Startup Therapy Podcast

Episode #38

Ryan Rutan: Welcome back for another episode of the startup therapy podcast. This is Ryan Rutan, along with Wil Schroder from startups dot com will, are you ready for a trip down memory lane, back to the future? We're going to go back in time and talk about what it was like to be in the first year of starting a startup and all of the fun that comes with that. You know, I

Wil Schroter: think when we talk to people about what the first year should look like, I think it's a bunch of things that are just counterintuitive, you know, there's, there's sounds

Ryan Rutan: like every year, but yes,

Wil Schroter: yeah, yeah, but there's this, there's this weird thing about year one where all of the things we kind of just seem like they make sense like how people will behave, what we can expect out of the product, how finances work. It seemed pretty straightforward. A lot of it just seems like, okay, I get it, I've got cash, this is how long it should last, this is my burn rate, This is how the product should work, et cetera. And then none of it happens. Like none of it happens. It almost goes the opposite way of what you expected and until you've been through it, none of it makes any sense. Like how the hell did that happen? And I think what we can do, Ryan, I think in this episode, we can just take a minute go over, you know, the top three or four things that blow everyone up, you know that through this whole process, they put all their chips on things, we're gonna go one way in every single time, no matter what the business is, they go a different direction.

Ryan Rutan: Yeah, yeah, I think expect the unexpected was coined by a startup founder. They had, it has to have been right.

Wil Schroter: It is. But here's the thing. So when we get into it, let's get into real details. Not just like, hey, things will go crazy because I think that ship advice, I think we can get into here specifically what's going to go wrong And you don't see it coming and there's a 99% chance it's going to happen. Yeah,

Ryan Rutan: I'm there. Let's do it.

Wil Schroter: So first thing that always comes up is no matter what you think the product is going to change Ryan. Here's where I think this messes people up. I think people think that if the product changes that, that's some sort of failure. If we chose to make cherry lollipops and they turn out to be, you know, watermelon flavored gum balls, that something's broken with our product strategy and the truth is it's the opposite, you were supposed to get to that second product, the product was supposed to change, but people don't think like that, you know what I mean? For

Ryan Rutan: sure. For sure. You know, it's funny actually. So there's there was sort of a shift at some point 3, 4, maybe five years ago now. I don't know, it's been, it's been some time where some of the thinking around this changed a little bit in terms of the pivot was all of a sudden and vogue. Do you remember this at this point in time where all of a sudden everybody was just constantly pivoting. That's all they were talking about. I got a little aggravated at that point too because the, the expectation went from what you're talking about, which is, if anything ever changes, we've failed to, if our product stays the same for more than two weeks, we've failed. I was, and I'm equally annoyed by, by both mind mindsets, right? But that one just really bothered me now, of course there's no, no harm and pivoting, but it was just, you know, these guys were doing more pivoting than, than an NBA player in the paint. It was just like, it was constant. You gotta stick with something for more than like two or three minutes to see if it works right now that you don't need to carry it to the grave. But yeah, so I've seen both ends of that spectrum. And the reality is there's, there's a nice soft center to that you can occupy and say, hey, look like as the product needs to change as we learn things about the market as we come into contact with actual customers and, and we find that the product needs to shift. There's no shame in that. And I think you're, I think the overwhelming majority of folks are so proud of what they've conceived on the lab bench that the idea that any of it might have to change is unfathomable.

Wil Schroter: I think if, if you get into the market in year one and your product is exactly what it's supposed to be, that only means one thing. You got lucky. That's it. And I'm not, I'm not knocking people's skill or anything else like that. And by the way, I hope that happens to you just to be clear, I hope that happens to you, but there's no way. And you said the lab bench, there's no way that in just concept, you can come up with a perfect product. It absolutely matches the market that has no changes whatsoever and have it just get right into the market. And I'm not saying it hasn't been done, people do it. What I'm saying is, it's so rare. So when it works, you don't think twice about it. What I'm saying is, Hey, it's probably not going to work, your first year is going to look something like this. I've got this awesome deal. I've been working on it for the past 18 months. We're just about the ship, we ship it and 100 things go wrong and this is, if everything worked great with building, you find out that the price point was wrong. You find out that people don't have a repeat by on the product, like you thought they did. You find the cost to acquire the customer is way wrong, which is less of a product issue. But sometimes a product issue, that's, that should be an expectation in year one. The expectation should be everything about this product will change. We're really getting down to it. We're saying that we want to put a product out there. That's malleable. We want the product to change, we need people to tell us what it's supposed to be. It's not for us to just magically know what every person the planet's going to want.

