Don’t talk to others who are depressed.

    * Don’t talk to others who are “half empty” types

    Surrounding yourself with positive role models would definitely be important during this stage of the cycle.

  3. Mmmm, this post is like a drink of water in the desert. When you’re zipping downwards and you can’t see the bottom and the ride just keeps getting faster, and faster. But there’s a choice. I can hit the bottom and fail, or turn the downward momentum back into upward momentum.

    Tim. Dude. Thanks. I REALLY NEEDED THIS POST.

    I also like the dos and don’ts at each stage and the reminder that I’m not insane…just on a roller coaster! 😉

  4. Ah yes, the highs and lows of business. Tim you are right, the financial issues we are facing is just like running a business. And as you can see in the media and the people on the streets, not everyone should be business owners. It takes a certain type of person that loves to thrive on stress. It is funny, because you physically have to experience the Transition Curve to really get it. That first time is a B*tch…

    Good Luck,


  5. Synchronicity! This was the perfect read at the perfect time for me. Thanks to Cameron and Tim for bringing this to my attention.

  6. Being a business owner and entrepreneur of 15yrs I definitely relate to this cycle. Another great source around this topic is Seth Godin’s “The Dip”. He looks at the cycle and shows how to choose which times to bail out or keep digging. It has added a lot of insight into deciding which endeavors I start. And when to get out.

    The main concept is to realize that this cycle relates to everything and to get out of the downswing takes effort and commitment. So decide before you get in if the pay off is worth the effort, time, resources etc.

    Plus, it’s a short book you can read in an afternoon.

  7. Great post about building consciousness in entrepreuring – and a thing to add: Time.

    There is no fixed time, which you can say it takes to run through a cycle of this curve and its emotions. Sometimes you run though it in hours, sometimes it’s days, other times weeks or months – and maybe even years, but I haven’t tried the latter, though. Also, you don’t necessarily stay in the different stages for the same amount of time. Some stages are quickies, other take longer. The bottom-line is, don’t try to fight or skip it, don’t ignore it; respect where you are, by being conscious of which stage you are in, and act according to the great advice given above.

    Enjoy the ride.

  8. Nice ideas Bill. But sometimes you can’t always calculate how well things will go. There is an ever existing mystery to any endeavor you choose to take. Obstacles arrive differently for each and everybody, but how you respond will dictate the payoff. Just look at the commitment Sly Stallone made to acting before the big payoff arrived.

    Cool blog you have btw….


  9. Kinda reminds of a post I read on Testosterone Nation. I guess the psychology is the same for business as it is for fitness.

    1. I really think there are some parallels. Can you plese paraphrase your thoughts on this a bit more detailed?

      In fitness we build muscles what means you build up fat too. Or we burn fat what means we lose muscles too. So all is cyclic. The key to success here is to build more muscles than fat and too lose less muscles than fat in the phase when it is time for it.

  10. Wow. Wow. Wow.

    What an incredible, articulate way of defining what life is like for a lot of us entrepreneurs. One of the most intriguing aspects of Cameron’s observations – to me at least – is in looking back. Having gone through some of these stages already and seeing him detail it with such exactness is incredible. It’s so dead on, it’s almost scary, really.

    What would really be great though, is if our loved ones could read this post as well, to understand exactly what we’re going through at different points through the journey. So often, people believe that running a company is all peaches and cream, To the contrary it’s far from that, as Tim’s book attests, as does Cameron’s article and the testimonies of millions of entrepreneurs across the globe.

    Thanks for the affirmation, Tim and Cameron. It’s good to know that the struggles and successes of entrepreneurship go hand-in-hand, and are shared by many!

  11. Nice post!!

    I believe that everything is on a “roller coaster” similar to the one described above only slightly more complex.

