Emotional Resilience in Entrepreneurship: Real Talk with Dénes Csiszár | Peter Sorgenfrei

Welcome to another episode of the Whole Human Podcast. I'm your host, Peter Sorgenfrei, and today I have Dániš Čišár with me from Budapest. Dániš, welcome on the show.

Thank you so much for having me.

So when we, uh, first got to know each other, we bonded over the joint experience of being founders and co-founders of startups. And, and today you're doing something differently. For the people who may not know you, would you mind introducing yourself and telling us a little bit about what you've done in the past and, and what you're currently up to?

Oh, sure. Where should I start? So originally I planning to become like a professional athlete. So I did pentathlon for more than a decade professionally, but then it turned out that I like spending my time in the classroom better because I don't know if the audience knows pentathlon. It's 5 different sports, so you have to do a ton of training. So I ended up doing 3 trainings, uh, a day. So, and only 2 on Saturday and 0 on Sunday. And then it was a bit too much because I wanted to, uh, go to university. So eventually I stopped. And I became a mathematician slash software engineer, which was fun. And I started my career creating awesome software for some really large organizations out there. Like I helped to bring life to software for European Space Agency, some pretty fun things in the defense sector, which would look like a video game now, actually, nothing drastic. And then after realizing that probably this is not the way I wanna end my career, I switched on and did a postgraduate in, in economics, switched on to consulting roles, sales, and then I met the startup ecosystem in 2007. So quite a while ago. And not soon after, we launched our first startup. Then that became successful and then we launched another and then that didn't become successful. Then another which failed as well and so on and so forth. And then eventually I, I'm now sitting on the other side of the table. So I started becoming an angel investor quite a while ago and then I led an incubator which was swept away unfortunately by COVID. And now I'm working for EIT Digital, which is a partially EU-funded pan-European ecosystem organization. And I'm interim head of acceleration and growth, meaning I'm overlooking all our startup operations. I'm working with a ton of founders like myself and like yourself. And I think that's the best job on planet Earth to work with startup founders.

So really also people are checking out your background and we'll link to it, of course, in the show notes and where we're posting this. They'll see that you've had a very varied startup experience. You've also worked for big corporates along the way. There was some Microsoft in there, I think, in the past. But the thing that we wanted to chat about today is, I think we had a headline around the emotional cost of entrepreneurship.

Yeah.

Because there's, obviously we see all the COVID stories when people raise money or they sell their company or. They go public in some way. And of course, also recently we talk more and more about sort of some of the difficulties building startups. But before we get into that, when was the first time you really struggled as an entrepreneur on a sort of the emotional level? Do you remember that time and what caused it?

I remember a few cases. Yeah. So one is sad. The other one is just inconvenient. So let me start with the inconvenient ones. In 2014, we funded Founded and then funded a gaming startup. And our brilliant PR agency, which is indeed brilliant, it was mobile gaming. So they persuaded us to launch the game around Black Friday because most of the mobile phones are obviously sold on Black Friday and then onward Christmas. So most of the application downloads are happening during Christmas and therefore the mobile game activation. So, which was all fun and the game sold well. What we didn't realize is that many users mean many support workload. So instead of sitting at the Christmas dinner table and visiting family, we were sitting in front of our computer and supported users, gamers who were, I don't know, stuck fighting the vampire or couldn't find their way out of the castle. And things like that. And then my wife made me promise not to launch any game around the Christmas time, but then I did the same mistake again, launching a game 2 weeks before, 2 years after, 2 weeks before our summer vacation. So again, the family was sunbathing in Spain on the sand, and I was up in the hotel supporting users again, because if you are a startup company just recently being founded, then a startup CEO is everything.

Right.

You cook coffee, you support users, you code, you sell, you talk to whatever. So we were spread thin, obviously, with resources. So I was sitting in Spain, 35 degrees, sunshine, and instead of eating tapas or drinking a piña colada, I was there in the hotel.

But, but at least you didn't do it on Black Friday and Christmas. You did it on summer holidays, so you were within the bounds of the—

Of the promise.

Yeah, exactly.

But then I had to make another promise not to launch any game.

So no more gaming companies.

Before any of the summer holidays. But soon after, the company went bust, so we didn't launch any further games, but it was not because we sacrificed our, our hours of family time. The other is a bit more sad. I, and I don't wish it on anybody, when your co-founder dies, that's like a super problematic part, right? Especially if your company is VC funded, there are so many documents to find because there's a natural flow of inheritance, right? So his, his children were inheriting the part of the startup, but then of course the VCs don't want to see a passive shareholder, so you have to buy those shares. And so on. So there's several months of logistical and legal processes and of course monetary processes around, but it's, but it's super hard. And I was like very close with my co-founder. So we talked every single morning, we had a ritual. So I dropped my daughter off at school and by the time I was driving to the office, which is a good 30 minutes from school, nice Budapest traffic jam for you in the morning.

