Why Self-Awareness is Crucial for Entrepreneurs (And How to Practice It)

The following is an edited excerpt from my new book, The Entrepreneur’s Framework: How Businesses Are Adapting in the New Economy.

It was near the end of August 2013 when the weight of working nonstop for the past eight months while having nothing to show for it caused my brain to collapse in on itself. I had barely slept in weeks. Whenever I lay in bed, my mind would immediately be off to the races, question after question looping around in my brain.

• Why am I in this mess?
• Am I letting down everyone who cares about me?
• How in the world could I have wasted $50,000, every dollar I had saved to this point?
• What have I done to my team? What will my family, friends, and colleagues think of me?
• How have I become a failure? I’m just one of the failures now.

Back when we were churning out websites for small businesses, we had found some neat ways to enhance our service and make our own jobs easier. Our clients across the board had expressed the need to manage their websites without having to go through a steep learning curve. So we built our own tools in-house so our clients could easily maintain their sites on their own. We called these tools Odysseus (our website editor), Poseidon (our email client), and Genesis (our little digital cloud storage).

Not only did our clients love them, but these tools also allowed us to make a bit of recurring revenue through monthly access fees. So I did realize that there could be a demand for these services outside of our current clients. And of course with Odysseus, Poseidon, and Genesis, we already had a solution that was completely validated by our clients. So we were sure that other small businesses would want these same tools to manage their own sites.

But I had just recently committed our team to pivot from building small business websites to building full-scale apps.

For that reason, I made sure that the idea of releasing our client tools to the public wasn’t even considered. All I wanted was for us to move forward on building full-scale apps. It really was my way or the highway, and I was intractable on that.

I sensed that the demand for apps was going to skyrocket, but what I didn’t understand was how much more difficult it would be to get a customer. I also didn’t realize how bad our original branding was and that it didn’t translate well with people who were paying top dollar to have an app built.

At first glance, I’m sure people looking through our website thought we were just a bunch of kids who didn’t really know how to do anything. These people were spending serious money on apps, and we were just some scruffy kids who were still known for building small business websites. These early struggles harkened back to when I was going door to door, except this time, I didn’t even know how to approach anyone.

So, eventually, we thought, why wait for the dream client to come in when we could just build our own app and become our own dream client? Screw the people who didn’t want us; we were going to enter the gold rush ourselves. We could be our own unicorns that were hitting the news and become household names. We already had the necessary tools to build this on our own; all we had to do was get out to market. That, we assumed, would be easy. Subtle would encompass all of the apps we believed any business would need to run their operations online:

• Manage their storage on the cloud
• Be able to read their email on the same app
• Update their website in real time
• Blend the calendar and a customer relationship management (CRM) into one seamless tool
• Newsletter marketing management, content management, analytics, and social media management
• Handle customer service

Sounds like a lot, right? Today, combining these tools might seem like common sense. But back then, there was no all-in-one solution. (Slack wasn’t a thing yet. Google Drive wasn’t a thing yet. Google Analytics was just starting to become the norm. Buffer was brand new. Salesforce wasn’t the dominant market force it currently is. WordPress wasn’t nearly as popular as it is today.) Every app required a separate application, along with a new monthly fee, new setup, new training, and a learning curve.

We did have the foresight to identify that gap and the opportunity that many businesses, small and large, could benefit from. We wanted businesses’ operations to feel “subtle.” We began work on January 1, 2013, with a goal date of having this app launched by August 1. I had budgeted the $50,000 to last us all the way until that date, which we thought would be more than doable. And for the first few months, it was nothing but excitement and euphoria. We felt like adventurers, exploring a brand-new world. As a team, we had become closer than ever before, spending nearly every waking moment working on Subtle.

By the beginning of that spring, we had announced to the world what we had spent the last several months on.

