Startup Therapy Podcast

Episode #118

Ryan Rutan: Welcome back to the episode of the startup therapy podcast, this is Ryan Rutan joined as always by Wil Schroder, my friend partner and the founder and Ceo of startups dot com. Well, I think it's pretty common in in most founders journeys that there's some day that you wake up and you realize this thing is working pretty well, things are going great for everybody except me, the founder like, hey, how do we get there? But like first let's talk about like when is that moment? When, when is that? You know, what's that precipitous event where we wake up and go fuck, like what happened? Like why am I here?

Wil Schroter: I think there's two parts right? I think half of it is when is that moment? And I gotta say like it changes for everybody, but it will happen, certainly have that moment, but a big part of it is how did we get here? Right? Like, you know, going into this, we had so much optimism about what our startup would be and how it would help us and change all our goals in life in so many different ways and yet somehow we looked around and we're like, this sucks, like why am I the only person sitting at my desk right now, why am I broke when everybody else is on vacation? Like what's happening right now and how am I the one that made all that happen? Like this, this was supposed to be my dream. Everyone else is living my dream, but me like how do we get here? And it reminds me of like when you wake up in the morning one day and you get on the scale and you're like, whoa, that's a big number. And it wasn't, that

Ryan Rutan: wasn't a

Wil Schroter: cheeseburger, right? It wasn't one pizza, it was a little bit over a long enough period of time until one day you woke up and you looked at the scale, right? And you said, I I got to do something here, right? So I think Ryan, what we should talk about, because I think it's every founder is dealing with it in some capacity is kind of how did we get here? And by way of that, what can we do to kind of put some steps in motion to get some of this back, right? To make it to be the startup that that works for us and not the other way around. Alright, so before we get into this next topic, I just want to let you know what we talk about here is like 1% of the conversation, you know, really, this conversation is going on all day long online at groups dot startups dot com. Where Ryan and I pretty much talk endlessly with founders about every one of these topics. So if by the end of this discussion, you like the topic and you want to dig into it a little bit more with Ryan and I just had two groups startups dot com and we'll pick it up from there.

Ryan Rutan: Yeah, yeah, sure, I mean, and we've we've talked about, you know, other other related topics where it comes down to this notion of kind of a death by 1000 cuts. Like you said, it wasn't it wasn't the it wasn't that the one cheeseburger, it wasn't a single slice of pizza. It's a lot of little decisions uh that that go counter to that dream that we're trying to build or that we believe are necessary sacrifices along the way. And I think it's that is one of those really critical and super hard to to kind of dissect without some really specific examples of those situations right? Where it's like we feel like we have to make that sacrifice in order to get to that future state that we want you. And I have seen this play out enough times that we know that often those sacrifices don't lead to that they lead to the scenario that we've described instead, which is you wake up going what happened like this, this is not this is not the train that I got on. Um but in the moment they can be really, really hard to see right? It it can be hard to predict the future and you feel like I have to make the sacrifice now in order to get that thing later. And I think that's one of the things that we can we can kind of key in on what are some of those little decisions that end up stacking up into these larger problems over time, like what comes to mind for you like. And then let's go as early as we can in the startup where we start to make some of these decisions, where we go off of that like North Star dream path. Um, and just end up at a strip mall instead.

Wil Schroter: Well, let's talk about what what concepts are proclamations we had leading into this. They're typically the same. I want to work for myself. I don't want people telling me what to do. I want to be on my own path, right? That's that's almost part and parcel with this whole thing. I want to create some financial freedom. I want to be able to make my own money so I can write my own paycheck and be able to kind of set my own my own future that way. Okay. And and as founders are listening to this and they're saying, you know, I do remember that goal. I remember bell, I want to be able to set my own schedule if I want to get up and go do something that I really enjoy doing. I'm just going to do it. I'm not gonna have PTO or vacation time because I'll take vacation whenever the hell I please. Right? And it's so funny. It's laughable because it sounds like it's supposed to work. It sounds like it's supposed to go that way. And yet as we're at our desk at 11 p.m. Looking at a bank balance that has a negative sign in front of it and looking at like how horrifically out of shape we are, how incredibly like distressed we are in so many ways in going. I made this. Yeah that's the worst part man. Yeah

