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How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
The Evolution of Entry Level Workers
Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
What's My Startup Worth in an Acquisition?
When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
The 5 Types of Startup Funding
What Is Startup Funding?
Do Founders Deserve Their Profit?
Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
Why is a Founder so Hard to Replace?
We Can't Grow by Saying "No"
Do People Really Want Me to Succeed?
Is the Problem the Player or the Coach?
Will Investors Bail Me Out?
The Value of Actually Getting Paid
Why do Founders Suck at Asking for Help?
Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
How About a Startup that Just Makes Money?
How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
Why do VCs Keep Giving Failed Founders Money?
$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
What If my plan for retirement is "never retire"?
Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?
Always Take Money off the Table

How Big of a Failure Can I Survive as a Founder?

Wil Schroter

How Big of a Failure Can I Survive as a Founder?

No matter how much we stand to lose, there is always a way to recover.

At the time it sure doesn't feel that way. Nothing keeps us up at night more than playing out every possible scenario of catastrophic outcomes for our startup. We think about the cost of losing our startup, our team, our investor's trust, and ultimately, our personal well-being.

And yes, all of this is super terrifying. But here's the thing, Founders have an amazing ability to recover from catastrophic losses because, in the end, we never consider the fact that the one thing we can't lose is our own tenacity.

It's important to think beyond the "monster in the corner" and play out the entire scenario of what a big loss means, looking all the way past to the other side of it, so that we truly understand what we're dealing with. When we do, and when we go through it, we learn that we can recover from a metric ton of loss.

What Losing it all Looks Like

Let's just start with the worst-case scenario (which rarely happens) — we lose everything. In this case, our startup goes out of business, we have to layoff everyone, all of the personal debts we signed off on come crashing in, and we're working the drive-through at Starbucks, crying while serving a venti half-caff frapp, light whip, sugar-free caramel, with an extra shot.

That's it, right? We're finished. Game over.

Not exactly. While all of that does indeed suck, there's one thing that it does not remove from this scenario -ourselves. Our recovery is 100% based on the fact that we don't lose our own ability to perform, rebuild, and be great again. We tend to completely overlook that important fact when we do our doomsday planning.

Losses that Leave vs. Losses that Stick

We also overlook the fact that most of our losses actually don't stick around — they leave entirely. It doesn't make them suck less, but we do a bad job of factoring this into our recovery estimate. For example, if our startup goes bankrupt and we lose everyone — it's done. People leave, investors bail, and the next day — it's just done. Those losses don't keep showing up every day at our doorstep for the rest of our careers. They all move on to more important things to do.

In fact, short of any personal debt that lingers, most Founders realize that post-apocalypse, their slate of life gets wiped clean entirely, which is a great thing. The moment we wake up the next day and don't have a crashing fiery zeppelin to pilot, we all of a sudden have a fresh set of downs to play with.

Therefore, we need to separate the losses that will stick around from the losses that won't. The losses that stick around are typically way less impactful than we think they are. We assume our reputations are forever tarnished — they aren't. In a year no one will remember or care. We think our finances will be forever ruined — they won't. That's because we'll go on working on something that actually pays us for a change. Our worlds have an amazing ability to self-correct if we let them.

The Clean Slate Plan

What we need to factor into our doomsday planning at 3 a.m. when we're staring at the ceiling of our bedroom is what we'll be able to do with a clean slate. A clean slate assumes the worst-case scenario is long since over, we're re-focused on our next thing, and we have our entire lives to make it awesome. As Founders who recover, that's what the future actually looks like. If you're not sure, remember that Elon Musk filed for personal bankruptcy just a decade before he became the world's richest person.

That's not to say that the path is all sunshine and rainbows — it's not. There's going to be a lot of strife in the middle, but we'll motor through it like we always do. We'll change our focus, we'll reload.

Our ability to recover from a brutal loss doesn't come from some grand strategy that we formulate. It comes from the fact that we can never lose ourselves, we can always build something great again, and every day we spend serving those goddamned Venti half-caffs is going to be the most powerful motivator we can ever have to rise back up again.

In Case You Missed It

Treat Departing Employees like Future Employees While saying goodbye to departing employees isn’t easy, how we handle it is totally in our control and can impact our future professional relationships.

Should I Pay People With Equity? (podcast) Paying people with equity is a time-honored tradition in cash-starved startup land. However, have you ever stopped to consider the real cost? Join Wil and Ryan as they break it down.

When is the Right Time to Give up Equity? Equity is the most important asset of a startup, both in its formation and as it grows. As such, we have to be super mindful of when (and how hard) we pull that trigger.

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