    Instead of just an up – then a down – then an up again, I think was actually happens in many cases is there is an up then a super bad down (similar to the great depression) then a dramatic up, followed by many seemingly insignificant ups and downs, then a reset and repeat. The only different variable is how spaced out the waves are in time; and the waves can be spaced shorter in some places than in others depending on the endeavor. The bailout package that just passed the house would be a factor that would lengthen the time of a down cycle and possibly shorten the time of any up cycle. It would not be a factor that should significantly change the depth of either. In other words for the next 2 years the DOW might fall 20% and then in 2 months it might gain 20%. This major gain would be a reset and the DOW from there might fall another 20% and then cycle up again. Beyond the next 6 months to a year I cannot say with certainty what will happen, but I do believe we are headed south for the winter (minus any upswing after the election).

    I believe this model can be applied to all things. If you have the cognitive ability to do so, it can very well be applied to investing. Right now, I think the economy could be headed toward a reset. I really think that the next 6 months to a year will be interesting. Too bad politics have to get in the way of the economy. The political system of the economy is one of the most inefficient markets that exists, aside from dealing with females (no offense, but I think you all know that you are fickle creatures). Unlike the stock market, you cannot analyze who is in good standing with whom, or which company the powers that be favor with any significant degree of accuracy.

    The mass media provides us with all these pundits preaching that speculation is bad for the economy. I say the world is beautiful if you can figure out what may happen and you place your money where your ideas are–even if they happen to be wrong. The opposite is the equivalent of saying your are going to do something and not do it.

    These are interesting times, and there is more ahead. I wouldn’t recommend going all in just yet. You might observe the fluctuations of short sided securities for the short term.

    I think I need to get a blog.


  12. Excellent Post! I’ve been through all of those phases and for the first time I bypassed the crash and burn and onto the informed optimism stage. This article really hits the nail on the head and does a great job at describing the process.

  13. Thanks so much for this post. Here I was thinking the manic-depressive feelings were something I should be worried about, when in reality I can use them to my advantage. Like several before me said, this was definitely what I needed to hear right now.

  14. Man, can I relate to this!! It’s taken me years to get over the highs and lows and to achieve emotional stability despite what’s going on around me. The secret for me is to have a crystal clear “why” (dream) or motivation behind what I’m doing. The bigger the “why”, the harder it is to let the lows get you down!

  15. Thanks Cameron.

    I’m finding that reaching Stage 3 – crisis of meaning – in both my career and my life at the same time is like finding a giant turd in the bathwater. I can continue for a while longer but it’s quite unpleasant and a little disturbing.

    I’m currently cleaning out my filing cabinet (and the bathwater).

    A useful article. Thank you.

  16. Great observations and a good post. Serial entrepreneurs will tell you this is the same curve for every of their ventures. It does NOT get any different with time. Only the second / third time around, you are more mature to know that you ought to take things in perspective.

  17. I cannot believe reading this. Seems like my personal story is published. You made my day Tim. Cameron Rocks..



  18. I’m very glad you posted this. I’m nine months into a new, and first, business venture, and it couldn’t be more timely. Great to have a validation of how I’ve been feeling!

    Thanks very much. This should be required reading for everybody starting a new business.

  19. What’s the definition of insanity? Doing the same things over and over again and expecting different results!- Albert Einstein

    I think we take ourselves too serious and I agree with Money for Veterans, except you should surround yourselves with positive thinking people at every stage of the entrepreneurial life cycle.

    Bill: interesting how you mention “The Dip.” I had trouble reading/listening to The Dip at first. The idea of quitting in my mind was always synonymous with failure, but then I realized that the old 80/20 rule is at play in every area of our lives. We simply can not do everything all at once without help and without careful trimming of what distracts us.

    We should be so fortunate to understand why we are driven to make mistakes. . .

  20. All looks very straightforward in cold print, but the harsh realities are a bit harder to deal with when you’re in the thick of it and not everybody is cut out for the long ride. Excellent article though.