Because we had nothing to actually show by this point, we technically marketed nothing. But we found out that didn’t really matter. We still managed to get people excited on Twitter by telling vague ideas of what they could be signing up for. People didn’t need to know what they were getting; they just wanted to know that they were going to be a part of the “future of work.” Remember, this was 2013 — marketing on Twitter was easy then, if you could generate some excitement and retweets. We learned that it was pretty easy to get people hyped up on little more than an idea.

Then we showed off some screenshots, and that really got people going — it gave the impression that the app was a real thing, that it was about to become something real and impactful. A few thousand people joined our waiting list. This only motivated us further — I mean, if thousands were already clamoring for just a general idea of what we had envisioned, how would they respond when they got to use the real thing?

But by the beginning of summer, our enthusiasm was beginning to fade.

Despite the hype and the sign-ups, we were growing frustrated with ourselves and one another. Even though we were working ourselves to death, we still were not maintaining the pace needed to finish by the deadline. We had spent a lot of time producing nothing that was usable at all.

And of course, up to this point, we had all but neglected Chop Dawg. We didn’t shut it down, but we weren’t marketing it either. Our complete and full attention was on Subtle. While it’s good that we didn’t outright abandon Chop Dawg, we were severely limiting our exit strategy in case Subtle failed, because our bread and butter had become a shell of its former self.

Honestly, we were spreading our priorities way too thin. We were effectively making six apps in one. The developers, who didn’t have a clear road map of the app’s design, were becoming infuriated with the designers because they kept working on things that were already in the middle of programming. The designers were becoming frustrated with development, as they wanted the product to look its absolute best and did not want to settle for anything less. It felt like we were trying to hit a moving target while blindfolded. Meanwhile, I was boiling inside because nothing was on schedule, the designs kept changing, and the app barely worked. I felt like I could not coordinate these two teams at all and that no one was making the effort that I wanted and expected them to. A few features were programmed and working, but we weren’t even close to having a functioning app that could be released.

Throughout the entire Subtle era, our remote team would get together in person once a month to work “hackathon style.” For those of you who aren’t familiar with the hackathon concept, we would get together in a room to all focus on the same objective, such as completing a new feature, for an entire weekend, with almost zero breaks. We would not allow one another to leave until all of our tasks were completed. By August, we all hated these hackathons. They had instead become the entrepreneurial equivalent of a WWE cage-match ring.

Then came one last hackathon. We were going to finish Subtle, no matter what.

As usual, we all got together, but this time, we didn’t know when our hackathon was going to end. I told everyone that our objective was to get this done and that no one was to walk out the door until it was ready, no exceptions. I was out of money, and in my mind, every minute that Subtle wasn’t ready meant a higher chance of our having to pull the plug. I could not admit failure and give my team I had fully paid an excuse to bail. So anytime the team stopped working, even for a moment, I’d snap at them.

How did they not understand there was no time to waste? Why did no one feel the urgency that I did?

We all used to joke and have fun during these hackathons in the early months of building Subtle, but now we just worked together in silence. For hours, everyone stared at their laptop screens, typing away while listening to music through their headphones. Finally, one of the team members “spoke out of line” and suggested we should grab a bite to eat. It was getting late, and no one had eaten the entire day. And just like that, my fuse went off. Oh, the gall to suggest that we break away for even a minute when we were down to the wire!

I lost complete control of my emotions. This is the moment when the reality of the situation hit me cold — my team had failed me, and I let them have it. I couldn’t stop yelling at everyone in the room. And my tirade was the last straw for the team, too — they weren’t going to put up with my abuse. So they left to eat without me. I had created a mutiny, and I was left there to think about how screwed we were. I sat in the bathroom for two hours and cried. I had no idea what to do. I felt powerless, like I had lost complete control. How could I have trusted this team, my team, with my money?

Once the team returned from dinner, two of them asked to speak to me privately. They explained to me they were tired of my treatment of them. They “weren’t being paid enough to deal with this.” They then blurted out the words that I knew were coming but never wanted to hear. It was time to pull the plug on Subtle.

