Startup Therapy Podcast

Episode #155


Ryan Rutan: Welcome back to the episode of the startup therapy podcast. This is Ryan Rutan from startups dot com, joined as always by my friend, the founder and the ceo of startups dot com wil schroder.

Wil Schroter: Well,

Ryan Rutan: there's this sense that like it's my startup and I'll cry if I want to or I'll win if I want to, but it's mine, right? And, and I control the destiny and, and it's mine, right? It's this thing that's mine. And yet so often we see particularly on the VC route that as you climb and climb and climb through fundraise after fundraise after fundraise, but at some point you're squeezed so far down in the cap table that it can look like there's very, very little upside left for you as the founder, How the hell do we get here?

Wil Schroter: Look, it happens all the time, right? And if you're listening, it's, if you've raised, it's probably already happened to you. So this isn't, this isn't a one off. Typically though, we don't really know what's happening to everybody else in this capital raises, we don't get to see everybody else's cap table. So in our minds, we're probably getting a super shitty deal and by the way, we probably are, but maybe everybody else is getting a better deal. The only real look you can get if you, if you're really curious as to how these things end is when you look at the filings of company's about to go public. And you look how much the executive zone, right? It's, it's almost always single digits now in good times. Like the last few years have been particularly good valuations are high. So startups tend to get our founders tend to get, you know, a better, a better lot, but in most times the average founder, by the time they hit I. P. O. Stage and again, I'm trying to play this all the way up is in the single digits now. And that's if you get to I. P. O. Which means you had a really successful company, which usually implies right, that you had better rounds. Now let's talk about the rest of us, the mere mortals who won't won't ever hit that stage. We are two years in, we've done friends and family, we've done co founder around, so to speak. We've done the, the seed round And we're already at like 12% and we're like, okay, I haven't even really raised a lot everybody yet, once we, if we take on more series a what have you, that's even, we can't even get it. I'm going to be pretty far down the stack, 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 the other scenario is all those things have already happened. I've already raised my cash, you know, whatever I've got X amount of percentage. I'm behind all of these other preferences of all the other people that invested And the company is just doing okay. If I work here 10 more years, I won't have any more upside. Like, like this is as good as it gets and I've got what I've got, right? What do I do about that? I am the founder. How the hell do I get out of this situation? We'll talk about that as well. Yeah,

Ryan Rutan: So let's start, man. So what is this really it, you know, what do we call this?

Wil Schroter: Um uh We call it being screwed, you know? Um We look at it and we say at this point, I've got to be very mindful that I have a ship deal. Here's the problem. It's the

Ryan Rutan: reality though, right? I mean that is the reality and but I want to be careful here because you and I and I talked about this a bit over the last few weeks and and again, pre show today we're not saying you did something wrong and now you've landed in shit deal. This is sort of the way it goes right, This isn't this isn't a series of mistakes or things that you could have done differently. It's a shitty deal because that's the nature of this type of deal,

Wil Schroter: right? Here's where I see it a lot. I see it a lot with folks that have raised quite a bit of cash and people don't see this from the outside. So I'll give you the insider's perspective. I've got a good friend of mine comes to me, he's been in business for about eight or nine years. He's raised about 20 to $30 million. And he said, look, I've got a handful of points left on the cap table. You know, we had some down rounds, we had some bridge, etc. But I'm 10 years in, you know, 8 to 10 years in and I'm long since threw all of my personal capital. So that's gone, right. I get an okay salary, but we've never done so well that I could get it extraordinary And that's not going to happen anytime soon. And the company is doing okay. You know, it's not terrible, but it's not really going to be exponential. But I'm tethered to this thing. Everyone else can quit. I'm tethered to this thing, at least in my mind for like the next 5-10 years I am screwed.