Mm-hmm.

But at least he was an early riser as well. So at least we decided to spend it usefully. So we did our daily standups at that time, and we did it for a good 6 years, right?

Wow.

And then suddenly I found myself trying to dial him in the morning and there was no one to dial, right?

Mm-hmm.

And like I said, we were like super, super close, so best friends and everything. And yeah, it was super sad. And you have to deal with that. So there are investors breathing on your neck. There are customers wanting your attention. And you feel that you do not even have time to deal with the emotional things. Like friendship and the emotional things are the really important things. It's not raising your EBITDA with that much or raising your valuation or multiples.

Right.

It's the emotional price. And yeah, just like you said, if I had, if I ever did a PhD in my life, it would probably be about the emotional price of, of entrepreneurship because it's undervalued and you can't imagine as a newborn founder what will be that emotional rollercoaster that's waiting for you. Yeah, of course you see these charts, right? Which they used to show you about Emotional rollercoaster, but it's really great.

You have no idea, right? You cannot imagine, I think. So I just want to touch upon this tragic, the tragedy that you experienced, right? We talk about co-founder challenges. You can disagree about stuff. One of you can get temporarily sick. I've had clients where one of the co-founders got sick and the other co-founder had to step in and do more stuff. And that's Manageable. It might be difficult, but in your case, I cannot imagine what that would have been like with your co-founder passing and your friend passing. That must have been horrific.

That's like finite, right? So there's no coming back from death as we know it currently. So yeah, not okay, please work a bit more for 4 months or a year even. It's the way of life you were doing things is over. Yeah, that's it.

So it feels disrespectful to talk about something else, honestly. But I obviously knew the background. And so hopefully for the listeners, thankfully most of us live to be 70, 80 years old, maybe 90 in the Western world. And maybe we should just encourage everybody to get your health checks, make sure you live as healthily as you can. And then on a more kind of boring startup note, make sure that you're in your agreements when you sign on with investors, have clauses, pathways, if this horrible thing happens to you, right? You don't think we feel invincible when we're building companies many times, right? We're typically in our 20s or 30s or 40s even. We don't think something bad is going to happen to us health-wise.

Yeah.

But it does. Hence being prepared is better than not being.

I agree. Yeah.

The emotional, the emotional cost. You're absolutely right. We're seeing all these charts and we're trying to tell people coming into it saying, hey, just try to build resilience. How can we best prepare people? How do we describe something that people think they understand, but they have no idea?

I think we have to tell them stories. Yeah. Because a nice way of presenting things is telling stories. And I'm also a professor at the university not far from here when I'm teaching young entrepreneurs. Mm-hmm. And what I'm telling them is that they are early 20s, so that the work hard, party hard coping mechanism simply doesn't work. You really are burning the candle.

Yeah.

On both ends, if you are trying to do that, right? What helps is enough sleep, sports, eating healthy, and have a healthy emotional life. So what I'm suggesting is to have a stable family background or an understanding spouse, partner who can help you with that because it's going to be hard. So you need a rock-solid emotional background. If you are single, then you have your friends, you have your family to help you. But maybe start explaining to them what you are trying to build and that maybe, guys, I'm gonna need your emotional support because I might miss a few parties. I might miss a few family dinners, but I'm not a bastard, right? I'm just trying to build something that lasts and please support me. And there will be times when I'll feel sad and down and in need of support. So please help me. When I'm turning to you, even if I didn't show up for the last 3 family dinners, that still means I love you guys. And yeah, I, I need your support and I need your love. So to have a stable emotional background helps a lot to get through those wrong buttons. And I assure you, you will have many wrong buttons. And you started to talk about fundraising, right? So it's, it's glamorous and successful. I think fundraising doesn't equal success. It's just now, yeah, of course, in this VC climate, raising is a bit harder, but it's still a lot easier to raise than to build a successful company. And that really starts when you sign the terms.

I'm going to stop you for a second because you're saying so many great things. So I just want to, I just want to pick up on a couple of them. Let's come back to fundraising is not success. Building a company is, and actually, even though fundraising seems like 6, 9 months, 12 months of hard work. It's what comes after that's actually the really hard work.

Exactly.