Ryan Rutan: It's funny, the products by nature are malleable, right. I think that the real issue becomes is the, is the founder malleable like that really seems to be what it comes down to, right. And it can happen for a lot of reasons. You might just be so tied to the idea. You've spent so much time thinking about it, you're just sure. Um, and by the way, that's not, it's not a great way to go about that, that you may be sure of it, right? You, you may have done, um, some market research that validated it, right, Which can be skewed in all sorts of ways, confirmation bias, not not least of your concerns there. So there's a lot of things that can happen to create inflexibility in the founder, right? Maybe it's just wanting to look like you're staying the course for investors if you have them or or for your staff right? Maybe somebody else is really responsible for the product and you're having a hard time wrangling them into believing, right? So if you've got a, you know, somebody who's in charge of development and you know, maybe they're strong arming, you're just at least not listening to changes need to happen the product. But yeah, I think the only time this really becomes a real problem is if you're, the product isn't working for some reason, there's some signal, some sign that you need to be changing the product, but you're not clear as to what that change needs to be. That's where this becomes dangerous. If you're seeing clear signals and understand what changes need to be made to improve that product, that's a positive thing, right? And just keep doing it. Keep optimizing. I mean, have we stopped optimizing our products ever?

Wil Schroter: Well, no, I think it's worth, it's worth talking about our products as the example here. So taking us back. So our year one was roughly 2012 when we launch, but our lead product wasn't startups dot com, it was fungible dot com. It was our fundraising platform and, you know, people forget about this for sure was

Ryan Rutan: going to change the world and crowdfunding was going to change it, right? Like we were sure of it and we had to be sure of it at that point, right? Because let's talk about how you build,

Wil Schroter: let's talk about that. So here's why we were so sure, and here's why this was a totally ridiculous assumption for us to make In 2012, crowdfunding was the most important word among startups. It was going to change how all startups got funded. It was the biggest most funded category as far as VC, etc. It was just, it was, it was a can't lose proposition. You couldn't turn on the TV without hearing something that got crowdfunded we were launching a crowdfunding platform fungible dot com at the height of the crowdfunding boom. We were in the right place at the right time. So at its on the outset, you know, on its face, you would look at what we did and you would say you nailed it. Except we didn't why? Because crowdfunding never actually happened once. We got past about 2012, it hit a peak and never went anywhere. Yes, Some people get crowdfunded rarely, almost never, especially, of course, we're talking equity, not just backing projects and we had based everything. Our media exposure are the team that we hired everything on one product and it was the wrong product. It was a good product, but not to build what we built out of it,

Ryan Rutan: correct? Yeah, it's a good, good starting point. And, and we managed to, to be flexible in that moment, right? And that's really the core of what we're talking about right now.

Wil Schroter: And so that's what happened, Ryan. We sat down and I remember sitting having a hard conversation saying, look, man, this is what we thought we were going to war with, it didn't work, what are we going to do? And so we stepped back and we said, look, funding is just a piece of the problem. All these startups need funding, which of course, but it turns out when they're coming to us, they also need help with their business plan, they need help with customer acquisition, they need mentorship. And that's really what helped us drive the bigger vision for what startups dot com is because we started to realize that what we had in mind wasn't the business, but to your point Ryan, we listened, we were more concerned with what is the business then why isn't it this?

Ryan Rutan: That's right. And and I think that's really important. The other important piece there and this can kind of slide by in the night if you don't pay attention to it, that's that we got into market right. The other thing that you'll see happen is this the other the other extreme is that you just keep optimizing product and optimizing product and thinking and listening and asking and talking and never actually get a real product into market. And so you never start to take away real lessons, have real conversations because we've all been there and you know, we've we've, you know throw the startup idea around the party game, right and you get some feedback and then, you know, people say that sounds good or doesn't, or you should do this instead, right? That's feedback. Sure, But it doesn't compare even close. It's like apples and I don't know something that's absolutely not Apple's not even another free.

