The stress of startups

Building a business can have costs beyond the bottom line, writes Sangeeta Kocharekar.

In March 2018, Alex Zaccaria was strolling along a New York City street when he heard a few clicks and crunches in his spine and nearly crumpled to the pavement. The pressure of two years as co-founder of Australian startup Linktree, which has surpassed $3 million annual recurring revenue, had finally caught up with him. “I remember thinking on that flight home that I was okay to not exist anymore,” says Zaccaria. “That was an alarming moment for me.”

The stress associated with running a tech company is no surprise. Elon Musk has admitted to working 120-hour weeks. What is surprising is the severity of symptoms founders like Zaccaria experience. A KPMG report released in October 2019 found that of 167 startup founders surveyed, four out of five weren’t satisfied with their mental wellbeing and stress levels.

Amanda Price, the head of KPMG’s High Growth Ventures team, commissioned the research after she saw a 2015 University of

California, San Francisco, finding that 30 per cent of entrepreneurs suffered depression and 27 per cent had anxiety. Despite those numbers, there is little research on the wellbeing of Australian startup founders.

Price attributes the lack of data to the newness of Australia’s startup ecosystem. But she suspects another reason, too. “I think there’s a stigma in speaking out about it. And I think founders worry it will affect their ability to attract more investment.”

But the issue needs addressing. In his 2018 book, Unicorn Tears: Why Startups Fail And How To Avoid It, entrepreneur and venture capitalist Jamie Pride wrote that after the ASX listing of his company, Reffind, in 2015, he “started thinking dark thoughts” and “had never felt this bad before”. He wound up in hospital with severe chest pains.

Zaccaria’s diagnosis was two slipped discs and one torn disc. “The general medical consensus was that this was the body’s reaction to always being in fight-orflight mode,” he says.

It’s a mode startup founder Zac Hayes of HA Accounting also knows well. After attracting more than 900 clients in just 18 months, he began to see his health decline. “The anxiety was from the moment I woke up to the time I put my head on the pillow,” says Hayes, who also suffered high blood pressure and gained 12 kilograms.

In the 2019 KPMG report, 56 per cent of founders reported doing less than two hours of physical activity a week and, despite the obvious mental toll of running a startup, 78 per cent hadn’t sought counselling in the past year.

For its part, the investment community has been “amazing”, says Price, and is working with KPMG to find ways they can support founders. “Venture capitalists have a real responsibility, like as a coach you have a responsibility to the athlete as to how hard you push them. I think we’re heading in the right direction – just not fast enough.”

In the meantime, Hayes predicts another dynamic could accelerate the journey: the next generation of workers and founders. Collaborating with a team who are all younger than 24, Hayes says he’s noticed they “are all about boundaries and knowing work is work”. It’s a “different mentality”, he adds. “It’ll be an interesting time.”