Startup Therapy Podcast

Episode #204

Ryan Rutan: Welcome back to the episode of the startup therapy podcast. This is Ryan Rotan joined as always by my friend and partner, the founder and CEO of startups dot com. Will Schroeder will. This isn't a problem for everybody. Hopefully it becomes a problem for more people. But uh as founders, one of the challenges that we have is that our companies start to make money at some point and we've gotten so used to not taking any of that money that sometimes we just perpetuate that right. There was no money to take before. And so we didn't take any, but now there is some money and we have a chance and yet time and time again, we see founders leave that money on the table given where the market is right now. How many founders do you think are really glad that they didn't take money off the table when they could?

Wil Schroter: I mean, look at it right now. Any public company CEO this is as big as it gets right when times were good. Meaning. So public sector that didn't take money off the table has nothing to show for it right now. Can you even fathom the journey that would be required in order to get from a company from concept to a public market and have nothing to show for. And by the way, like I feel for those founders, that's my point. I'm saying that's the best case scenario. That's the best case scenario when you were at the top of the top of the top. I think of other cases where a company had exploded for a minute. Like in a good way, the founder was smart, took some money off the table when times were good and never took money since I'll give you a couple examples that are very public. One is of course we work. Adam Newman might have been the almighty king of taking money off the table. Now, however, you feel about we work or Adam New or I personally I don't care point is he was very smart in the early stages by taking money like like looking at and go like, hey, we work might be big, could be huge and truthfully it did become huge or it might not. And I'm gonna to hedge my bets and make sure, you know, I take some money off the table. Another example is Travis from bird bird being the scooter sharing service. If I recall correctly, my memory is always decent on this stuff. He took like 43 million or give or take off the table during their explosive funding round where they hit like a $2 billion valuation in like, eight seconds. Last money he's ever seen last I checked, which is a while ago. Bird was trading for, like, pennies on the dollar on some random stock market. Like, that's all the money he's gonna see. And that's what we need to talk about today. Like, when you have your shot, take it, you know what I mean? Yeah.

Ryan Rutan: Yeah, for sure. For sure. Yeah. I think that far too many founders don't take the shot when they can and look, we're not just talking about things like going public and taking money off the table.

Wil Schroter: Right? Absolutely not. I'm saying that's the biggest example.

Ryan Rutan: Yeah, these are the big examples and, and even there like the fact that we have negative examples in that space, right? People who got all the way there and still have nothing to show for it. I mean, like it is brutal, right? It's like Tom Brady through the entire career and then having no money to show for it at the end. Right. Exactly. All the things you won, all the games you put in all the time and practice, you did all this stuff and you just kept deferring the cash component until the end. Like there's not a good reason to do that, we'll dig into it. But where does this start? Like, why do we develop this mentality? It

Wil Schroter: becomes this muscle that we develop from day one and it looks something like this, I don't deserve it yet. And in a lot of cases I don't have it yet. So deserve it yet. But we all start from the same place broke. We put a little bit of our own cash, maybe, like use a credit card, some debt, maybe raise a little bit of cash, whatever. But we start with pretty much nothing. So we're from the get go used to compromising in a way that maybe we've never done before in, in a way, maybe with, with our last job where we had a big salary, right? Or we were in college and we didn't have to compromise anything. We were broke to begin with. Point is we start from a place where we constantly have to put ourselves in the back of the line. We make $100. There's no way we can take some of that $100. It's got 90 places to go all the time and we're in a growing business or, or we're in a struggling business, either way we need cash and we always put ourselves at the back. There's never a part where somebody stops us and says, Ryan, it's time to start getting paid right now that it happens. Never. And it's

