Hustle vs. Health | Knight's Newsletter on Mental Health

As Jonathan Anguleov, founder of Aircall, said in the Leaders of Growth podcast, building a company is like running a marathon. Or even a triathlon. But, by all means, it’s not a sprint.


To be successful, you’ve to make sure that you are at an optimal productivity level. This is highly affected by your mental health.


In this Mental Health Month’s newsletter, we discuss:


1) How you can manage your mental health as a founder or operator

2) How you can optimize the mental health of your team/co-workers.


Why is mental health such an important topic for start-ups?


  • 19% of founders felt that starting a company had contributed negatively to their well-being (Atomico's State of European Tech Report 2019).

  • In a study of 242 founders by Dr. Michael Freeman of UC Berkeley, 72% of entrepreneurs are directly or indirectly affected by mental health differences, of which 49% reported a mental health history and 23% were asymptomatic yet reported a family mental health history.

  • The same study shows that founders are around 50% more likely to report having a mental health condition, with some specific conditions being incredibly prevalent amongst founders.

Founders are:

  • 2X more likely to suffer from depression

  • 6X more likely to suffer from ADHD

  • 3X more likely to suffer from substance abuse

  • 10X more likely to suffer from bipolar disorder

  • 2X more likely to have psychiatric hospitalization

  • 2X more likely to have suicidal thoughts


Entrepreneurs Mental Health - Michael Freeman - Knight Capital
Source: Are Entrepreneurs “Touched with Fire”?, 2015

Dr. Freeman’s results alone should make us realize that taking just a remedial approach to our mental health is prehistoric. The traits that propel CEOs to the top can also plunge them into darkness. And, when you’ve climbed so high, you have further to fall. You can’t afford to be reactionary anymore. “The best strategy to proactively maintain wellness and prevent mental health problems is to focus on prevention,” Dr. Michael Freeman states.



What can I do to improve my mental health?

Andy Johns is a startup advisor who has worked for $1B companies such as Facebook, Twitter, Quora, and Wealthfront. He is also an investor at Robinhood and Webflow and a mental health enthusiast. Andy developed a framework composed of three parts to help you avoid burnout and establish balance in your life.


1. Define your range of tolerance.

For each species, there is a set of environmental conditions within which it can best survive and reproduce. Staying within this range of acceptable tolerance should be the goal so that you can flourish in all dimensions of life, not just the professional.

Shelford’s Law of Tolerance

When we take on too much, we push ourselves outside our tolerance range into zones of intolerance. We will then experience various indicators like feeling irritable, anxious, sad, angry, withdrawn, or shut down.


Some behaviors inspired by the wildly used motto “work hard, play hard”, common in the startup scene, are usually not sustainable. In a conversation with Knight Capital, Andy Johns affirmed: “What this statement suggests is that a person should spend their time swinging between extremes. And as anyone with a mood disorder (e.g., bipolar disorder) would tell you, it's not pleasant or sustainable to constantly swing between extremes.” He recommends that founders instead use the motto: "Work steadily, recover consistently.”


But how can we work steadily and recover consistently?

a) Take an inventory of your current stress level and possible stress responses to assess your mental state. The Beck Depression Inventory, Patient Health Questionnaire), and Andy John's quesstionaire are some resources to evaluate this.

b) Create your tolerance list

  1. List of intolerables: A list of things to completely avoid.

  2. List of boundaries: A list of self-imposed boundaries favorable toward health and well-being.

  3. Plan to flourish: A list of items that put you in your optimal performance zone.


This table by Andy may help you create this list. Then, create your tolerance target, which is a visual representation of the list.

  • The items in the red center circle are the ones you want to avoid at all costs.

  • The items in the middle yellow circle could cause intolerable experiences and should be treated mindfully.

  • The outer green circle is where you want to dedicate your time since they encourage resiliency and allow you to flourish in all of life’s dimensions.


2. Pick your career progression

Our career progression can be divided into three stages:

1) The first stage is setting a foundation for getting your career started.

2) The second phase is the acceleration phase when we tend to push to climb the ladder.

3) The last phase is the peak phase when we slow things down and ride the coattails of our prior work.