But you're talking about a healthy emotional life and you talk about sleep and food and exercise. And I write a ton about these and I couldn't agree with you more. But something that strikes me as you're sharing this is we don't talk enough about having the conversation, right? So actually sitting your partner down, if you have one. Or sitting some of your friends down saying, I have this idea. I'm going to go after it with my co-founder or with my team. My journey is going to be anything like all of the other journeys out there. It is likely that I will turn into a little bit of an asshole on occasion, miss things, have mood swings, struggle with stress and anxiety and all sorts of other things. When that happens, I hope that you will put your arms around me and help me through it, even if I have not been present, as you said. And I also hope that you will force me to take care of myself, but doing it with love and care, right? Because many founders I meet have challenges in their domestic lives, right? They feel that their partner is nagging or not supporting them or not understanding. And my argument to them is that's probably because you're not very easy to be around. It's probably part of your fault. So talking about it at the outset, super helpful. The other thing I suggest is having a regular check-in with your spouse or with your partner. Maybe once a month you have a little bit of a family business meeting and you sit down and saying, how have I fared this month? How have we— been in our partnership. The problem is the vast majority of people, they don't talk about it. They assume that there's going to be unequivocal love and support. And then they're surprised when they drift apart from their partner and then they feel even more alone in this journey. All right. So that's the emotional cost of entrepreneurship. The personal relationships we've talked a little bit about. You said this thing about fundraising. Explain, unpack that a little bit. What happens after you raise money and why is that more difficult than before you raise money?

Okay. So in my experience, when a team starts, it's the typical startup. So they either gather at somebody's kitchen or maybe at a coworking space or a Starbucks and they start working and probably meeting twice a week to raise, to build the MVP, to strategize, to have fun. But 100% of this process is under their control.

Hmm.

When third parties are introduced, customers, for example, but they are easier to handle, right? Because there's a clean-cut contractual relationship between you and the customer. You deliver, they buy, they pay. There are some problems, you solve them. That's it. You move on to the next customer. So it's like a, Finite something again. If you successfully fundraise, which yeah, now very well take anything between 9 and 12 months in Europe, of course you're going to celebrate. They're going to transfer you the money. You're going to see it in the mobile app. The text message chimes that you got an incoming transaction, but then what your investor Especially VCs, so not angels who tend to be more relaxed, but VCs will force you to double all your numbers year over year for the next 5 years, right? Which seems to be easy for the first W because you've been 3 people, now you are 6, you have 1 customer, let's have 2, and so on. The tale about the, the chessboard.

The rice grain on the chessboard.

Yeah, exactly. So that was before—

Maybe you should tell people who don't, maybe you should tell the rice on the chessboard for the people who don't know.

Okay. I hope I'm telling the story right, but as the legend goes, there was a person who was asking compensation by bringing, taking a chessboard on the, or placing a chessboard on the table and asking, okay, on the first chessboard, give me one grain of rice. On the second, twice the amount of the previous one, and so on and so forth. And 2 on the 64th power is a really large number. So there is—

A large pile of rice.

Yeah, probably more rice than the empire had in its, in, in all of its stocks. So yeah, doubling once, twice, maybe okay. 3 times, super hard. 4 times, 9, impossible. And, um, now I, I just checked the PitchBook report that an average European startup takes 9 years to make an exit. So it's 2 on the 9th power.

Mm-hmm.

That's also a lot. And when you are a founder, you are not prepared for that because you are enthusiastic, you are an inventor, you wanna build things. Maybe you are also a bit idealistic. Uh, in, in doing things. What you are certainly not is a founder who's ready to lead a company of 1,000 large, present in 6 continents, doing, I don't know, $10 million ARR, but an investor will force you to do that. Having a VC means that you have to grow big. And once you grow big, You have to let go. That's the other thing they are forcing you to do. And you have built something that grew big. Probably you lost some part of yourself during the process. Maybe your family and friends that, that was intact, though I doubt that. Uh, and then you have to sell it.

Yes.

So that's the path you are setting yourself onto, and that's gonna be hard.

And, and that's what I, that's what I really appreciate about the way that you talk about this, right? Because most of the people who start something that I've come across started because they have a good idea. They don't necessarily think about it becoming world-changing. I don't believe that Mark Zuckerberg believed Facebook was gonna be what it's gonna be today. I think he was just trying to meet girls, to be honest, right? Um, but we start these things and then they grow and then we get some traction and then the narrative is, You have to go raise money because otherwise you can't grow it to something that's big and really meaningful. And 2 to the nth power is 512. So you essentially have to, if you are one employee to start with, you will be 512 employees after 9 years. That's a completely different animal to manage.