Ryan Rutan: so dangerous because that dynamic never changes. There's always going to be somewhere else to spend that money, right? It's always gonna be somewhere else to grow. And so at some point, you have to, to decide to invest in yourself as the founder, not just continuously invest in the business or you're putting yourself into really dangerous territory. And you've said this and it's absolutely true. Businesses don't run out of money. Right. Especially early stage startups. They don't run out of money. The founders do right. At the moment, you can't make ends meet game over. Right. We're not playing anymore. We gotta go and do something else to make this work, to make life work. Right? Life continues to happen. Whether the startup does it or not, the startup can sit and do nothing. And so I think that it's not always obvious, it's not always clear when that point is where you can start to say, ok, we need to sacrifice a little bit of growth maybe because it's also not clear that everything, every dollar you spend actually turns into growth. In fact, most of them don't, that's the nature of startups. But at some point, we have to make that decision. And I think that just as a journalism, people start too late in doing that. Right. I very rarely is like, did I see somebody like, wow, you know, they took money off the table too soon and that's why they're no longer around. I don't have a single story where I can actually say that I'm sure it's happened maybe five times, but I don't have any of those

Wil Schroter: stories. I'll give you a personal story that actually has nothing to do with starting startups. But it illustrates this so cleanly. My wife and I, when we go out to like Vegas or something like that, we're not big gamblers, but we do enjoy playing blackjack. And so when we do, we always have the same mentality, we have to bet enough money that if we win some, we're willing to walk away from the table. But if we lose it, we're not just gonna be pissed the entire time. Right. It's a very modest amount. Right. It's enough to buy a very nice dinner. That's about it. Right. But here's what we do. We sit down on the blackjack table and we get our cash, we get our chips and we agree that if we lose all these chips, we have to walk away, which, by the way has a lot of parallels here, right. Which you lose all your chips. Like, ah, yeah, but I can make it back, you know, that whole mentality. But stick with this. Here's what happens every single time we start playing and we're having some drinks. We're having a good time. We play blackjack because we can play for a long time. But we start playing and I always win a ton and my wife just loses every single time. I'm not sure why I have no idea. She's sitting right next to me like she asks me what to do. But for whatever reason, her luck is just somehow different. But here's how she wins. I end up going up and as I'm going up, as chips are coming toward my side, my wife starts funneling them right over to her side then because she's smarter than me, she starts funneling her chips into her purse. Right. She's literally taking chips off the table right in the exact way that we mean it. So what happens at the end of the night? One of two outcomes, Either one we gamble enough and we win enough that we were like, oh my God, this was amazing or I lose all my chips and I'm all pissed off. But every single time when we walk away from the table, Sarah's like, aha. But did you know that I was, I have been funneling chips off the table the entire time in retrospect, maybe she's not even losing, maybe she's just so good at funneling chips.

Ryan Rutan: Her stack keeps getting smaller but not for the reason you thought. Yeah.

Wil Schroter: Right. Right. I either have all the money we started with or I have more like, did you know like that we want even more? And I'm like, damn. And so every single time again, she literally takes chips off the table and every single time I'm like, man, it was easy to like play with house money and like keep pushing forward to trying to like invest in the business, so to speak. But at the end of the day, the only thing I'm thankful about are the chips we took off the table.

Ryan Rutan: Yeah, there's the only ones that count at the end. Yeah. Well, they're the only ones you can actually do anything with at the end. Right. Anything that stays there. Right. And it is a nice parallel because this is exactly the mentality that founders have. Right. It's like, well, if I've only got 10 to bet I can't win as much. Right. So, if I take five off the table and I've only got five to bet, I'm gonna reduce my growth rate. We're gonna reduce the impact this business has. We're gonna reduce what our winnings are so

Wil Schroter: close. I'll give you an example. So as part of beating up that analogy, more, here's how we think about it. Not only should we not take chips off the table, we should dig into our wallets or purses and put more chips on the table and then more chips, then we're gonna lose them, then more chips and we're gonna lose them.

Ryan Rutan: Let's go get chips from other people and play with their money too. Right.

