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

  1. Hi Cameron, as someone who has (Internally) struggled with the label “Bi-polar” I have spent the last 15 years doing a version of what you described above – but relatively without forethought. I still find myself making the error of over exuberance wrt financial decisions upon the rebound. I really enjoyed this article and the structure it laid out. And perhaps, more importantly, I really appreciated the tone of the article as being positive and can do rather than “you should de-stress and do nothing with your life” – which a shocking amount of medical literature recommends. Thank you for this contribution. I really appreciate it. Joseph “Soxy” Price

  2. What are the skills to learn to make the falling less hurt?

    To shortn the depression or to make it less deep?

    Is it dangerous to shortn the recoverying-time of feeling bad by maybe medics or self-hypnosis or other psychological techneques? If no how do you overcome that time?

    In the last year I followed the advice from the 4hww and I experienced a hypomanic episode with having a lot of fun and success.

    Everything worked brilliant for me and I was really euphoric and thought about having found the last part of the puzzle I am working on for years – which is my life and personality.

    My life felt like a big party.

    Sadly after 3 month having fun the 4hww party ended. Social honorship for my activities came delayed. My energy decreased. I was not able anymore to stick to my plans concerning timelines. To make things worse I was clinging on the 4hww principles which includes setting deadlines to all my activities and breaking the relationship to my mother (due to 80/20 analysis). I thought she belongs to the 80% of people pulling me down, what I nowadays (6 month later) still think.

    My performance in all areas that were important in my life went almost down to zero in that time and I thought that the personality I formed myself to be within years was destroyed with in month. These areas include, friends, fitness, entrepreneurship, and studying at the university. When trying to work at the computer I got a headache. Sports did not bother me. Leaving home did not bother me. I ended up eating massive really massive amounts of cake and other unhealthy shit like 6 icecream-stics one after the other gaining 10kg in a period of 1-2 month. Before that time I was really fanatic in sports training sometimes arround 10 times a week doing model fotoshootings and maintaining a body fat percentage of 7%.

    One day I was not even able to remember the 4hww principles and the routines of the hypomanic dream-time experienced in the past months.

    Trying badly to survive I spend my day either working or walking arround in my apparment or from the appartment to the supermarket and back, eating and sleeping, putting myself almost in social isolation. That leaded to a really decreased comfort zone.

    Yoga helped me. Education helped me. Acceppting that things had gone wrong helped me. Focusing on recovering rather than big dreams helped.

    Now after depression I recovered. I do my sport 4-5 times a week. I build more selfconfidence day to day increasing my comfort zone again.

    I still feel shocked and scared a little to reexperience what I described above. To overcome fear it would really help me to know how to avoid these situations or make them less worse. It feels good to have a plan B in the pocked if you do not beleave that “steeling lunch from children” works 😉

  3. Really, really great post Tim. Thank you so, SO much. I have never felt so despondent with my life’s work as I did today – and then this just magically fell into my lap. I knew i was bipolar or whatever you want to call it, and i knew that it was cyclical and to just wait it out; but this information is truly … remarkable. I am lucky to ‘know’ you.

    Everything happens for a reason.

    Be well!


  4. Spot on, been through all of those in mini cycles and bigger longer term cycles, cant really add anything at this stage, but as I am just embarking on a new venture I find it very relevant and helpful, thanks

  5. Yep, very good to be aware of. It helps to learn how to use the lows of emotion as well as the highs. Rather than groveling in self pity it’s we can make it work for us.

    Coaches help with that a lot. Sometimes we just don’t know how to handle something because of the our closeness to the situation. With the right questions we can pull back and see the bigger picture.

  6. Amazing advice. The specifics of what to do and what not to do in each stage are so helpful.

    I think the big thing I’ll take away from this is not to try to learn new things while in the Crisis of Meaning stage. I tend to do this, and it hasn’t helped in the past, and reading this article helped me see why.

    Next time, I’ll focus on gaining my confidence back and getting things under control, not focusing on technical details and trying to LEARN things specifically.

  7. Wonderful post. Feels like I’ve come to the right place. Where many before me have come and dipped their toes in stage 3 (I’m swimming in it.) Nice to know there’s company to be found here. And that stage 3 is just that, a stage. While reading the descriptions of stages 1 and 2, I thought, “yes! That’s how it is. Precisely.” And so on with stage 3, “yes! Terrible! Here I am. Please pretend you don’t see me, as I’d like to hide and vomit somewhere without disturbing anyone.”

