17 Lessons on the Psychology of Being a Searcher and CEO

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A funny thing happened to me during my ~10 years as a searcher and CEO: Though I had an endless number of commercial problems and opportunities that required my attention at any given time, it was often the personal considerations that kept me up at night: Indeed, I rarely lost sleep over whether to raise prices by 5% or 15%, but instead was kept awake by the idea that even asking the question suggested that I didn’t truly know what I was doing. I wasn’t anxious about what mix of equity and debt to include in a letter of intent, but was instead anxious about the prospect of not finding a company to acquire at all after spending two years in pursuit of one. Though I sometimes allowed myself to enjoy the growth that my company had enjoyed, I usually left conferences feeling insecure and self-conscious after hearing other CEOs talk about how much faster they all seemed to be growing their companies.

Thinking back on the early days of my journey as a searcher and CEO, I was likely as prepared as one could be from a purely commercial perspective, though was woefully unprepared for navigating the personal and emotional roller coaster that entrepreneurship inevitably presents.

For this reason, I thought it might be helpful to compile some of the lessons that I’ve learned over the years that cover the “human side” of acquisition entrepreneurship. Though these lessons bounce around between various subjects, I hope at least one of them provides you with a reason to reflect on your own situation, and perhaps make a change for the better in the process.

(1) Our True Motivations for Pursuing the Entrepreneurial Path

In an attempt to justify things like extended periods away from home, long hours, or a reduced ability to participate in home or family life, it’s unfortunately become all too common for entrepreneurs and CEOs to revert to a mostly hollow platitude that says something to the effect of “The only reason why I work so hard is for my spouse and my family”.

Candidly, I suspect that this simply is not true in most cases. Indeed, it wasn’t at all true in my own experience, if I’m being honest: Though freedom and financial security for my family were certainly potential happy consequences of my entrepreneurial ambitions, they were not at all the reasons why I pursued them in the first place. I’m certain that I would have pursued the exact same path had I been single or in any number of different family circumstances.

The plain truth is that most people who pursue highly ambitious career paths do so for reasons largely related to themselves. The sooner you rid yourself of the delusion that you’re doing it for others, the sooner you’ll come to realize the magnitude of what you’re asking of your spouse and those you love: To make meaningful and prolonged sacrifices to support your largely self-interested endeavor (I don’t mention self-interest with a negative connotation here, but instead a factual one).

The fact that a spouse or children may benefit from the outcomes of these pursuits (financial or otherwise) is often irrelevant: I don’t know this for certain, but I suspect that many spouses and children of entrepreneurs and CEOs would happily trade the possibility of a lifetime of financial freedom for a more present, available, balanced, and emotionally engaged partner working in a more traditional job with much less financial upside.

(2) How to Think About Taking Entrepreneurial Risk

One way to put context around the risk of not acquiring a company after a two-year search is to think about it in the following way: Two years represents ~5% of the average working life for the average North American adult (40 years, between the ages 20 to 60). So from the perspective of time, our most valuable asset, one’s downside is known and capped at 5%. In contrast, the upside of taking an entrepreneurial path with respect to freedom, independence, autonomy, satisfaction, and fulfillment is far more than 5% (likely something closer to 500%). Accordingly, it would seem that through the lens of time alone, pursuing your entrepreneurial dreams presents upside potential that is asymmetrically larger than the risk that it requires you to assume.

Though entrepreneurial risk can indeed be mitigated, it can never be eliminated entirely. Like many risks however, “insurance policies” exist to make entrepreneurial risk more palatable, but for whatever reason most people don’t seem to recognize that they’re already policyholders.

In my own case, when I decided to become an entrepreneur in 2012, I had just finished spending two years (and a few hundred thousand dollars) getting my MBA from one of the world’s best business schools. Instead of viewing my degree as an opportunity to make as much money as possible after graduation, I instead viewed it as the world’s best insurance policy against taking entrepreneurial risk: After all, if this degree didn’t get me a great job after a few years of trying to hack it unsuccessfully as an entrepreneur, what would?

What insurance policy are you sitting on, likely unknowingly? It could be your academic degree(s), your professional experience, your intelligence, your propensity to work hard, or your existing relationships within a given company or industry. Regardless of the form of insurance that you’re holding, you’re almost certainly already in possession of an asset (or perhaps several assets) that can act as a built-in contingency plan should your entrepreneurial endeavor not work out.

