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Founder Sacrifice — At What Point Have I Gone Too Far?
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How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
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The Case Against Full Transparency
Should I Feel Guilty for Failing?
Always Take Money off the Table

Many Startups Shut Down a Few Times Before Succeeding

Wil Schroter

Many Startups Shut Down a Few Times Before Succeeding

Every startup dies a few deaths before it lives forever.

But that's not what they tell us in the startup Founder brochure. Instead, we make up this fairy tale that our startup must be a great idea that instantly takes off, leaving customers and investors standing in line to hand us their cash. We keep making great decisions while we struggle to stay on top of our meteoric rise. Our days are jam-packed between photo shoots for magazine covers, headlining major conferences, and giving powerful speeches at company retreats.

Sound familiar?

No, of course it doesn't. Because that's not how any of this shit goes. The real version of a startup involves failing incessantly, sometimes to the brink of shutting down, until we rise back up and finally make this thing work. People don't tell us that we will likely go in and out of business many times on the road to success, but in fact, that's often the case.

Go broke. Rinse. Repeat.

In my first startup, I went completely bankrupt - twice - before turning the corner. What does that look like? It looks like me calling my landlord to say I can't pay the office lease, laying off all my staff, pretending to clients that we were still viable, and avoiding my friends and family altogether. In a word — not awesome.

But each time I revised my plan, ran lean, and then slowly worked back up to a point where I could re-build the business using what I had learned last time, which often amounted to "Don't hire anyone until you're 100% sure you can afford them for the long term!"

At the time I thought I was the only person that had ever "gone broke and returned". But I'd come to learn later that many, many startups do this, we just don't realize we're the only ones.

Shut Down = Temporary Pause

Unlike a big, established business, startups are far more malleable when it comes to the status of our "operational condition". We often have the ability to chop things down considerably and run "lean" for a period of time while we figure stuff out. COVID forced the entire world to do this in 2020 and we often saw how many different ways Founders were able to deal with this condition.

Often we are swinging from funding event to funding event, and as nice as it would be us to top up the bank account long before that next cash infusion comes in - that rarely happens. What's more typical is that we wait too long to raise capital, run out of capital, and then run like mad to make up for that fact. In the interim — we basically shut down.

These "shutdowns" are typical, and the amount in some cases to a "temporary pause" until we get our shit together. What keeps the startup moving from one shutdown to another is typically a wildly resilient Founder who just won't give up. I've been through shutdowns that worked well (my first story) and I've been through shutdowns that never made it past shutdown (how much time do you have?) and I can tell you, they feel nearly identical while you're in them.

Founders "Manage" Shutdowns

As Founders, we need to be in a position to manage our shutdowns. Sometimes we're building plans to scale, and other times we're building plans to make it through a shutdown. This is all part of the job we signed up for. When it comes to managing a shutdown the most important thing is to think through how to rapidly de-scale a business so that it can be around long enough (in some form) to ever get past the shutdown.

Founders are like vampires — we can get killed many times before our time is up. Also, many of us as just as pasty.

What's important is that we recognize shutdowns as part of the startup lifecycle and not a one-off event that "only happened to us." It's normal friends — treat the event like yet another insane thing we have to do to make our dreams come true.

In Case You Missed It

How Do I Design My Startup Around My Life? There’s very little preventing us from designing our startups around our life goals. It starts with us being very clear about what we want to achieve and then taking clear, small steps toward those outcomes.

7 Habits Of Highly Successful Entrepreneurs From ice cream powerhouses to e-commerce pros, here are some traits from great founders that I’ve observed and tried to emulate throughout my 20-year career as an entrepreneur.

How Much Should I Be Working? (podcast) While there's truth to the assumption that more hours equal more growth, we'll explore how it benefits to think quality and not quantity when it comes to your weekly punch card.

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Reply4 years ago

Mohamed Natheeem

"Perfection simply doesn't exist." ― Stephen Hawking.

Nobody's perfect and mistakes are bound to happen.

So, learn from the mistakes so that you can avoid those in your next steps.

Without failures, you can't think out of the box.

Go broke. Rinse. Repeat. Will try to follow this mantra @Wil

Mohamed from Wooberly
https://www.rentallscript.com/uber-clone/

Katherine Jacobson

Wil, I loved this article, thank you for sharing! I am curious — how have you, or other founders you’ve seen go through this, portray a “shut down” or “temporary pause” to the public (or in my case an exciting pivot which means major pause while we restructure)? Do you believe in transparency with your customers/your following? If so, just how transparent are we talking? I would think sharing your journey on a platform like Tiktok could be hugely valuable in potentially building even more of a following in the interim but there’s also something to be said about keeping your head down and focusing only on the pivot. Thoughts?

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