Wil Schroter: That's exactly it. And so now all of a sudden, a certain amount of time has gone by in the case of startups, let's say like 567 years, we've been losing for so long for so many years, we've lost track of it. Now, our credit card balances would say otherwise if we pulled home equity, if we pulled savings, if we took loans, personal, whatever, all of those are very well documented, but they happened over such a long period of time. We've almost forgotten that they weren't supposed to be there to begin with. Right. We've almost forgotten that these debts were something that were intended to pay us back. And so now it's payback time and let's say that there's a few instances, few scenarios that most people are gonna run into. One is the first month quarter, maybe a year where there was actually some level of profit, right? Which has never happened for first time. That's one, the second is some sort of liquidity event. I mentioned a case where like Travis from bird takes uh you know, $40 million off the table. Probably not what you're dealing with, but something like that, right? Some sort of deal could be a fundraise less likely these days could be a small sale of some sort, whatever, some sort of liquidity event and you don't know what to do with it. Right. In both of those cases, Ryan, I think the first thing we're talking about is you don't feel you're entitled to it. No, 100% you're used to, you know, everything goes before me and how do you flip that switch?

Ryan Rutan: It's tough, right? Because I think people are looking for that moment in time. They're looking for some kind of a signal that says we don't need this money for anything

Wil Schroter: else which never

Ryan Rutan: never, right? Like it's it startups like a baby bird, right? It's just always gaping maw ready to consume more, right? There will always be, be a way to consume. There always be a way to grow. This becomes even more problematic if you're a funded startup, particularly V C funding where you now only have one allowable outcome, right? Which is to get to I PR or sale. And so you now have to grow, you have to keep growing, you have to keep doing, doing, doing. And so it makes it even harder to make the decision to take money off the table. And so it's really about developing this mentality around like it is your money, right? If you start with thinking about it as your money first, would you give it back to the business? Right? So instead of thinking that's the business's money, should I give some to me? Pretend you gave it to yourself and now look at all the things the business wants to do and all the money it wants to consume, would you hand it over? Right? Like there's probably a great analog here between like a parent child, right? Like if I just assumed all the money was for my kids, it would all get spent every month, every dollar of it. Right. It would all go away. We'd have a lot more candy wrappers in the house. If instead I take the money, which is exactly what I do and then I determine how much of it I'm gonna portion out to the Children and what is now a justifiable allowable or necessary expense. You somehow think about it very differently. But when you assume it's the business's money that you're going to take versus that's my money that I can use for the business. I think there's a good mental shift there. The problem is everybody's looking for that shift point and they're not finding it. They're saying like the calculus doesn't work. I don't know when I can do that. When can I do that or you can do that whenever, right, the business had no problem taking your money

Wil Schroter: and will continue to, I'll give you another example so many years ago running this ad agency and agency starts to take off and, uh, things are going well, we're on a huge, huge growth curve and it's, you know, exciting times and the business is consuming a lot of money. But the cool thing about an ad agency or just professional services as a whole is that you tend to just get paid. There's nothing that complicated about it. We're building humans for time and you can't fake it either make the money or you don't and maybe you don't get paid. But if you do the money is there. And so we're hitting this big growth and we're, you know, starting to have a very large staff. And at that time that year, we made 27 million in profit, right? $27 million in profit, real profit, like actual money we collected.

Ryan Rutan: I wish I didn't know how this ended. Will, how much did you take off the table?