Consider how your broader life choices will fit your tolerance target and when you should or should not “climb the ladder.”


Andy Johns - Career Progression - Mental Health - Knight Capital
Credits: Andy Johns

3. Pick your life progression

Determining if you should keep "climbing the ladder" is partially answered by understanding what the consequences are in other aspects of your life. There may be times when you decide it’s necessary to expose yourself to periods of intolerance. But the key is to consciously choose when and why this makes sense.



Think of yourself as a Professional Athlete

Founders are high-performers. They put in extraordinary effort. Therefore, they need adequate rest and recovery.


One of the most important things that a founder can do is design their daily schedule to include sufficient time for rest and recovery. In our conversation with Andy Johns, he recommends founders think of themselves as professional athletes, such as Lebron James. The basketball player spends over USD 1M in recovery and has a small team of people who focus solely on his post-practice post-game recovery program.


“Founders of companies are elite performers and need to similarly integrate rest and recovery into their daily program to stay ‘fit’ enough to run their company over a long period. This involves having a schedule that incorporates adequate sleep, quality food, time away from technology, connecting with others, some exercise, and ideally, allocating time toward meditation,” Andy states.


Although investing time in your wellness and mental health pays off, there are moments when hustling and getting your business off the ground is a priority. In those cases, it makes sense to focus on high-impact but low-time consuming activities to boost your mental and physical wellness, increase your productivity and avoid burnout.


Exercise, nutrition, sleep, meditation, cold therapy… but what is the most important thing?

Self-awareness can give you an unfair advantage in every area of your life, and mental wellness is no exception. In our conversation with Dr. Freeman, he states that one of the most important things is accepting reality and acting accordingly.


Freeman warns: “If you notice issues like depression, anxiety, panic attacks, mood elevations, or substance use problems, don’t pretend things are good when they really aren’t. Seek help. The sooner you intervene with mental health issues, the easier it is to turn them around and the less likely they will damage your business and personal life.”


For his part, Andy Johns says that the one key strategy you, as a founder or operator, can follow to improve your mental health is to utilize breathwork to regulate your nervous system. In our interview, he explained: “There are breathing methods that awaken the nervous system to an alert state (something good at the beginning of the day). There are also breathing methods that are good for calming the nervous system down (e.g., before bed). Not only it is free, but breath techniques work relatively quickly as well. Especially when combined with cold water or heat exposure since they both interact with the nervous system.” Needless to say, if you're getting just 3 hours of sleep per day, non of these techniques will help you.


Top 19 tools to increase your range of tolerance and improve mental wellness

As software investors, we love having digital tools for everything. Below, we categorized 19 different tools to help you tackle various aspects of your life that lead to good mental and physical health.


Knight Capital - Mental Health Digital Tools


What can I do to improve the mental health of my employees?

Manage yourself first

Peter Drucker once said that you should learn to manage yourself before managing other people. Dr. Freeman explains that managing yourself starts with self-awareness.


He recommends a couple of options to increase self-awareness:

  • Working with a coach, therapist, or mentor

  • Requesting (and listening to) feedback from others

  • Taking self-assessment screening tests

  • Having a curiosity about the root causes of problems when things go wrong.


Once you’ve nailed self-awareness, you should learn self-management. In our chat with Dr. Freeman, he states that emotion regulation, which is part of emotional intelligence, is a critical factor in this. Here are some steps he recommends to become more emotionally intelligent and be better at helping your team to thrive:


  1. Learn to identify different emotional states in yourself and other people.

  2. Learn to regulate your own emotions. Listening to podcasts, watching YouTube videos, or reading books about emotion regulation would be a good place to start.

  3. Subsequently, you can help your team members regulate the emotional tone of your organization.


Invest in your employee's mental health

Digital tools may play a valuable role in addressing mental health challenges in the workplace. Employers seeking to improve the well-being of their teams will benefit from learning about the solutions available and identifying suitable examples to integrate into their broader workplace support and wellness offerings.


“For every US$ 1 put into scaled-up treatment for common mental disorders, there is a return of US$ 4 in improved health and productivity.” - World Health Organization, 2016

Working to prevent and reduce mental-health issues among your workers helps reduce absenteeism and employee turnover. It also contributes to a healthier culture and increased productivity.