Ryan Rutan: we did this to ourselves, like I I picked this path, I designed this and then I made all the little decisions that got me here. Yeah I remember thinking actually having the thought at one point that like I was my own boss and I was probably the worst boss ever like for myself and just thinking like man I I chose this um but now like the decisions that I'm making um and this was like this was early on like so I had a co founder but like it was really early on, no real employees and contractors, buildings and stuff but like it wasn't really managing people is really just managing the business and managing myself and I was a horrible boss to myself right? My expectations for myself were absolutely ludicrous. Um and it was all self imposed, right? That's the truly laughable part Um and and how quickly we can get there too, it wasn't like all of a sudden I was like we're about to cross into the Fortune 500, you know we've got to really like knuckle down and we're like we're about to cross into the, we made $500 um zone, which is where we were at. And yet I was just like I was pushing myself so hard and all of those things, right? All of those reasons, all of those beautiful proclamations that I had made. Um we're just like tossed out the window if I don't think even had a window in that office. Um So yeah, it's uh it's self imposed and it happens fast, really

Wil Schroter: fast. Well it does. And so it happens in ways where we don't see it. We're essentially mortgaging our goals without realizing it. For example, we take on our first employee, here's how we think it's supposed to work. I've I've now hired an employee, their staff, I'm boss man. They do what I said, here's the reality of it. I'm awake at three in the morning staring at the ceiling saying how the funk am I going to pay this person? We just lost another client, We're not gonna be able to make payroll. That doesn't feel like being boss man. That doesn't feel like everyone jumping at my every whim that feels like me at three in the morning, wondering how I got here and how now everybody else's concerns are my

Ryan Rutan: liability and all of a

Wil Schroter: sudden, right? If they're not getting their job done now I'm spending all my time in frustration babysitting them to make sure they get their job done, That's not what I had in mind. They were supposed to come to work, bring me coffee, I don't even drink coffee, but I, but I had this, this idea that I wanted it and and they come to me and they say, Mr Schroeder, what do you need in this scenario? They also call me Mr Schroeder for some reason to, I'm like the monopoly man and in and I have this idea that all of these things are working for me, but the reality is every time I set those goals, how they play out goes the exact opposite. And so what we end up doing is we end up once again mortgaging those goals, right? We end up saying, okay, I get it, you know, you have to take some time off to go do whatever you're gonna do, I'll fill in for you or legal, right? Or hey, I understand that like, um, we're gonna have this long Deb cycle, I guess I'm gonna have to work weekends, but in my mind, I wasn't like, let's create something where I get to work weekends all the time. That would be sweet,

Ryan Rutan: right? Everyone runs counter

Wil Schroter: No, no, or or I'm going to be on the road for 200 days a year and not see, my family that wasn't part of my, my goal setting for a startup. but I have to write because if I don't, or if at least, you know me and my team don't, we're not going to be around long enough to, you know, could run this thing any longer. And Ryan, I think what kills us is that there's never a moment typically where we stop and say, ah ship, okay, now we're kind of short changing our goals, right? Like, like this is a moment where, you know, we said that we didn't want to report to anybody, but if we take on a big client were essentially reporting to them because they've got our entire book of business or if we take out an investment, we're essentially gonna be reporting to a board. But we have to, because we have to raise money and we have to grow this thing. And so yet another goal gets compromised. You know, by the way, I just want to mention if what we're talking about today sounds like the kind of discussion you wish you were having more often you actually can, you know, we're online all day everyday working through exactly these types of topics with founders, just like you. So any question you would have or maybe some problem you just want to work through. We're here and we love this stuff and we're easy to find, you know, head over to groups dot startups dot com and let's just start talking.