Wil Schroter: Well, let's say I had 27 at the beginning and it had zero at the end. Guess which number went to me. Now, here's what I thought. And this is again and, and I'm using a big number deliberately here so we can talk about like there's no way it couldn't work with a number that big, right? There's no way you couldn't have done whatever. Here's the thought process. Yes, that's a lot of money. But more to come, dude. If it's 27 million this year, it'll be 50 million next year, right? I'm using specifically a very large number to show how easy it is to seduce yourself because with that much money, you're like, dude, of course, we're gonna figure it out, right? Like, like why get crazy with it now, plus the business was growing very quickly in truth to be told we needed every penny of that, right? So it wasn't like again, we were 40 years into the business and this was the 20th year in a row. This had happened like this came out of freaking nowhere. And so my point is we looked at it as look, the business needs it. Let's let it ride, so to speak. And we did so what happened, the business consumed every single penny and it started to become bigger. You know, it did a lot of things we wanted to do. But all of a sudden we're like, hm, that money went really fast. Right. Money. We thought that we had made, that we had et cetera freaking gone. Here's the calculus you're doing. Is this the most most expensive money I'll ever take? So, if Travis says, hey, this $40 million I'm making this up costs me 10% of my equity again. For a lot of people listening. They're like, who cares to, you know, take it. You'd be dumb not to do it, but hold on a second at the time at the time. If you genuinely believe what you've created is the next whatever, then the idea of taking, say it's a smaller amount, a million dollars, 500,000, whatever the number is right? You believe it's the dumbest thing you'll ever do because you believe that 40 million will be worth four billion today. You hear stories about the lost founder of Apple that sold his, his shares back or whatever and you know, they gave up a gazillion dollars like that kind of stuff. Here's what I'm saying is, it's so easy. There are so many arguments that we can use to convince ourselves to convince ourselves that this is a terrible idea to take money off the table that we are absolutely harming the business and everyone else. And so time and time again we punt, you know what I mean? You know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the answer already exists. You may just not know it, but that's ok. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups dot startups dot com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with

Ryan Rutan: it. Yeah. And it's always a bad decision, right? How many times have we have we talked to founders who took money off the table who then regretted it? Like, how many of those stories do you have? I have none.

Wil Schroter: Yep. I'll give you an example year after we do uh 27 million whatever dot com. Bust 9 11 whole thing implodes, not our business, but just the whole economy as a whole. And the reason I bring that up is because part of our broken assumption tree in all of this is the assumption that I'll get another chance. And that's the part, that's the part of the calculus that founders that haven't done this before. Don't get now founders that have done it before. Yours truly. That have gone through this and like, dude, you probably never get this at bat again. You don't think twice about it. You're like, like I'm taking it as soon as I can get it because it probably will never come again. And you know, we talked about this in a previous episode, right? We talked about how your success rarely comes again. These two things are part and parcel right there. Yeah, we believe that that growth is linear. That success is linear. It is not, it's peaks and valleys and this might be the last peak we ever

Ryan Rutan: see. That's right. And not only is it not linear, it's also not exponential. And I think that's the other problem. I think that one of the reasons we're willing to say I'm not gonna take it now because I'll get the opportunity again. And not only will I get the opportunity again, it's gonna be way bigger when I get the opportunity, but only if I don't take it now, right? We don't have enough time to unwind all of the breaks and that logic. But there are significant flaws in that line of thinking. Number one, it isn't likely to happen again, right? Just statistically speaking, it's not likely that's fact, right? It's not likely to happen again. It's not guaranteed to be bigger, let alone exponentially larger. So even if it is bigger the next time it happens. So what you take money off the table now then do it again then. Right. Good for you. You came around twice, you took money off the table twice. That's ok. Right. Not taking money now, in the hopes that you get an outsized payout because of that, as if that's some sort of an investment that you're making with a clear return. Right. This isn't a certificate deposit. There's no guarantee on that. The guarantee is actually the opposite. Like the, the likelihood is that nothing will happen and that you will lose the opportunity, right? And that it's just, it's so painful to watch founders who have already suffered right to this point. Like we're making earlier, you've already not taken a salary, you've already dipped into personal savings. You've already done all these things you've, you've at least taken a massive pay cut to do whatever you're doing and now you've not taken money off the table, you've got nothing to show for it. And now what right now, what do you do? That's the other side of this at that point. Then this is the other problem that we see at the tail end of this thing. Imagine your mentality now where like it's not growing, it's no longer attracting funding. It hasn't become this exponential thing that you wanted it to become. What do you do? Particularly if you take funding? We talked about this before then you end up in that no man's no women's land of funding where you can't get more you can, you can't grow without it. What do you do? Do you wind down the business at that point with, again, nothing to show for it. Right. Like our, our friend that IP O uh took no money off the table. It's a disaster. Right. And it's a self inflicted wound. Right. Like so many of them in the founder space. But it's one of the more painful ones.