(3) Nobody Else Gets It

Nobody understands what it’s like to be an entrepreneur or CEO unless they’ve been one. Full stop. This can mean that:

• It can (and often does) feel very lonely at the top
• CEOs often feel as if they have very few outlets in which they can voice their personal & professional challenges
• Friends, family members, and even spouses will never truly understand what it’s like to be a CEO
• The realities of entrepreneurship (or leadership) are often very different from most people’s romanticized notions of them
• The CEO seat isn’t one that tends to engender a lot of sympathy from those on the outside looking in: Though many understand the rewards of company leadership – like compensation, decision making authority, and independence – few understand the sometimes-arduous journey that’s required to get (and stay) there.

(4) The Most Difficult Part of the Search Process

For me, the most difficult part of being a searcher had nothing to do with industry analysis, modelling, deal structuring, or anything else that one is likely to learn about in business school. Instead, I found that the most challenging aspect of the search journey was the feeling that I was never really making any notable progress. For lack of a better way to put it, I often felt as if I was “floating”… Neither progressing nor regressing in any meaningful way.

Though this may not sound like a particularly large challenge on the surface, it’s more difficult than you might think, especially for those of us who, for better or for worse, derive a lot of our satisfaction from the concept of regular achievement. More challenging still was having to sit with this feeling for upwards of 2 years.

In academics, we get grades and eventually progress to more advanced classes. In our professional lives, we get performance reviews, raises, and promotions, all of which serve as tangible examples of progress, momentum and achievement. I found the search process to be totally bereft of these types of feedback mechanisms, and as a result, it always felt very difficult to know whether all of my efforts were actually leading to anything.

As author David Gibson once wrote: “The experience of observing constant motion without lasting achievement, is so wearisome that no amount of speech can catalogue it”.

It is my experience that the search process tests your stamina, patience, and ability to manage your own psychology as much as (or perhaps more than) it does your intelligence, creativity, or willingness to work hard.

(5) The Inverse of the “Golden Rule”

It is generally agreed that the “golden rule” is to treat others how we ourselves would like to be treated. Without taking anything away from this very important idea, I find that the inverse is equally important: To remember to treat ourselves as we would treat others, especially when navigating difficult or stressful situations.

If you stop to think about it, it is truly amazing how much more critical we are of ourselves than we would be of a loved one in the exact same situation under identical circumstances. The next time you’re chastising yourself for making a mistake, ask: “How would I advise my spouse if they found themselves in an identical situation?”. Chances are you’d be much more understanding and empathetic with them than you would be with yourself.

If it’s so logical and intuitive to treat others with empathy and understanding, why isn’t it equally logical and intuitive to treat ourselves in this same way?

Sam Harris put it best when he said “If your best friend were to ask how she could live a better life, you would probably find many useful things to say, and yet you might not live that way yourself. On one level, wisdom is nothing more profound than an ability to follow one’s own advice”.

(6) Put Your Own Oxygen Mask on First

As a CEO, over time I came to notice that the mood of the broader employee base often directly reflected my own mood as the leader: When I was sluggish, tired, or worried, almost inevitably the broader employee base came to demonstrate those same things. When I was excited, energetic, or optimistic, most others tended to feel the same way.

This means that, as a leader, investments in yourself become investments in others. Organizational health suffers unless the CEO properly attends to her own personal health, both mentally and physically. Once you understand that company culture is often just a macrocosm of the CEO’s psychology, you’ll understand that there are commercial benefits (in addition to the personal ones) that stem from taking care of yourself before taking care of others.

(7) Comparison is the Thief of Joy

I’m proud of the fact that many CEOs feel comfortable opening up to me about their anxieties, doubts & insecurities. What this has taught me is that nobody has it all figured out (including, and sometimes especially, those who seem like they do). Remember that companies are almost never doing as well as they seem to be doing from the outside looking in. They are also almost never doing as poorly as they seem to be doing from the inside looking out.

I’m reminded of the following quote from the author Oliver Burkeman:

“One of the biggest causes of misery is the way we chronically compare our insides with other people’s outsides. We’re all (…) energetically projecting an image of calm proficiency, while inside we’re improvising in a mad panic. Yet we forget (…) that everyone else is doing the same thing. The only difference is that they think it’s you who is truly competent”

Remember, if every conference, panel, or CEO roundtable forced all of their attendees to drink a truth serum immediately before the event started, the likely result is that most would leave the event feeling comforted and supported, not inferior or self-conscious.

(8) Imposter Syndrome

Imposter Syndrome can be loosely defined as “feelings of inadequacy that persist despite external evidence of success”.  Particularly in my first few years as a CEO, when I understandably had less confidence in my abilities, I couldn’t help but regularly feel like a bit of an imposter: What business did I have being a CEO given my age and complete lack of experience? Almost all of the things that the business was asking of me were things that I had no experience in dealing with.

