Management is a ‘dinosaur’ whose time is up

Shubha Sharma in The Hindu

Adman Prahlad Kakkar’s school of entrepreneurship throws participants into the deep right from the word go

Here are some things they will never teach you at Harvard Business School. To begin with, be prepared to throw your Peter Drucker manuals out. Learn from the horses, the sharks, the Himalayas, the tribals of Bastar, at the feet of a spiritual master and the biggest guru of them all: Mr Murphy. He of the Murphy’s Law canon.

Learn that money is not everything. The value you create is just as important to a business. As an entrepreneur, understand your connectedness with all of life.

This unusual curriculum at a Mumbai-based institute of branding and entrepreneurship has been scripted by advertising filmmaker Prahlad Kakkar, a man reputed to break every rule in the book. The Prahlad Kakkar School of Branding and Entrepreneurship offers a one-year course on ad filmmaking and branding as well as a two-year fellowship in business and entrepreneurship. It is run in association with Whistling Woods International, a media and communications institute started by filmmaker Subhash Ghai, and is located in an area that churns out more illusions in a year than you can ever imagine: Film City, Goregaon.

This school is for real, though, and has the hard knocks built in. At the core of its curriculum is fear, and learning to ride it. Fear, says Kakkar, prevents the young and old from taking decisions and responsibility. And failure goes in tandem with fear. Kakkar takes pride in the fact that his curriculum does not have a single success story. All success stories, according to him, are doctored in hindsight. “And therefore they are lies. Failure is something nobody wants to be associated with. It is the truth. So we select, for our teaching, almost success stories.”
He believes in throwing the participants into the deep, from the word go. The course begins with a bootcamp. “You go down to survival level. You’re going to come back with new perceptions, alliances, friends and new teams, all of which will last a lifetime,” says Kakkar.

Flying

The next fear it aims to tackle is that of flying. The course requires participants to jump out of a plane in South Africa, and go on a safari down the Zambezi. They will camp in the dark and survive on meagre rations. The next day, students have to find their way back with the help of a map.

Learning to fall from a horse is also part of the class. The students face an animal that is 10 times stronger than they are. And when they fall, they learn that they never ‘remain fallen’. “If we teach you how to fall, then you lose the fear of falling.”

In the larger scheme of things, either you conquer a challenge through sheer strength or join in – in this case, you merge your being with that of the horse. “But don’t join it and lose your personality. So when you do mergers with other companies, it’s not to destroy them and sell. The whole idea is, is it going to take you 10 years to develop the company of that size, that momentum and those clients, or would you rather buy it over and make it a part of your company?”

And then, there’s the mother of all fears: navigating the ocean. “It’s the fear of the unknown. The only two unknowns left on the planet today are space and the ocean,” says Kakkar. The course requires you to go through a deep-sea diving course in the Andaman Islands, qualify as an internationally-certified diver, and just when you think you’ve conquered it all, you go into a cage and face the great white sharks under water.

Legendary shark

The legendary shark is far more fearsome in our imagination, says Kakkar. “We put you in a safe, controlled environment to overcome your illogical fear of these magnificent creatures. Behind the safety of the cage your mind opens up to the possibilities of their strength, aggression, instinct and beauty and the ability to survive under any circumstances.”

The next big phobia after the sea is snakes. So the curriculum requires you to spend four to five days in a snake farm, handling the species. “There are rules of engagement with them too. Most of the time they’re aggressive because they think you’re aggressive. We call this the reptile sensitisation programme,” says Kakkar.

The stillness quotient comes from the Isha Foundation’s Inner Engineering course. “When you need leadership and you don’t have the stillness that yoga teaches you, you can never ever command respect,” says Kakkar.

And to cap it all, is a tryst with the mountains. Jamling Norgay, who climbed the Everest, will take participants on hiking. “The mountains and the sea are two most humbling experiences. They knock the hell out of your ego. Norgay teaches you rock climbing, leadership and team building,” says Kakkar. The students will also learn how a restaurant runs, because as Kakkar says, Murphy’s Law, which says if something can go wrong it will, is hugely prevalent in a restaurant.

