Startup Therapy Podcast

Episode #66

Ryan Rutan: Welcome back to another episode of the startup therapy podcast. This is Ryan Rutan joined as always by wil schroder startups dot com. Ceo and founder and my partner and friend. Hey, will you wanna talk about reputations?

Wil Schroter: No, I want to talk about you just introduced me as your friend. I was the first time you've ever acknowledged in the, in the 10 plus years that we've known each other, that we actually are friends. So I just want to acknowledge that back. You truly are friends.

Ryan Rutan: Don't worry, we can scrub that out and post. I'm just trying to help your reputation here. This is all going to feed into some good stuff for this episode, right? Like, oh he's a friend of Ryan's well hell, instant credibility

Wil Schroter: boost. Yeah,

Ryan Rutan: well that's not true. I have acknowledged you as my friend several times once because I thought you were related to the cop that had me pulled over. But

Wil Schroter: it turned out not to be true, it's odd, but

Ryan Rutan: apparently last names are a better indication of relationship than first names. He was also a will. So you know,

Wil Schroter: I tried

Ryan Rutan: alright, back to business back. So let's let's talk reputation man, it's, it's one of those those assets that that we know exists um can be extremely hard to understand which direction you're building and has long term and massive impacts on, you know, you're you're standing as a founder, your ability to grow your business, um for good or for bad. So let's let's dig into it man.

Wil Schroter: I think I think we all implicitly understand um resumes. You know, here are the things that I've done in my resume kind of opens doors here is maybe we went to school or here's the last job I had and we all understand how collectively over time our resume has become a big deal and we should invest in those resumes. But I I don't think that a lot of founders understand um how important their reputation is and how your your reputation, your resume aren't the same thing at all. And and your your reputation is very hard to build and very easy to destroy. Its its its one of those things where um all of your actions cumulatively start to add up over time and we're in a business where our reputation really matters. But a lot of us don't realize how important it is until later on in our lives when we've built the reputation good or bad and have come to rely on it. And I think, you know, we should just spend some time talking about where and how our reputations get built, why they matter how easy they are to screw up and what the cost is if we don't get really serious about managing our reputations. You know, and and and of course the actions that come with building reputations. Yeah,

Ryan Rutan: sure. Right. And and a lot of them are not obvious right. I think there's a lot of things and and in fact if we go back through the podcast catalog, there are a number that we've we've talked about that absolutely feed into the relationship. The one that jumps to mind. Uh most most strongly was treating employees who are leaving the company as if their their, you know, current prospects, right? And how you treat those folks on the way out. Um those kind of things definitely feed strongly into into reputation. And I like the analogy of the of the resume and using that as kind of the antithesis here because they are similar and yet they're they're absolutely not the same thing. In fact, your your resume is what you say about yourself. Um And I would say your your reputation is what everybody else says about you, right? When you're not around,

Wil Schroter: that's that's a that's really well put. Um and you know, your resume is telling you telling me what you've done, but your reputation tells me who you are exactly. And when it comes down to it, um I would say particularly early in our careers, one of the challenges that we have is that we're still kind of thinking in a vacuum. We just haven't been around long enough um in the world, particularly the founder, in a lot of cases to understand how critical that currency is. Uh you know, for us as uh as founders and folks building the business. But I think what happens is we get into this, this position where um we we make maybe harsh, quick rash decisions without recognizing that making ourselves feel good or solving the problem for the moment may seem like the right decision at that moment, but it has a heavy, heavy cost on a reputation as founders. Let me let me just provide a simple example. Just so we're all kinda on the same page. Um, we take out someone in our startup and employee, uh, they come on board and just for whatever reason, things don't work out right. And we get all frustrated. You know, maybe they're behind in timelines, they missed a sale, they did whatever they did to upset us. And uh, we let things get heated and you know, we make a whole thing where we push them out the door in our mind at that moment, problem solved, We hired this person, they did a bad job. We made sure they got the hell out of here. And now we're moving on, that is exactly not where that ended. And I think this is kind of just the, the whole understanding of where our reputations are challenged and how they're, uh, you know, permeated throughout the marketplace, That person that left, that we just, you know, ceremoniously fired is then going to go tell everyone what an asshole we are, right? And, and, and by the way, like if someone had a great experience with you, they might tell one person, probably zero, but if they have a shitty experience with you, they'll tell everyone, I mean, that's what glass doors for, that's what every review site is for. But the whole point is um, you know, you're the amount of impact you make when you do something good, you know, for your reputation in many cases is like a firecracker. Like what are those little things that used to throw on the ground? They were made of paper and a little little snaps,

Ryan Rutan: snaps, snaps,

Wil Schroter: right? Yeah. Like in my mind, I always picture doing something good. It's just like creating a little snap, doing something bad, no matter how bad we think it is or how bad it's not. Um is an M. A. D at best or a atom bomb at worst. The worst part about it. The person who decides what that is is the person who's on the asa end of that being an investor and employee. A customer, you name it.

