What motivates entrepreneurs

What's up, everyone? This is Alex, the host of Founders Journal. As you may know, I built Morning Brew from my senior year of college until we sold the business in 2020. And now I'm building a variety of businesses in different spaces and different stages. I'm basically averaging 1 to 2 new businesses per year. And because of that, I have had the opportunity to test a ton of different products and services, ultimately landing on a core software stack that serves as my business operating system whenever I start a new company. I have my go-to banking service. I have my go-to formation service. I have my go-to domain hosting service. But probably the most important of them all is my HR service, Gusto. If you're a longtime Founders Journal listener, you know how much I think about people in the context of business. A business is nothing without its people, which means a platform that helps me manage and take care of my people is invaluable. And that means I've tried every HR platform under the sun, always with the same exact goals in mind. First, I want a product that's intuitive and delightful to use. As a non-HR person, I find the intricacies of payroll, benefits, taxes, compliance, and expenses to be painful. So I just want something that makes my life easier. Second, I want it to be affordable. I'm a bootstrapper at heart. I started Morning Brew with $0, and I started StoryArc with $0 as well, which means I don't have infinite dollars to drop on SaaS products. And third, I want a platform that acts as my one-stop shop for all things people. I want it to handle payroll, benefits, hiring, onboarding, and taxes, all while integrating with all of the other tools in my business stack, whether it be QuickBooks, Slack, or Google Workspace. Well, Gusto hit the trifecta, which is why I am a customer and use it for every single one of my businesses. Yes, this is a paid sponsorship by the amazing team at Gusto, but I would sing their praises even if I wasn't being paid to do so. So if you're looking for a platform that takes the pain out of payroll, benefits, and HR, I highly recommend you check out Gusto. And if you sign up at gusto.com/alex, you will get your first 3 months free. Now onto the episode.

What's up everyone? This is Alex Lieberman and this is Founders Journal. For those who are longtime Founders Journal listeners, welcome back. For those who are new to the show, here's the deal. Founders Journal is my audio diary made public for the world. My goal is to increase your odds of success as an entrepreneur by sharing the stories, lessons, and tactics that I experience as I build my businesses. You can expect the podcast Monday and Wednesday with episodes that are under 20 minutes in length. And if you want to get notified when a new episode comes out, make sure to subscribe wherever you listen. Today on the pod, I am talking about what motivates you as an entrepreneur, the pros, the cons, and how my forms of motivation have evolved over the years of building businesses. Let's hop into it. So one of my favorite books in entrepreneurship, one that I kind of use as like a reference guide now for running businesses, is called The 15 Commitments of Conscious Leadership. And it's by Jim Dethmer, Diana Chapman, and Kailey Warner Klemp. And it is a book that kind of sums up the learnings and the frameworks of Conscious Leadership Group. Which is an organization that tries to create more conscious leaders. First of all, I would highly recommend you read this book. Again, there's like, there's probably 3 books that I keep next to me whenever I'm working because I think of them as the best reference books for entrepreneurship. One is 15 Commitments of Conscious Leadership. One is Traction by Gino Wickman, which talks about the entrepreneurial operating system. And then one is The Great CEO Within by Matt Mochary, who's a world-class exec coach who has coached people like Brian Armstrong, from Coinbase and other venture-backed CEOs. But there's one part of this book that I wanna share and then kind of talk about my experience with it. And it's on page 50 of the book, if you do happen to have it, where the authors talk about the different levels of motivation in building a business. And so I'm gonna read what they define as the different levels of motivation, and then I wanna share kind of how my forms of motivation have evolved over the years, why they've evolved, and what it kind of means for me long-term. Here's what they say. We have observed that leaders typically use 5 levels of motivation. Number 1, toxic fear, blame, shame, and guilt. Number 2, extrinsic motivation, money, title, the corner office, and other perks. Number 3, intrinsic motivation, learning, fulfilling purpose, and autonomy. Number 4, play, creativity, and expressing our quote unquote genius in the world. And number 5, love. They go on to say levels 1 and 2 always leave a negative residue, whereas levels 3 through 5 don't. Great leaders learn to motivate using methods that don't leave a negative residue, so they lead from levels 3 through 5. So you have these 5 levels of motivation. And what I want to start by saying is none of these levels are inherently bad, but like the authors say, there is a residue that is created by certain levels depending on the type of motivation you have. The second thing I'll share, and you see a lot of this talked about