Wil Schroter: Well, when you

Ryan Rutan: want to think about how you use that to drive your product, right? It doesn't work. You gotta be in market, you've got to be interacting with the customers in a real way. That's what drives the insights that allow you to change that product,

Wil Schroter: Year one. Your product is just a mechanism to learn from your customer. That's it. The product, it doesn't have to be set in stone. You just have to get in the game. And I think that if more entrepreneurs have more founders knew going into this, that they don't have to be right in year one, it would take a huge weight off people's shoulders and more importantly it might cause them to listen a little bit more. Yeah,

Ryan Rutan: yeah, I think that that's a big piece of it, right? Because when we feel like we can't change or that we shouldn't change, right, that we have to stay this course. It renders feedback unimportant, right? And that's a really, really dangerous mindset to take on because it's always important, right? You may not always react to it. You're not going to react to every customer request. Hopefully, you know, not every bug needs to be squashed right now, but that feedback is so important and it's only important to the extent that you have the mindset and the frame of mind to, to be willing to accept it, absorb it and do something with him, right? If you're in a position where you've decided, no, this is it, we gotta stay this course, then you're really putting yourself at a huge disadvantage and you're probably setting yourself up for failure right from the start.

Wil Schroter: Absolutely. Absolutely. So let's talk about other things. Let's talk about the people that are involved in year one.

Ryan Rutan: Oh man.

Wil Schroter: The probability you

Ryan Rutan: mean, wait, did you, did you say the people who were involved in year one or did you say that people who aren't involved in Year two,

Wil Schroter: which was it? Which is pretty much the same thing. The probability that any of the folks that are involved in year one are still there in year four is so incredibly low. This is, this is again something people just don't tell you that they assume, hey, look, I've got all these great people, they're super fired up. Some of them are working for equity. Everyone is fully on board with this product until they're not until they're not until the

Ryan Rutan: Gimlets wear

Wil Schroter: off. They never wear off. But the, there's two sides to this one side of it is the folks that join the folks that commit initially. This, their, their commitment level burns off for any number of reasons right there saying, hey, I'm not getting paid enough or this sounded great when it was just an idea, but now that it's an actual product, I kind of hate working here, etcetera. And then there's another side of it, which is, the organization grows changes so quickly that the organization doesn't need them. You know, at first, you know, we needed a full time attorney because we had so much, uh, you know, legal work in this with this one guy that was just about to graduate with his law degree. So he was super involved. And then the year two comes around, we don't need legal work anymore, you know, customer acquisition. And so the

Ryan Rutan: organization at this point,

Wil Schroter: Yeah, man, the, the organization quickly outgrows the people that are there in the formative stages and year one when things are the most amorphous. The probability that we can pick exactly who should be in the organization for the long term hall of the organization Is Damn near zero. But we think that as a failure, we think if, if people don't last that something's broken, I don't think it's entirely the case.

Ryan Rutan: It's not, it's, it's the same mentality that gets you into trouble around product, right? The idea that you have the product right from the beginning, the idea you had the people right from the beginning. And by the way, those two things are very much linked, right? As the product changes. So too might the need for people or or the lack of need for somebody on the team, right? If you're, you know, and and we see this happen, you may completely re platform. You might change your technology stack, we've done this a couple of times, right. If you're no longer shipping dot net code dot net, developer becomes a lot less useful,

Wil Schroter: happens all the time,

Ryan Rutan: right? And it does right? And there's there's reasons for it. And so, you know, again, we said, we said this at the top, but like everything is in a state of uncertainty, right? And I love what you said about, you know, that your product in the first year is really just about giving you the opportunity to to listen to your customers in the same way that first year with the staff is a lot of that's going to be figuring out who plays what position and what positions are even necessary, right? Like what formation do we take? And so there's going to be a ton a ton of learnings in that first year. And of course, all of this is very hard to learn because you're learning it all for the first time and you're learning it all at the same time. But, you know, you gotta lean back a little bit and and pay attention again and we'll just we'll probably repeat this resection just be flexible, recognize that the need to change isn't a sign of weakness, it's not being wrong. It's well, it could be right. You could have been wrong. You could have picked the wrong human for the job. But more often than not, it's about the change in the role that leads to the ill fit, right. It didn't start that way, but it ends up there and you have to react to that.