Ryan Rutan: Let's hold on, let's hold on a point here for just a second. Well, because I think this is important because the company is just doing well enough, but it's not in a position where it can now continue on an exponential path. this is a problem. Right. This isn't a problem for a lot of companies, right? For companies that didn't take on capitol that didn't squeeze the owner down, it's OK, right. What's the pejorative term we use for them now lifestyle businesses as if that isn't what we're all trying to build, right? Um, but so you can't have that, right. If you've gone the capital raising route and you're now squeezed way down on the cap table, there's no version of just having a good and stable company that's going to leave you with any type of real upside as a founder. Right,

Wil Schroter: Right. And, and that's the thing, Ryan, we've got startups dot com were privately held company, we didn't raise money, we could do whatever we want to take distributions, we can do all the things that companies can do. So for us, we determine our own fate. Yes. Once we take on money and a lot of people don't realize this until they've done it. Those options usually go off the table and that's a lot of what we're talking about if you own 10% of the company, but you're taking big fat distributions every year, getting your big salary or whatever. It may feel like less of a ship deal. But if you're forced into a below market salary with no ability to have cash upside and no real visibility as to what whether your equity is ever going to transfer and even if it does, you're probably so backed up in the cap table that by the time that money would make it to you, you'd have to have such an exponential outcome. And unfortunately, you know exactly what your chances are because you're, you're the closest to it there, right? You can pretend to be optimistic. But late at night when you're staring at the ceiling, you're like, this is never going to happen

Ryan Rutan: when it's become fairly obvious that that growth curve can be steady and stable but not rocket ship.

Wil Schroter: This

Ryan Rutan: takes a lot of motivation out, right. The wind kind of comes out of the sails at that point because you now know right, the probability of us ever re achieving that growth curve or if we ever had it to begin with is relatively low and the likelihood of any other type of big outcome is extremely small

Wil Schroter: and you

Ryan Rutan: don't have the ability to do all the things we just talked about like distributions or profit share, whatever it is that would give you some internal upside. What is their right? And this, this is where it gets really, really emotionally tough for founders.

Wil Schroter: Yeah, I think that a big part of it is, again, we feel alone in this as we're thinking about it. We've got these really tough emotions. One emotion is, I don't deserve to feel this way I created this situation And so if it's a shitty situation that I have to deal with it, like I have to own it, etcetera, and I'm not taking accountability off the table here. Okay. Because yes, it is your situation. Yes, you created, but it doesn't mean you are tethered to it. Like you're the captain that has to go to the bottom of the ocean while everybody else floats off in life rafts. That's not what I mean. And guess what? Right? Every founder that I talked to about this has no idea that they have any other option. They just assume that they're all forever shackled and the outcome of the boat is their outcome mechanics going down, they're going down and they don't even realize they've forgotten that they have options. If you were to

Ryan Rutan: ask me what the most powerful force in all of startup land is its inertia, right? It's once we start doing something, we just assume that we forever have to keep doing that same thing. We have to stay that course. And it happens in a lot of different scenarios. But this is one of those I think because of the complexity and because of what's at stake, I mean, we're literally talking about the company and the value that it represents to you. This feels pretty pretty important, right? Like this isn't something just like, you know, maybe I'll just walk away. So of course that's not going to be your your first instinct. Um, but it is a possibility, right? And I think that we forget that we do have some options here and we're not necessarily inextricably tied to this thing. Of course we aren't and we know that and yet we don't see an alternative that feels even remotely close to just continue to suffer through it with a little upside. So we'll do that. So what should we be doing instead? Like what is the outcome here?