Wil Schroter: Here's the interesting thing. Personally, we don't need that many wins right. At a personal level. Right. Let, let's say that we're in year seven of our startup and it's doing ok. Not great. And when I say, OK, not great. I mean, like it's making some money, I'll use the numbers. It's a $5 million business throwing off $375,000 a year. And when I say that nothing wrong with that, I'm sure there's plenty of founders listening right now that I would kill for that right now. And you should, it's an accomplishment. Other founders, oh, five million is not anything. Ok? Whatever point is you're in year seven, you're making enough money as a business, not you personally, but as a business where it's like you're doing ok, but you're not making so much money where it's like, I don't even know where to put all this cash. Here's where it starts to get gnarly within seven years of deferring comp of pulling out of your savings and doing all the the stuff that every founder does. You've built up a guaranteed liability. Let me add some color and categories. I'm curious what you think and maybe you've got some more in your mind. One category is just, it's obvious is debt. You got debt, whether it's student loan debt, whether it's personal debt you created for the company, it doesn't matter. We all get saddled with debt, right? So you've got that. The second is what I'm gonna call like opportunity. Here. Go. I can't buy a house right now. Right. There's something in life that I wanted to do, usually house is the big one that kind of everybody deals with, but I have some opportunity that I can't take advantage of. Hell, it could be a vacation at this point. Right. That I can't take advantage of because the business always pulls the, the money out from under me. Right. A few of us are to the point where we're thinking about retirement and sending kids to college and stuff like that. So that probably comes later, but still an issue. Right. In the third one. As far as those things is, I don't have another way to make money. So if this one doesn't make me money, that's got nothing else. Right.

Ryan Rutan: Nothing to fall back on.

Wil Schroter: Yeah. And so you've got all your debts that are certain, you've got your lack of stuff you can't do, right. You know the house or whatever, your big thing. Might be and then you've got no other, no other way to make up for it. All three are working against you. I think those conditions over a long enough period of time create Quicksand for a founder, right? Like make it so that they feel like they're drowning

Ryan Rutan: and they don't take the Yeah, but again, it's so crazy that that mentality ends up keeping them stuck in that same position, right? Like the very thing that got you there is gonna perpetuate it, right? So it's it is really difficult, right? Like we said, you, you get used to it, like in the beginning, you form this muscle memory around, not taking money around, you know, it says I do this because then later I get the big payout that covers it all. So I spent a couple of weeks ago now talking to a founder had an interest opportunity not to sell the business, but to sell an asset that the business had built and it wasn't a huge amount of money, it was a nice payout and the asset itself, the break even for them on this, like for what it generated for them as a business, they were gonna get about 10 years worth of revenue in one shot off this thing, right? Without having to do any more work, right? So this wasn't just like an asset that was just kicking off cash. But the founders said to me like, well, look based on the pro rata and what everybody's gonna get, this won't even cover, you know what that I've already put in personally and I went, neither will taking $0 off the table. Right. Like that's exactly what I was thinking. You're less in the hole, right? Isn't that the idea? But the, the thought process was again, if I don't take it now, somehow, sometime soon there will be a bigger version of the same thing. That will be more than my deferred comp that will be more than the credit card debt. That will be more than the down payment I needed for the house that I've been in renting instead, right? It's so so broken, right? That there's this belief in exponential as there's a certainty, it's just not there, right? The longer you put in guarantees one thing, the longer you put in, that's it, you just put in more time, right? That's it. You don't just because you've been around longer, it doesn't mean you're somehow, you know, multiplying your outcome, right? That is through the mechanics of the business and what you do with it, which of course you're gonna try. But I see so many founders who are like, especially the ones that like that mid stage, right where you're talking about, you're like 5 to 7 years in and it hasn't hit yet. It hasn't caught that crazy stride and yet somehow you believe and you have to as a founder, like I'm not saying, don't believe in yourself. But like what makes you think that if you've been given a chance at a linear increase an outcome of some sort? But you say no, because somehow you believe that right around the corner is that exponential turn, that's gonna make everything different, right? And that somehow those two things are related. If I take money off the table today, that exponential turn won't be there. I could make all kinds of arguments to the contrary, which is say if you take care of yourself as the founder and you don't feel like your backs against the wall. If you don't feel like you're about to go off the edge of the cliff, you'll make better decisions to be more likely to grow knowing that you're safe, right? That feeling of safety goes so far in terms of being able to then make calculated risks and do the things you need to do to grow the business. But that's a whole other episode.