Compounding this feeling was the reality that in my first year as a CEO (and for many years thereafter), I made more than my share of mistakes, and I interpreted each of these mistakes as evidence that I didn’t know what I was doing. Conversely, I never seemed to interpret any of my accomplishments as evidence that I did know what I was doing… Such is life for the type-A over achiever, I suppose.

For whatever this may be worth, over the years I’ve come to appreciate that imposter syndrome is incredibly common among CEOs and leaders of all types (and, interestingly, it tends to persist even when one obtains more experience, more success, and a longer track record). Instead of viewing imposter syndrome as a bad thing, perhaps you can re-frame the feeling as proof that you are pushing towards your highest and best self.

I’ve also come to appreciate that imposter syndrome is almost an inescapable consequence of the search fund model: Remember, the very idea of the search model is predicated upon placing a young, inexperienced leader in a role that she would otherwise only obtain after 10-15 years of additional experience.

As Morgan Housel once said: “There are two types of successful people: Those with imposter syndrome, and sociopaths”.

(9) Forget About the Morning Routine

I often wonder if our constant pursuit of optimization and self-actualization is becoming counterproductive. One shouldn’t exclusively exercise, meditate, journal and intermittently fast their way to peace & equilibrium. A perhaps unintended consequence of the rise of “self-help” books, podcasts, and social media personalities is that we’re beginning to ignore the importance of fun, silliness, indulgence & even laziness. Though these things may not make for particularly interesting or “shareable” online content, they’re often equally as important

(10) The Unfortunate Rise of “Hustle Culture”

Almost inevitably, every year in late-December seems to produce especially high levels of unnecessary, unhelpful, and misguided hustle porn from some entrepreneurs and CEOs who mistakenly conflate taking a break or slowing down with being lazy or lacking commitment.

This intellectually lazy line of thinking is flat out incorrect at best, and dangerous at worst. Any fool can fill time with work and any fool can make themselves perpetually busy. Perpetual business is nothing to be proud of. It often signifies more problems than it does merits.

As a young CEO, I often felt guilty resting while others were (ever so publicly) “still grinding”. With experience and hindsight however, I’ve come to learn that my concerns were misguided, as resting is exactly what I should have been doing at the time.

If your situation and circumstances dictate that working through the winter break is the best thing for you to do, then by all means dive into your work without hesitation. However, if you catch yourself working for its own sake, working because you think you ought to be doing so, or (worst of all) working because you see your peers doing so, then stop and question whether you’d be better off resting instead.

A few observations that I sometimes still need to remind myself of:

(1) The sum of the hours that you spend working is not a proxy for your levels of commitment or ambition

(2) A “brute force” metric as simple as hours worked per week doesn’t tend to reflect the mental and emotional burden that many leaders tend to carry. The mind of a CEO is often occupied with thoughts related to the business even when they’re not explicitly working. Even if a CEO limits her active working hours to, say, 50 hours/week, an additional 10-30 hours/week is often still spent thinking about the business. This is an important nuance, as this rumination tends to take place at precisely those times during which the CEO is attempting to rest, and has the effect of lessening the extent to which she’s able to effectively do so.

(3) Lack of a life outside of work is not something to be proud of

(4) When you’re working, work fully. When you’re resting, rest fully. Time spent in the middle is the most dangerous place of all, as you reap neither the benefits of work nor play

(11) Fear of Failure

In many ways, a search fund can feel like an incredibly binary endeavor: Either you buy a company, or you don’t. If you do, you either make money for yourself and your investors, or you don’t.  For me (and for many others), this created a very strong fear of failure.

The overwhelming majority of searchers don’t have any track record to speak of as an operator prior to assuming the ultimate operator role, that of the CEO. Many searchers also don’t have any transaction experience prior to buying their first company (and if they do, it’s almost always as part of a broader team, rarely is it in one’s individual capacity). For this reason, when we first assume the CEO role, our career win-loss record is officially 0-0, and upon exit, we feel as if we’re either going to be 0-1 or 1-1, with nothing in between. The possibility of having an 0-1 track record was an objectively scary thing for me.

In light of this, like so many searchers, the pressure that I put on myself to succeed was enormous, which, in an unintentional sort of way, actually heightened my fear of failure. It’s also interesting to note that fear of failure tends to be particularly acute for those who have never really failed at any material undertaking (personal, professional, or academic) in their lives. This described me at the time, and I suspect it describes many of you as well.

(12) Contingent Happiness

As a CEO, in many ways I found that my sense of overall happiness and fulfillment was very much tied to the commercial success of my company. I was forever attempting to master the elusive skill of “compartmentalization”, but I’m not sure that I was ever successful in doing so. In short: I was as happy as my company was successful.

