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The psychological price of entrepreneurship: The good, the bad, and what to do about it.

Being my own boss has been a wild, wonderful ride, and it's been hugely beneficial for my personal well-being. But it can also be pretty hard.

The stress, the failures, the rejections, the isolation, the stakes which often feel very high. It can be emotionally taxing, to say the least.

Is it really worth it? For me, the answer is a resounding "yes."

But what toll is it really taking? And how can we maintain our mental health while going down this path? It seems to me that understanding the possibilities, both good and bad, can help us to navigate them more effectively and consciously.

The psychological price of entrepreneurship

Let me start by saying that new businesses are being created at a rate never before seen. In 2020, there were more new business applications than any year prior, and in 2021, we're on track to beat that.

New business application graph

In my mind, that is a very, very good thing — and I'll touch on the benefits later (including some contradictory studies). But bear with me for a moment as I dive into the dangers that many of these entrepreneurs (myself included) may face.

According to a 2019 study by the National Institute of Mental Health, 49% of entrepreneurs have one or more mental health conditions (a third have two or more) and 29% have symptomatic family members. Compare that to 32% for non-entrepreneurs, with 16% symptomatic family members.

Think about that for a minute. Three quarters of entrepreneurs (and half the general population) either have mental health issues or are affected by them in their immediate families. And that was pre-pandemic. I bet that number is going up.

Researcher Michael Freeman studies mental health in entrepreneurs. His data shows that entrepreneurs are two times more likely to be depressed, six times more likely to have ADHD, three times more likely to have addictions, ten times more likely to be bipolar, two times more likely to suffer from depression, and two times more likely to have a psychiatric hospitalization.

So what's going on here?

Apparently, the answer is two-fold: People with these conditions are attracted to entrepreneurship. And the entrepreneurial lifestyle makes people more vulnerable to mental health conditions. Let's dive deeper into each possibility.

Why people with mental illness are attracted to entrepreneurship

It appears that entrepreneurs are cut from a different cloth. I'll give a few examples that I've found.

People who are attracted to this type of work tend to be highly creative and motivated. These traits are often correlated with strong emotions, which can make them vulnerable to mood swings.

Folks with ADHD are often attracted to the work because they have a tendency to be risk-takers.

There also seems to be a tendency toward narcissism. The confidence of narcissists makes them more likely to try their hand at building a business. And the charm that often accompanies narcissism can be helpful.

And then there's addiction. One study showed that serial entrepreneurs have addictive personalities. Makes sense. This often manifests in behavioral addictions like obsessive thoughts and withdrawal-engagement cycles. But they can also lead to other addictions, like substance abuse.

I think Aristotle said it best:

"No great mind has ever existed without a touch of madness." — Aristotle

Why entrepreneurs suffer from mental illness

Whether a person has a "touch of madness" or not, they may move in that direction if they choose this path. Why? It's different for everyone but here are a few difficulties I've found which tend to have a big impact on entrepreneurs:

  • Physical isolation — working from home and often lacking a team.
  • Emotional isolation — entrepreneurs often feel that people won't understand their troubles, or they don't want to burden their loved ones.
  • Neglecting relationships — these often fall by the wayside in favor of work.
  • Neglecting well-being — entrepreneurs can become so focused on their businesses that they stop taking care of themselves.
  • No "off switch" — working all the time and having difficulty slowing down.
  • Burnout — related to the above. Check out my post on this for info and tips.
  • Frequent failure — all entrepreneurs fail and it can take a toll.
  • Loss of identity — it's easy to tie one's identity to the business, which is dangerous.
  • Loss of self-worth — similar to the above, tying self-worth to success can be devastating.
  • Lack of control — ultimately, I think you gain more control of your life through entrepreneurship, but it can certainly feel like you have no control.
  • Feast or famine — the lack of a steady paycheck can be emotionally taxing.

According to Freeman, traumatic events happen often in entrepreneurial life. And founders make matters worse by neglecting health in favor of the hustle, which "triggers mood vulnerability."

Psychotherapist and author, Dr. Paul Hokemeyer said it well: “Entrepreneurs are trained to ignore the qualitative needs of their well-being measured in meaningful and authentic relationships, overall life satisfaction, and happiness. The message they have internalized from the field’s most celebrated entrepreneurs is the outdated prescription of 'no pain, no gain' and a pernicious message that success is purely measured in quantitative returns, return on investment, and profit." For more information on this, check out my post on hustle culture.

The short of it is this: Entrepreneurship is challenging. And the actions that many founders take in response to these stressors (isolation, grinding, etc.) actually make the situation worse in the long run.

Some helpful practices for entrepreneurs

That this has a negative impact on founders is obvious. By extension, then, it's safe to assume that it will hurt their businesses as well. How do we limit the impact?