in 15 Commitments of Conscious Leadership, is the most important part of kind of understanding your motivation is Just having the awareness to know what level you're operating from. And as you'll see in a minute, for the first several years of building my first business, Morning Brew, I had a lack of self-awareness in what level I was kind of operating from. Over time, I became more self-aware, and then now I'm really trying to evolve the levels of motivation I'm using in order to build my companies. So let me talk through my journey with Morning Brew and what motivated me with Morning Brew. So if you were to ask me in kind of the first 5 years of me being the CEO of Morning Brew, what was motivating me to build the business, I would have unequivocally said— and I wouldn't have known this terminology, but my answer would have been level 3 motivation, which is intrinsic motivation, learning, fulfilling purpose, and autonomy. I would have said something along the lines of, I love building a business. I have a love for the game, and I have this desire to put something great into the world. Now, I think part of that was true, but it was probably the minority of what was motivating me to build the business. I would say if I had to put a number to it, 10% of my motivation for the, you know, the first 5 years or as long as I was the CEO of Morning Brew was driven by a love for the game, a love for building, and a love for putting something great into the world. I think as I gained more awareness over what drove me to build Morning Brew, the real answer was I was operating from a place of level motivation, extrinsic motivation, money, title, the corner office, and other perks. And there were really 2 things that were driving my extrinsic motivation in Morning Brew. The first was a fear of not having enough money. As some Founders Journal listeners know, I lost my dad when I was a junior in college. At the time when he passed away, my mom was no longer working. She had retired. And so he was the sole breadwinner of my family. And whether rational or not, after he passed, all I could visualize— I literally would have this image in my head of kind of a pile of money that represented, you know, the Lieberman household's net worth. And all I could visualize after my dad passed away was money flying off the pile and no money being added onto the pile. And so then I very quickly became anxious about spending anything on my family's credit cards. And I very quickly felt like I had a responsibility to my family to make money for the family and grow the pile. You know, the final interaction that I had with my dad was in the hospital. I was holding his head. You know, he was already basically gone. They just had to turn the machines off. And I said to him, I'm going to take care of everyone. And again, don't know if that was a rational thought. I really, I had no sense of my family's financial situation at that time, but all I knew is I was putting that responsibility on myself. And so basically for the next, let's call it 10 years, my entire entrepreneurial journey, all I could visualize was me giving checks to my family to make sure my family was taken care of and also making sure that I was no longer a financial burden on my family where I was going to pay for everything that, you know, cost money in my life. And it is incredible how much motivation can come from the fear of not having enough money and the fear of kind of your family members or the people that you love deeply, their quote unquote financial safety. And so that was, I would say, the biggest driver of motivation In Morning Brew, the second biggest driver again came from what I would call like an early trauma in my life was which was me not feeling safe or belonging in school. Basically, from fifth grade to twelfth grade, I was bullied, and I think it was a number of things. I didn't feel secure in my skin. I I found it difficult to relate to the other kids in my grade. I was the youngest or one of the youngest in my grade. because most people, I went to a private school, most kids either were held back or just were on the older end. So I was a July birthday. Most people were at least a year older than me. And so basically from 5th grade to 12th grade, I'd go to school, I'd be by myself, or when I was with a group of people, I would be teased or made fun of. I never felt secure in myself. I never felt secure in my standing of kind of the grade or the community or the friend group. And so I think I absolutely felt this chip on my shoulder to prove that I was worthy, to prove that I was valuable, to prove that I was attractive in every sense of the word, because I had no sense of self when I was in school. I felt like everyone was smarter than me, cooler than me, better looking than me. And so bring this together, like those 2 kind of early experiences in life created what is this level 3 extrinsic motivation that drove the majority of my motivation for Morning Brew. So I wanna talk about extrinsic motivation for a second. Extrinsic motivation is incredibly effective. So that's the thing. That's why when you hear like operating from fear or doing things based on extrinsics, like I think there's naturally a negative connotation with it because it means you're not doing things based on what brings yourself joy or happiness. And that's not necessarily true in the sense that Being driven from a