In every personality test that I’ve ever taken, the personality profile that comes back with overwhelming frequency is effectively than of an “achiever”. That is, for better or for worse, I tend to derive a lot of happiness and fulfillment from the concept of regular achievement. This can indeed be a very helpful personality trait for an entrepreneur/CEO, but there can be a darker side to the achievement coin:  That is, I really tend to struggle during prolonged periods where I don’t feel like I’m achieving anything that is particularly meaningful.

As the CEO of a company, especially in the early years, the feeling of achievement can actually be surprisingly elusive.  I often describe my first two years as CEO as taking two years to untie a knot that it took my predecessors twenty years to tie. It felt as if all I was doing was treading water, but of course what I wanted was to be swimming forwards, at an increasing rate of speed.

This essentially meant that my inherent need to achieve felt as it went unsatisfied for 2 years. Though this might not sound like a particularly big deal to some, it was more difficult for a personality type like mine than most might imagine.

(13) The Impact on the Spousal Relationship

As a CEO, I noticed that periods of company or professional success often correlated with fulfillment and engagement in my relationship, but periods of worry, uncertainty, or self-doubt at work often correlated with me feeling stagnant or even disengaged in our relationship.

Perhaps most unfortunately of all, I now see that the person who was most important to me regularly got the worst of me: As CEOs, at work, we effectively have no choice but to conduct ourselves with patience, thoughtfulness, and engagement. However, when I came home at the end of the day, I did so in an exhausted and emotionally depleted state. And because of this, I often felt too exasperated to talk to my wife about the day’s problems (as I preferred not to relive them), I had very little energy for anything other than attempts to rest, and I was so absorbed in my own work that I often didn’t ask my wife about hers.

(14) Peaks & Troughs

Though it’s generally well understood that the entrepreneurial journey is characterized by a never-ending series of ups and downs, less well understood is the reality that most entrepreneurs privately feel sheepish about the fact that their journey seems to feature a lot more downs than ups. 

This makes sense, for a few reasons:

Firstly, we often try to prevent ourselves from getting too high after a win, and too low after a loss. Though seemingly logical, the unintended consequence is often that we allow ourselves to fully feel the lows, but don’t allow ourselves to fully feel the highs.

Second, as human beings, evolution has made it such that we are wired to feel pain more than we feel pleasure. This “negativity bias” is a product of evolution that has taken place over hundreds of thousands of years, and has acted as an important survival mechanism for us to ensure that we remain properly vigilant around anything that may threaten our ability to survive and reproduce.

One small and simple way to overcome these inherently human tendencies is to keep an ongoing “success journal”. Though it may sound trite, forcing yourself to write down your wins, successes, and instances of growth & progress can sometimes be the only way to remind yourself of just how far you’ve come in any given period of time. For some reason, unless we go out of our way to formally record and revisit all that we’ve accomplished, otherwise notable successes quickly give way to the newest challenge, the newest instance of self-doubt, and the newest source of fear and anxiety.

Beyond the emotional peaks and troughs that are an inescapable part of entrepreneurship, I also find that there are peaks and troughs related to activity levels: During particularly busy periods at work, we yearn for things to slow down. Once those slow periods arrive however, we worry about why the slowdown in activity may be happening, or worry that it may be permanent, so we yearn for things to ramp back up. I suspect this is a microcosm of the broader human tendency to want what we do not have.

(15) Managing Anxiety

Though anxiety is an inevitable part of all of our lives, below are some tools, practices and strategies that I’ve found to be particularly helpful when experiencing acute instances of it:

• Take 10 minutes to write down (not just think about) how you would advise a loved one (say, your spouse or a child) if they found themselves in the exact same situation under identical circumstances. It is a virtual certainty that you would be much more understanding and empathetic with that person than you would be with yourself.

• Explicitly acknowledge periods during which you’re not feeling anxious. Even if you consider yourself to be a chronic worrier, you’d likely be surprised by how often you’re not feeling anxious if you pay sufficiently close attention. Like all other emotions, you’ll find that anxiety tends to come and go, however we never give these two states equal weighting: We always acknowledge when we are anxious, but almost never acknowledge when we’re not. This very human tendency likely creates a highly distorted sense of how frequently we think we experience anxiety.

• Write down how you will feel about the current stressor in 6 months, 1 year, or 5 years. You’d be surprised how fleeting most of our stressors tend to be.