I am in no way an authority on this, so I'll be listing resources created by mental health professionals in the next section. But I did find some things in my research that may help entrepreneurs, so I'll list them here:

  • Know the symptoms and make lifestyle changes if they come up.
  • Become financially stable before you embark on your project (or opt for a side project instead).
  • Create a more balanced routine.
  • Set clear (and realistic) goals.
  • Accept that you'll fail from time to time.
  • Get a mentor to teach and support you.
  • Take care of yourself. That means getting enough rest, relaxation, exercise, connection, and nourishing food.
  • Get outside, spend time in nature.
  • Meditate.
  • Journal and reflect.
  • Learn to leave work at the "office" (even if you work from home).
  • Get a therapist.
  • Have a support network and open up to them.
  • Become a part of a community
  • And when you see someone else who is struggling, reach out.

Going back to Freeman, he suggests that the most important thing entrepreneurs can do is to maintain relationships, and it's often the first thing that goes out the window. He also says it's important to identify with more than entrepreneurship. Have hobbies, get involved with charities, etc.

Since some of the tips above require knowing the signs, here are a few that can tip you off: Mood changes, weight changes, sleep changes, behavioral changes, changes in sex drive, decreased functioning, increased sensitivity, nightmares, aggression, isolation, apathy, fatigue, chronic pain, tics, headaches, skin irritation, stress sweats, inflammation, substance abuse, coming down with illnesses frequently, mood swings, and excessive highs/lows/worries/fears/etc.

Mental health benefits of entrepreneurship

The focus of this article has been on the dangers of entrepreneurship to mental health because I think it's important to have an eye on what many of us are going through. And because I feel that understanding it can help us to navigate it. But that's only one side of the story.

While I'm sure that most of the indie hackers reading this are already well aware of just how awesome this line of work is, I'll briefly share what I found about the mental and physical health benefits of entrepreneurship.

One study found that entrepreneurs had lower blood pressure, lower rates of hypertension, went to the hospital less frequently, enjoyed higher well-being and satisfaction, and had lower incidences of both physical and mental illness.

Another study showed that becoming one's own boss can improve mental health. And in the case of people moving from full-time employment (as opposed to unemployment) to entrepreneurship, their physical health improved too.

Obviously, this is a very different story than we saw in the studies mentioned earlier. 🤷‍♂️

Entrepreneur and author, James Clear, believes that entrepreneurs are indeed healthier, and that this is due to the way that entrepreneurs approach life — their confidence, purpose, and willingness to take control of their own destiny. He says this mindset, when applied to health, makes for healthier people.

I mentioned earlier that more businesses are being opened than ever before. Well, that's extra cool in light of research showing that as the number of small businesses in an area increases, so does the health of the surrounding community. While it's unclear whether this is causation or correlation, entrepreneurship's benefits seem to go beyond the health of the entrepreneur.

And beyond all that, we know that entrepreneurship allows us to make our own schedules, be our own bosses, and take our lives into our own hands. It's fun and challenging. It builds confidence, pays the bills (hopefully), and, if done right, can actually allow us to live healthier lifestyles.

It can also provide us with meaning and purpose, which has been shown to heavily impact our mental and physical health.

Resources on mental illness

Like I said, I'm not a mental health professional. If you're having a hard time, please get help. Here are some more resources that may be of use:

Wrapping up

So yeah, entrepreneurship is pretty great. It can also be hard. And none of us is alone in it. You got this. 👍

  1. 9

    Definitely getting outside in nature and exercise are very important.

    And sleep! Get 7-8 hours, people.

    1. 5

      Yes! Fixing my sleep habits changed my life. From my early teens until a couple years ago I was a "sleep when I'm dead" kind of guy. I used to get 4-5 hours per night.

      The lightning bolt for me was Matt Walker's book "Why we sleep". He shows that nearly every aspect of our body and brain is harmed by sleep deprivation. Walker's 3 episode series on Peter Attia's podcast is probably a decent substitute if you prefer that format. I can't recommend it highly enough.

      1. 2

        Hadn't heard of that book before, thanks for the recommendation!

    2. 3

      Agree, good sleep is key.

    3. 3

      Couldn't agree more! I don't think I mentioned nature, but that's a huge one for me. 💯

  2. 5

    I am in a few supportive chat groups. Found these to help me feel normal and excited about my work, alone.

    Highsignal.io is the newest community I joined.

    1. 4

      Thanks for the mention.

      Yes, people need to get on more calls and talk to other founders.

      It's lonely doing something out of the ordinary

      p.s. excellent post!

    2. 2

      That's great advice, thanks for weighing in! 👍

    3. 1

      I'm running a mental health support community called peerhose.com

  3. 4

    Hi James,

    Awesome write up! I recognized myself in quite a few circumstances in your article😁

    Yeah, entrepreneurship is fucking hard... And I still have a looong time to go until being financially independent... but slowly I've come to cope with all the problems (hasn't been easy though)... At this point I'm searching for a side gig, since realistically it'll probably take 1 year or so until my business takes off - but I've come to peace with that😁

    Best,
    John

    1. 3

      Thanks! Glad to hear you're finding your way and that you're at peace with the process— that's something to be proud of for sure. 💪

      1. 3

        Thanks! It has been (and still is) a wild ride😁

  4. 2

    Thanks. It is critically important to talk about mental health. We, humans, are fragile and the modern lifestyle has been increasingly stressful and toxic. I believe that being in control of your design, work, and directions is healthy given you take care of building resilience and positivity.