  21. Most things in life follow a similar curve. This was night picking up girls

    1. Uninformed optimism – Me and one other guy are driving 4 girls back to their hotel from a night of celebrating a 21st birthday

    2. Informed pessimism – We now have too many girls and no easy way to split them

    3. Crisis of Meaning – The most sober girl hates my friend and begins tearing down the party

    4. Crash and burn – going home because it’s approaching 6:00 AM and I’ve got a full day’s work ahead of me

    BTW – Everyone whom I’ve let borrow my copy of the dip has quit their job within a month to find a better one

  22. Cameron is so passionate when it comes to this kind of stuff. He has personally helped our company (I Love Rewards) get through some of our lowest points.

    If you haven’t seen Cameron speak live, I definitely recommend it!

  23. This article explains exactly what I’m going through trying to my blogsite up and making money. I think I’m wavering between stage 2 and 3. Hopefully I will make it to stage 4. Thanks for all the great advice. I’ve already put some of the suggestions in to play and they’ve helped me stay away from stage 4.

  24. Excellent post, it’s so true, i’ve been there, i know all that including the crash and burn part, the advice is excellent really, i’ll add another one, never give up if it has burned, rebuild a new one, being an entrepreneur is worth even if sometimes things get nasty, because the rewards are a lot more and better

  25. Inspiring thoughts. Thank you, Tim. It was your book that gave me the cojones to start my own business and now that I am at the “crisis of meaning” phase, I really needed this article you just wrote to give me a positive input. Really, thank you.

    If you ever pass by Freiburg, Germany be sure to email me. I’ll be delighted to show you the real students’ life.

    Un saludo de colega,


  26. I am heading to Buenos Aires in February for a little R&R and I would like help in finding apartments to rent by the week near Puerto Madero. Any help would be appreciated.



  27. This post describes my life. I think I just realized that I am an entrepreneur. I was feeling sick about my current business but didn’t know how to change things around. I hit the wall. Knowing when to quit is important also. I’m optimistic about my next venture while my current one has me about to crash and burn.

  28. Hey Tim,

    It’s so clear that the role emotions play in business and particularly in investments can make or break your entrepreneurial success. Proper state management as you go through these cycles is critical. I get asked constantly by my readers about muse development- but- I think this is ‘muse 101’ right here.



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  30. It is no question that in America we like graphs and pie charts and categorizing emotions.

    But… no true innovator would follow another entrepreneur’s list of dos and don’ts. This post is for the sheep.

    Thank you for informing us on your own processes, Tim. But remember, what works for you is not what works for everyone.

    -Mozar’ts Left Toe

  31. I find reading and running everyday helps me cope with this so I don’t come across as a bi-polar nut. Nice post.

  32. I know that other comments have touched on this already, but I’d like to add that I also think this pairs wonderfully with Seth Godin’s book The Dip. This post compresses the already short text and does it gracefully. Great job, Mr. Herold.

  33. Brilliant observation and the way you have presented is impressive. I bet every first time entrepreneur almost always goes through all of these phases. Can feel it. Thanks for this post!

    A request if you/others can address in some other post may be:


    The advice on capitalizing Crisis of Meaning stage is helpful. But may be it is time to call it quits for the better. How does one arrive at this decision.

    I would like to quote Seth Godin “[Strategic] Quitting is not same as failing”

    It the hardest time with poor morale, lost confidence, stress & burn – mentally, physically and financially. You probably have even stopped believing yourself, in your business and doubt your rationality. And this super critical decision.

    Here in India at least we have serious lack of people(advisors) who can help you make that judgement call – Quit or Stick.

    Any structured way to arrive at this quit/stick decision at such stressful times?

  34. Tim,

    Is it possible to hit stage 4 and Crash and Burn, but then you find the right “mechanic” to help you get the rollercoaster back on track to continue to Stage 5? Maybe not the exact same rollercoaster, maybe some changes needed to be made before you can put it back on the tracks?