Wil Schroter: Sure. So you know the way we talk about it and Ryan, when you and I talked to founders is we first remind them that you still require incentive. And so we talked about this sometimes in some of the podcast. But let me just, just remind folks of this component, there are two factors to how you're engaged in the company as an owner, that's where the stock comes in. A lot of what we're complaining about right now. And as an employee, the two are not inextricably linked. People forget this. In fact, most offenders don't even know this, they assume well, I'm an owner. So of course I have to work there. And again, this is more about, there are two separate roles. If you decide that you don't want to work there and you quit today, chances are other than you know how your vesting works, you still have your stock just like your investors do, right? Just like your team does. If you decide that you're going to go work somewhere else, you'll get a salary somewhere else, right? You'll get paid separately, You'll have incentives somewhere else, at which point you work at this company, but you have no incentive. You just have a shitty job, right? I mean, that's what it comes down to. And I don't think people think in those terms, they just assume again, I started this thing, I'm tethered to this thing, this is my lot in life and I'm just screwed. You have to have incentive. And especially, as in this case, I'm talking about as it relates to investors. The investor's job is to make sure you stay incentivized. Here's what they do. They say, well, you have stock, you're incentivized. And there's some truth to that argument, but there's another way to look at it is I had stock and I just sell it all to try to create more value for everybody around me right now. I don't have it. And and with that my incentive. That's so that's what I'm saying. Yeah. And it's so tough to I mean,

Ryan Rutan: like that conversation with investors, we've seen this play out where it's like, yeah, I have stock in the company. So do you you made a one time investment that, by the way is less than what my my market salary would be for a single year. I've been doing this for eight years. Um, You still have the same position on the cap table yet, I never see, you show up here now. That wasn't part of the original deal. But it doesn't mean that it's not dis incentivizing, right? Like when we look around, it's the same thing, right? When we look around and see what else is happening and, and sort of where we sit in all this, right? Like I now have the least upside. I have the most responsibility. Uh, and, and I'm tied to this in ways that nobody else is right. Like you're talking about your friend who is now buried all of their personal capital and this as well. So it's like if I stop this, I am, I am worse off than I was nine years ago when I started this, right? Not a great feeling after having invested what we invest as founders in this. So yeah, we have to have some forward looking incentive. I think the moment the incentive becomes, I'm running from the fear of failure versus I'm running towards an outcome that I actually want to achieve. We've got a problem, right? And it's one that has to be addressed sooner than later. And I don't know what your experience with this will, but the founders, I talked to most of them are dealing with this way way, way too late, right there at that point where they're just were not at all, which I would throw in the way too late bucket. Um, right. So they're just yet you've got to do something about this and you've got to do it at a point where you still have the energy and motivation to do something with that, right? If you're just running from the fear of failure and you just don't want to lose more than you've already lost. It doesn't end well, right? And this is just not going to turn around in a way that's gonna be positive for you as the founder?

Wil Schroter: Yeah. You know, and so part of what I would say is, uh, there's no version if we're waiting for someone else to do this for us where that's going to happen, there's no version where someone pulls us aside and says, Hey Ryan, you know, I just don't feel like, like, like you have enough incentive in the company. Here are some of my stock, are you literally never gonna, are

Ryan Rutan: you telling me that the founder fairy godmother is a myth, will

Wil Schroter: No, I mean, like, we keep assuming that it's going to come externally right? Externally? It only goes one way people taking things from you right? Externally, no one gives anything to, you know, other than in cash, but then they take your equity right? As they should. For the founder, we have to sit back, we have to have this moment of self reflection and we have to say, okay, here's where I'm at in life, forget what happened up until now. But here is where I'm at, right, I need to have these things in life, I need to be at this point, I need to be in a situation where either I can see a path to this uh you know with um with my current job or not. And at some point we just have to be honest with ourselves once we are and we say look I actually I can't like keep going on running into debt nonstop and like basically running backwards like most of the folks that I know that are in this position, I have been through the same gauntlet which is, they went 3-5 years of getting no pay at all. Uh use all of their personal savings, all of their assets, drained everything personally just to get to the point where they were getting funded etc. God funded, got a basic salary which by then they were so thankful for, right? But again, there's 78 years plus into this. Uh Not always, but you know, usually and they're like damn dude, like I lost so much money just to get to this point and I actually don't have a magical, you know, treasure chest of cash to replenish all of this. So I don't want to build a house or buy a house rather or you know my kids are going to college, who knows by then whatever the expenses are, I'm looking at it going, I actually can't afford to live and that's not okay, that's not okay for