Ryan Rutan: It does. And I like the concept of mortgaging. I really, I really like that, that that's the word that you chose here because it's a great analog for this. Um, but it's, it's, it's a dangerous, it's a dangerous mortgage that we're taking on because it's typically a lot of like it's a bunch of, it's a bunch of subprime credit cards. That's what it ends up being right. And you don't realize the rate on these things. This is, this is where it really becomes dangerous. The, these sacrifices that you make makes sense at the time given that it gives you what you think you need in that moment. What you cannot understand and see in that moment typically is what the actual cost of those sacrifices is Compounded over time. In the same way that if you went to say like, Oh, I need a new laptop, cool. How much is the laptop? $2,000? Well, I don't have $2,000. No worries. We've got financing. Cool. What's the rate, 85%, I guess. I don't need a new laptop. Right? But in our startups, we do often mortgage things At incredible rates, right? But we don't know, just can't see at the time. We don't know it, we're mortgaging our health relationships. We've talked about the different currencies that we spend to build these and the interest rates that are truly applied to these things and I think this is a big part of the problem right there that 200 days on the road. it feels necessary because it gives us what we thought we needed in that moment. But what we don't realize is what we've traded in future value in terms of our life, the quality of living the, the, the connection to team family the rest of it at the time were making those deals because again, there is no fine print, right? There's nowhere to read that rate that takes a bit of a crystal ball and or just the hard experience of having gone through it and knowing I'm not going to do that again.

Wil Schroter: Right. Right. And also at the time we think that we're actually improving the goal right? At the time when we take on investment, we're like, no, no, taking an investment is good, that's going to grow the business, which will give me more freedom. And on paper, that kind of makes sense. Well, we haven't experienced yet because we probably haven't done it before. Is that that new investor, that new board has become our boss times 10 like because all of the things that we would have had freedom to do five minutes ago are forever taken away from us. Now. I'm not knocking investment. That's just what it is. Same thing with employees in our mind, I have all these people working for me, but it's not until we write payroll for the first time and that money gets deducted out of our account. Like, oh, employees are a massive liability. My largest liability and it's gonna keep coming back to me on a regular basis, right? All these people are going to do the work for me. No, they're not. They're gonna work maybe, hopefully they're not gonna do it for you. The only way that work's gonna get done is if you are in the weeds, making sure it gets done. There's no kickback moment where you're the foreman, you know, at the docks and everybody else is doing work and just throwing money at you like this doesn't work that way. Wait,

Ryan Rutan: there's no startups union. Are

Wil Schroter: you sure there will be? And so all the things that we set out to do and we thought our startups with the conduit to get done, wind up going the opposite direction. But the messed up thing is that we're actually the ones driving at that direction. We were shifting into reverse and we're like, wow, look how fast we're going. And so, um, what I feel like is that all of our goals because they get lost, We stop looking at them. Right? So one of the things Ryan, you and I have done with the rest of the team going in, we said, we don't want to answer to anyone. And so it's been 10 years a million times have we come back to the yes, we could do this, but we don't want to answer to anyone right now that said, this is the first time in my career where I've ever held to that every single time before, Ryan, when, when a big client came up, right, that would essentially rule my life or an investor or a partner or anything else like that. I jumped on it in the name of progress, right? And and at that very moment fired a bullet in whatever chances I ever had of maintaining some of those goals.

Ryan Rutan: Yeah, no, it's, it's absolutely true. I think that, you know, I said at the top of the episode, but the, the north stars become so important here because those, those clear crystal objectives and we're not talking about necessarily revenue goals, right? This could just be personal time goals could be whatever. But if you don't have some fundamental points that are unchangeable, right, that they're inflexible now, of course there's pivots, there's things like that. But like to some degree, some of these things need to be unchangeable. They need to be fixed so that you can aim at them and you can use them to make decisions, right? This is where I often find people stuck and just mired in in what otherwise wouldn't be super complicated decisions and or it would be very clear that the cost of making the decision would not be worth it in the long run because they don't have these North stars, they don't have a point in the future. They can look at and go, does this get me there? And does it get me there in the way that I want to get there right, right? And if you don't have that these decisions become impossible to the point of just being arbitrary, you're flipping a coin at that point and saying I'm going to do this. And and of course it's a path forward, right? Um, but like you said, there are some decisions that you make and we've, we've covered this in another episode as well. Taking on capitol that eliminates a bunch of potential paths because now you're essentially scale take on more funding sell I. P. O. These are really the only allowable outcomes once you've got those that that boss times 10 that you described you as the investor, right? So some of those decisions really change the path that you even have and that may move your North star and that may completely change your ability to reach those goals that you set out to meet in the first place.

