And so as I was thinking through my personal goals for this coming year, and discussing individual goals with each of my kids (a recently adopted ritual I highly recommend for any parent), this article from The Economist caught my eye. The article's subtitle, tells it all: "Depression may be linked to how willing someone is to give up his [or her] goals." The article describes research published in the Journal of Personality and Social Psychology by Carsten Wrosch and Gregory Miller, where teenage girls who had strong "goal adjustment capacities" - the ability to disengage from unattainable girls and reset their attention onto new goals - avoid feeling down and depressed. In contrast, girls who get stuck on their goals and can't reset are more susceptible to depression. The implication is that if you aren't facile at adjusting your goals, and they're overly ambitious goals, it can lead to depression.

Applying this research to entrepreneurs is an interesting thought experiment. As investors, we VCs are always attracted to entrepreneurs who set big, hairy audacious goals (BHAGs). Who wants to invest in an entrepreneur whose pitch is, "I'm going to make a nice living in a small niche," as opposed to, "I aspire to achieve world domination"? Yet are those entrepreneurs more susceptible to depression and defeatism when they're unable to achieve those outrageous BHAGs?

To reconcile these two views I am reminded of an excellent book I recently read by renowned Stanford psychologist Carol Dweck, called Mindset. Dweck's research shows that successful people in business, sports and life have "growth mindsets" rather than "fixed mindsets". The "growth mindset" is one in which a person believes that one's world view is less about ability and more about lifelong learning. "Growth mindset" individuals feel they can always learn from experiences (failures and successes) and develop resilience because they're focused on personal growth rather than achievement tied to rigid objectives. When a "growth mindset" individual faces adversity, they focus on the learnings and the self-improvement opportunities that come from adversity.

I have seen in my own work that the best entrepreneurs do set BHAGs, sometimes outrageous and unattainable ones (create a $100 million company in 5 years from scratch? Is that really possible?), and push themselves to achieve excellence. But the ones that really distinguish themselves are the ones who embrace the "growth mindset." They embrace life long learning, no matter how great their achievements, and allow themselves to occasionally hit the reset button and adjust their goals without breaking stride when reality intrudes (such as, say, the greatest financial crisis since the Great Depression) are the ones that can blend the best of both worlds.

What kind of mindset have you seen work best?

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I was reminded of the movie over breakfast this morning with the CEO of one of the major ad agencies. Just as you'd expect a high-powered agency executive to be, he was smooth, smart, suave and urbane. But his industry is under siege from the Nerds. On one side, he has techno-media companies like Google, Yahoo and MSN using technology and data to eat into the traditional ad agency value chain. On the other side, he has advertisers like P&G, Ford and Coca Cola demanding more sophisticated targeting and effectiveness for their incremental ad dollars - no longer accepting the old way of doing business over a three martini lunch. The stakes are getting higher: Think Equity estimates the global online advertising market will be north of $40 billion in 2009 and still growing at 15-20% per annum while TV remains flat and radio and newspapers suffer.

That's because the two key assumptions regarding how much money a portfolio company would require from start to finish (the exit) have changed: (1) the length of time before exit; and (2) the number of portfolio companies that would attract outside capital to lead follow-on financing rounds.