Wil Schroter: Yeah. And I think that the probability that right formation for this amorphous product for this new industry, for this new company, for this new culture, for this new everything you've picked exactly the right people that are the perfect fit for the entire longevity of the company is damn near impossible. Like there's no way you could have done that. And again,

Ryan Rutan: how could you?

Wil Schroter: It happens. Okay. Sometimes just for whatever reason, your motley crew of of of startup folks make it through to the long haul. It does happen, but it's rare and it should be rare because everything that you're signing up for and I mean the the employees in this case is going to change. So again, I was maybe the attorney that joined when we had a lot of legal work, but it's not just that I could have been the lead developer in the company and I was a year out of college and that made sense when the company had no other developers, But three years in the company has 40 developers and I'm in no way shape or form qualified to even beyond this team, much less be leading it or whatever else. You know, my visions of grandeur might be. And I think that for the founding team, the idea that the players will change, I think sometimes sparks a feeling of disloyalty, you know, this person was here from the beginning, you know, how can we not keep them on the team? I think it it sparks a bit of uncertainty, you know, as far as the management team goes, you know, can we not hold people together? Maybe you can't? But remember, most of the people probably shouldn't be here to begin with. You know, their time may have come and gone. And the way I see it is in the first year of a company, you have to be comfortable shedding your skin. It's okay to go through three marketing directors until you find one that works. It's okay. But people don't tell you that they think about hiring like when it's in a big company,

Ryan Rutan: right? Where almost everything else is certain. You know, the role you're hiring for, you know, the expectations you have baselines to compare it to, right? And this is this is not that it's the opposite of that. It's full uncertainty. And so being prepared and just being flexible in that situation is going to be your best bet. You know, I can go back in time. And I remember my hesitations around this, we're around the certainty from right? You mentioned that and in a world of vast uncertainty, right? You talk about is running into the abyss as you're running into the abyss. The idea of changing any of the people that were involved in that Sprint felt really, really bad to me. And that was my hang up around changing the team. I realized that I had well eclipsed some of their capabilities and I needed different people in those roles. It was really hard for me to change that because so much else had changed. I felt like taking and changing the people would destabilize things to a point where I just couldn't handle anymore. And it was really an emotional problem, not a, not a staff problem. It was my it wasn't really the practical issue that was challenging me. It was the emotional issue of dealing with that change. And the reality was eventually I did make that change. It kind of got forced into it. And from that point on, as I got the right people the right roles, things got a lot smoother. And I no longer had that worry. But that first time man, was that tough.

Wil Schroter: Of course it is. And and again, it's combined by the fact that the management team has probably never done this before to they've, you know, that was exactly it. Like there's there's no constant in this equation. They're all very so the likelihood you're going to get any of them right is why I say it's luck and I hate to use the word luck. I like to use the word, you know, fortunate, but I really do believe that there's a bit of breath you have to take in this process to say, I'm not going to get it all right at once. If I get a few things right, right off the bat, that's awesome. But I got to be willing to come back to the drawing board over and over and over at every part of our business.

Ryan Rutan: Yeah, that's, it's that is the mindset, right? And that it's just pure flexibility and it doesn't mean that, you know, you sort of caved every pressure, but you do need to be willing to react, willing to change

Wil Schroter: and be patient with the process, Which is, which is where the next thing, which would be, everything will take twice as long would probably be a conservative 10 times as long as you think it's going to take, name your thing. It will take 10 times longer I guarantee. And where that blows us up Is we don't have time for things to take 10 times longer than we expected. We need to get them right right away because we got bills to pay and the money is running out. And so here's where I see it the most often I see uh, sales cycles if you're, if you're doing an outside sale or anything else like that. Always taking way longer than you think and here's what throws you off. Oh for sure. Ryan, it looks something like this, we made two sales quickly And let's say they were 30 day sales cycles. So that's kind of what our sales cycle is. Dude. No, it's not. That's where your sales cycles happen to be for two random sales. The likelihood that those two random sales will define the sales cycle for every customer you're going to have for the next year, two or three years beyond is impossible. Yeah.