Ryan Rutan: what we put into these things

Wil Schroter: correct? 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. There has to be a reckoning. There has to be a point where we go back to the board and say, I need as an employee, I need a new deal that may include more incentive comp for stock for cash or whatever it is and you have to be okay with that. Here's why. And and and my friend who I mentioned earlier, uh, did exactly that and we talked through it at length and we put a plan together. We talked about how to approach the board, etcetera. And I said, let them know that you're not bitter, you're not angry and you own the fact that you put yourself into the situation, you try to make the right decisions. But the situation also is what it is. Here's what, where you need to be in life and here's where the company is falling short like any other human, right? And you have to be willing to say if we can't account for this, then I have to find another situation that will, that's a tough position to take. Especially like when you made the commitment to all those folks, but what's important isn't so much, it's not a threat. It's, you guys have to understand where I am with my life, my career, my family, if I have one, etcetera, and what I'm trying to get accomplished unless we are painfully clear about that fact, no one will paint that picture for us ever.

Ryan Rutan: It's absolutely true. I would love to, I'm gonna pull the audience now. Well, it's probably not gonna work very well, but I'm gonna pull the audience right now. I'd like everybody to raise your hand if you knew that you could actually go and do this because I talked to founders all the time. They're like, wait, I can go back, I can talk to my board. I can talk to my investors. We can renegotiate. Yeah, you can. Um, is it fun? Is it, is it a happy conversation that everybody's just willing to jump into with both feet? Typically not. But to your point will sometimes we get to the point where it's the only way to move forward, right? We have to change tack. We have to change path in order to make this viable for us as well as them, right? If we just give up and fold doesn't benefit them either. So, you know, not a great place to be in the leverage that you have in this situation sucks. It's not fun to use, but you can't do it. I'm listening to, I heard exactly, it sound like three hands go up. Well out of hundreds of thousands of people. So it doesn't sound like too many people knew you could do this. Um, but yeah, great point. Let's talk

Wil Schroter: about how to do it, yep. Just for what it's worth because I think folks are listening like, okay, this sounds great. Please tell me exactly how to go about this. And having coached some folks through before, I'll give you just a quick hint. Here is the worst way at the next board meeting. Spring it on everybody say, hey, next slide here it is like

Ryan Rutan: you to meet my

Wil Schroter: replacement. Yeah, yeah, yeah. Don't do that. That's actually the worst way to go about. It sounds like you had to go about it. Uh, let's say on your typical board, let's say you've got 5 to 7 people in almost every case. Hopefully you have one person who is most friendly to your cause, right? Typically the person you inserted onto the board, if you have nobody that's friendly to your cause I can already tell you how this is going to end

Ryan Rutan: Step one. I'm adding my mother to the board of directors to, we're going to talk about my replacement.

Wil Schroter: Uh, first step long before there's any board meeting or what have you is you have to get in front of your friendly, you have to explain to them at a very personal level say like uh this has nothing to do with the company. Companies find this is me at a personal level, here's where I'm at from an energy standpoint, from a life standpoint etcetera. I can't keep going like this. It's, it's got nothing to do. Like I actually like what the company is doing and I want to be a part of that, but I'm no longer in a position where it's actually working out for me anymore. I've taken all like the freebies, if you will, where I pulled out of my savings, you know, I've drained my retirement or whatever. It's all gone man, right? Like I can't be totally leveraged. And typically the irony is all the people on the board, none of them are in that spot. You know, whenever the investors like, well we're on the same side of the table, it's like, dude, you flew

Ryan Rutan: her in a private jet, we're

Wil Schroter: not on the same side of the table.