That was it. Subtle was never going to launch because I had no team to do it. Instead, they had the audacity to tell me, after I had spent every dollar I had on them, that they weren’t being paid enough? At least they got paid! What about me? What was just a waste of time for them was life-changing for me.

I wanted to fight the team on this. I really wanted to tell them off. But my rage finally cooled down during my four-and-a-half-hour drive back home. I realized that I really had nothing else to say. Everything that I had been doing for the past eight to nine months was wiped clean — nothing to show for it, all the money gone, and my team hated me. I couldn’t begin to imagine what I was going to do now.

Believe it or not, today I don’t consider this a loss but a necessary learning experience.

I didn’t know it at the time, but this pain was something I needed to go through to learn some valuable lessons. Without the failure of Subtle, I wouldn’t have known about any of my flaws — flaws that would have eventually killed Chop Dawg, too. It also taught everyone on my team a valuable lesson — that we weren’t acting like a team at all but instead a group of people in their own individual bubbles. We knew how to code and design apps, but we were incapable of making anything into a coherent whole. Subtle actually ended up being a practice canvas that we were able to screw up on, rather than making those mistakes while blowing someone else’s money.

In retrospect, there were many reasons why we failed, namely:

1. No one had been in sync with anything from start to finish. We made things way too complicated for ourselves by constantly redoing designs and never agreeing on how the app should really work. We would work on one variation during a given week and then would be chasing a new idea the next. I also never adjusted our schedule, even as we were falling behind. We failed at Subtle because we were always working on a moving target, increasing our expectations and workload, but not adjusting for the date it would take to get there.
2. We should have built the leanest product possible to get it out the door. People were signing up for a product that they had a vague idea about; we could have and should have come out with a piece of the app. They would have been happy as long as they knew that they were getting the first iteration. It would have been much more cost-effective, and I could have spread my $50,000 budget rather than blowing it up. Instead, these would-be users just became angry that we never launched anything at all.

I wish I had known Phil Kennard during my Subtle days, because I could have really learned about the right approach to building a minimum viable product (MVP) right then and there.

Phil was a software developer by trade, which meant he could tinker around with building a product himself. That made things a lot more flexible. He could quickly churn out an MVP and see what happened. It didn’t need to be a final product, but it did need to honor a specific goal: to give the vacation-rental owner a home base to run everything from one place. Note that the goal of the MVP was not the same as the goal of Futurestay today, which is to provide vacation-rental owners with automated instant booking. For the MVP, there was no automation. Instead, it was meant to be a simple home base and website builder — no system for payments, no connectivity to booking platforms such as HomeAway and Booking.com; it really was a light website builder. It was simple, and it was effective in getting people to sign up.

Phil and Jon Fabio used their weekends to work on the MVP while keeping their day jobs. Still, the MVP didn’t take long to come out. While it wasn’t effective as a true home base for vacation-rental owners, it could still be considered a major success because it showed off the future vision to customers. The MVP was also effective in making vacation-rental owners and managers care about the product, even if it wasn’t very good yet. After all, they cared enough to complain about the product’s inadequacies and they gave many suggestions of what they wished it could do. The fact that they cared enough to make suggestions about what could make Futurestay better, Phil observed, meant there was a tremendous opportunity afoot. The MVP got the audience interested in what Futurestay could become, and it did so without breaking the bank.

In hindsight, we should have rolled out one simple app for Subtle at the start and then communicated our vision.

Unlike Futurestay, we never once took user feedback into consideration as a way that we could expand our product. Not only would we have gotten Subtle out there with one-eighth of the effort, but we would have gotten to know our potential audience as well. Instead, we spent all of our time in the cave, building and rebuilding. We could have marketed our idea with an MVP, found an audience, learned more about their interests, and generated some real revenue to put back into Subtle’s development, all with very few resources needed. Had we gone that route, my money could have been stretched out for so much longer.