Wil Schroter: I think if we were talking about what are the things that I can count on, I can count on debt is gonna gonna stack up, right. I can count on debt. Debt doesn't magically go away. Profit does debt does not, right? No, in fact,

Ryan Rutan: by itself left to its own devices, debt just gets larger. That's the way it works by

Wil Schroter: design. Right. Right. And so when I think about this, from the founder's perspective, and I think about two conditions. One is that I've become self conditioned to put myself at the back of the one, right, as the founder and I've been doing it the whole time. I'm not cool with that. I'm just used to it. I almost forgot that you're not allowed to do it. Right. The second part is I keep believing that this isn't the right time that there's always a better time in the future. And I always believe that the calculus works like this. If I make what might look like a short sighted decision right now, that I will automatically regret it because there will be a better decision later back to my gambling analogy. If I take all my chips off the table now, it's not that I've made a couple dollars on my, my winnings. It's that I've lost exponentially more. Had I put that in and gotten the split aces that split aces, that split aces that got all blackjacks across the table and the entire casino is going crazy right in my mind, right in my mind, it's not that I I'm taking money. It's that I'm taking away from a future opportunity that in my mind has got to be greater. And what we're saying is the probability of that happening. Go back to my splitting ace to splitting ace is pretty much zero. And it's cool. We're built to believe that those things can happen because our optimism is kind of how we fuel out of this. But dude, just from a probability standpoint, it's probably not going to happen from a probability standpoint. The only thing that you can count on or appreciate, right is the fact that maybe you took some cash off and maybe paid off some bills, you paid off a credit card or a student loan or something like that, that you can guarantee that that happened. And let's take it a step back, right? If at some point, I'm so guilty that I took money off the table. In some cases, you can always put it back. I mean, it's, it's not like you set it on fire. I think the logic is broken. You know what I mean?

Ryan Rutan: No, the logic is totally broken, right? It also implies again that somehow by taking the money off the table, that we eliminate that outcome, right? It isn't like walking away from the blackjack table, right? We're still there. We've just taken some money off the table that we've now converted into cash that we will not convert back into chips or we could like to your point, you could always give it back, right? If the business really needed it and then you can look at it and say the, the challenge is when it's house money, right? You're gonna keep using it for the house, right? You, you're gonna keep gambling right. The minute you turn it back into cash, it's that much less likely because I think this is where so many founders really get stuck is that they just look at it's the company's money or go, I'm gonna put it into the budget and the budget will always be there, right? The budget will always be then always be ready to consume every dollar you've got, if you let it in, you want it to and look maybe there are times where you want to do that. You say like we see a really significant opportunity for growth and we want to grow for the right reasons, right? But we talked about this too, just growth for the sake of growth. At what point do you finally say enough and do something with it? Where does that growth start to benefit you as the founder, the employees, whoever the other shareholders are, at what point does that start to pay back? Right. If we're just continuously pushing the growth curve again, we where's the stop point? Where do we hit save and say like I want to create like a new high water mark here and then we can build from this point forward, right? But founders don't do that. I

Wil Schroter: think part of the two is like specific to the founders in most businesses is all along. They've been digging these massive holes for themselves, right? Again, personal debt and and all these other commitments and the other part of it is you're creating holes, let's say with your cash, you know, with debt, what have you, but also you're creating holes with time because it's like you have fewer and fewer years as the years go by to replicate that earning, you know, to put it back. I tend to find that in my experience, I've seen people at either end of the, of the age spectrum very early in their careers because they don't understand how long their careers are and very late in their careers where like, dude, I literally don't have enough time, you know, to put cash back and it doesn't really matter where you are in your career. The truth is those years do matter, right. If you invest 10 years in something you have nothing to show for it. That's 10 years, you're gonna be doing something else. I've done it. I know exactly how it feels. Right. I think the flip side is we don't have a mentality where we're like, dude, I have to pay those debts back. Like that's actually my number one charge, like, and you know, who doesn't have a problem with this? Your spouse? Yeah, I've never heard of a spouse being like, whoa, whoa, no, you won't take money off the table. Good, sir.

