Fear Is The Mind Killer. SVB And the Very Bad Week.

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SVB And the Very Bad Week.

"Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me"
Frank Herbert, Dune.

First of all, I just want to send good vibes and virtual hugs to everyone who suffered through that weekend. You probably had done most things right: you got the funding, made the hire, got the job, put in the hours and then suddenly, by end of day Friday, it looked like it could all just be … gone. And there was nothing you could do about it.

If that was you, I imagine the weekend was Not Fun.

One potential consolation is that you will probably only experience one or two of these reality-shaking moments per career, so in a worst case scenario, you’re half way done (I’ve had two in forty years, one of which was a stock drop of 40% in half a day).

So congratulate yourself for having got to today! You are stronger, may have learned something, and have some stories to tell.

Fear iIs the Mind Killer

Fear drove the SVB debacle from the very beginning, transmitting a psychic shock wave through thousands and eventually millions of people who vibrated with it, reflected it back, and built the atmosphere of panic still further.

Human beings feel “bad things” — emotions, feedback, experiences — far more strongly than good (“Negativity Bias”). A loss, or a potential loss, has a far greater impact than a gain. A negative comment cuts us more deeply than a positive one strengthens us. We can speculate as to why — if our ancestors didn’t pay careful attention to negative events, they were likely to end up dead — but whatever the reasons, it’s baked into our behavioral systems at a very fundamental level.

“…bad things will produce larger, more consistent, more multifaceted, or more lasting effects than good things” — “Bad Is Stronger Than Good”, Baumeister, Ellen Bratslavsk Finkenauer 2001

So the news of impending loss had significant power. It was then turbo-charged by our incredibly strong drive to be socially accepted, driven by the social cues in all the tools that wire us together (Twitter, email, text).

“it seems fair to conclude that human beings are fundamentally and pervasively motivated by a need to belong” — “The Need to Belong. Desire for Interpersonal Attachments as a Fundamental Human Motivation”, Baumeister, Leary 1995

So, the combination of “I could lose a lot, which feels really, really bad” and “The smart people on Twitter are selling, I don’t want to be left out!” results in "I’m gonna sell!! But NOW!". And hey presto - bank run.

Once the run happened, many in the tech community faced a weekend of the worst kind: an uncertain, potentially very serious threat that they had no way to influence. A situation we should definitely fear (our animal systems were telling us!), but over which we had absolutely no control.

What Fear Wants. What Fear Does.

Fear, once it takes over, only wants one thing: to remove the threat. That’s it. It doesn’t want us to think, doesn’t want us to relax, doesn’t want us to waste any time. It wants our entire focus to be on getting to safety and getting there fast. It's designed to deal with situations that will kill us in a moment, not over three days while the FDIC figures out what to do (not that anybody was actually going to die if their company failed, but it sure felt like it, didn’t it?).

So when fear is in charge, we:

• Get ready to run and fight. Our blood pressure goes up, heart rate increases, our blood flows to our limbs and away from our heart.
• Become heavily biased towards action, or completely unable to take action. We either rush madly into activity or freeze.
• Get tunnel vision. We don’t want to take the time to brainstorm or see the bigger picture. We want a solution, anything that will remove the threat. Creativity takes too long and increases uncertainty, which is the last thing we want.
• Go to our in-groups, and get ready to protect against out-groups. We instinctively need allies in these moments, so we divide others into “with us or against us.”
• Find that anger is close to the surface. Fear and anger are close cousins — fear as a response to threat, and anger at the perceived wrongs that put us there. Some of us have also learned that anger causes action and change, so is a tool that can work, temporarily, in this moment (but will leave damage behind).

All of these override our rational responses: our ability to judge long-term vs. short, to seek a wider selection of solutions, to trust others and to control our emotions. We almost literally “lose our minds” — become unconscious, reactive, and shallow.

All of this makes perfect sense if we’re being chased by a bear. For most of the threats we have faced as a species, thinking is the wrong tool: it’s incredibly slow and imprecise in guiding physical action. Now though, survival is rarely a case of physical action: being able to skillfully and carefully use our cognitive abilities is exactly the necessary response and the reverse of what fear wants.

How Conscious Were You Able to Be? (A Leadership Question)

Being able to stay conscious in the face of a perceived threat is one of the most precious gifts you can give your people — the knowledge that even though there is serious uncertainty and risk, somebody in a position of power has detached themselves from the forces of fear and is able to operate skillfully and with care.

“If you can keep your head when all about you are losing theirs… Yours is the Earth and everything that’s in it…”  Rudyard Kipling. If.  (My edit)

So how’d you do? When you have the time and inclination, look back at Wednesday to Sunday from that week. How much were you able to take your time, detach from your visceral physical reactions, think clearly and carefully, remain civil and balanced with those around you? What would you do differently? How would you find the time to act and speak with care?

Don’t be too critical: sometimes it’s enough to just survive and spend time celebrating the fact of your survival. This was a bad one and perhaps all you learned was that the bad ones are … hard.

How about the people around you? What do you know about your team, your investors, and your company now?

(Yes, you will not be the first to note that a number of people who are seen as leaders in the tech community were not clear, careful, civil, or balanced in any way).

You made it through. Pick up the lessons when you can. Onwards.

Notes

Collective Effervescence

What a great phrase! It describes that wonderful state when the group is just working. Ideas are flowing, connections are zinging, stuff is getting done, friction is low. If you've played in a band or team sports, done improv or just had a great conversation, you know the feeling — everybody is just on.

For me, that state is what management and leadership are all about. Hard to get to, but it's a terrific goal. (This is a recent discovery. I'll be coming back to it).

"Bad Hires Are Inevitable, Damaging But Survivable" — VP Eng, Unicorn

Sad but true. Worth remembering as you beat yourself up about a hire not working out. Hiring well is hard. People are unpredictable.

Orgs Don’t Need to Make Complete Sense

Org charts are necessary but lo-fi representations of how an org works. They are the map, not the terrain. They imply rigidity where an org is necessarily fluid, and they don't show the vast web of relationships that really defines how the work gets done.

I've had clients get stuck trying to design orgs that make complete rational sense. Unstick yourself!

Links

Some Crises Build Character, Others Reveal It - Ed Batista on the crisis and how to reflect our responses to it.

What Lies Beneath - Why Humans Do Stupid Stuff At Work (And Elsewhere) - my notes on how unconscious action played out in one event way back in the day.

Managing Stress - the tl;dr - a very, very short post on the basics of managing stress.

Venture Catastophists - Scott Galloway on how JP Morgan personally prevented a crash in 1907 through force of action, and how the luminaries of Silicon Valley in 2023 ... did not.