Ryan Rutan: The law of small numbers will eat you alive on that kind of stuff, right? You cannot, you know, the other one that I love is that, you know, so then the other thing people will do is they'll take that and then they'll project that out. Right? And so like you take your, your best performance ever and then we make that what we're going to use to project everything that will happen on into the future, right? Let's take the best case scenario and project that out, right. Which is also really dangerous because it leads to disappointment. But just to find everything. I think the only Yeah. So yeah, I think the, the, the only thing that you can count on there as being on time is the calls from the people who you owe money to write those, never take long as you expect those always come on time.

Wil Schroter: But let me, let's just, let's dig in a little bit as to those things again, if you're a first time founder and hopefully your leaning in a little bit when you're listening to this, let's just talk a little bit about what you should probably extend those timelines out too. The first thing is you've got your projections for the year, you've got how much you're hoping to make a month one, Q one year one etcetera. Whatever those projections are, double the time it'll take to get there and be hopeful that that's enough. Here's why. And Ryan, I think all of these things start to tie together, you can't make projections for a business that's never existed. You can make guesses. But the problem is when we commit those guesses to paper and we start to say this should be our revenue by Q1 by year one etc. We start to forget that they were guesses. We start to think, well, you know, those are goals now.

Ryan Rutan: Arbitrarily assigned numbers. Yeah, no, they're not.

Wil Schroter: You can get two goals, you can get to projections maybe in year two, probably in year three, you can't make fine determinations of time or in some cases income when you don't have a system in place yet. It's impossible to say how long something is going to build if you've never built it. And and I I'm shocked at how often people overlook this fact, you know, the, the VCS will come in when VCS work with say, you know, a lot of different startups so that they have a pretty good comparison and they'll say, how quickly can you get to revenue, how quickly can you get the team staffed up, etcetera? And you want to do well by your investors? You want to tell them, you know, we'll get this done by this date. But just to be fair, until there's a system in place until you've done this enough times with this company during this year. You don't know, you don't know at all. And yeah, you have no idea. It's

Ryan Rutan: like you said, it's guessing, it's guessing and it's arbitrary assignment of dollars required, time, required resources required. Who can do it? Who can't, how do we do it? Right. And you just, you have no idea and you shouldn't and you shouldn't expect to have an idea. Again, flexibility is key here where you've got to be willing to set some some loose targets and you just got to work as hard as you can to get it done right? Hitting or not hitting a deadline that you had zero data to set in the first place shouldn't make you feel bad. We're good. It's just something that got done right.

Wil Schroter: Well, look, here's, here's my thing. Whenever I'm looking at year one planning and again, we've done this enough times now we coach enough startups. What I look at is, what are the things that I Absolutely no. Okay, so if I'm looking for to hire, let's say a developer, what do I absolutely know, I know how, how long recruiters typically take to turn over candidates. So I'm using a recruiter. I know that whomever I'm going to hire is probably gonna need 2-4 weeks to give their notice and come back. I know about what I can pay and whether that's the top or the bottom of the market and whether that's likely to attract, that's it. I've never hired a developer at this company turns out no one's ever heard of us. So us trying to hire developers takes a lot longer, turns out

Ryan Rutan: confidence level zero.

Wil Schroter: Exactly. Developers aren't dying to work for a company that only has two people in it because they get well paid anywhere. Didn't think about that in year one. Now look man in year two and year three, once we, we've, we've got our feet under us, things change a bit. We can start to make different types of predictions. But in year one I think we need to be really, really, really conservative because if we're not, what happens is we start making important bets on dates. We can't possibly hit and important bets look like this. People that we hired thinking revenue is going to come in office space. We committed to thinking that revenue pretty much anything that you commit to that also has revenue coming in at some point.