    The reason I ask is because like the rest of the people that commented, I’m at the end of stage 3, and to be honest, I think it might be my best bet to walk from this “rollercoaster” and make some major changes before I put it back on the tracks. I’ve been selling direct to consumer and handling everything from manufacturing to sales to distributing to customers’ homes all over the country. I have been thinking that it might be best to sell my same products through retail stores, which would add in two middle men…a distributor and a chain of retailers. I will be cutting out a great deal of profit, BUT I feel that I can increase volume dramatically, while decreasing my own workload and increasing efficiency. It would be the same concept and same product, but a completely different sales strategy…then I put the new rollercoaster with a new set of cars on the same track and add some grease. What do you think???


  35. The perfect post at the perfect time – I’ve been sliding from stage 2 to stage 3 recently, and just turned the corner – just barely – like A DAY AGO.

    Reading this was the perfect thing at the perfect time.

    Thanks so much!

  36. WOW – some AWESOME comments here from everyone.

    I’m going to take a stab at answering a few today (and I’ll get to more this week) just heading out with my kids for a hike in the redwood forests here in Vancouver (a great way to stay balanced and avoid Crisis Of Meaning 🙂

    Theme 1: How do we know when to get off the curve ? i.e. persist or try something else.

    That’s really the crux of Crisis Of Meaning. It sucks to get there – and we all will. Sometimes it really is best to “get off the curve” and onto a new one. Other times it’s best to re-focus, get help from mentors, friends, family, coaches etc. to help us “see the forest for the trees”. Trying to go through Crisis Of Meaning in complete isolation is practically assuring yourself of Crashing & Burning (failure).

    I’ve always turned to others for support & guidance when I get near Crisis Of Meaning.

    If you’re considering getting off the curve – turn to others to support you first – OFTEN others will help you figure it out and you can calmly round the corner to Informed Optimism.

    Note: When you’re at Informed Optimism – be careful – keep getting the emotional support you needed to get there – you don’t want to slide backwards off the curve. It usually takes a good couple months to re-build your confidence after coming out of Crisis of Meaning.

    Hope that helps.

    Cameron Herold

    Founder, BackPocket COO

  37. Theme 2: “Wow, this article describes my life exactly”.

    Almost EVERY entrepreneur I’ve shown this model to over the past 20 years has said the same thing – “I’ve been at every stage a number of times”.

    Once we all know the feels of the stages we’re at – we can help each other through them.

    Enjoy the ride – we’re ALL riding it together. 🙂

    Cameron Herold

    Founder, BackPocket COO

  38. Perhaps he didn’t mean it this way, but as it reads, this is a great article on how to start a business in the Silicon Valley style — in other words, how NOT to start a business. Start with the hype and work out your business plan only when you’ve collected everyone’s money and you’re facing disaster.

    Believe it or not, it’s possible to start a business with prudence, research, experience, and a gradual build-up, with testing at every stage. Read Paul Hawken, not Cameron Herold.

  39. Tim, thank you for this well-timed insight. Learning these phases in the last five minutes has given me a whole new perspective on the roller coaster I have been on for the last 8 years, and is helping me focus on my own current Crisis of Meaning. Keep it coming!

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  41. Very well written – it’s amazing, as an entrepreneur myself, looking at each of those stages and thinking “Wow, I’ve been there!” Even after you get your business off the ground, it continues (if you’re an active business owner). Thanks for the insight and encouragement!

  42. @Aaron – re: Silicon Valley start up model.

    Hey Aaron – awesome comment – and I completely agree – starting a company with caution and a gradual buildup is totally the way to go.

    This isn’t at all meant to be a model on how to start a biz – rather it’s just a model showing how entrepreneurs anywhere, in any business model tend to feel at various stages of running companies (no matter what kind of companies they are).