Kakkar himself has dived into various oceans. Besides Genesis Film Production, one of India’s oldest ad film production houses, he runs a scuba diving school and has also been running restaurants. He broke even with his scuba diving school only after 10 years, so “failure” and “falling” aren't new to him either. The curriculum, then, is born out of his experience — notably his 25 years at Genesis.

One of the key things he realised at Genesis was that youngsters need to be trained to own their jobs, and not just do them. No one, MBAs included, are encouraged to own their jobs. They are simply cogs in a larger machine and everybody works them by remote, he says. At Genesis, Kakkar got mostly “misfits” —16-year-olds whose parents used to ‘dump’ them on him — and he had to mould them. “I knew I had to empower them very early to make decisions. I didn’t believe in people who procrastinated.”

Management, he says, is “like a dinosaur” whose time is up. A company like Google is flat, and everyone will need to become like them to survive. Decisions need to be taken at the low end. “Middle management people are afraid because they’ll lose their jobs. Youngsters couldn’t care, because it’s their first job anyway.”

Train young people

The institute will train young people to fight for responsibility, to want to own their jobs, to be territorial about what they do, and take decisions fearlessly. Importantly, it will break one big management practice: there will be no summer training. Instead, participants get to form a management company and take over a sick company from banks. They have one year to turn it around. “If they manage to keep it afloat, let alone turn it around, they will be the most wanted people in any organisation.”

The larger idea is to add value. “They have to be independent and confident, highly motivated and flexible on the ground, understand the difference between value and money. To give back as much as they take. If they add value to whatever they do the money will come.”

With this paradigm shift, it’s only logical that the institute keeps the curriculum flexible. For the first year, students will learn the rules of engagement as they exist – this comprises the theory component of the course, built upon by the practical part. The next year, they will be tested on how they want to change the rules for the future, and this will form the basis of the curriculum for the next batch. He compares the process to a commando’s final test — blindfolded, he takes a sophisticated weapon, dismantles it to its last spring, puts it back together within the timeframe and fires it.

The faculty is drawn from the commando-in-action pool. Apart from Norgay and South African cricketer Gary Kirsten, there’s Dhiraj Rajaram, founder of MuSigma — a frontrunner in the analytics space. The course, which costs close to Rs.13 lakh, is a combination of Kakkar’s passions, whether it’s scuba diving or cooking. At the final graduation dinner, the students will even cook for their parents.

“I’ve never worked a single day in my life. I converted all my hobbies into work,” says the institute’s founder-chairperson. And it looks like some of those are still being stirred. “I’ve suddenly decided to have some more fun,” he says. He plans a line of T-shirts that will be “highly abrasive to everybody.”

“We’re doing a whole line on Papa Pancho (the restaurant he runs). Or on sports. There is also an entire line on Savita Bhabhi, which is all you wanted to know about sex but were too scared to ask.”

Convention can go for a run. Or if you’re afraid of the idea, go ride a horse. Because for Kakkar, this is simply about playing it different. “Somebody says, ‘Where do you think of these ideas? How can you make them a business? I say the business happens. First let’s get a product out that is unique.”

That is perhaps why he is clear his course will create “warriors, not wimps”. From a man who has always dared to pursue his innermost calling, this isn’t surprising.

Government and Innovation - A much-maligned engine of innovation

Matin Wolf in FT 

Conventional economics offers abstract models; conventional wisdom insists the answer lies with private entrepreneurship. In this brilliant book, Mariana Mazzucato, a Sussex university professor of economics who specialises in science and technology, argues that the former is useless and the latter incomplete. Yes, innovation depends on bold entrepreneurship. But the entity that takes the boldest risks and achieves the biggest breakthroughs is not the private sector; it is the much-maligned state.