Ryan Rutan: It has, it has the word revenue in it

Wil Schroter: and Ryan you mentioned this, the, the only thing that's constant or expenses, you know, those, we can, we can almost guarantee that the bills are going to show up. But when we're doing our proforma, when we're looking toward the year, often if it's Ryan, it's just you and I in the room, we're thinking money needs to come in because we need to get paid or, and I think we should cover probably this next, we're running out of money and it's only going to last us for nine more months so we need to make sure that we hit these milestones by this date. It's like, dude, if we only have nine more months, we can probably assume we're going to 18 months of cash, right, is always gonna take us 18 months to get where we want to cut

Ryan Rutan: that nine months and a half to 4.5 months in terms of how much, how much cash you got left. Let's talk about that. Because everything that we predict takes twice as long, let's, let's just call it out, the money will last half as long as you think it will

Wil Schroter: and it'll take twice as long to raise.

Ryan Rutan: And that's if you're lucky,

Wil Schroter: yep, Okay, so just again, if you're, if you're, if you're listening to this one, you're like, okay, I'm, you know, I'm making some mental notes here or what have you, We run a fundraising platform called, we've helped startups raised over $500 million dollars in the platform. The reason I'm bringing this up is because every single startup that comes to us says some version of We need to raise money, we need to get the money raised within the next 90 220 days. And our, our stock answer is typically okay. It's not gonna happen. Like, what do you mean? I was like, like, well we're already talking to investors, etcetera. And what we try to explain is no matter how long you think money raising takes, it will take you at least twice as long if you do everything right? And I think no one ever believes us to be fair. This isn't because they don't want to and I don't blame them. You don't want to believe it's going to take longer. But it always

Ryan Rutan: does. The answer anybody wants to

Wil Schroter: hear. It always does. And

Ryan Rutan: yet that's the reality.

Wil Schroter: And the converse is once it's in the bank, it's going to last half as long as you think it will. The reason that's important Is because if I think Ryan, if you and I raise and we've got money in the bank now for what we believe is 18 months. Well, it's only gonna last for nine months. We don't understand it at the end of nine months when it's all gone, we'll understand it. Yeah, well no, we're the, we're the two timing discrepancies matter Is we thought we had 18 months of cash, but we only have nine again. We don't find this out until too late. We thought it would take us three months to raise more money and it took six. Now imagine your that backward on both estimates. You know what that would tell you technically we should should have started raising money 90 days after we closed our around and guess what? That was probably the right answer. But no one tells you this

Ryan Rutan: and nobody doesn't. Right. Yeah. Yeah. Well that's because they're coming off of the PTSD of just having raised around. They don't want to go right back into that funding. I don't blame anybody

Wil Schroter: for that. But look, the time to raise money is when you just raised money, is when you have money for startups, we do a really bad job of forecasting how long cash is going to last. Because there's a few things we always screw up, particularly in year one. We always often take where we are now and project that into the future. Now look, we add the cost of developer salaries, the cost of marketing, the cost of this. The cost of that. What we don't factor in are those costs breed more costs. If you hire a customer acquisition guru, that person needs more money. If you hire a developer, that person is going to need more development resources. All of those resources have dependencies and then there's all the stuff we just don't know yet. We don't know about this legal bill that's going to pop up. There's it's, you don't know where it's coming from, but it's coming, it's

Ryan Rutan: coming the only guarantee. Yeah, for sure now and it goes, you know, go go all the way back to the top, right, everything is uncertain. The product is going to change, that leads to cost changes, the people are going to change. You may you may find that right? You had a technical co founder who then bows out and so somebody who was working for equity now needs to be replaced with somebody who is absolutely going to want cash. And that was unforeseen, right? But these things happen all the time and you know, it, there's there's no avoiding it. But you can't just say, well, we'll just stop developing our product and hope that we hit the rest of the milestones like revenue will still come, even though we don't launch our product, right? That's not gonna happen. And so you, you get these, you know, the, and this is where some of the timeline stuff comes from, right? So that change in staff may, you might have been accurate in your first prediction about how long it would take that person to complete the job. But the minute that rolls over to somebody else, they've got to get up to speed on the code base. They've got a different way they want to do it. They're not as familiar with the, with the product that you would envision, right. There's all these things that can stretch that timeline and now you're paying this person, right? So there's very few mysteries about why this stuff happens at the end, but it's really hard to see it in the moment. So, you know, as you said, plan on taking twice as long, plan on having half as much time in terms of money as you think and you'll at least be closer to being right. It may not end better. Yeah,

Wil Schroter: You won't be run out of money, But, but here's the thing, If you're conservative in the way that you're saying, Hey, I thought we had 18 months, but let's just back it down to nine or 10 or 12, just not 18. And at the end of that time period you still have money. There is no problem. Right? You, you can't break on that forecast. Conversely, obviously, if you do, if you plan out 18 months and 12 months and you're out of money, it's a huge problem if you start raising money too early and you're able to raise more money and you have more cash in the bank. There is no problem. There's, there's never a problem with being more conservative about these estimates. All of the problems come from the opposite. And

Ryan Rutan: that's exactly right.