place of fear is exceptionally effective. I don't think I could have built Morning Brew at the time of my life in the same way if I wasn't driven by the motivation to take care of my family and the, the chip on my shoulder to prove that I was valuable and that I was worthy. Those things gave me such a fire under my ass that when I started working on Morning Brew, even though I had never built a business before, I knew we were going to build a successful business. I knew I was going to sell it. I knew I was going to have a great financial outcome. I knew I was going to take care of my family, and I had this irrational belief that it was just a matter of time, not a matter of if it was going to happen or not. And it almost reminds me of this quote that Barbara Corcoran said on Shark Tank once. I was watching some episode of Shark Tank, and I remember she said to someone who had lost a family member that Barbara said something along the lines of, like, she loves investing in people who lost a family member, who are grieving or kind of have lost someone close to them, because she knows that it creates this incredible fire under their ass that can't be kind of replicated or manufactured. And I would say, as grim as that is, I do think there's truth to it, which is I don't think it was possible at the time to manufacture the level of motivation I had in Morning Brew because of my desire to take care of my family and to work ruthlessly, kind of to fulfill on the promise that I'd given to my dad. And so it's this weird thing, which is that I wish that no one had to go through what I went through. I wish that no one would have to suffer to feel that level of motivation. But I also think creating that level of fire, that level of grit, is incredibly hard to manufacture. So that was kind of my journey of Morning Brew, which was largely extrinsic motivation. A tiny bit of intrinsic motivation. For the first several years, I had no awareness that I was extrinsically motivated. I largely thought I was intrinsically motivated. But now I want to talk about how my motivation has shifted over time because it looks totally different. So we sold Morning Brew in October of 2020. I stepped down as CEO in April of 2021, and I would say April of 2021 to December of 2021 was probably the hardest time of my life psychologically because I lost all sense of motivation, identity, purpose, direction. And, you know, this is a very common thing for post-exit founders where it's like you've been in the CEO seat for a long time. You've defined yourself by your CEO and founder title. Once you lose it, you're like, who am I? And so I spent about a year trying to figure out what was going on. Why did I feel so lost? And by the way, the best way I can describe this feeling is like if It's similar to a professional athlete who spent, you know, let's call it their entire life working up to playing in the pros. They realize their lifelong dream. They play in the pros for, let's say, a decade, and then they retire and they're like, then— and they're like 35 years old and they're like, what do I do the rest of my life? It was a similar type of feeling. But as I was kind of doing, you know, probably way too much reflection in that year after stepping out of the CEO role, I think something that I realized is the downside. I think I became acutely aware of the downside of level 3 motivation, of extrinsic motivation, because the issue is, is fear-based motivation is effective, but it is ephemeral. It is not long-lasting. Once the fear is no longer a fear, it's no longer going to be something that motivates you. And so what that looked like in practice is once we sold Morning Brew, you know, I got to a place of financial independence and financial security that the fear of not taking care of myself financially or not taking care of my family financially was no longer a concern. And then the second one, which was the chip on my shoulder, the motivation to, to prove that I was worthy, that I was valuable, that I was smart, those fears went away as well because, you know, we had built a business, we exited it. We had, you know, a 300-person team at one point. Business was doing $70 million a year in revenue. So there was just proof that this story I had of myself not being worthy as a kid growing up was not true. And kind of my desire to kind of like prove the haters wrong was also fulfilled upon. And so since that fear went away, the motivation went away. And so that is the thing about what I would say any of the fear-based motivators, which are according to 15 Commitments of Conscious Leadership, are toxic fear. That's level 1 toxic fear, which is blame, shame, and guilt. and level 2, I actually misspoke, I said level 3 before was extrinsic. It's level 2 is extrinsic motivation, which is money, title, the corner office, and other perks, is the downside of these 2 levels is once the fear goes away or once the extrinsic need is filled, you lose the thing that motivated you. And so basically what happened is as these motivators went away because I no longer had the fear, I had to figure out what was gonna motivate me moving forward because it was a very strange feeling for me my whole life. to believe that my edge, my advantage was not being smarter than people, but working harder than people. All of a sudden, going from feeling like I was a 12 out of 10 on the motivation scale to being a 2 