Mazzucato notes that “75 per cent of the new molecular entities [approved by the Food and Drug Administration between 1993 and 2004] trace their research ... to publicly funded National Institutes of Health (NIH) labs in the US”. The UK’s Medical Research Council discovered monoclonal antibodies, which are the foundation of biotechnology. Such discoveries are then handed cheaply to private companies that reap huge profits.

A perhaps even more potent example is the information and communications revolution. The US National Science Foundation funded the algorithm that drove Google’s search engine. Early funding for Apple came from the US government’s Small Business Investment Company. Moreover, “All the technologies which make the iPhone ‘smart’ are also state-funded ... the internet, wireless networks, the global positioning system, microelectronics, touchscreen displays and the latest voice-activated SIRI personal assistant.” Apple put this together, brilliantly. But it was gathering the fruit of seven decades of state-supported innovation.

Why is the state’s role so important? The answer lies in the huge uncertainties, time spans and costs associated with fundamental, science-based innovation. Private companies cannot and will not bear these costs, partly because they cannot be sure to reap the fruits and partly because these fruits lie so far in the future.

Indeed, the more competitive and finance-driven the economy, the less the private sector will be willing to bear such risks. Buying back shares is apparently a far more attractive way of using surplus cash than spending on fundamental innovation. The days of AT&T’s path-breaking Bell Labs are long gone. In any case, the private sector could not have created the internet or GPS. Only the US military had the resources to do so.

Arguably, the most important engines of innovation in the past five decades have been the US Defense Advanced Research Projects Agency and the NIH. Today, if the world is to make fundamental breakthroughs in energy technologies, states will play a big role. Indeed, the US government even helped drive the development of the hydraulic fracturing of shale rock.

Mazzucato insists this involves more than state support of research and development, vital though that is (in the US, the government funds a quarter of R&D and nearly 60 per cent of basic research). But the state is also an active entrepreneur, taking risks and, of course, accepting the inevitable failures. America has been a developmental state since the days of Alexander Hamilton. Indeed, the nation’s recent role as the premier promoter of fundamental innovations owes as much to its state as to the get-up-and-go of its entrepreneurs. 

Germany’s failure to remain at the forefront of today’s new technologies, in contrast to before the second world war, may be down to the limited role now accorded its state.

Mazzucato loves puncturing myths about risk-loving venture capital and risk-avoiding bureaucrats. Does it matter that the role of the state has been written out of the story? She argues that it does.

First, policy makers increasingly believe the myth that the state is only an obstacle, thereby depriving innovation of support and humanity of its best prospects for prosperity. Indeed, the scorn heaped on government also deprives it of the will and capacity to take entrepreneurial risks.

Second, government has also increasingly accepted that it funds the risks, while the private sector reaps the rewards. What is emerging, then, is not a truly symbiotic ecosystem of innovation, but a parasitic one, in which the most lossmaking elements are socialised, while the profitmaking ones are largely privatised. Do ordinary taxpayers understand that their taxes fund the fundamental innovations that drive their economy?

This book has a controversial thesis. But it is basically right. The failure to recognise the role of the government in driving innovation may well be the greatest threat to rising prosperity.

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It’s a Myth That Entrepreneurs Drive New Technology

For real innovation, thank the state.

By Mariana Mazzucato|Posted Sunday, Sept. 1, 2013, at 5:00 AM

Some of our hero worship of tech entrepreneurs like Facebook CEO Mark Zuckerberg would be better directed at the government.

Photo by Justin Sullivan/Getty Images

Images of tech entrepreneurs such as Mark Zuckerberg and Steve Jobs are continually thrown at us by politicians, economists, and the media. The message is that innovation is best left in the hands of these individuals and the wider private sector, and that the state—bureaucratic and sluggish—should keep out. A telling 2012 article in the Economistclaimed that, to be innovative, governments must "stick to the basics" such as spending on infrastructure, education, and skills, leaving the rest to the revolutionary garage tinkerers.