Are you ready to do that? Yeah.

You have no idea. But you're really good at designing pens and now you're managing an organization that's larger than probably 80% of companies out there, right? So that part is difficult. And then there is the pressure, as you're putting it, on delivering the returns. So you said it so beautifully, people lose a part of themselves. They give a part of themselves to achieve this. And for what? Yes, maybe very few of them go on to be rich or have some money in the bank, but at what cost? But that leads me to my next question. Why don't more people, in your opinion, just fund their businesses themselves and create lifestyle businesses? Why do you think there's this glamour to go raise money?

Because there's this glamour to raise money. It's like an ouroboros, right? Because this is what, and I think every single person who has the ambition to become an entrepreneur or an investor is motivated by fear and greed, right? I want more, but I'm afraid to lose what I have and I'm afraid of failures. And you are somewhere in between. Yeah, a bunch of other factors, but it all boils down to these if you are in the startup ecosystem. And if you are building a product, you are raising, and this is again like a conundrum because one of your competitors is raising right now, right? So they said yes to all of these questions, maybe not even knowing what they said yes to, but they said yes to some of these or more, most of these Questions just raised, let's say, $5 mil, and you are here trying to reinvest your $100K of EBITDA to the company, or okay, $500K EBITDA to the company, and they will eventually scale better. They will have more marketing and sales money to spend. So they will invade your territory and take over your customer base. So that if you have a product company, you have no chance but to raise. If you are building a services company, then you have a much better chance of building a lifestyle business company. Because in my experience, if you build a boutique software development agency with, let's say, 10, 15 developers and like you CEOing plus project managing, with some outsourced back office and let's say 1 or 2 more PM, architect, whatever. That's a totally viable business and you will make good money, right? I'm pretty sure about that. But then you have to consciously stop and saying, I'm gonna be a 15, 20 people company and that's it.

Hmm.

And you have to say no to many, uh, because obviously you're gonna be good. Let's see the optimistic scenario.

Uh-huh.

So you will have more prospects and opportunities than the size of the company, but you still have to say no to that. And then, because if you stay, start to say yes, you will fail or fall into the productivity paradox, right? And the larger you are, the less productive you will be. And Shoemaker wrote a book titled Small is Beautiful. Maybe then you should read that. And stick to that. Build a family business, 15, 20 at max developers, just to follow that example and stay there. But if you start to compete with startups in any way, your only option is to raise and then you are there in the rollercoaster.

So we've essentially created an arms race that you cannot avoid.

Exactly. More or less. That's my opinion. Yeah.

I, I want to, we're coming up to rounding out this episode and I have a feeling we could speak for hours and maybe we'll do another episode one day if you're up for it, but you've done it all, right? You've been a founder, co-founder, had some success. You've had some failures. Now you're working with others trying to do the same thing. What is one piece of advice that you would impart upon somebody starting on this journey? What is one thing that they should keep in mind every day when they wake up?

One piece is hard, but don't do it alone.

I'll give you more than one.

Okay.

A couple then.

First, don't do it alone. Okay. So have an awesome co-founder.

Yep.

Probably even 2. So 3 is best because then statistically you can pull yourself out from the ditches.

Mm-hmm.

So have an awesome co-founder and Live a healthy life and before committing to this all, sit back and do some self-reflection on your emotional and psychological stability on starting this and try to plug the holes and build a stable emotional background before committing to all of this because it's not going to be easy.

That's sage advice. I think the co-founder thing has been talked about before. It's incredibly difficult to do alone. Not many people succeed, actually very Very few people should be doing it by themselves. I think the self-reflective question, some people might be challenged by that because they have self-doubt. They're like, ah, I'm not sure I can hack it, so I won't do it. I would amend what you said by encouraging people to have that conversation with themselves, and if they're in doubt, start having habit or relationship with other people that can help them along the journey, right? Interesting.

Mentors. Yeah.

Somebody like EIT, for example, or other institutions where there might be somebody who could speak with them from time to time, or somebody like me, obviously. Danish, this was tremendous. Thank you.

Thank you so much. I was happy to be here and I'm happy to come again if you invite me.

I'm sure we'll do another episode. And for the people who are listening to this or watching the video, Thank you for joining us for another episode of the Whole Human Podcast. We will be doing these every single week. So if you have somebody that you think I should talk to, or if there's a topic that you would like us to cover, please let us know either through the show notes or just find me anywhere online. It's pretty easy. Thanks again and have a wonderful day.

Thank you so much.