Ryan Rutan: Growth at all

Wil Schroter: costs. Yeah, I'm sure it's happened and I'm sure there's, I'd love to hear that story by all means therapy at startups dot com. Do you have that story? Share it with us because I've never heard it in 30 years. Because the spouses just like my wife at the black jacket table are like, ok, idiot, do whatever you're gonna do. But like, I also want to be able to buy us dinner. Like that's my priority. I'm gonna go focus on that. So I tend to look at that as a bit of a voice of reason, you know. Yeah, for

Ryan Rutan: sure. Yeah, for sure. And I think that's part of the problem. Right? Is that the voice of reason, isn't there? There's two factors combined. The one where we say we're just used to doing this. This is just how it works. This is what I have to do. I have to sacrifice and sacrifice and sacrifice in order to get to the promised land, which isn't true. You can do both. And then the other side is that, that there is even a promise land to get to, right? That's the other fallacy is that somehow just around the corner waiting for me. If I just keep abusing myself for the short term, in the long term, I get something great as a result, right? Other than the knowledge of how that played out, it's the only thing that you will actually guarantee, you'll know how the story ends. Statistically speaking, it won't end well. So if you do have the opportunity, just take the money off the table, right? Like again, we've said it three times I think already, but you can always give it back right. If it's your money, you can then decide what to do with it. Right. It can be there for you. And, you know, kind of the, the opening question here that we asked was, how many founders do you think are very, very sorry that when they had the opportunity over the, like the last 3 to 4 years, didn't take money off the table, wish that they had at this point. And the answer is probably most of them are all of them.

Wil Schroter: It's hard to think about losing when you're in the process of winning. Right? When all of a sudden we go from nothing and now we've got $27 million of profit in a single year. And, you know, a number we couldn't even have conceived uh prior to that. It's hard to think that that won't happen again. Now, in retrospect, when I laid out the way I did, right. It seems obvious like you idiot, what are you thinking? But at the time the business was growing like crazy. We actually did need the money. I mean, like we had massive amounts of payroll. We had massive amounts of hiring. We were doing like we needed lots of cash, we were building new buildings, all kinds of stuff. And so it made sense at the time, but there's things that I think as founders, we just don't have a good sense for, especially if we haven't done this before. I keep going. Back to you haven't done it before because you kind of need to have gone through this once to see. Oh shit. Now, I understand now, I understand like why I have to, to take what I can because there are so few opportunities to do it. We always think later on if things are going this well, now they will go exponentially better in the future. Like we talked about rarely the case. But I think what happens is we see that moment like, oh man, we should probably take a little bit of money off the table. We defer it and then we sit around waiting for the next moment. I'll give you an example when that $27 million year happened, right? And that was every bit of like 23 years ago for me, right? 23 years ago in 23 years across eight more companies. After that, I've never seen it happen since. So just, just to point out like 23 years later, I'm still waiting for that moment to happen. I can be damn sure that my decisions will be much different. Can I just