Yet it is ideology, not evidence, that fuels this image. A quick look at the pioneering technologies of the past century points to the state, not the private sector, as the most decisive player in the game.

Whether an innovation will be a success is uncertain, and it can take longer than traditional banks or venture capitalists are willing to wait. In countries such as the United States, China, Singapore, and Denmark, the state has provided the kind of patient and long-term finance new technologies need to get off the ground. Investments of this kind have often been driven by big missions, from putting a human on the moon to solving climate change. This has required not only funding basic research—the typical "public good" that most economists admit needs state help—but applied research and seed funding too.

Apple is a perfect example. In its early stages, the company received government cash support via a $500,000 small-business investment company grant. And every technology that makes the iPhone a smartphone owes its vision and funding to the state: the Internet, GPS, touch-screen displays, and even the voice-activated smartphone assistant Siri all received state cash. The U.S. Defense Advanced Research Projects Agencybankrolled the Internet, and the CIA and the military funded GPS. So, although the United States is sold to us as the model example of progress through private enterprise, innovation there has benefited from a very interventionist state.

The examples don't just come from the military arena, either. The U.S. National Institutes of Health spends about $30 billion every year on pharmaceutical and biotechnology research and is responsible for 75 percent of the most innovative new drugs annually. Even the algorithm behind Google benefited from U.S. National Science Foundationfunding.

Across the world we see state investment banks financing innovation. Green energy is a great example. From Germany's KfW state bank to the Chinese and Brazilian development banks, state-run finance is playing an increasing role in the development of the next big thing: green tech.

In this era of obsession with reducing public debt—and the size of the state more generally—it is vital to dispel the myth that the public sector will be less innovative than the private sector. Otherwise, the state's ability to continue to play its enterprising role will be weakened. Stories about how progress is led by entrepreneurs and venture capitalists have aided lobbyists for the U.S. venture capital industry in negotiating lower capital gains and corporate income taxes—hurting the ability of the state to refill its innovation fund.

The fact that companies like Apple and Google pay hardly any tax—relative to their massive profits—is all the more problematic, given the significant contributions they have had from the government. Thus, the "real" economy (made up of goods and services) has experienced a shift similar to that of the "financial" economy: The risk has been increasingly moved to the public sector while the private sector keeps the rewards. Indeed, one of the most perverse trends in recent years is that while the state has increased its funding of R&D and innovation, the private sector is apparently de-committing itself. In the name of "open innovation," big pharma is closing down its R&D labs, relying more on small biotech companies and public funds to do the hard stuff. Is this a symbiotic public-private partnership or a parasitic one?

It is time for the state to get something back for its investments. How? First, this requires an admission that the state does more than just fix market failures—the usual way economists justify state spending. The state has shaped and created markets and, in doing so, taken on great risks. Second, we must ask where the reward is for such risk-taking and admit that it is no longer coming from the tax systems. Third, we must think creatively about how that reward can come back.

There are many ways for this to happen. The repayment of some loans for students depends on income, so why not do this for companies? When Google's future owners received a grant from the NSF, the contract should have said: If and when the beneficiaries of the grant make $X billion, a contribution will be made back to the NSF.

Other ways include giving the state bank or agency that invested a stake in the company. A good example is Finland, where the government-backed innovation fund SITRA retained equity when it invested in Nokia. There is also the possibility of keeping a share of the intellectual property rights, which are almost totally given away in the current system.

Recognizing the state as a lead risk-taker, and enabling it to reap a reward, will not only make the innovation system stronger, it will also spread the profits of growth more fairly. This will ensure that education, health, and transportation can benefit from state investments in innovation, instead of just the small number of people who see themselves as wealth creators, while relying increasingly on the courageous, entrepreneurial state.