    My entrepreneurial experiences are in: House Painting, Autobody Collision Repair, Barter, Junk Removal and Entrepreneurial Coaching/Mentoring. I’ve actually only been in the high tech space once – and that was when a company I was president of was acquired by an internet company.

    So ya – if anyone is wanting lessons on “how” to start a company – that is not what this model is for at all. This is to help us understand why we’re feeling like we do.

    Hope it helps.

    Cameron Herold

    Founder, BackPocketCOO

  43. @ Jose Castro-Frenzel

    Great question about “how does one find balance between the stages”

    From what I’ve seen we never so much get “balance” as we do get calmer through all of the stages from the self-awareness gained by knowing “why” we’re feeling like we do at each stage.

    Once we start recognizing the stages we are at while we are in them – it just gets easier to move through the transitions. The ups and downs are always there – i.e. the curve continues on and on.

    I don’t even want to control my own entrepreneurial highs and lows – I just keep leveraging them no matter what stage I’m at. Knowing what stage I’m at though has really allowed me to stay calm throughout the transitions.

    Hope that helps.

    Cameron Herold

    Founder, BackPocket COO

  44. Cameron, this question is for you. How would you address a transition from industry into another? More clearly, if you currently own a business but are wanting to transition into something else, but don’t know exactly what it is what you want to do. What should one do in this position. This situation is a very frustrating situation that makes you think you will be stuck running a business you have no interest in and drives you crazy!!!

    The difficulty that I have seen in this is that one gets comfortable with a good source of income from your business but would ideally like to own/run a business that can fit your ideal lifestyle better- in this case “mobility.”

    I understand you are busy but if you get a chance to answer this it would be greatly appreciated.


    Jose Castro-Frenzel

  45. @ Doc Kane re: “sharing this with our loved ones”

    Hey Doc,

    You really raised an AWESOME point here.

    I presented this topic to a group of entrepreneurs in Omaha on the Berkshire Hathaway shareholders weekend. Most of the entrepreneurs had their spouses with them. Many of the spouses came up to me after the presentation and said that knowing this may have saved their marriage 🙂

    They said they’d always wanted to know what was going on in their spouses mind – and never knew how to help let alone why they were acting or feeling the way they were.

    Sharing this content with our spouses, kids and families for sure helps them. And in words of Jerry Maguire it helps them to help us too http://snipurl.com/43ts3 [video_google_ca]

    It’s also smart to share this content with our employees – they are silently freaking out watching us ride the roller coaster too.

    Great point – thanks for sharing it.

    Cameron Herold

    Founder, BackPocket COO

  46. I agree with you Money for Veterans, the impact of hanging out with negative people or unmotivated people can really have a costly effect on you during any stages in the business, especially when adversity is confronting you. All in all I think we should all recognize that everything is seasonal. The good is sometimes just right around the corner.

    Thanks again Cameron,


  47. “I don’t even want to control my own entrepreneurial highs and lows – I just keep leveraging them no matter what stage I’m at. Knowing what stage I’m at though has really allowed me to stay calm throughout the transitions. ”

    Thanks for the advice, this makes a lot sense. It is like being lost in forrest but at least having a compass.



  48. Making YouTube videos should be on the list as something you REALLY want to do, or really DON’T want to do in the “Uninformed Optimism” stage. 🙂

  49. Cameron, thanks for putting this phenomenon in such a nice package. In my work with entrepreneurs, I see this cycle over and over again.

    As a sales and marketing coach/trainer/consultant, I often have clients come to us when they are in Stage 3, otherwise known as extreme pain. The best thing I’ve found to do for them is talk them off the ledge, boost their confidence and turn them loose. They come back later in Stage 4 when they are ready AND able to actually put some plans in place and execute.

    Now I’ve got a great model to show them where they are and why they shouldn’t hire me when they come knocking the first time.

  50. Hi Tim. I wrote a post for writers referencing your post. I believe you nailed it spot on. Been there and done it. Let’s talk ’cause I got 67 journals of stuff just to prove your point.

