The Psychological Price of Entrepreneurship
Back in 2008, Smith was working long hours counseling nervous clients about getting out of debt. But his calm demeanor masked a secret: He shared their fears. Like them, Smith was sinking deeper and deeper into debt. He had driven himself far into the red starting–of all things–a debt-settlement company. “I was hearing how depressed and strung out my clients were, but in the back of my mind I was thinking to myself, I’ve got twice as much debt as you do,” Smith recalls.
He had cashed in his 401(k) and maxed out a $60,000 line of credit. He had sold the Rolex he bought with his first-ever paycheck during an earlier career as a stockbroker. And he had humbled himself before his father–the man who raised him on maxims such as “money doesn’t grow on trees” and “never do business with family”–by asking for $10,000, which he received at 5 percent interest after signing a promissory note.
Smith projected optimism to his co-founders and 10 employees, but his nerves were shot. “My wife and I would share a bottle of $5 wine for dinner and just kind of look at each other,” Smith says. “We knew we were close to the edge.” Then the pressure got worse: The couple learned they were expecting their first child. “There were sleepless nights, staring at the ceiling,” Smith recalls. “I’d wake up at 4 in the morning with my mind racing, thinking about this and that, not being able to shut it off, wondering, When is this thing going to turn?” After eight months of constant anxiety, Smith’s company finally began making money.
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