Wil Schroter: The challenge with the first year of founders is that they just don't know this, They haven't been through it before and they get caught with their pants down every single time and we try to coach folks and to be fair, like anything in life until you've gone through it. It's hard to know that these things are true. Dude, I'm telling you everything we said in the last half hour or so is exactly the way it's going to go down now. Your mileage may vary. I hope some of the things we talked about aren't things that, that you have to deal with, but come on Ryan, like we've talked to thousands and thousands startups. How often doesn't this happen?

Ryan Rutan: Well, here's the way I've seen it play out right. There's always balance in the universe. So if you get lucky on one front, right, Like maybe you picked exactly the right team, you probably picked the wrong product. Like it just, it balances itself out so you may or may not suffer from all these issues, but you'll likely suffer more on one and the other and they're all, you're going to go through all this stuff in one way shape or form. You're going to pass through the gauntlet of fire. That is the first year of starting a company and, and that's okay, right? Like you said, lean back a little bit, be patient, you know, don't be passive, but be patient, learn as much as you can from each of these areas that we've talked about and just be mindful about timelines. Um, and not just because of the practical impacts it has, we didn't talk about this, but one of the things that starts to happen is founder frustration or depression or you know, you start to feel like you're failing because you didn't hit an arbitrary timeline or because the money is now going faster than you predicted. Well, of course it is right. And I think that, you know, if you can come into it with some expectation that those things will happen, you're going to be in a better mindset to be able to deal with it. My, my big concern with founders when I see them projecting things that I feel are just completely unrealistic isn't actually about whether they accomplish it or not. It's about how they're going to feel when they don't because I've seen what I believe to be great founders with great ideas bow out too soon because they took some early false negatives because they didn't hit a funding goal or they didn't, the product didn't take off as fast as they thought it would. And so they just folded up the tents and went home far earlier than they should have.

Wil Schroter: You know, something interesting right now, as you were saying that I was thinking back a little bit to our year one at startups dot com. Every single thing we just described happened to us, Every single thing. And this was this was my 9th startup. This is what you're like seven started. Like it was we've been through this, we've been to this movie so many times and all the things still happen. The only difference and I want to pick up on what you just said is we knew what our expectations should be When we made the bad hire. We're like, Yep, this is what happens in year one when we had to change the product. Like, yep, that's pretty much what happens in year one. We just weren't surprised by it. We didn't look at it as always screwed something up. We looked at it as no, this is just the ship that happens when you're working in an amorphous state, this is how things work. And I think by setting that expectation or just having it already kind of beaten into us, it didn't hurt as much. It wasn't awesome. Would've been great if we nailed the product the first time I had all the right hires the first time, everything went twice as fast as predicted and the money lasted forever. None of that happened. But, but because we knew that was going to happen, we were prepared for it. And I think that the emotional part is really important. I think the financial part, we forecasted accordingly. So we didn't get caught with our pants around our ankles. I think all of those things made a huge difference in what I'll call the Survivability of year one.

Ryan Rutan: That's a wrap for this episode of the startup therapy podcast. This is Ryan Rutan on behalf of my partner Wil Schroder and all the startups dot com family thanking you for joining us and we hope you'll continue to join us. Be sure to subscribe rate and comment on itunes or wherever you love to listen to startup therapy. You can find all of our episodes at startups dot com slash podcast. If you're looking for more amazing resources to launch or grow your startup, be sure to head to startups dot com and check out startups unlimited. It's everything we have to offer from our online university to our amazing community of experts and founders and even all the tools we've built like biz plan, fungible and launch rock. It's everything a founder needs visit startups dot com slash begin that startups dot com slash B E G I N. You'll thank me later.

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