Wil Schroter: I look at them as debts masked as payoffs. Right? Right. I mean, raising capital is exactly that, but taking on staff is that for some people depending on their relationship, taking on co founders. Right? Like I was good with how I wanted to do things. Now, I've got three co founders. Now I've got three other paths that this thing can take, right? If I don't have all those people agreeing to the same thing at the time. They sounded like payoffs where at startup weekend, everybody said, let's go do this thing. So I've got three other people that will work for free and work on the idea and you know, whatever until it becomes something. And now I've got all these personalities that I'm dealing with again a debt, you know, masters a payoff. And look, all of these things are part of building a startup. So this isn't to say all these things are inherently bad. Um, they come with the territory. What we're really talking about is not seeing what the effect of them are, right? We're running like I said, we're running at full sprint, but we're actually in reverse toward what our goals are. And more importantly, we're allowing everyone else to agree that our goals don't matter implicitly. And we do that by constantly, constantly putting ourselves last when I first started my first business and I'm sure this is with you with everyone. I just assumed putting myself last was the noble thing to do. So here's what you do every startup, You try to outwork everybody, you take no pay, you run up all of your debt. These are all old school in the lore in the halls of, of startup justice. The right things to do. The problem is we get really used to doing them after a while. We get used to coming home late. We get used to missing soccer games, We get used to running our bodies, you know into the ground And after a while we start to get to this point where it doesn't even occur to us, what the hell we're doing to ourselves, You know what I mean? Yeah,

Ryan Rutan: it's just, it's just an entrenched behavior. It's a, it's a habit at that point, right? Um, and like, like most habits, you know, they can, they can be good, they can be bad. Um, but when you don't recognize that you're just doing something out of habit, I think it's always bad even if it's something good for you. Like recognize why you're doing the thing you're doing and and how well it aligns with the goals. Um, and in so many of these cases we just, again, you get used to putting ourselves last, we get used to um, you know, being the last one to leave the office, the first one in all of these things that we, that we think matter and sometimes do, but again, without considering the cost, um, and looked at in a vacuum, they don't sound that bad. You're like, yes. So what you worked a little harder, you're the founder. You should do that. Yeah. For a while until it like ruins your health or your, your, your emotional state, um, or your physical state and then no, you shouldn't have done that. That's bad. And now your startup is going to suffer because of it. So right about recognizing the costs of these things as we go and recognizing what have these have just become habitual behaviors because the reality is, yes, late nights might have been part of the startup at some point. But if you're 10 years in is the expectation that you and I should still be leaving the office At 10:00 at night. I certainly hope not, right? Like that's not now. There are nights where we have to do that right? There's times where we do that, There are still times where things come up, there are emergencies where they're exciting opportunities, right? There are nights where I can't sleep because I'm so excited about what we're doing that's okay on occasion, right? But if that becomes my daily rhythm and it's without thought of cost or what it's actually achieving now we're in a really, really dangerous spot because now we're just doing it out of habit and that's super dangerous.

Wil Schroter: Well, we'll stick with that. There is a threshold where commitment becomes destructive and we forget that it's destructive. We forget, you know, again, we hop on the scale and like, wow, I'm super out of shape and we forget that that there was a time where we actually cared about that we forget that not being there for our family when they need us isn't okay. The problem with this is we just chip away at these behaviors over time and the whole time, this is this is the fallacy the whole time. Our belief is that all of this commitment is working towards something that will achieve the goals where we don't have to do this anymore. Now some of that's true, you know, and that that is part of building a startup. The problem is the the difference between commitment and destroying ourselves gets lost somewhere along the way and we get to the point where we're so used to just default destroying ourselves. We kind of forget why we're doing this to begin with or we lose the ability to just say no to just kind of step back and say, you know what? Fuck this, why am I not getting paid? Right? Like we raised a series a round, I'm getting paid less than everybody else at the company. Why? Like why did I agree to this? And you start to look back and you say there's no way I can look at my marriage over the past two years and say it's gotten better because of my startup. If I was starting my startup from from from ground zero and I knew what I knew now I would have never signed up for it, right? And so if that's the case, you got to look back at some point and say given where things are, this is not working for me anymore, I have to make a substantive hard change. And I think part of that change comes from recognizing that these things have just kind of bubbled up over time and now you've got to basically pay back that debt that you've created with yourself

