For Israeli entrepreneurs and startups, 2020 began like many others. With the auspicious nature of “2020 Visioning” entrepreneurs turned corners into a new decade, dazzled, hopeful and inspired to bring tech to new heights. Startup founders wrote new goals, marked KPI benchmarks and set their eyes on new funding prospects. But with the COVID pandemic, we know things played out differently during 2020.
Already by February, the rising severity of COVID-19 showed us that entrepreneurs would be in for an economic and financial roller coaster this year. This roller coaster challenged the stamina, leadership, agility, psychological stability of every startup entrepreneur and high tech employee. Looking back, the year 2020 demonstrated resilience -- the capacity to thrive amidst stressors--of individuals, businesses and industries alike.
As a startup business coach, I work with founders to develop the mental mindsets, daily habits, soft skills and resilience capacity to help them thrive personally, as a team, and as a company. I witnessed how the COVID-19 pandemic ignited their professional and personal growth in their roles as a CEO, manager, leader, founder, family member and team member.
I asked the entrepreneurs I work with to reflect on the past year: benchmarks achieved, their highs and lows, lessons learned about self, entrepreneurship and mental resilience and advice they would share. Remarkably, all entrepreneurs I interviewed suggested the 2020 produced company growth in sales, market validation, MVP, technology development, number of employees employed and funding raised.
The startup industry
The growth these entrepreneurs experienced is representative of a wider trend. While many industries are still suffering as a result of the pandemic, the startup tech ecosystem is one that has particularly thrived. For startups in the Israeli tech industry, 2020 proved to be on par with previous years as shown through investment data of the Israeli high-tech market.
During the first quarter of 2020, signs pointing to unusual circumstances were evident in Seed funding rounds as many investors were risk averse towards early stage companies. Seed deals’ median decreased approximately 80% during Q1–Q3/2020. And the number of angel investors in Seed rounds during Q1–Q3/2020 decreased by 60% from 2018 – 2019 levels.
After the initial shock, Israel’s tech bounced back to normal. Startups and investors alike acclimated to remote investment meetings. What might be thought of as a wrong year to launch a startup can be countered simply by looking at how the ecosystem is still being supported by investors. During the second wave of the pandemic, Israeli high-tech deals reached a new quarterly record $2.74B in Q3/2020. In Q2–Q3/2020, Israeli and foreign investors made more investments than on average over the last five years.
High-tech as an industry is celebrated for its ability to be agile and innovate as needed. For founders and startups, the pandemic created an imperative to pivot depending on the surrounding circumstances. In the past, many successful companies have in fact emerged out of recessions due to their ability to disruptively innovate and respond to need. For successful entrepreneurs, crisis becomes an opportunity.
From Crisis to Opportunity
Michal Berresi Golomb, CEO & Co-Founder of ZICC, a biotech startup creating solutions for aquaculture said, “ 2020 was a year in which I had to slow down the run forward but not give up in the face of many different challenges.”
“It’s about adjusting my strategy and using it as an advantage,” said Eitan Tsarfati, serial entrepreneur and CEO of SWAPP, an AI based technology construction planning company. This is exactly what COVID instigated for many founders. Entrepreneurs are exemplary at demonstrating how to take advantage of a challenge and turn it into an opportunity.
Vee is a startup offering a corporate volunteer platform. May Piamenta, CEO, saw such an opportunity. “We adjusted the product, raised $1M, recruited 12 amazing people and gained our first product market fit. This was one of the most fulfilling years of my life,” she said.
COVID also created a new set of needs and expanded particular markets. Kai.ai is an AI driven wellness companion that guides you throughout your day helping you learn, grow and become a better version of yourself. For Kai.ai, the COVID period demonstrated a greater need for their product. “COVID increased awareness and attention to mental health and wellness dramatically and it drove our growth,” said Alex Frenkel, CEO of Kai.ai.
Wellness and the Life of an Entrepreneur
Wellness has indeed become a talked about and prioritized value in 2020. COVID affected each one of us, our families, friends and colleagues. Great leaders this year led with empathy and emotional intelligence knowing that this would have a ripple effect on their business. ““I came to understand the importance of the well-being of the employees, and the need to instill peace of mind in the staff members during the corona period. We created a role of 'head of people' led by Zohar Pfennig, a position I did not understand its value until I saw the impact it created for the whole company,” said Tzach Ram-On, CEO of INTSITE.
In my work with founders, I emphasize the importance of entrepreneurs prioritizing their own mental health. We develop and practice strategies so they can best lead their businesses and teams to success.
Entrepreneurs in particular experience heightened levels of stress. A survey report conducted pre-COVID by Canadian Mental Health Association showed that among entrepreneurs surveyed, nearly half (46%) experienced low mood or felt mentally tired at least once a week, while three of five (62%) felt depressed at least once a week. Furthermore, nearly one in two (46%) felt that mental health issues interfered with their ability to work. (CMHA).