• Get Cognitive Behavioral Therapy (“CBT”)

• Begin addressing the source of anxiety through taking action (to the extent that the source of your anxiety is actually within your control). Jeff Bezos put it particularly well when he said the following: “Stress primarily comes from not taking action over something that you can have some control over. So, I find that if some particular thing is causing me to have stress, that is a warning flag for me. What it means is that there is something that I haven’t completely identified yet, perhaps in my subconscious mind, that is bothering me and I haven’t yet taken any action on it. I find that as soon as I identify it, and make the first phone call or send off the first email message, or whatever it is that we’re going to do to start to address that situation, even if it’s not solved, the mere fact that we’re addressing it dramatically reduces any stress that might come from it.” Remember that action doesn’t follow mood, but mood follows action: The best way to “feel like” working out is to exercise for 3 minutes. The best way to cure writer’s block is to write for 5 minutes. The best way to motivate yourself to meditate for 15 minutes is to close your eyes and breathe deeply for 30 seconds.  

• Be aware of your specific triggers: Different people tend to have different things that tend to trigger periods of high anxiety for them. When you become more aware of your own specific triggers, you’re likely to become less worried or troubled when anxious feelings arise, as knowing exactly why and from where they arose tends to make the feelings less unpleasant, or at least easier to understand.

• During many of the times in which I’ve experienced acute anxiety, I’ve found that there tends to be an underlying emotion that I have not yet fully acknowledged or processed, and that unacknowledged emotion often manifests in anxious feelings. So the next time that you experience meaningful levels of anxiety, it may help to ask yourself: Is there a related emotion that I’ve been ignoring? If the current source of my anxiety is a symptom, what might be at its root?

• Ask yourself “The Six Questions”
  • What are the objective facts (things that any neutral third-party observer would agree with) that support the idea that I indeed have something to be highly anxious about?
  • What are the objective facts that do not support the idea that I have something to be highly anxious about?
  • If the bad thing indeed happened, how would I cope, and what would be the likely outcome?
  • What benefits is my anxiety providing me with?
  • What costs am I paying as a result of my anxiety, and how do the costs compare to the benefits?
  • Am I simply trying to eliminate uncertainty?  

(16) Re-framing Your Problems

As a CEO, it can often feel like you’re forced to deal with a never-ending torrent of problems on a daily basis. Though this was indeed a source of frustration for me, I found that regularly going through the following thought exercise was a useful way to re-frame the idea of dealing with problems in the first place:

Imagine a situation in which you are placed in a room with 99 other randomly selected people from across the globe. Imagine that you get the choice to participate in an exercise in which everybody throws all of their problems into a pot, after which everybody’s unique set of problems will be redistributed to, and assumed by, somebody else in the room. If you’d be unwilling to play this game, then perhaps a more constructive exercise would be to be grateful for the types of problems that you get to deal with.

As author Oliver Burkeman says: “Develop a taste for having problems. Behind our urge to race through every obstacle or challenge, in an effort to get it “dealt with”, there’s usually the unspoken fantasy that you might one day finally reach the state of having no problems whatsoever. As a result, most of us treat the problems that we encounter as doubly problematic: first because of whatever specific problem we’re facing; and second because we seem to believe, if only subconsciously, that we shouldn’t have problems at all. Yet the state of having no problems is obviously never going to arrive. And more to the point, you wouldn’t want it to, because a life devoid of all problems would contain nothing worth doing, and would therefore be meaningless. Because what is a “problem”, really? The most generic definition is simply that it’s something that demands you address yourself to it – and if life contained no such demands, there’d be no point in anything. Once you give up on the unattainable goal of eradicating all your problems, it becomes possible to develop an appreciation for the fact that life just IS a process of engaging with problem after problem, giving each one the time that it requires – that the presence of problems in your life, in other words, isn’t an impediment to a meaningful existence but they very substance of one.”  

(17) Vulnerability as a Leadership Superpower

Lack of vulnerability is particularly prevalent among young CEOs, who often feel as if they must know all of the answers, even to the hardest questions, else employees and other stakeholders will out them for being the imposter they subconsciously believe themselves to be. While this is entirely understandable, my experience suggests the following:

• Ironically, vulnerability is often the trait that we most appreciate when its being demonstrated by others, yet it’s the trait that we least frequently demonstrate when we deal with others ourselves
• Vulnerability begets vulnerability: If you want your employees to be genuine, honest, and open with you, then you must first demonstrate those behaviors to them. Otherwise, in spite of what you say, employees will not feel safe opening up to you with information that may prove to be of value. A comparable double standard would be if a CEO encouraged her employees to take vacation, but never took any herself.
• When you’re open about not knowing the answer to a question and asking for help to arrive at an answer, it not only humanizes you as a leader, but employees often appreciate the trust bestowed upon them when asked to be part of the solution.

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