Ryan Rutan: control Z myself back to that point, please? But

Wil Schroter: that's the point. I mean, and again, and it's any company and I'll use this as the extreme example that went public in the last 24 months, got absolutely decimated. You know, most startup companies, most public companies, tech companies, I've got stocks that I'm still holding that are down 99.8%. There was some founder on IP O day that was thinking about buying like everything they possibly could. I'll pick him because I don't know him. I hope to meet him someday and shake his hand. There was a company called Wish. There was a huge boom in at the beginning of COVID because COVID hit and then all the shopping moved online and they had the perfect storm for a second, which was this kind of like cheap commerce. If you will. It was like the dollar store of commerce in a model where people are all stuck at home. In some case, everybody's like washing their budgets, et cetera and they took off. Right? Incredible board. I think Peter Thiel was on the board. It was like, it was, they like a who's who they did everything, right. Wish goes public and I should have looked this up before the show, but wish goes public. I invested in them. That's why I know this wish goes public and it's got like a $40 billion market cap. You know, maybe it's 30 but it, it was insane. And I'll never forget the reason I'm bringing this up is because the founder bought a $16 million house in Bel Air. Like the day they went public and all I thought to myself was two things. Number one, that either might be the most expensive thing you'll ever buy in your life. I mean that in a couple of ways, not just the total price tag but the, the cost of not being able to pay for it or another was, yeah, dude, while you can do it because this might be the last time you ever get to do it. Epilogue to that wish is trading at pennies on the dollar right now. Their market cap is like in the eight figures, maybe nine figures. Probably not. Right. Like, it's insane. It's so bad and I'm not picking on them. I have no animosity toward wish. I wish my stock did better. But whatever my point is at that time, the guy's worth hundreds and hundreds of millions, maybe billions of dollars. Now, he's not worth a penny, bro. That was 14 months ago. That's not like we're not talking like 10 years ago. Right.

Ryan Rutan: This is the problem with the rocket ship. It can go up fast, it can come down fast. And I think that's part of the, the challenge of the mentality. Right. It's like, ok, had that just continued and had things, you know, continued up and doubled and tripled and quadrupled from there. You know, how much better off would he have been? How also you gotta ask yourself how much better off do you need to be? Right. If you've already got the $16 million house, have you won at that point? I don't know. Most people would probably say I, I'd be ok with that. I mean, it

Wil Schroter: depends if you're liquid, you know, it depends on how we did it and I have no knowledge there. You're

Ryan Rutan: not, no longer liquid. Yeah, the tax bill might become a problem on a $16 million house. There's all kinds of issues. Right. But I think that in principle, at least, you know, taking the money off the table to do that was the right move. And it kind of illustrates a point which is like, you don't have to fully hop off the rocket ship, right? He didn't cash out everything he had, he didn't sell everything he had and he sold some of what he had, right? And in hindsight, that was the best part of what he did, right? Because now, you know, you know what didn't drop by 98% the value of that home,

Wil Schroter: the only that he has left, right. It could be. But, but it's to point out these are the fastest growing, the most exciting, the most explosive, the most amazing orders of magnitude beyond what most of us are ever dealing with and even they deal with this. And the reason I say this is because you might look at that and go, ok, well, that guy was worth $2 billion on IP O day, right? Like taking 20 million is nothing compared to what he's worth now until you understand that in a fraction of a second that goes to zero that $5 million company that's doing $375,000 in profit. Right. You know, that, that we referred to earlier, you might have a good year or maybe you do a million in profit. What you don't realize is that's probably the last year that's ever going to happen. Right. The next year, the next year, the next year, every year, you're trying to, like, kind of chase the dragon trying to catch up to that number. And like 10 years later, you realize that never happened again, back to $27 million right? Like the truth is we have very, very, very few opportunities, sometimes, never, sometimes never, very few opportunities to actually stop, take a little bit off the table, refill some coffers and actually move ahead if it's one of the few times that any of us, any of us get the opportunity to actually take some cash off the table, take it off the table, it's your money. That was the whole point of this thing. And honestly, you'll probably never get that opportunity again. So in addition to all the stuff related to founder groups, you've also got full access to everything on startups dot com that includes all of our education tracks which will be funding customer acquisition, even how to manage your monthly finances. They're so so much stuff in there. All of our software including Biz plan for putting together detailed business plans and financials launch rock for attracting early customers and of course fund for attracting investment capital. When you log into the startups dot com site, you'll find all of these resources available.

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