In 2020, COVID has intensified the stressors on entrepreneurs and making burnout more likely but also harder to identify. A survey on Emotional Resilience in Leadership 2020 conducted between November 2019-May 2020 with 261 respondents from 43 countries identified the six most common stressors that lead to burnout.
- Feelings of Isolation and Lack of Psychological Safety
- Unsupportive Workplace Culture
- Existential Crises and Lack of Purpose
- Over-invested Identity (leaders who attach their identity to that of their business or teams outcomes)
- Gender-, Racial- and Age-based Discrimination
The accumulation of unprocessed and unaddressed stressors can build up over time. Stressors in short increments and manageable doses can build stamina to manage conflict periods. However, stressors built up over time can lead to fragility, inability to cope, fatigue and ultimately burnout. Developing mechanisms to manage stressors is essential for entrepreneurs.
As a psychologist by training, CEO of Kai.ai Alex Frenkel added, “It’s a marathon, not a sprint. It doesn't make any sense to burn out.”
For Frenkel creating a steady schedule with wellness routines as part of the day to day is critical. This includes, working out, getting enough sleep, spending time in nature outdoors, journaling and daily meditation and off times during weekends. “Ultimately it’s about celebrating the positive and sharing gratitude and appreciation to other people,” he said.
Many founders noted exercise, meditation, music and designated time with family as their activities to cultivate wellness.
Michal Beressi Golomb calls it finding your “islands of quiet”. Your island of quiet might be the things that give you energy, rejuvenate or relax you.
“Even in periods of calm, when everything is great, it is valuable to incorporate practices of mindfulness, reflection, wellbeing, balance, emotional regulation because it will serve you when the challenges come, and they always come,” Frenkel added.
Times of chaos are often periods of our greatest growth and learning. We have much to learn and admire from startup entrepreneurs in 2020. Through the founders I coach, I am consistently in awe of their perseverance and openness to learn and grow.
Guy Montuelle, CEO of Bygr, a PropTech startup based in Norway said “Those who use a crisis to their advantage can get out stronger from it. Keep on executing, and if your strategy is correct, you will succeed.”
In reflecting on advice for aspiring entrepreneurs, Erez Dror, CEO of Genda, a ConstructionTech startup, said “The journey is hard, find someone that has been through it that you can talk with. Don’t get too emotional about the ups and downs. Things will change in any direction several times a day.”
Being an entrepreneur can often feel lonely. We need to cultivate systems of peer support through networks with colleagues, a therapist or coach support. And as May Piamenta suggested, “Share the experience with relatives, even if you don't think they understand.”
On a tactical note for startup survival, many CEOs realized this year the need for securing longer runways in funding. Especially during uncertain times, reaching the next milestone might take longer than expected. Building a solid foundation, POC, MVP and infrastructure takes time.
What Keeps us Going?
At the end of the day, the most resilient entrepreneurs maintain positive mindsets, believing they are unstoppable. Shai Ronen, an investor from PTZ Ventures and former entrepreneur, said “Startups experience near-death-experience on a regular basis and even rock-star entrepreneurs of unicorns struggle to stay resilient. You never know how close you may be to the solution.”
Waking up remembering your ‘North star,’ your purpose and passion is a key part of fueling the entrepreneurial drive. For Michal Beressi Golomb, “The desire to fulfill and create motivates me every morning anew and the belief that our venture will improve the world and bring intrinsic value to both man and the environment.”
The reality is that maintaining a positive attitude day in and day out is difficult. As an honest reflection, one CEO shared that “Some days I am not energized in the morning or the day and I know it is part of the process.” This acknowledgement that it is part of the process is the self-awareness and resilient mindset which is essential to cultivate as an entrepreneur. I admire the openness with which this entrepreneur shared his reality. Imposter syndrome, the feelings of inadequacy or self-doubt despite demonstrated success, is commonly experienced or felt among entrepreneurs. It is even more common among female entrepreneurs. Talking about this experience aloud will help you realize that you are not alone!
The tumultuous year that has been 2020, mirrors the lived experience of startup entrepreneurs on a daily basis. High levels of uncertainty, extreme levels of emotional highs and lows experienced on any given day. “You think you control everything but you don't, so just do your best and don't get too emotional about the ups and downs,” said Eitan Tsarfati.
We have much to learn from the lived experience of these entrepreneurs. They are demonstrating how to truly thrive in a VUCA world (Volatile, Uncertain, Complex and Ambiguous).
This year, we are creating a more nuanced narrative about what it really looks and feels like to be an entrepreneur. A narrative where entrepreneurs are encouraged to ask for help, take breaks, create harmonic relations between work and personal life. This, in effect, will endorse the development of mental resilience, stamina, agility, grit and psychological stability required for entrepreneurial success.