Ryan Rutan: for sure, for sure. And and there's a lot of things that drive us into these behaviors, right? Again, depending on what the situation the startup is, you've taken on funding. You may feel beholden, you have to keep doing these things. We've talked about this before. The investors may not feel the same way at all, right. We, we talked about these, these one sided conversations several times where we feel like we have to do something because there's some expectation. We feel this level of guilt. Um, you know, the people who joined us early in the team, you know, we haven't, we haven't raised their salaries enough, we haven't gotten them to, to, to a liquid moment. We haven't done these things. Um, we can easily forget about all the things that we have done for them. Um, but you know, there are these things that we thought would happen, these things that we wanted to happen and so we feel guilty about that. And I think that's part of what traps us into these habitual behaviors even well past the point of of their utility, um, which then leads us into something else. Not only do we develop these habits and set these may be very deeply internal expectations. Again, subconscious expectations that we're going to keep doing this stuff. Then we look around and we realize,

Wil Schroter: so

Ryan Rutan: does everybody else.

Wil Schroter: It's on us. They all

Ryan Rutan: have this expectation that we're going to keep doing this because that's the expectation that we created for them of what we are willing to sacrifice to do this, right?

Wil Schroter: And we're proud of it in many cases, You know, we were proud of, right? The badge of honor. Um, Hey everybody, I'm gonna abuse myself to the end. Then I want you to get used to that. And, and the worst part about me killing myself is I'm going to tell you how, how, what a badass I am for doing it right. It's just, this is kind of backwards startup lore. And I think that, uh, of all the places where we make those little sacrifices. For example, we take on funding and we say, you know what, you know, the noble thing for me to do is I'm gonna take the smallest salary possible so that the entire company has more capital to work with. And there's some truth and kind of understanding around that. However, here's what actually happened. We just told everybody it's okay to not pay right. My contribution, I have equity. So my, the time that I spend isn't, you know, worth paying for everyone else's, but just not me. There's no version. We've talked about this in previous episodes where the investors pull us aside and say, Ryan Wilf, you guys have been killing yourself for too long. You're in so much debt right now. You've barely even seen your families at the very least, let us stop you up on south conversation. I've never had

Ryan Rutan: so many unread emails that are, that have that same subject

Wil Schroter: line, Just

Ryan Rutan: ignore him because you know, I want to keep sacrificing

Wil Schroter: well and think about this. If if say with our staff, right? If if they keep dropping the ball on things and we keep making up for it in their minds kind of like kids feel like, you know, they have their, their parents to make up for it. If we drop the ball, that's fine, Ryan will be there to make up for it right now. Um it's not that I don't have to try that hard, but if I fail, someone else will will solve the problem for me, right? And we get so used to being in that that mindset, that behavior that we forget that was the polar opposite of what we were trying to achieve, literally hired this

Ryan Rutan: person so I would never have to do that again. And yet now I have to do it and I have to do it irregularly just when they dropped the ball. Right? So it means it's these surprises that come out of nowhere and I've now built my new routines around the expectation that I don't have to do those things and so it becomes even more disruptive. I mean I've I've definitely had situations in the past where I've put work off onto somebody else's plate and it became more work for me somehow as a result because of the disruption because of course I didn't just empty my plate and leave it empty, right? I emptied the plate of that and then I loaded it up with something else And then that kept creeping back in and disrupting the other thing I was supposed to be getting done and it can be really disastrous, right? And when you multiply that by 10, 1550, 200 employees, you see where it goes right, It gets, it gets shitty exponentially quick.