    I started my first business, entering the category of entrepreneur, last year. I didn’t want to start my own thing. I’m a designer. I can take on anything, but my field and preference is design, and things like marketing, selling, shipping, operations, official government documents, they all freak me out a bit. However, no one else is creating and putting out there what I believe should be made available, to myself, and everyone, so I’m having a go at it.

    Nice to know that there’s life after stage 3. Thank you.

  8. Thank You Tim! It was very comforting to read your text. When we see clear expressed these different phases and the inherent feelings, that we feel confused when we are going through it, it just calm down all the hopeless feelings and give hope and strength to re-start again with more consciousness of all of it.

  9. Dear Tim,

    In 2012 I was to be the food of the month on QVC. They ordered 47,000 cases of NoOodles and my supplier only shipped me 5,000 cases and even worse did not tell me until it arrived at the warehouse. That was the worst time of my very hard journey as an entrepreneur. For years I had learn to believe that my highs and lows were not normal that something was wrong with me. My mom has sent me your symposium on harnessing the bi-polar entrepreneur. I can not tell you how happy and relieved I was after I read it. You and your books have inspired my life in a positive way and I will continue to share what I have learned from you with my tribe of NoOodlists. Thank you… Thank you… Thank you! Chef Terri

  10. Great read! As a relatively new entrepreneur I have lived these phases. It is reassuring to know that it’s “normal” and I’m not alone. Thanks for the post!

  11. Oh no, I have read the whole post while being at the end of stage 03! Hopefully this post doesn’t fall in the “how to be successful” category 😉 Seriously I am struggling lately as everyone wants my money but it seems no one likes to give me theirs.

    So the question is, what has to happen that you will make the turnaround? Just cleaning will hardly help earning money and if you shouldn’t talk to customers and alike it is hard to get traffic to your site.

    For me the best thought to keep in mind is the big fat baldy dude in the red BMW Convertible! I worked in the finance industry before and could easily attach some (let’s say) stereotypes to that metaphor. And I am much more afraid of ending up like one one of them. So crash and burn is not an option!

    Greetz from Germany


  12. Fantastic article – like my life story – One saying I always try to remember whilst on this rollacoaster is :

    “The Reward is the Journey, Not the Destination”

  13. Wow, I know this post was written years ago but I just came across it and have to say how helpful I think it is. As an entrepreneur I have been through all 4 phases multiple times and wish I’d read the advice about what to do (and especially what not to do) at each stage earlier. Really great, practical advice. Thank you!

  14. Stability is exactly what I need in my business ventures or I can get burnt out quickly. Your work has helped me create new jobs and reach my goals. Thanks for these tools!

  15. Thank you so much for this- just crashed and burned after 8 yrs of the first 2, now crrawling back up- in a completeloy different place- so good to hear that this is normal have been completely alone with this until now.

  16. This year, I started teaching high school for the first time and this chart perfectly describes the first-year teaching experience.

    For me, the uninformed optimism came from viewing inspirational teacher movies like The Ron Clark Story and Freedom Writers and reading books like Educating Esme and The Perks of Being a Wallflower.

    The informed pessimism started when a lot of my students didn’t turn in their first assignment.

    The crisis of meaning started the day two students stormed out of class.

    I spent two months cycling between Crisis of Meaning and Informed Optimism and I read this article over and over. I thought I could keep myself from Crashing and Burning.

    Then, true to the article, I ended up in the doctor’s office from stress. Then I resigned.

    But here’s the surprise: I thought Crashing and Burning would feel awful, but actually I feel better than I have in months. Having done the best I could, I feel at peace walking away.

  17. This is really good. Pretty much spot on as far as the stages of a start up go. I think I am just coming into stage 5, balanced, not over excited, controlling my fear – ready to push through logically. I think I indeed went through every one of these. Love the article!

  18. Hey Tim! It would be great if your articles were like 4 minutes learning. I love them by the way, but takes too much time and that does not fit so well to your value proposition. 😀

  19. This really spoke to me. I am currently at month 20 of building my business and often experience these radical changes in my motivation and general workflow. This article breaks down the mental battle I go through on the daily and brings to the table logical and actionable responses to those feelings. My only question would be: Is it normal to experience all 4 phases in one day or within a few days?weeks? I would appreciate any insights.