I had a team that was inexperienced at the time with making apps from start to finish, so we just kept going in circles with no direction and too much to do. I was also very inexperienced with managing a team on such a project, which was the even bigger problem. I was too focused on my team’s failures while neglecting my own. I should have seen that there was no cohesion, but I didn’t have the leadership or the know-how yet to do that.

1. I learned that you should never take the concept of the team for granted. You shouldn’t expect them to succeed if you can’t offer them any kind of direction. Successes are always the result of team efforts, but failure usually stems from the top. It is critical, as a leader, to identify what could have caused the failure, why it wasn’t recognized prior, and how to resolve it moving forward.
2. I should never have put all my eggs in one basket. Investing every dollar I had into Subtle was foolish. I wasn’t looking out for everyone’s best interests in the long term; instead, I was blinded by short-term greed. I learned that if you’re going to burn the boats to take over an island, you should at least be prepared for the fact that if you don’t get the island, there won’t be any options left.

Back then, I wouldn’t have looked back and listed everything that went wrong with Subtle and what I should have done differently. This would only happen once I started to figure out self-awareness.

Being self-aware is not only about identifying why you feel and do the things that you do; it’s also recognizing what causes you to feel those ways and do those things. How do you handle it when someone on your team fails to perform and hides it from you? How do you handle it when a customer is upset? How do you maintain peace and understanding when you have third-party vendors in control of something that you depend on to succeed? I’m not just talking about this from a business operational sense (although that is important) but from a personal behavioral sense, too.

Self-awareness begins by asking what, not why.

Tasha Eurich, the author of the book Insight, explains why those who are most self-aware use the context of what versus why. It is because why doesn’t help us. If I said to you, “Why aren’t you feeling good about your business?” you would probably answer something such as “Not enough revenue” or “I’m unhappy and stressed.” However, if I ask you what is making you not feel good about your business, there’s a greater potential that you’ll come up with more substantial answers. Instead of just describing your feelings, you’ll list concrete problems that can possibly be solved.

Tasha doesn’t outright dismiss the importance of noting the whys. Those are still a critical piece of the self-awareness equation. So let me introduce you to the three-whys equation. The concept is simple: you ask “why” to each “what” explanation you give yourself, and it takes you down to the real root of a problem, question, or feeling that you have.

Let’s say you have an employee who is looking to quit. They say they do not like their job, that this isn’t the right fit for them. Ask them why they think so. Their response might be that the atmosphere and culture have changed — they used to enjoy showing up to the office, but now it feels toxic and they would rather avoid it at all costs. Again, you ask why they think the culture has changed. After thinking it over, they might explain that one of the new team members is always too cynical and impacts the entire team dynamic and morale. This is the power of the three-whys equation — it leads you to the what. And by asking what, you not only know the result that needs to be changed but also what can be done to change it.

One of the most helpful tools of self-awareness is keeping a journal. I always have one on me (physical or digital) and write down everything, from daily accomplishments to how I am feeling in the moment. I use these notes to identify trends in myself, which in turn helps remind myself to stay cool, calm, and collected when the going gets tough. The journal lets me see how things play out long term with my emotions. I have all of this documentation on myself and my processes that I can always refer back to. As an added plus, writing in a journal always gives my brain some rest from the digital world.

Be tough and competent.

Eugene (Gene) F. Kranz, former flight director for NASA during its Gemini and Apollo programs, has a saying that he made sure everyone in his flight control would understand: be tough and competent. I like this because it eliminates the other made-up pressures that people tend to put on themselves. Instead, it encourages the mindset of always remaining resilient in times of stress, pressure, and uncertainty. It also discourages from overthinking too much.

This is the same mindset I apply to journaling. I always strive to identify where I am not up to par with how I need to conduct myself as an entrepreneur, a CEO, a service provider to my clients, a mentor, and a role model. I also constantly try to identify areas where I am not giving myself enough credit. I need to know where to put my time, energy, and soul into improving. Above all, I need to understand how the things I do each day align with what my heart tells me I most enjoy.