Wil Schroter: And I think probably the person that, that we convince the most that this is okay, is ourselves right Again. We have

Ryan Rutan: to be

Wil Schroter: doing it right and yet, and we're like, I guess this is the way it goes right or we have a horrible relationship, you know, with, in our personal lives, right? Because of the startup, you know, um, you know, like I guess that's the way it goes right and over time we've gotten so used to this being the case, like I said, like the miss soccer games or the arguments because of, you know, where the startups at back at home, things like that, that we start to lose our minds and we forget again that if we were starting this from scratch you and I Ryan, we're co founding a new company together and we said all of these things are about to happen. Neither of us would sign up for, it

Ryan Rutan: would be like we either

Wil Schroter: find a way to block that now or it's

Ryan Rutan: or it's a no go and you know, like let's take a moment to appreciate the irony that just based on the typical personality of the entrepreneur and the reason that we started these things again, like that freedom being way up there, right? If not number one for everybody, It's in the top three. You can't tell me, it's not the irony that we would not accept these conditions that we've placed upon ourselves from anyone else on the planet, right? The, the depth of that irony cannot be overlooked, right? The hypocrisy involved in the way we treat ourselves when we absolutely would not accept that treatment from anyone else. In fact, that's often the reason we're doing this in the first place, right? So we've got to get over

Wil Schroter: that. But consider the other fact, it's also within our power to reverse this, right? This isn't a forever sentence, right? Like we, we do have the capability to reverse all this. This, this crazy thing that we got ourselves into. However, in the same way that we got there bit by bit, you know, death by 1000 paper cuts. We also essentially, I think have to chip our way back out of it, right? We can't just say, oh no, I'm taking as many vacations I want, I'm getting paid exactly what I want. That sounds awesome. It doesn't quite work that way. But I think if we zoom out of touch and we were to say, okay, look, it's fucked up by how I got here. But but I'm here here are the steps that I'm gonna start taking towards getting myself out of this and getting back to what my original goals are. You know what I mean? Yeah. Yeah. I think

Ryan Rutan: that's, it's really, I mean where it starts and I guess it starts with the realization right there. There has to be something that makes you go, hmm, I need to fix this, right? And so there's kind of that, that big moment, maybe not that big. Um in most cases it does, it tends to be something large that happens. Um that that makes you lean back and say I need to evaluate this. And then it goes back to just reevaluating those initial goals that you set out to achieve right. It's it's not more complicated than that. Now, compare those exactly, compare them to where you are now, figure out what the deltas are and then decide what steps will get you closer to those goals. If in fact they are still the same now, I think that goals can change over time, life circumstances change over time. You and I both know people who have started companies and then middle of the company started families. And that can absolutely change those Northstar goals and that's okay too. But that requires a realignment. But let's just assume that your goals were what they were and they stayed that way and you're just off course the course re corrections just take, going back to a clear understanding of what those things were and then how do I get there? But how do I get there this time with some control over my experience in all of this? Right? Because at the end of the day, we didn't build these things so that we could work for them. We built them so that they could work for us. Of course it's a give and take and and their, their periods where we're doing more of the work. But at the end of the day, at the end of the startup, at the end of the line, if there isn't some sort of payback or there isn't some sort of beneficial outcome for you and that's through your own design in action. Something's gone terribly awry. But like you said, it's totally fixable, just takes attention.

Wil Schroter: Alright, So that was fun. But let's actually keep this conversation going. You've heard what we think about this. But you know, Ryan and I would really like to hear what you think and we're online, like all day long, pretty much talking about every startup topic you could think of from fundraising, the customer acquisition to just really had to get all of this crazy startup stuff out of your head and there's tons of other founders just like you, they're weighing in on these topics. So you'll get a chance to just hang out and meet some really smart founders were also super, super easy to find. You head over to groups dot startups dot com and let Ryan and I hear what's on your mind. Let's get to know each other a little bit and let's just start having more of these conversations.

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