    Also in one post you managed to de-stigmatize Bipolar.

    Be proud of that one my friend.



  51. It is posts like this that remind me *why* I enjoyed your book.

    Sometimes I feel like you tread a little across that line that makes stuff just seem a little too commercial and I suppose I feel a little disenchanted.

    But this, this is glorious and hits me perfectly at the right moment.

    Thank you.

  52. This is an excellent post. I think it’s important for entrepreneurs to keep their cool in rough times. After all, fortunes are made during economic downturns.

  53. Tim,

    Again, Brilliant. I have lived this cycle several times over as I’ve grown and changed my business model. The current credit crisis had me near a burnout, until I re-aligned myself and changed my methodology and tactics once again. I’ve been buying more copies of the book and giving them as gifts, but I still feel like I should write you a check as my business consultant. You’re always spot on.



  54. I love the way you get to the point and infuse humor into an otherwise very serious topic. It was very helpful. One important thing left out of the curve was how our connection with our higher selves will keep us moving forward. Self-care is a powerful tool and when used properly will propel us into the next stage. I’ve had several businesses throughout my 40 years on this planet and with each new venture, my physical enthusiasm waivers sooner. Yeah, I know I’m getting older and as I do, balance becomes essential. Rest for me now is kind of like food and water. I’ll die without it. You rock Timothy Ferriss.

  55. @Jose – re: Transitioning to another industry

    Hey Jose – great question about transitioning to another industry in your Oct 5th, 6:34pm question.

    I’ll take a stab at it for you – I don’t believe in multi-tasking. It doesn’t work. You end up doing a couple things poorly or with less focus. I LOVE mono-maniacs with a mission 🙂

    My belief is that if you’re leaving one biz to get into another – you need a FULL break and some time in between to refresh, think clearly, write a painted picture etc. before starting the next company. One way to have that full break (especially if your current company is profitable) is to put someone else completely in charge of running your current company so you can reap the benefits of cash flow and wait to find a suitable buyer – while you take a break – and then launch your next venture.

    I’d caution you though – having multiple girlfriends at the same time never works out well for anyone – same with companies. At least – that’s my experience 🙂

    Cameron Herold

    Founder, BackPocket COO

  56. TIM – very good!!! You are the man.

    So tell us more about HOW NOT TO HIT STAGES 2, 3, and 4. Is that wishful thinking?? I know we’re bound to hit hard times, but what if….

  57. There is nothing quite like pushing yourself to the very brink of your personal limitations to help temper arrogance and egotism. I personally really value the trip I have taken along this curve. Prior to really throwing all of my financial, emotional and physical effort into my business, I was doing great work for other people with little to no personal risk.

    In my mindlessness and without understanding the emotional safety net that playing with other people’s money gave me, I presumed I had all the answers and gave all of the kudos to my team and – secretly – to my amazing leadership skills.

    Growing a self-funded business from zero sales in a market with high elasticity of demand brought me face to face with every personal and professional shortcoming I’d been avoiding for the entirety of my working life. It was also an amazing reality check – the world is big and the winds of change blow through even the most “solid” companies, relationships and societies.

    Letting go of my own need to see myself as the center of a very small universe and embracing the ride rather than shutting my eyes has allowed me to encounter reality in a way that I never did before. I feel like, as a result I relate to everything and everyone around me more authentically and with more compassion. That’s not to say I have it figured out, but I certainly feel that riding the roller coaster has helped in in more ways than its hurt me. Here’s a quote I love that i think sums it up nicely:

    “What we choose to fight is so tiny!

    What fights us is so great!

    If only we would let ourselves be dominated

    as things do by some immense storm,

    we would become strong too, and not need names.

    When we win it’s with small things,

    and the triumph itself makes us small.

    What is extraordinary and eternal

    does not want to be bent by us.”