out of 10 because I no longer had those fears was incredibly mentally debilitating. And so, you know, I'm still on this journey, but basically my whole goal in life has been how do I shift to lower levels of motivation? So, right, the 3 through 5 for 15 Commitments of Conscious Leadership are number 3, intrinsic motivation. learning, fulfilling purpose, and autonomy. Number 4 is play, creativity, and expressing our genius in the world. And 5 is love. I'm really thinking about how I can shift, um, my motivation. And I would say today, as I think about building businesses, there's a few things that come to mind. I feel most at peace and I, and I feel most excited about the work I'm doing when I feel like 3-year-old Alex. And when I think about 3-year-old Alex, I just think about this kid who is filled with wonder. To just give you a little bit of insight into 3-year-old or 5-year-old Alex, 3-year-old Alex memorized every dinosaur by every period, would have action figures of them, would pull them out of a box and recite them on command, what all the dinosaurs were by period. 5-year-old Alex was in his kindergarten class trying to invent a pen highlighter combination by cutting a pen, cutting a highlighter, putting them the, you know, the ends together and taping them. And all of a sudden you could write and highlight at the same time. And so my goal is, how do I get back to there? Because if I can get back to there, I will feel just a deep sense of fulfillment in learning quickly, learning rapidly, and feeling like I'm full of wonder and play. And so when I think about the work that I do today, I think about what are contexts that can get me into that feeling of wonder. It's working with other people. who are full of wonder and curiosity like me. It's working on problems or businesses where the learning curve is really steep. So I'm forced to be deeply curious. And it's also working on businesses where the context of it is interesting to me, where it doesn't feel like I'm just doing it for the money. And this is something else I've had to work through, which is I definitely do still feel motivated by money. Money is motivating to me. The idea of cash flowing and earning more in life is motivating to me. And for a while I felt bad about that because I'm like, if money is not bringing me much more marginal happiness in life, why is it that I still feel motivated by it? And my, my general story is that I think all of us, we're never going to not be motivated by fear-based factors. And I do think just multigenerationally, I have a scarcity mindset around money. I think also in society, we've been taught that money is connected to being valued and being loved, and that's what we all want in life. And so I no longer have an expectation that that will be 0% of my motivation. But my— the way I think about all of this is how can that be just a smaller part of my motivation? And I feel like the majority of what I am doing now in building my businesses is driven by love for learning, for curiosity, for having wonder, for play, and for creativity. And so that's why today, like a big way that I build business is, is if you've listened to Founders Journal before, you've heard me talk about that. Now I focus on the 0 to 1 of businesses. So I've set up my whole life where I incubate businesses. I bring on a co-founder and CEO who will operate the day-to-day of the business, especially once we hit product-market fit. And the reason I've done that is because when I got to the later days of Morning Brew, I lost my love and energy for building. And the reason for that is the early days of building a company feels like art. It feels like when you're deeply focused on the product, it feels like you're inventing things because everything's being done for the first time. It feels like you're going from having an idea to having something real in the world and people using it, it being novel and it providing value to people. And so I've also tried to construct my life and the way that I operate in business to focus on a stage and phase of business that I feel like I'm most at play, I'm most creative, and I'm most full of wonder. So again, I'm still so early in my journey. I'm only 10 years into entrepreneurship and I still have so much to figure out. But I think what I'm thinking through now is I have this awareness, a greater sense of awareness than I did early in my career of what motivates me. Early in my career, I was definitely majority motivated by extrinsic motivators. They're incredibly powerful. I would argue that they actually create more of a fire in the moment than intrinsic motivators or play-based motivation, but they are not long-lived because once you get rid of the year, the motivation goes away. I view the motivators that I'm trying to welcome into my life today, meaning intrinsic motivation, play, creativity, and expressing my genius. I view those as a slower burn. Maybe they're not 150% fires, but even if they're 100% fires, but they can last for 30 years, that's what I'm betting my career on. That is it for this episode of Founder's Journal. I hope this was valuable. I hope it gave you some insight into the different Benefits and risks of different forms of motivation and how mine have evolved over time. As always, if you have any questions, shoot me an email to alex@storyarb.com.

Thank you as always for listening, and I'll catch you next episode.