You need to be both optimistic and pessimistic about your startup; being too far on either extreme will lead to failure.

A stereotypical pessimistic founder often reacts to one painful experience by wanting to quit or change everything, feeling like everything bad is happening to them.

Talking to an overly optimistic founder can initially be exciting, but as the conversation continues, you may become confused about their lack of tangible progress or insights.

When a leader is too optimistic, their plans may seem unrealistic, leading employees to question the leader's credibility and the company's stability.

Setting aggressive goals is meant to motivate founders to move quickly; failing to meet these goals doesn't mean the company is bad, but rather that they may have given up too early.

If you're too pessimistic, you might give up too early or expect things to be easier than they are, which can drain the energy of those around you.

If you find yourself feeling drained after conversations with a founder, it may indicate that they are too pessimistic, affecting the morale of the team.

Magical thinking in startups refers to unrealistic expectations about success without a grounded plan, making it harder for founders to face reality. It is when you believe in unrealistic causes and effects, thinking that things not rooted in reality are true for you. For example, some founders think that if they pitch their startup to a prominent investor, they will instantly recognize its brilliance and offer support, which is a flawed mindset.

Many founders extend their magical thinking to believe that funding comes from luck rather than understanding how the world truly works. They often think that if others got funded through luck, they can too, without studying the actual processes involved.

Founders often make excuses when asked direct questions about their startup's challenges, creating complicated narratives that place blame on external factors instead of taking responsibility for their growth and customer acquisition.

A common misconception among founders is that raising money will magically solve all their problems. They may believe that their investors will save them from failure, which leads to a lack of critical thinking and preparation for ongoing challenges.

Hiring someone is often seen as a solution to complex problems, with the belief that a new employee will automatically resolve issues within the company, especially before achieving product-market fit. This is an overly optimistic view.

Founders sometimes believe that just because a trend is popular, their startup will succeed in that space. They fail to recognize that entering a market at its peak can be detrimental, as they are competing against established players who have already gained significant advantages.

The best founders can hold conflicting ideas simultaneously, such as feeling the pressure of a crisis while still pushing forward with sales efforts. This ability to manage cognitive dissonance is crucial for navigating the ups and downs of startup life.

To succeed, founders should be optimistic but remain grounded in reality, avoiding magical thinking that detaches them from the actual challenges and dynamics of their business environment.