This weekend, I was chatting with a friend who’s a psychiatrist. She often deals with patients in crisis. I sometimes deal with founders in crisis. So I got to thinking…
How can I apply what psychiatrists do to my work investing in startups?
Some founders I meet with are in a very difficult period in their lives. They’re losing their business, having to lay off employees, and saying goodbye to their dream.
So, I asked her to explain how she deals with patients in crisis. We distilled the approach into a four-part system you can apply to any human relationship: Listen, Validate, Reassure, Explain (LVRE).
Here’s how it works…
Listen: Listen to the person’s problem. Sometimes, what a person in crisis needs most is to be heard. What’s more, if you don’t know what’s going on with them, you cannot help them.
Consider our world of investing….
We investors often give ill-considered opinions. We jump in without knowing all the facts, much less how the founder is feeling.
If we do a better job of listening, we have a better chance to help.
Validate: Try to validate the person’s feelings and concerns, even if you don’t see things the same way.
My psychiatrist friend sometimes deals with patients with paranoid delusions that have no basis in reality. Nonetheless, she can validate those feelings, saying that the patient must be very worried or upset given the experience they’re having.
Founders I deal with are much more grounded, of course. But validating how they’re feeling is just as important.
Perhaps a founder feels overwhelmed with the company’s problems. I could respond by saying, “It’s understandable why you feel overwhelmed, you’re in a tough period with cash getting short.”
Reassure: Reassure the person that things will be all right.
For my friend, this can be difficult. She needs to reassure someone in a mental health crisis that they will be okay and will feel better in the future.
The situations I deal with as an angel are not as extreme. But if a founder is losing his business, he could still use reassurance.
For example, I can tell him that he will move on to another job or another company. His career is far from over.
In fact, the most successful founders usually have a few failures in the rearview.
Explain: Lastly, my friend explains the treatments she is about to give a patient. If she needs to give them medication, for example, she explains why and what to expect. When a patient knows what to expect, they’re less anxious.
So, how does this translate to our world in startupland?
If a startup is failing, I can explain that all I expected was for the founder to try his best and keep us updated. I can also explain that historically, failure has been a step to later success for most founders.
Wrap-Up
Several of the most successful people I know were psychology majors. This is no accident.
Everything in business comes down to people. No matter how technical the industry, we have to connect with other human beings.
Try the LVRE framework along with me! The more we practice it, the better we’ll get at relating to others.
Then, we can work together to create something great!
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