    – Rilke

  58. It really helps when at stage 3 to actually hear that others have been there and you are not simply going out of your head alone. I am going through this lonely time of despair and really needed to hear this. Its the chicken soup for us at stage 3!

    I have been thinking is it all worth it? Should I quit and go work for someone else again (you have to admit it is an easier option, but I always return to entrepreneur thinking and end up back here again – done it many times 🙂

    This post helps you realise it is time to let go of the need to control at stage 3 and ride it out – I will use your very helpful tips and try accepting what I am going through – Thank You!

  59. @Nathan K

    Hey Nathan – Great question.

    In my experience – we can’t fit the law of gravity 🙂 Even with this simple model. What goes up must come down.

    That being said – some entrepreneurs have lower highs, and higher lows – i.e. their curve is a bit flatter than others. And you may not feel the emotions at any of the stages as severely as most.

    All entrepreneurs that I’ve ever met or shown this to however – have all ridden the roller coaster a few times – it’s a never ending ride – so we all can choose to enjoy the ride regardless of the emotions we’ll feel while doing so.

    Hope that helps.

    Cameron Herold

    Founder, BackPocket COO

  60. Cameron:

    Great post! Your credentials are impressive. Can you tell us a little more about this achievement?

    “Building a PR team that landed more than 5,000 stories in those same 6 years”

    I have a pretty solid in-house blog and PR team, but I’d like to know if any of the entrepreneurs on this site have had success with an outside agency.



  61. @Casey

    Hey Casey,

    I’ve been landing PR consistently for companies I’ve owned or helped lead since 1986.

    From Oct 2000 thru May 2007 I was with 1-800-GOT-JUNK? and was the Chief Operating Officer there. One of the many business areas I built and led was PR.

    We built a simple little system that’s pretty much exactly what I’ve always done 1) Know your target, 2) Know your angle and 3) Pick up the phone. Seems pretty simplistic – but through a lot of hard work we landed a TON of media. In all we landed in excess of 5,000 stories in the 6.5 years I was there including Dr. Phil, Oprah, Fortune, FSB, Wall Street Journal, New York Times, Globe & Mail etc. etc.

    We never used outside PR Agencies (they traditionally just don’t pitch as proactively as we liked to).

    Hope that helps.

    Cameron Herold

    Founder, BackPocket COO

  62. Cameron,

    Thank you! Thank you! Thank you!

    The first time the light bulb came on and I understood how I am wired was when I meet John Gartner discussing his book “The Hypomanic Edge.” In it he mainly focused on what you call Uninformed Optimism, a condition where hypomanics “leap on every wacky idea that occurs to them, utterly convinced it will change the world.” I often find myself here, and it is often the most convicting and exciting part of life.

    While Uninformed Optimism is perhaps the most fun, most energizing…it is the other stages that you write about that have meant the most for me today…you said it is ok to be outside the energized state of Uninformed Optimism. It is ok to accept the other stages, expect them, enjoy them and work through them.

    Thank you for the common sense actions to take to work through each stage. I have been in each of these stages, felt it, knew it in my gut, but didn’t really know where I was and didn’t know why I couldn’t “catch” the energy of Uninformed Optimism.

    Thanks for making the dim light grow brighter.


  63. Thanks so much for this post. When I started almost 3 yrs ago I didn’t know about these swings and whenever Stage 3 came I suffered from severe anxiety attacks.

    It is only within the past year that I’ve been able to recognize my patterns and work them to my advantage.

    Stage 3 felt like the time to dig in and work harder but for me the only thing I wanted to do was escape. I beat myself up for being lazy, non-productive, and a procrastinator.

    Now I understand that a long lunch with a friend or sneaking out for an afternoon movie is exactly what I need to get myself over the hump.

    I also learned that for me Stage 1 is the best time to market and implement the systems that keep it all from going to hell when Stage 3 hits.

    This article makes me incredibly happy to find that I’m not alone and not so different from other entrepeneurs.