Ryan Rutan: Get on the same side of the table now. How we got here was very different. Yeah,

Wil Schroter: yeah. Like come on, it's ridiculous argument, whole other podcast. But first thing I want to do is we want to isolate our friendly, Get them sympathetic to our cause. But most importantly get them to help us tune up our approach and our story and our expectations? So for example, let's say that we're in year five we were making $140,000 and compared to making $0,000 previously, that was all the money in the world. But compared to what we think we can make in the market, Maybe we could make $200,000 mark. Just make it up in the world. Does't matter. But because if you average over the last five or six years we made zero on all those years, we've averaged like $50,000 a year. Most of that all average on the high in the last 18 months probably. So we're broke. And so we have to be able to kind of re paint that picture for our Friendly because they'll have forgotten or not characters didn't know. Sure. Yeah. I

Ryan Rutan: mean that's the thing I it's so important because you know to your point taking this this time to kind of explain this from a very personal nature. Those aren't updates they've been getting right. They don't know your personal financial situation in all likelihood they may or may not care, but they probably don't know right. And so it's incumbent on us again communicate this stuff to them. Well I don't want to derail you. I like where we're going with this. But one quick question. Um in terms of the development of the Friendly, I've seen this done multiple ways but beyond the friendly, do you recommend going with individual conversations for the rest or do you get the friendly on board and then you bring this to the board all at once. Again, I've seen

Wil Schroter: both

Ryan Rutan: ways. But here

Wil Schroter: the next steps. Yeah. So um the next step is for if you have another friendly, obviously having two friendlies, always one on one conversations. Um Always live. Never email conversations. Never, never, never never want to go that way. Because reading the response is the conversation. So again,

Ryan Rutan: for the audience

Wil Schroter: live doesn't

Ryan Rutan: mean slack either,

Wil Schroter: right? Life doesn't mean

Ryan Rutan: sMS write like you talk to the people. This

Wil Schroter: is the epitome of a human conversation. Even if it's hard to bring up our hard to have, you got to have it in person. Especially because it's hard to have right? You have to have it. It'll fail Otherwise once we get our first friendly, that is now our ambassador for the rest of this process. So if we go to each person individually, maybe we have a good relationship with each person, we can do that, chances are probably not right. There's a couple of people who were were good with and the rest uh it could go either way, but aren't necessarily going out of our way to to help us. The friendly then becomes, you know, this board member then becomes the person who's helping us sell this to everybody else? Right? So the next most important thing is to have more than one board member. So that the focus at this point is getting the second board member on board with this approach. And really what we're saying is we're not really sure maybe what the complaint is going to be yet. But more than one of us on the board believes that we need to take care of you, right? That that's your, your incentive structure is broken. We don't want to lose you. And so we're listening. Once we have two people, it's not a lock, but it's, I rarely see it go the other direction. And so at that point, once we've got two people, by the time we get to the board meeting, we should have talked to everybody before the board meeting. This is politics 101, right? You never want to wonder what's going to happen on the board and you should have figured that out long before the board

Ryan Rutan: don't ask the question that you don't know the answer to, or at least the vector that it's going to be answered in. Right.

Wil Schroter: Exactly. So the board meeting should make it more official if that's where it needs to happen. And again, this may happen between a board meeting. But ultimately, what you want to find out is, if you have a spectrum, right? Um, it wouldn't be exactly five co founders. But let's say you've got five board members that aren't you and your co founders that you want your friendly than one other person then of course you've got three other people that you've got to convince there's always your friendly on one end of the scale and a complete asshole on the other end of the scale. And really all of this is just working your way up to that boss level, right? Until you get to your, uh, into this, you know, the one person that's clearly not going to be on board. And really what we're doing is we're building a case among enough people that say that this has to get done. The more people that, that we went over, the more of a foregone conclusion that we can do this at all.