The Psychological Price of Entrepreneurship

INC. 5000

BY JESSICA BRUDER in inc

No one said building a company was easy. But it's time to be honest about how brutal it really is--and the price so many founders secretly pay.

 

By all counts and measures, Bradley Smith is an unequivocal business success. He's CEO of Rescue One Financial, an Irvine, California-based financial services company that had sales of nearly $32 million last year. Smith's company has grown some 1,400 percent in the last three years, landing it at No. 310 on this year's Inc. 500. So you might never guess that just five years ago, Smith was on the brink of financial ruin--and mental collapse.

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.

Successful entrepreneurs achieve hero status in our culture. We idolize the Mark Zuckerbergs and the Elon Musks. And we celebrate the blazingly fast growth of the Inc. 500 companies. But many of those entrepreneurs, like Smith, harbor secret demons: Before they made it big, they struggled through moments of near-debilitating anxiety and despair--times when it seemed everything might crumble.

"It's like a man riding a lion. People think, 'This guy's brave.' And he's thinking, 'How the hell did I get on a lion, and how do I keep from getting eaten?"

Until recently, admitting such sentiments was taboo. Rather than showing vulnerability, business leaders have practiced what social psychiatrists call impression management--also known as "fake it till you make it." Toby Thomas, CEO of EnSite Solutions (No. 188 on the Inc. 500), explains the phenomenon with his favorite analogy: a man riding a lion. "People look at him and think, This guy's really got it together! He's brave!" says Thomas. "And the man riding the lion is thinking, How the hell did I get on a lion, and how do I keep from getting eaten?"

Not everyone who walks through darkness makes it out. In January, well-known founder Jody Sherman, 47, of the e-commerce site Ecomom took his own life. His death shook the start-up community. It also reignited a discussion about entrepreneurship and mental health that began two years earlier after the suicide of Ilya Zhitomirskiy, the 22-year-old co-founder of Diaspora, a social networking site.

Lately, more entrepreneurs have begun speaking out about their internal struggles in an attempt to combat the stigma on depression and anxiety that makes it hard for sufferers to seek help. In a deeply personal post called "When Death Feels Like a Good Option," Ben Huh, the CEO of the Cheezburger Network humor websites, wrote about his suicidal thoughts following a failed start-up in 2001. Sean Percival, a former MySpace vice president and co-founder of the children's clothing start-up Wittlebee, penned a piece called "When It's Not All Good, Ask for Help" on his website. "I was to the edge and back a few times this past year with my business and own depression," he wrote. "If you're about to lose it, please contact me." 

Brad Feld, a managing director of the Foundry Group, started blogging in October about his latest episode of depression. The problem wasn't new--the prominent venture capitalist had struggled with mood disorders throughout his adult life--and he didn't expect much of a response. But then came the emails. Hundreds of them. Many were from entrepreneurs who had also wrestled with anxiety and despair. (For more of Feld's thoughts on depression, see his column, "Surviving the Dark Nights of the Soul," in Inc.'s July/August issue.)"If you saw the list of names, it would surprise you a great deal," says Feld. "They are very successful people, very visible, very charismatic-;yet they've struggled with this silently. There's a sense that they can't talk about it, that it's a weakness or a shame or something. They feel like they're hiding, which makes the whole thing worse."

If you run a business, that probably all sounds familiar. It's a stressful job that can create emotional turbulence. For starters, there's the high risk of failure. Three out of four venture-backed start-ups fail, according to research by Shikhar Ghosh, a Harvard Business School lecturer. Ghosh also found that more than 95 percent of start-ups fall short of their initial projections.

Entrepreneurs often juggle many roles and face countless setbacks--lost customers, disputes with partners, increased competition, staffing problems--all while struggling to make payroll. "There are traumatic events all the way along the line," says psychiatrist and former entrepreneur Michael A. Freeman, who is researching mental health and entrepreneurship.

