Startups and the Stockdale Paradox

Why on earth can I only seem to post about once every two months? Note to self: startup, new family and blog posts don’t mix well.  Sheesh.

It is possible that I’m the last person to read Good To Great. But, if you haven’t read it, you’ve got to. The central question the book addresses is: how is it that some companies putter along for years and years and then suddenly transform themselves into great companies which deliver tremendous returns for shareholders?

As is usually the case for business books, it’s more descriptive than predictive (it accurately describes what happened at these companies but it doesn’t necessarily mean that emulating those steps predicts your own success) and it profiles companies that have been in business 25 years or longer (not exactly startups).

But, the book is worth $27.50 for page 85 alone. Tape it to your wall.

Page 85 has what I believe to be the ultimate summarization of the required mindset for a startup. And, it doesn’t come from an entrepreneur. It comes from a sailor. Author Jim Collins calls it the “Stockdale Paradox”.   

The Stockdale Paradox is named after Admiral Jim Stockdale who was the highest ranking US military officer imprisoned in Vietnam. He was held in the “Hanoi Hilton” and repeatedly tortured over 8 years.

8 years.

Collins describes going to lunch with Stockdale (can you imagine?) and trying to understand how he survived 8 years as a POW while so many died after just months in captivity.

Here’s how Stockdale put it.

“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”

Wow. 8 years of torture, all the while never losing faith in the end of the story?

“Who didn’t make it out”?

“The optimists. They were the ones who said ‘we’re going to be out by Christmas’. And, Christmas would come and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. Then they died of a broken heart.”

So, on the one hand it was about unswerving faith that one will ultimately prevail while on the other hand it’s about banishing all false hopes? As usual, the guy who lived it says it best.

“You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

Holding those two seemingly contradictory notions in his head simultaneously was the key to Stockdale surviving, even thriving, in his experience. And, I believe, it is a perfect summary of the mindset you’ve got to have in starting a company.

You have to believe that your vision will come to pass. You’ve got to do everything you can to make it happen. But, you can never let your belief and faith cloud your confrontation with reality.

In the front of each notebook I write in, the first thing I put on the inside cover is “face reality”. I write it to remind myself that many startups fail because they don’t take a true accounting of the facts of the market (usually because they’re never as good as you want them to be and it sucks to look them in the face). Most startups are long on faith and short on reality.

Entrepreneurs are wired for optimism. But, in Stockdale’s story, it was the optimists who died. Don’t forget to balance optimism with fact and belief with reality. If that can get someone through 8 years of being a prisoner of war, it certainly can get anyone through a (trivially compared) startup.

40 Comments

  1. Ben Wills says:

    You’re not the last person to read it, I just started it ;)
    Ben

  2. Sean Winstead says:

    Thanks for writing this. It was very encouraging and well worth the wait .

  3. The Paradox of Faith and the Pursuit of Dreams

    Seems like an apropo message for times like this: faith in the future while not burying or running from the pain of the current reality. (Hmmm, if all had gone according to plan, I would have been coming home later

  4. kareem says:

    You might be interested in Confronting Reality, a book I just finished:
    http://www.reemer.com/reading/archives/2005/01/01/12.02.28/

  5. Frank says:

    Great to hear from you again. Agreed, while I won’t dare equate passion with prison, what seperates startups with happy endings from those who leave early is the passion to see the finish. Having run one business and closing it to move on in life, I was satisfied that I had done all I could do, passionate to the end, then life goes on. “Where can I take this?” is much more satisfying thought then “I wonder if I can it there?”. Why, because the first question has no finite answer and the second one does.

  6. Gabby Dizon says:

    I’ve read this book already, but hearing about it again from someone who’s been through the startup phase several times and lived to tell the tale is an inspiring thing. I hope your posts come more often, though! =)

  7. They may be infrequent, but they’re also interesting. Keep it up, please!

  8. The Stockdale Paradox

    Bnoopy: Startups and the Stockdale Paradox Page 85 has what I believe to be the ultimate summarization of the required mindset for a startup. And, it doesn’t come from an entrepreneur. It comes from a sailor. Author Jim Collins calls it the “Stockd…

  9. adam says:

    I agree with Frank. Book is good but hearing from someone who’s been there and done that really helps. I completely forgot about that passage. It definitely puts things into perspective. For the past year I have been only thinking about my company’s ultimate goal of opening up a shop and begin the franchising process, but then lately I’ve become the optimist, where I keep saying, ‘only a few more months and we’ll be on our way’ then it passes and I get despondent but keep forging ahead.
    Thanks for refreshing my memory, and keep on posting. No worries as to it being so infrequent.

  10. biriblog says:

    Subtle and not so subtle insights

    Fred Wilson of Flatiron, writes of the importance of planning for leadership succession. Specifically CEO succession, and how critical it is for everyone involved to get involved, and how often it is ignored, resulting in some tough consequences. Great…

  11. Derek says:

    Well, posting once every two months isn’t going to get you into the Top 100, but then again, I think the long tail is a better place to be any ways.
    As far as optimism goes, maybe that’s the difference between a first time business starter, and us grizzled veterans of the startup world. We’ve had all the optimism stomped out of us by reality.