    1. 1

      Yeah, it's super important. We're fragile. But we're also really strong — I think both things are true.

      Couldn't agree more about designing our lives — huge benefit of being an entrepreneur. And building resilience is key 🙌

  5. 2

    What a great article! I afraid that we need more of these.

    1. 1

      Thanks, glad you found it valuable 🙏

  6. 2

    this is such an important topic! I think there's a misleading depiction out there that most entrepreneurs are overnight successes and being your own boss will always yield significant financial reward.

    I wish there was more truth out there about your odds of success and the impact running a business can have on your mental health. Brad Feld and Mark Cuban have both done a lot to dispel the misconceptions, and it's so great to see entrepreneurs at all stages sharing that it's not always rainbows and unicorns.

    For me, a group of peers can do a world of difference. Folks that understand where you are in your journey, which is why I like online communities like Indie Hackers so much. For those that want to meet in person with other entrepreneurs, I'd highly recommend EO (https://hub.eonetwork.org/) and EO's Accelerator program (https://www.eonetwork.org/eo-accelerator) to connect and share experiences with other entrepreneurs. If you can afford it, a coach can really help, too.

    Take care of yourself, all.

    1. 1

      Totally — community is huge. Thanks for weighing in and sharing those resources! 👍

  7. 2

    I remember vividly at a startup event, Steve Blank (the OG) was on stage and he asked the crowd to put their hands up if they come from broken families. Majority of hands shot up.

    His hypothesis was that entrepreneurship attracts people that are familiar with, or can handle chaotic environments. I imagine it might not be a clear cut cause and effect but a more complex relationship between the two.

    1. 2

      That's super interesting, thanks for sharing. There's a lot more to this topic than meets the eye!

  8. 2

    Wow, thanks for sharing this valuable resource. Love your detailed analysis of founder's mental health. I'm sure you have done quite an extensive research to write this post. Kudos for that. I'm running a mental health support community https://peerhose.com Think of it as IndieHackers built for mental health.

    1. 2

      Nice, looks like a great resource! 💪

  9. 2

    A couple great reads on the idea of finding integration/balance between working & making time for your ideas.

    Struggled for a little while thinking I wasn't a real indie hacker if I wasn't willing to dive off the salary and bet 100% on my ideas, but have reached the point where I believe the health benefit of not stressing about paying rent, or having food on the table, helps me be a better creator. This way everything I do doesn't have to be geared towards quickly creating an income, I can write blog posts for myself even if they won't get a billion views on Medium.

    1. 1

      But what do you do when you work a consistently intense job with volatile hours and travel like consulting or banking? With a 9-5 it seems to make sense but with 60-80hr weeks how is this possible?

      1. 1

        You won't be able to put in the same amount of time, that's true. At least from what I've found, people don't use their time well even if they have a lot. If you keep consistent, dedicated time, even if it's smaller than you'd like, you can still make things you want. There's a great article somewhere about protecting your sacred hours, the time when you are the most focused and work on the highest priority item moving you toward your goal and eschewing productive procrastination.

        That said, if someone goes looking for excuses why they can't, they're guaranteed to find one.

    2. 1

      Thanks for the resources! Totally agree — starting projects as side-gigs makes the most sense to me.

  10. 1

    thanks for suggesting resources for mental health care

  11. 1

    John I’m so glad you posted about this! In May 2020 I started this text message community around the idea of Emotional well-being for Entrepreneurs: https://DailyInspire.co and got it funded for a year by a micro grant.

    Now it’s self funded and I’m evolving it into a newsletter (Carrd + ConvertKit). I think there’s still room to go on taking care of ourselves and learning how to best love entrepreneurs. ♥️

    Appreciate this write up!

  12. 1

    As you were stating, personality traits and behaviour leads both to entrepreneurship and the issues that you listed above (in or out of entrepreneurship). The resilience and persistence of entrepreneurs allow them to keep trying when things get hard: there's a pivot, the context becomes different or numbers are not adding up. This leads to frustration and burn-out. Knowing one self and setting boundaries and rules from the start is the best way to deal with these issues, in or out from entrepreneurship. It's hard, but it's worth it.

    The negative sides related to frustration and depression would be much worse if the person worked in corporate environment that has no change or excitement. I think mentorship is one of the best ideas I've heard so far together wih keeping people close to you. People who care for you and will be able to show you the stop sign when necessary.

    1. 2

      Well said. Setting a clear structure for your work and holding that structure is super hard but really really helpful. I try (and often fail) to do that.

      And yeah, I agree with you and Freeman about having people close to you and sharing with them. My wife is a lifeline for me, and I started a men's group with a few other guys where we talk about what's going on in our lives. Super helpful.

  13. 1

    Many topics in covered in article. You mentioned both sides of entrepreneurship or side hustle. And thank you for resources.

  14. 2

    This comment was deleted 2 years ago.

    1. 1

      I used to do mostly cardio but I added weight lifting into the mix a while back and it's felt great for me. Haven't done much swimming for exercise, but I do jog to a nearby water source and jump in a few times a week — can't tell you how helpful a cold plunge can be.

      And the office space was a smart idea!

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