This report of McKinsey looks at how to use digital tech to support employees’ mental health and resilience.


McKinsey identified three horizons that companies can move through, from offering fragmented solutions - the starting point for most businesses today- to an optimal approach in which mental health and resilience are embedded within the organization with strong employee engagement, capability building, and performance support.


The three horizons provide employers with a framework to diagnose their developmental state and consider options for progress.

  1. Horizon 1: fragmented. (multiple isolated initiatives).

  2. Horizon 2: integrated (initiatives are aligned and supported by a central platform).

  3. Horizon 3: embedded (a holistic approach with full performance support).




How are other software companies addressing employee mental health?

Microsoft has an initiative called ‘Microsoft Cares’ where they take mental health initiatives as a serious matter. The company has begun a confidential counseling service designed to care for employees in a balanced way.


Through this program, Microsoft aims to support its employees and their immediate families maturely. The enterprise has appointed the best counselors and wellness coaches available 24/7. Their employees can reach out to them through mobile apps, e-workshops, and easy access charts. There’s more - Every month, Microsoft conducts a 1-on-1 session with the counselors on a variety of topics suggested by their employees.


Google has its employee wellness program called gPause. Google offers meditation practices and stress-reducing classes to all its employees.



Uber: US employees can use Lyra Health. Outside the US, employees can use ComPsych Guidance Resources, their International Employee Assistance Program that provides confidential counseling services for grief, anxiety, and stress.



Zendesk partnered with the mental health benefits provider Modern Health starting in May 2020 to offer easy-to-access resources, including therapy, coaching, and videos. The company saw 20% global usage among employees. According to Zendesk, 90% of the users connected with care, and 50% matched with a certified coach. Through Modern Health, employees participate in community circles, similar to an employee resource group, some of which focus on destigmatizing mental health in the workplace. Others center on conversations about challenges like coping with political and social unrest.


Personio is another example of a B2B SaaS company tackling employee mental health.

They track the following KPIs:

  1. Employee Feedback/Ratings: You should regularly solicit opinions from your employees because asking is one of the best ways to see how someone is feeling.

  2. Productivity Levels: Place your happiness rating against company success. Do your employees feel good, and can your business achieve all its goals?

  3. Sick Days: This metric can signal too many overworked employees, generalized stress from work, or overall dissatisfaction.

  4. Overtime: If teams are spending too much time working, it can mean too much workload, misalignment in priorities, too-tight deadlines, or poor time management.

They undertook the following actions:

  1. They organize virtual health weeks where they offer courses covering stress management, better sleep quality, or yoga.

  2. They introduced benefits around this topic, e.g., TherapyChat® and Selfapy® – a kind of online coaching and therapy for depression, anxiety, and panic attacks.

  3. #WeAreInThisTogether: the company shares stories and motivational postcards to create a sense of community.

  4. They send out monthly Pulse Surveys regarding how people feel about working from home to understand the different setups better and optimize their responses.

  5. Remote work is also new for managers. With how-to sessions, Personio supports them in leading their teams optimally through this challenging time.


What are good tools to increase my employees' mental health?


At Knight Capital, we gathered a list of around 100 companies that built tools for managing mental health in the workspace. We filtered the lists that have a business offering.


This resulted in a market map of 45 companies which we deem as a good starting point for founders exploring the possibilities of improving the mental health of their workers.

B2B Mental Health Market Map - Knight Capital

At Knight Capital, we believe that mental health and wellness among founders and employees are part of the foundation for success. It's also a way to create more sustainable businesses with a positive impact on the lives of employees, customers, and society in general. Whether you're a founder or an operator, we hope you have a refreshing Mental Health Month.


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Contributors:

Tijs Bellers, Investment Analyst at Knight Capital.

Arthur Nobel, Principal at Knight Capital

Franco Lagomarsino, Marketing Manager at Knight Capital


About Knight Capital:

Knight Capital is a leading venture capital investor based in Amsterdam, focusing on B2B SaaS businesses. We help companies scale through funding, growth expertise, and by giving access to our SaaS ecosystem of partners.