  64. Absolutely Brilliant!!!!!

    I cannot WAIT to show this to my husband! He actually calls my entrepreneurial mood swings “the rollercoaster” and now I can just smile, scream and hold on for the ride instead of freak out!

    I often described this experience like trying to hold onto a tiger by the tail…a wonderful, scary adventure…an out of control- but exhilirating rush of emotions. Endorphins, euphoria, despair, positivity, negativity, uncertainty, triumph…and the rollercoaster alone knows when and where the next dip or curve lurks!

    Thanks for reminding us Cameron and Tim, that this is a normal phenomenon, and that we are ALL experiencing these drastic ups and downs. I think this is required reading for all entrepreneurs AND their spouses!!!

    Thanks so much. I love this 4hww cyber-family! ha ha

    Tim, you are the Mac-Daddy. Cameron, you are the BOMB. I truly appreciate all the meaningful information you pass along! I am enriched when I put your info into practice.




  65. This post was just what the doctor ordered. I really needed to read this today. Like for most, things have been pretty challenging for me lately. To the point where the I’m taking anti-anxiety meds along with sleedping pills to get me through the night. Too bad my doctor hasn’t read this, otherwise he would have just told me that everything I’m feeling is completely normal. but now I know. Thanks Tim for this awesome post, you’re the best.

  66. This post was just what the doctor ordered. I really needed to read this today. Like for most, things have been pretty challenging for me lately. To the point where I’m taking anti-anxiety meds along with sleeping pills to get me through the night. Too bad my doctor hasn’t read this, otherwise he would have just told me that everything I’m feeling is completely normal. But now I know. Thanks Tim for this awesome post, you’re the best.

  67. Terrific intelligent description of the choice we make to create our own destiny, despite the circumstances, or to allow people who have no vested interest in our personal outcomes to determine our future for us through infludence and fear. THANKS

  68. Rock on with your bad self for writing this post! I can RELATE!

    Early this year I wrote a blog called “Entrepreneur: Egomaniac, Raging Bitch or Just Outright Crazy?”

    After reading this article I can safely answer the above question and say: ALL OF THE ABOVE!

    I started an investment business 8 years ago. Business slowed a lot in the last year and I am bored beyond words. We had the typical ups and downs and recently, it’s been a big downer. *yawn*

    In the last few months I started another venture – a non-investment based motivational thing with laughs and community outreach. I have so much enthusiasm and optimism right now I feel like I might explode like Veruca Salt almost did on Willy Wonka and the Chocolate Factory.

    I think I’ll heed the great advice in this article and hold off on major marketing purchases until I get my head out of fairytale land. Kinda sad though, I like the fairies!

  69. G’day Cameron,

    Your curve has possibly saved my marriage, as I can finally visually explain to my wife the reason for my manic-depressive tendencies!

    My query to you regards rocking back and forth in the valley of doom between points # 3 and #5, not falling off but not climbing out.

    How does one escape?

    Kindest thanks.

  70. This article really hits home because I just lost a business. Thank God, I’m still optimistic, and since I lost everything, it’s now informed optimism.

    Great article Tim. If you’re ever in Chicago and you want to train jiu-jitsu, I’d love to roll with you at gracie barra chicago.

  71. Steve L,

    Here is a resource that might help with your question of how to “escape” the valley between #3 and #5.

    “The Dip” by Seth Godin. You can read it in an afternoon. It talks about this cycle and how to prepare, win or know when to quit.

    Hope this helps.

    Have Fun – Be Free

  72. Oh yes the ups and downs of being a business owner, the elation and the self doubt, I can transition from one phase to the next in a matter of hours! The first step is acknowledgement, everyone else who has a business is going through the same thing. Step two is activity pairing, and having read about it, it makes perfect sense, I had wondered why sometimes reading a book about business can be uplifting and other times offputting -it’s not the book but the context that I as the reader find myself in. Thanks Cameron.