  12. It’s all about soul

    A few days ago, Joe Kraus (at Bnoopy) posted about the Stockdale Paradox, coined by Jim Collins in Good to Great. Kraus is reading it; I haven’t and probably won’t if only to be contrarian. (Besides, what of mine has Collins read recently?) The paradox…

  13. What a great bullet point! As one of the prinicpals in an ASP start up, I have really struggled to remain even-keeled throughout the peaks and valleys of the past 10 months. One of the things I told a close confidant who asked me how things were going was “Things are never as bad as they seem and things are never as good as they seem”
    Thanks so much for a post that really crystallized for me my mandate. Keep the torch lit, keep the dream alive – but fight the fight on every front.

  14. David Locke says:

    I found the book prescriptive in that it says hire this kind of person. You can’t make that kind of person through post-hire training. They have to be that kind of person, what other authors have called the servant leader.

  15. Scott McClure says:

    Adm. Jim Stockdale was quite the character… After the war, he was the running mate for Ross Perot in the 1992 election, and had some interesting debate tactics. He opened the debate with the questions, “Who am I?” and “Why am I here?”, answered one question with the response “Out of ammunition.” and turned off his hearing aid in the middle of a debate.

  16. Daily Links says:

    Bnoopy: Startups and the Stockdale Paradox

    An excellent read – taken from *Good to Great*

  17. Brett B says:

    Great post, really enjoyed it.

  18. Craig says:

    “…startup, new family and blog posts don’t mix well. Sheesh.”
    You had me impressed with startup, new family and reading books…
    Great post (as usual)

  19. lowercase says:

    the end of the story….

    this guy doesn’t post very often, but what he does post is always gold… i loved this piece on never losing faith in the end of the story. it has so many applications to life that is worth reading slowly….

  20. Admiral Jim Stockdale

    If you have not read Good to Great you must. Joe Kraus points out that on page 85 jim COllins discusses the Stockdale Paradox. When you know the whole story of Admiral Stockdale’s POW experience in Vietnam it is all

  21. The Meaning of Optimism

    My brother teases my about the name of my blog, because he sees many of these entries as not being very optimistic. As is so often the case, I turn to the words of others to make my case:Bnoopy: Startups

  22. Frank says:

    I was at one of those false hopes, don’t face reality startups.
    Here’s a real hope, seems to be un-reality startup technology – using your mind power instead of a keyboard or mouse to control a computer.
    Now if I can get some fundoing for it :)

  23. I have the book on the shelf but until a few moments ago hadn’t picked it up. Think I will make the time to read it.
    I spent the last 6 months dreaming about and planning to start a particular business, only to walk away from it a few weeks ago. The more research I did the more I realised it was time to face the facts. Chances of success were minimal.
    Your post is really encouraging. Keep it up.

  24. The Stockdale Paradox

    Deviating from the usual subject matter…please take the time to read Startups and the Stockdale Paradox. The path to entrepreneurial success lies at the intersection of vision, persistence, belief, and cold, hard reality.

  25. Candida Kutz says:

    Joe- Wise posts from such a young man. I’m sorry I wasn’t able to meet you at the SVW “offices”!

  26. PK says:

    This is a great book, easy read, paperback is cheaper :-) , see my summary/notes here: http://www.pkshiu.com/review/good_to_great.html

  27. Rucha says:

    Hi
    A friend of mine forwarded me the link to this particular page of your blog. I had taken up the book “Good To Great” but had been too lazy to read through it completely. I must say I was quite deeply impressed by your description of “The Stockdale Paradox”. I am going to be so rude as to mention your blog on my blog as well… Do let me know if you mind, I will take the reference out immediately in case you do… this reference I make is on my blog called “Sign of the Times” if you care to visit and look it up.
    Thanks
    Rucha

  28. The Stockdale Paradox & The Long Tail

    You all must think that I do nothing all day but blog.
    Today, reading Yaro’s blog, I was lead to another blog where I found two pieces of interesting information.
    Firstly, the long tail. It has been picked up by many other online press outlets….

  29. David Locke says:

    I’ve been the optimist. Now days I’m the pessimist. I know that my business partner, the founder will never startup. I’ve put three years into this and we were supposed to start last month, two months before than, and two months before that. Just keep on going back. Failure after failure after failure. Belief, crush, belief, crush….
    I certainly don’t want to see any more launches that don’t cut it. I want to see one definate launch that goes somewhat correctly and generates some revenue. But, I won’t be the optimist anymore.

  30. Bnoopy Wisdom

    Joe Kraus, founder and CEO of JotSpot, a provider ofapplication wiki services (and founder of Excite, Inc.), authors a blog called Bnoopy. Its not updated often (last post was 6/29/05) and who knows what the title means, but much of t…

  31. The Stockdale Paradox

    I am reading Jim Collins Good To Great.
    While reading Chapter 4. Confront the Brutal Facts (Yet Never Loose Faith), I came across the stockdale Paradox. I remembered having read about it earlier.
    I googled for it and found the link .
    I had re…

  32. Pam Miller says:

    Enjoyed this post immensely! Commentary on the Stockdale Paradox was particularly striking.

    8 years.

  33. kevin li says:

    it would be a shame to discuss how to face reality without mentioning ray dalio and bridgewater

    http://www.bwater.com/Uploads/FileManager/Principles/Bridgewater-Associates-Ray-Dalio-Principles.pdf

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