Complicating matters, new entrepreneurs often make themselves less resilient by neglecting their health. They eat too much or too little. They don't get enough sleep. They fail to exercise. "You can get into a start-up mode, where you push yourself and abuse your body," Freeman says. "That can trigger mood vulnerability."

So it should come as little surprise that entrepreneurs experience more anxiety than employees. In the latest Gallup-Healthways Well-Being Index, 34 percent of entrepreneurs--4 percentage points more than other workers--reported they were worried. And 45 percent of entrepreneurs said they were stressed, 3 percentage points more than other workers.

But it may be more than a stressful job that pushes some founders over the edge. According to researchers, many entrepreneurs share innate character traits that make them more vulnerable to mood swings. "People who are on the energetic, motivated, and creative side are both more likely to be entrepreneurial and more likely to have strong emotional states," says Freeman. Those states may include depression, despair, hopelessness, worthlessness, loss of motivation, and suicidal thinking.

Call it the downside of being up. The same passionate dispositions that drive founders heedlessly toward success can sometimes consume them. Business owners are "vulnerable to the dark side of obsession," suggest researchers from the Swinburne University of Technology in Melbourne, Australia. They conducted interviews with founders for a study about entrepreneurial passion. The researchers found that many subjects displayed signs of clinical obsession, including strong feelings of distress and anxiety, which have "the potential to lead to impaired functioning," they wrote in a paper published in the Entrepreneurship Research Journal in April.

Reinforcing that message is John Gartner, a practicing psychologist who teaches at Johns Hopkins University Medical School. In his book The Hypomanic Edge: The Link Between (a Little) Craziness and (a Lot of) Success in America, Gartner argues that an often-overlooked temperament--hypomania--may be responsible for some entrepreneurs' strengths as well as their flaws.

A milder version of mania, hypomania often occurs in the relatives of manic-depressives and affects an estimated 5 percent to 10 percent of Americans. "If you're manic, you think you're Jesus," says Gartner. "If you're hypomanic, you think you're God's gift to technology investing. We're talking about different levels of grandiosity but the same symptoms."

Gartner theorizes that there are so many hypomanics--and so many entrepreneurs--in the U.S. because our country's national character rose on waves of immigration. "We're a self-selected population," he says. "Immigrants have unusual ambition, energy, drive, and risk tolerance, which lets them take a chance on moving for a better opportunity. These are biologically based temperament traits. If you seed an entire continent with them, you're going to get a nation of entrepreneurs."

Though driven and innovative, hypomanics are at much higher risk for depression than the general population, notes Gartner. Failure can spark these depressive episodes, of course, but so can anything that slows a hypomanic's momentum. "They're like border collies--they have to run," says Gartner. "If you keep them inside, they chew up the furniture. They go crazy; they just pace around. That's what hypomanics do. They need to be busy, active, overworking."

"Entrepreneurs have struggled silently. There's a sense that they can't talk about it, that it's a weakness."

No matter what your psychological makeup, big setbacks in your business can knock you flat. Even experienced entrepreneurs have had the rug pulled out from under them. Mark Woeppel launched Pinnacle Strategies, a management consulting firm, in 1992. In 2009, his phone stopped ringing.

Caught in the global financial crisis, his customers were suddenly more concerned with survival than with boosting their output. Sales plummeted 75 percent. Woeppel laid off his half-dozen employees. Before long, he had exhausted his assets: cars, jewelry, anything that could go. His supply of confidence was dwindling, too. "As CEO, you have this self-image--you're the master of the universe," he says. "Then all of a sudden, you are not."

Woeppel stopped leaving his house. Anxious and low on self-esteem, he started eating too much--and put on 50 pounds. Sometimes he sought temporary relief in an old addiction: playing the guitar. Locked in a room, he practiced solos by Stevie Ray Vaughan and Chet Atkins. "It was something I could do just for the love of doing it," he recalls. "Then there was nothing but me, the guitar, and the peace."

