Balderton report confirms founders deliver diminishing returns from ever increasing hours

Recent research from Balderton Capital reveals that start-up founders are under greater pressure than ever emphasising diminishing returns from ever-increasing hours.
Balderton report confirms founders deliver diminishing returns from ever increasing hours

To support founders and increase the chances of startup success Balderton Capital has launched a Founder Wellbeing and Performance Platform. The platform was created based on research among 230 founders as well as the firm's 20 years of experience investing in Europe’s entrepreneurs. The platform includes a tailored six-month health and nutrition program, peer-to-peer support, and on-staff executive support. 

From time to time a working environment, especially when building a business, can be overemphasised by a lot of pressure, challenges, and stresses along the journey, and one way of trying to deal with that kind of environment is working even more to overcome the obstacles. The research examined what the key obstacles and pressures are that startup founders are facing, and what is the best way to optimise performance in such an environment.

The research highlighted some of the key findings:

  • 89% of founders surveyed felt that the startup ecosystem was a naturally competitive and high-pressure environment.
  • 82% believe that working long hours is an inevitable part of being an entrepreneur.
  • 71% say that entrepreneurs are expected to constantly prioritise working over investing time in their own wellbeing.
  • 51% of founders say that investors and board members put pressure on entrepreneurs to always be available.
  • 84% feel there is an expectation that entrepreneurs must always work long hours in order to be successful.
  • 83% of founders feel that, past a point, there are diminishing returns from simply putting in more hours.

Lack of balance in life + stress + high-pressure lead to negative performance for the founder and the whole team

When it comes to decision-making, 88% of the founders agree excessive stress can result in bad decisions. Similarly, 83% believe that constant high pressure can lead to team burnout and that it can negatively impact business performance (64%). But, finding time is a key issue stopping founders from looking after themselves. Another factor is also isolation.

Having that in mind, 72% say it’s hard to find time to prioritise wellbeing while 61% say they find it hard to find support from those who understand the unique challenges they face. What is important, 81% of founders feel VCs can help create a culture where entrepreneurs can look after their wellbeing, with benefits for their performance and increased success.

“The historic approach of simply working harder and putting in more hours no longer makes sense. Rather than resulting in more success, Balderton’s research shows that, past a point, this can negatively impact decision making, creativity, and even result in burnout, which is cited as one of the top reasons that startups fail. By changing the dynamic and resetting expectations in the startup ecosystem, we can increase the chances of success, both for the founders and investors.” - Suranga Chandratillake, general partner at Balderton Capital

Balderton's research showed that adding more working hours will not improve performance, but what can have a positive impact is a holistic approach that includes factors like sleep, nutrition, and also personal and psychological support. That kind of approach will help in overcoming the pressures and improving performance. Also, VC support in providing greater support and resources will help founders in facing and overcoming those obstacles.

The platform consists of a couple of elements:

  • A Health and fitness programme - Led by a team of clinicians, the programme takes a personalised approach to improving physiology, nutrition, fitness, sleep, and mindset in order to optimise performance.
  • CEO Forums – as peer-to-peer support. These forums are a good place for a discussion about the personal and professional challenges that leaders face.
  • Executive coaching – While dealing with and navigating the high-pressure moments, the company’s coaches are providing ongoing support to the founders and CEOs.
  • Events and resources – designed to empower and educate founders to help them perform at their best.

Balderton’s research also suggests that investments in founder wellbeing are very low, and this can damage the chances of success in some companies specifically knowing that there is a large number of work staff. The example can be found in all countries, as, like in the UK, there are nearly 5 million people working in start-ups and scale-ups, and the tech ecosystem is valued at more than $1 trillion.

Investors have huge expectations of this generation of tech founders and more than ever we need innovative technology to solve some of the world’s biggest problems. However, there is a clear disconnect between what founders know helps them to produce the best results and what happens in practice. Frankly, when founders can not perform well their whole company suffers. This is why Balderton is taking steps to ensure every founder is supported and helped to grow both as a leader of their team and as a successful company builder. We think that is the way to achieve success as we invest for the future, building the European tech companies that will make an impact on global markets.” - Balderton Capital managing partner Bernard Liautaud

More about the programme can be found here.

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