Ryan Rutan: If you got the prevailing wind in your favor one or two standing against, it isn't gonna matter that

Wil Schroter: much. Here's what's most important about the first person and certainly the second person, they'll let you know what the temperature of the organization is over the board is about something like this, basically. If in your mind, you're like, well, hey, I was making a buck 40 but I could go to Mckinsey and make three fifties, so you should pay me 3 50 and they're like, you're out of your mind, like you one, you've never gotten a job offer like that, number two, you're 26 years old, What makes you think? You could possibly get that? Like they'll bring you back Dunder

Ryan Rutan: Being 26 is exactly what makes me think that right? Not knowing any better,

Wil Schroter: but again, the idea of being, we need to talk to somebody outside of our our own head to find out whether we're even on the same plane, the other side of it is they can look at it and go honestly, like you're right, everything you're saying is correct, You should be paid more, you're worth more, you're all these things and I don't know how we're going to do that, right? Again, uh you're looking for that external validation to see if you're exactly it is even possible.

Ryan Rutan: Sure, yeah, you gotta you gotta open the door for possibilities. I I like, I like the way you structure that, I think it is important to know that you don't have to come with all the answers, but you have to bring the conversation to the table, right? There is no upside in continuing to run with no upside right? There's there's just nothing, nothing is going to come of that, right? And so you have to do this, right? And so you don't have to have all the answers, right? I don't think anybody's gonna expect that you've got to come with some level of a framework around what you think needs to happen, at least being able to clearly articulate what the pain points within it are for you, so that you know what has to get fixed? Maybe not how, but what uh and then you're on good footing to move forward with a meeting and, and with conversations that I think you can find yourself in a better position or if not at least you know where you stand and then, and then you kind of have the bigger, harder, scarier decision in front of you, which is, do I continue to do this at all?

Wil Schroter: Right, Okay. So stick with that. So I've also got some scenarios where this with that is the answer to the board comes back and they said it was by the way, it was never as contentious as we I thought it would be. Right. Again, sometimes the answer is no, but it's not necessarily like this intense like argument. Come

Ryan Rutan: on. There's nobody like pounding their fists on the other end of the table. Like, you know, you got to stick with this money and I put my kid's college savings, right? Right. Look like that.

Wil Schroter: Um I mean, it can, but what I find is a certain amount of sympathy um, for the, for the founders flight, but here's the big difference. If we rely on sympathy as a whole, hey, you know, I haven't made enough money, I have to do this etcetera. The probability of success is pretty low. Instead we have to rely on consequence. Everyone responds to consequence here is what will happen if this doesn't happen. So here's how we approach that, right? It's never a threat. Alright. We're just, it's not even appropriate what it is is is it's a it's a workaround, right? It says, look, if we can't make this happen, my goal still need to be met this. The the answer to this won't be my goals. Don't matter. That's actually not even a discussion. My goals matter, right? And you have to be resolute. The answer will be, here's how we'll try to move forward without me, right? Um saying I'll quit and go fund yourself. Figure it out. Is not the right answer. That's a threat. Right? Works well

Ryan Rutan: at a fast food job

Wil Schroter: very, very rarely anywhere else. A resolution is look um if we can't make this happen, here's what I think it would take to replace me and here's how long I think it would take to find the candidate that could do that, right? And I'll move to usually the chairman role, that's how they put ceos out to pasture. Um And from there we'll um we'll operate the company according right? You have to remind people that you are not an indentured servant. If I leave, let's find someone else because I still have equity. I'm on the same side of the table. You are, but I'm not an indentured servant. I don't have to work here for ship pet. It's not the way this works. Um And by the way, you're an investor to you don't have to work here at all. It's so I'm pretty sure your equity and mine are the same, right. Um, and so if we go into this without addressing consequence, the consequences I leave will have to find someone else. And if we don't take care of this in realign incentives, um, there will be a problem if there's no problem. If the problem is just my feelings are hurt. We're relying on sympathy. The probability that it's super low,

Ryan Rutan: you'll get paid in empathy

Wil Schroter: with our, with our friendly and ideally kind of, you know, our backup friendly. If you will, we've got to be able to develop that pitch, you know, to be able to develop that, that proposal to say if this doesn't happen no hard feelings, but here's what's going to happen next. And I've yet to see someone propose this is what's going to happen and come back without a job, right? It's very rare unless they really did it wrong.