Through it all, he kept working to develop new services. He just hoped his company would hang on long enough to sell them. In 2010, customers started to return. Pinnacle scored its biggest-ever contract, with an aerospace manufacturer, on the basis of a white paper Woeppel had written during the downturn. Last year, Pinnacle's revenue hit $7 million. Sales are up more than 5,000 percent since 2009, earning the company a spot at No. 57 on this year's Inc. 500.

Woeppel says he's more resilient now, tempered by tough times. "I used to be like, 'My work is me,' " he says. "Then you fail. And you find out that your kids still love you. Your wife still loves you. Your dog still loves you."

But for many entrepreneurs, the battle wounds never fully heal. That was the case for John Pope, CEO of WellDog, a Laramie, Wyoming-based energy technology firm. On Dec. 11, 2002, Pope had exactly $8.42 in the bank. He was 90 days late on his car payment. He was 75 days behind on the mortgage. The IRS had filed a lien against him. His home phone, cell phone, and cable TV had all been turned off. In less than a week, the natural-gas company was scheduled to suspend service to the house he shared with his wife and daughters. Then there would be no heat. His company was expecting a wire transfer from the oil company Shell, a strategic investor, after months of negotiations had ended with a signed 380-page contract. So Pope waited.

The wire arrived the next day. Pope--along with his company--was saved. Afterward, he made a list of all the ways in which he had financially overreached. "I'm going to remember this," he recalls thinking. "It's the farthest I'm willing to go."

Since then, WellDog has taken off: In the past three years, sales grew more than 3,700 percent, to $8 million, making the company No. 89 on the Inc. 500. But emotional residue from the years of tumult still lingers. "There's always that feeling of being overextended, of never being able to relax," says Pope. "You end up with a serious confidence problem. You feel like every time you build up security, something happens to take it away."

Pope sometimes catches himself emotionally overreacting to small things. It's a behavior pattern that reminds him of posttraumatic stress disorder. "Something happens, and you freak out about it," he says. "But the scale of the problem is a lot less than the scale of your emotional reaction. That just comes with the scar tissue of going through these things."

"If you're manic, you think you're Jesus. If you're hypomanic, you think you're God's gift to technology investing."John Gartner

Though launching a company will always be a wild ride, full of ups and downs, there are things entrepreneurs can do to help keep their lives from spiraling out of control, say experts. Most important, make time for your loved ones, suggests Freeman. "Don't let your business squeeze out your connections with human beings," he says. When it comes to fighting off depression, relationships with friends and family can be powerful weapons. And don't be afraid to ask for help--see a mental health professional if you are experiencing symptoms of significant anxiety, posttraumatic stress disorder, or depression.

Freeman also advises that entrepreneurs limit their financial exposure. When it comes to assessing risk, entrepreneurs' blind spots are often big enough to drive a Mack truck through, he says. The consequences can rock not only your bank account but also your stress levels. So set a limit for how much of your own money you're prepared to invest. And don't let friends and family kick in more than they can afford to lose.

Cardiovascular exercise, a healthful diet, and adequate sleep all help, too. So does cultivating an identity apart from your company. "Build a life centered on the belief that self-worth is not the same as net worth," says Freeman. "Other dimensions of your life should be part of your identity." Whether you're raising a family, sitting on the board of a local charity, building model rockets in the backyard, or going swing dancing on weekends, it's important to feel successful in areas unrelated to work.

The ability to reframe failure and loss can also help leaders maintain good mental health. "Instead of telling yourself, 'I failed, the business failed, I'm a loser,' " says Freeman, "look at the data from a different perspective: Nothing ventured, nothing gained. Life is a constant process of trial and error. Don't exaggerate the experience."

Last, be open about your feelings--don't mask your emotions, even at the office, suggests Brad Feld. When you are willing to be emotionally honest, he says, you can connect more deeply with the people around you. "When you deny yourself and you deny what you're about, people can see through that," says Feld. "Willingness to be vulnerable is very powerful for a leader."