  20. OMG. THIS!!!!!!!! I am currently at stage 4 (and so much happier here at the moment!). Stage 3 sucked. Plain and simple. I never want to go back there again but not I’m seeing the cycle repeats itself so I’ll embrace it, ride it out when it happens again, and likely refer to this amazing post! Thank you so so much! I only wish I would have read it 5 years ago… 🙂

  21. I’ve been struggling with bi-polar disorder for 20 years now. I’ve tried to deal with it in different ways. I read this post about 3 months ago and decided to put into action some concepts in this post to help out my business. I’ve had great results. I’ve increased revenue by 15% in the last two months by using how I feel to determine the action I should take.

  22. Just started my freelance copywriting business 4 months ago, and this 100% relates to what I just went through.

    Of course, freelance copywriting has relatively low risk, but yet it still felt like a risk (and people around me treat it like a big risk, which I don’t think it really is), which made it feel more intense.

    Step 2 really helped put me on the right track and pinpoint things that were a complete waste of time. I cut out about 15-20 hours of extra copywriting work a week to focus on 10-15 hours of the most important copywriting work.

    This brought me over the hump during step 3.

    Now I’m approaching step 4, guess I’ll plan the next wave of growth =)

  23. Wow. I just realized I was doing this for years! Yeah, since I was 13 I am already business-minded and circumstances like this always happened in different magnitudes at some point in my life, and I am sure most people too! This helped a lot for my next moved. I’m controlling my emotions now, both positive and negative. This is a very helpful article. Cheerios!

  24. And here I was thinking I was just crazy. Lol. Great timing. I am I the midst of a startup (not my first rodeo) but you get caught in the moment and forget it is all one big ride up down and around. Thanks Tim. PS love the new book.

  25. Hi All, I just want to ask if anyone ever tried using medical cannabis as an alternative meds? I have read many articles about medical marijuana and how it can help you in terms of chronic pain, glaucoma, eating disorder/anorexia, anxiety disorders and panic attacks, inflammation, even cancer and a lot more. [Moderator: Additional text and link removed.] Cbd and thc are also new to me and I don’t even smoke. If this is true I cant find any solid conclusive evidence that speaks to its efficacy. Any personal experience or testimonial would be highly appreciated. Thanks

  26. I’m a “very unique” 😉 fan – 48-year-old, premenopausal wife, mother, communicator, dreamer and entrepreneur. Just listened to you and Tim Urban and was very interested to hear you talk about your genetic disposition to bi-polar disorder. I KNEW we had more in common! 😊 Are you going to share more management tips for others who deal with this? I could really relate to what you’ve put in place to keep the dark wolves at bay.

  27. This is so brilliant, I can’t even…thank you Tim for this post. Bookmarking and using, probably daily, for at least the next five years.😀

  28. The graph makes a lot of sense Tim Ferriss! I just went through the “Crises of Meaning” phase and trying to move forward towards “Informed Optimism” phase. 😁

    [Moderator: additional text and link removed.]

  29. I tend to overdo it and keep myself busy all day, often running myself ragged. When I have free time, that is when my mind wanders and can get me into trouble. I empathize. Thank you for your blog.

  30. Tim – we need to share this again – more than ever due to covid – I.e. our mutual friend Tony last week…

  31. Excellent point of view. If I were to contrast the two ideas, how do you think it would be to best approach this?

  32. Hello thank you for the super helpful article. I have been teetering between stage 4 and stage 5 and not realizing it. I am a new entrepreneur 3 years full-time. It was so helpful and insightful to read this article and understand what the process has been as I round the corner. In stage 4 but most recently been, I instinctively stopped reading all the books the people I’ve been connecting with around business growth I just pulled back from all of it not realizing what was happening but just knew that it didn’t feel right or good and I had no interest in it. And I was able to be kind to myself and accept that’s where I was even if I didn’t understand what was happening I trusted the process of growth.

    So glad I listened to my gut instinct these past weeks as I now feel my inspiration, optimism and intelligent recognition of stage 5 returning.

    Grateful for this article. Thank you