Most of us have been raised to “suck it up” when feeling upset, angered, flustered, frustrated, or confused. But emotions are a natural part of ourselves to be embraced and understood. The idea that we need to bottle it up is not only a terrible mindset to have, but it also leads to unsustainable entrepreneurship. Emotions stem from real, underlying issues; we need to identify these issues in order to become better leaders for our companies, team members, customers, clients, you name it.

Being open about how you’re feeling matters. If you receive an email that frustrates you, identify what frustrates you about it, and then ask yourself the three whys. There is no point in being passive-aggressive or just ignoring it and letting it simmer in your head. I am not suggesting you go and have a volcanic eruption as I did with Subtle, but it is much healthier to be honest (in a mature way) about what you think in the moment and turn it into a learning experience for yourself and the people whom you’re working with.

There is a reason why we begin the framework with self-awareness. Without it, you’re not capable of learning or leveraging any of the other principles this book will provide.

As you read the remaining chapters, I will challenge you to question yourself, your beliefs, and your capabilities. You need to consider yourself the same way scientists and researchers consider data. We work with the best information that we know but never accept what we know as the guaranteed answer. Success requires having the hunger to learn, practice continually, challenge your routines, improve, reiterate, and yes, question yourself.

As you complete each chapter, think about how you’re performing in each principle listed in the framework and articulate it with a score of 0 to 100 percent: self-awareness, empathy, leadership, short-term thinking, long-term thinking, economics, operations, and purpose.

The lower the score percentage, the more improvement you will need to become a well-rounded entrepreneur. The closer to 100 percent, the stronger you are at each individual principle. The closer you get, the more efficient and fulfilled you’ll be. You’re not necessarily meant to hit a flawless 100 percent across the board (candidly, I do not think this is even possible), but this is the constant goal that you should forever be trying to reach.

Here is an example of the framework filled out following the methodology described above and throughout this book:

In this example, here is where this one individual has ranked himself or herself:

• Self-awareness: 40 percent
• Empathy: 90 percent
• Leadership: 60 percent
• Short-term thinking: 70 percent
• Long-term thinking: 30 percent
• Economics: 20 percent
• Operations: 80 percent
• Purpose: 50 percent

There is nothing to be ashamed of if you’re at 40 percent and nothing to gloat about if you’re at 90 percent. You’re a work of art, a master of your craft, and striving to become better for yourself and others. Most do not take the time even to assign a numerical value to keep track of, but you’re not like most people, are you? The only thing you could ever be ashamed of is lying to yourself. Assigning yourself a number that isn’t true is just self-sabotage.

This is why self-awareness is so critical. Without it, you can’t understand context or become grateful for what you have or what you will have. Self-awareness ties everything together and is the universal principle that will apply to everything else. Self-awareness is about being open to yourself, challenging yourself, understanding yourself, and holding yourself accountable. No one else is looking, so it’s all up to you.

Learning self-awareness is the only way that I was able to turn around Chop Dawg after my failure with Subtle. I also would not have been able to write this book if it wasn’t for self-awareness. When Subtle failed, I wanted to blame everyone for our shortcomings. I blamed my team for not producing.

It took a few years and a lot of practice with self-awareness, but it is clear as day to me now that it was never their fault. I wasn’t open about my thoughts and I wasn’t aware of our shortcomings. I didn’t even understand my own feelings at the time, let alone the ability to articulate them. I didn’t have the wherewithal to speak up when things were starting to go downhill, nor the maturity to sit down with my team and talk out our problems.

Chop Dawg is only successful today because I don’t just practice self-awareness personally; it’s a maxim that has spread across the team. Even our clients have become more self-aware through our being a positive influence.

To me, it is the very top purpose of the Entrepreneur’s Framework: self-awareness is the guiding star that will allow you to become successful with every other principle of the framework.

To learn more about how to succeed as an entrepreneur in today’s world, pick up The Entrepreneur’s Framework: How Businesses Are Adapting in the New Economy by Joshua H. Davidson.