The Maslow’s Hierarchy in Startups
By: June Wang
Tags: Growth Marketing, Entrepreneurship, Careers, Organizational Psychology, Startup

Just like you can’t expect a person who is barely covering his bills to think about when he could buy a private jet, a startup that is constantly worrying about how much money they have left is incapable of acting on a vision that doesn’t help with short term survival. Despite the leaders rationally understanding that they should invest for the long term.

The Maslow’s Hierarchy

Almost every job posting in early startups asks for “ability to adapt, manage stress, track record with obsession in hitting targets”. Startup environment is famous for its fast growth, quick and frequent pivot, intense pressure, indecisiveness and phobia of not being the most effective and productive one. If you work for startups, it normally feels like you signed yourself up for a fast-paced and stressful life. In the workplace, we collectively sugarcoat it with “The higher the pressure, the harder the diamonds.”

Have you ever thought about why? Have you ever wondered, does it have to be this way?

I want to challenge the norm of “working in startups equals living in anxiety. ” I believe that there’s a better way.

It’s time to rip off the sugar coat and look at what’s really happening here

The more unknown there is, the desire to gain control is stronger. Startups are the explorers that actively wander into the unknown, the dark, mysterious, untapped area. Fear is deeply rooted in our amygdala, even the bravest heroes share the same brain design.

When leaders in the company are worrying about money all the time, anxiety ripples from the top to the bottom. When every single dime we spend has to make a profit, naturally and inevitably the company will only focus on ROI and try to turn their wildest dream into a linear or exponential growth curve. If you are breathing and living in this mindset day in and day out, overtime, your only purpose and worth will be connected to a line that represents the company’s revenue and profit margin. If the line goes up, you are happy and successful. If the line goes down, you are anxious and failing.

You don’t control the finance, it controls you.

Companies like this normally get sucked into a negative spiral. The more alarming your lack of financial security is, the more desperate you are trying to get out. When the environment feels threatening, creativity and positivity can’t thrive, growth at all cost will never be enough. The business is not sustainable nor defensible.

Is there a better version of the reality available?

Startups are also famous for their high turnover, or being a stepping stone to a bigger and more stable company. Employees can jump ship when things go south, what about the founders? How can you live in financial insecurity and move up the Maslow’s hierarchy at the same time?

Growth needs do not stem from a shortage, but rather from a desire to grow as a person. So do companies. Maslow (1943) initially stated that individuals must satisfy lower level deficit needs before progressing on to meet higher level growth needs. However, he later clarified that satisfaction of a need is not an “all-or-none” phenomenon, admitting that his earlier statements may have given “the false impression that a need must be satisfied 100 percent before the next need emerges” (1987, p. 69).

Startups’ first goal is normally to reach break-even or profitability, to achieve this primary goal, it requires a balance development throughout the Maslow triangle. Just like you can’t go rob a bank to achieve your financial stability, you can’t grow your company at all cost with growth hacks. Only looking at financial modeling is easy and it is lazy — a more balanced development requires deep maturity in the leadership team and the deep understanding about the values that can’t be properly measured or translated into numbers. Instead of spending 100% of your resources and focus zooming in your company’s survival, there’re better alternatives.

Ray Dalio has an amazing 30mins video about The Principles For Success for people, personally I think the principles are very true for businesses as well. And in the video, it lies the secret of how to balance between survival and vision, short term and long term.