Ryan Rutan: Yeah, yeah, yeah, yeah. You're saying that like everybody just decides, yeah, lets shutter it, that that feels like a better outcome. Yeah, rarely the case and it's not just okay that can happen. But I think that's the scenario where there's a lot of other things going wrong in the business and it's on a downward trajectory. I think what we're talking about is the business is relatively fine, right? It's just no longer fine for you write your upside is now limited. Um, and so yeah, I don't think I've ever seen that happen either. Well, the thing I will say be prepared for some potential hypocrisy here because I've, I've seen founders get caught off guard by this, where it's like, alright, so, um, we're gonna need to go and find somebody else who can do this job, you know, for for what we're paying me and I will cease to get paid and I will just have equity like the rest of their like, there's no way we could find somebody to do what you do for what we're paying you bingo. Gotcha. But, but but I've seen founders get caught off guard by this, right there. Like, and I didn't know what to say. I'm like, well, what were you thinking? I was thinking, well, that's a bunch of shit man, if you expect me that. Yes, that that's exactly it. Right? But so be prepared for that, right. Be be willing to, to accept that there may be some pushback. And, and you know, this is often a way where I've seen this play out a couple of different ways, but one the person still, you know, did step aside, they hired somebody else. They put them in place, um, at, at, at the same salary, right? Or maybe a higher salary or they just decided to raise the founders compensation knowing that they were likely the best person they could find for that role, given all the historical context, given, you know, all the time and effort they put in and that trying to find somebody else to do that for same or a little more or whatever was going to be more fraught with risk than simply right sizing them. And, and so, you know, this is often how we get to that outcome that we want again, not a great and lovely piece of leverage to have to wield, but it's effective.

Wil Schroter: Yeah, exactly. There has to be some some level of consequence and it doesn't have to be a threat. It has to be just if we don't do this, here's what I would propose next. And again, spring somebody else and maybe bring somebody up from within the current team to kind of run things except it's

Ryan Rutan: not a threat. It's just the reality of the situation

Wil Schroter: correct. And and we have to be very clear about why this is happening again. If we come across like uh we just sounded like we're childish about it like, you know, we didn't get our way. Yeah. It's not gonna work.

Ryan Rutan: Let me play with the clown or I'm taking all my toys and I'm going home, right?

Wil Schroter: Yeah. I'm fried. I'm broke and I'm at a stage in my life where I can't bet 5 to 10 years on, you know, past comp it just doesn't work that way. I'm not in a position where I can do that more often than not. There will be some concession to be had. They're like anything else in life, There are zero concessions on what you don't ask for. And in some cases what I've seen happen is the board says straight up no, at that moment, instead of sitting around saying, oh well, you know, maybe this will work itself out later, you know exactly where you stand and if you decide to stick around with that, so be it. But the illusions are gone at that point, this is what it is. And you either you gotta take that deal or not in order to find a new job, which again, you can certainly do. Yes, you can, yeah,

Ryan Rutan: again, like you said, we're not indentured servants were not tied to this thing um, through through anything other than our own emotions. Um, and so we gotta, we gotta start to decide what is best for us as founders. And I, you know, I think we've laid it out pretty clearly today, uh, that you find yourself in this position where there's no upside to run towards and you're just running away from failure. Um or even just running on the treadmill that isn't benefiting you in any way, isn't elevating you. Isn't changing your life circumstances for the positive. That's the time where we really have to start to think about what we're doing with ourselves and take some of these steps and try to course correct. Yeah,

Wil Schroter: yeah. Look, there is no nobility in running yourself into the ground, there is no nobility in running yourself into the ground. I'm telling you, we all believe that like, you know, we were less of a founder if we don't run ourselves into the ground and drain ourselves of our cash and our everything in life. It's like every life force we could possibly have. There's nothing noble about that, right? It may sound noble, it's actually a terrible decision and it's a reflection of us not standing up for what we deserve and fighting for, which is what this always comes down to. 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 have 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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