Ryan Rutan: Yeah. You don't get to control that at that point it goes exponential or it doesn't, but it's completely out of your control from the point. You make that decision to leave it that way and put that power into their hands. Uh you've you've you've done it to yourself at that point.

Wil Schroter: But then it grows see because think about anybody you've ever talked to where um they made a comment about somebody and you know, you take the gravity of that comment or that that assessment based on who's giving it and kind of what they said. But then you hear it twice. You know, like I may have had some questions the first time, but if I'm hearing this twice like that, that must really be true. And then maybe here a third time, Right?

Ryan Rutan: Well, you know, geometry taught us this right. Once you've got two points, you can start to draw lines and, and if those lines point in the right direction in the wrong direction, you're likely to follow right. It doesn't take a ton of data, particularly. It's coming from trusted sources. You know, people that, you know well, and, and they have a good reputation with you. Um, you know, you're going to listen to what they're saying, you're going to, you're going to feel what they're feeling and that can either go north or south depending on how you treated those folks

Wil Schroter: well. Okay. And so let's take it at its foundation though. Let's talk about why we're saying, um, hey, you're going to do bad things that are going to tarnish your reputation. We're saying that because specifically founder reputations are so easy to turn it. And, and I don't think people realize that has nothing to do with you being a founder. It has to do with when you become a founder, you're then going into the total unknown, you're going to start a business that's never existed before. Working with people who have never had this job before at this company selling the customers, you've never had before in the market. You've never been in a product that

Ryan Rutan: doesn't exist, which investors,

Wil Schroter: you've never been like, everything that could go wrong is about to go wrong,

Ryan Rutan: right? But hang on just a second, because there was, there was something that occurred to me before. And I think it's important as we were talking before about building the reputation and the fact that it's starting to build before we realize it. Um, I think one of the reasons that's so problematic and the reason that it, that exists in the first place, this idea that, you know, we're not really seeing it happen the early stages of starting a company. It's, it's like a series of first dates or first impressions, right? And it just happens over and over and over again. But it all feels very transactional, right? And, and you may not get that second shot on goal with somebody for for months or years. You may never come back around to that client again. And so I think that's part of it, right? You don't immediately feel the cost, right? You can, you can feel the benefits of good reputation if you got a name that gets you through a door or something like that, that's great. Um, but you don't necessarily feel the negative impacts of the reputation until much later. Right? And, and so I think it's, it's really important to go back and kind of think about that, think about your interactions now. Um, all of them, right? And, and, you know, I don't want to get you into some sort of endless mind loop here where you're, you're over analyzing every action you take. But on the other hand, they have more gravity than you're probably giving them, uh, at this point, right. And so do be careful and do consider all these little actions, whether it's firing somebody, how you treat a client, right? How you leave somebody that says no to you today. Um, may impact whether they say yes or no to you again, the next time it comes back around, it's not obvious in the beginning because it just seems like everything is brand new to your point. You know, you're basically building on quicksand and, and everything is nascent right from the investors, You're working with your team, your product, all of it's brand new, but it doesn't stay that way. It doesn't stay that way for very long at all. Right. And, and things do start treating, do start to run to the same people. Um, your customers talk to each other at some point. Right? And so all of these things do start to stack up. Alright. I surrender my, my soapbox. Um, you know, treat it with appropriate gravity

Wil Schroter: Well, no, no, but, but that, that, this is sort of the point. It's particularly hard for founders and, and for the folks listening, you know, if you're in your first year, second year, third year, etcetera, one of the things that we often do is we compare kind of, you know, our resume building slash reputation building with what it would have been like at an established company, an established company. You can still be a jerk, right? And people still not like you, but the gravity of you being a jerk isn't nearly as significant. It is as it is here here when you're a jerk, you affect so many people, um, investors, customers, employees like everyone is connected to you. Are you doing something to tarnish your reputation as a founder in everything is going against you? The probability that you're going to be successful with this venture at all is already incredibly low. If you show up at google and you do really well or really poor, no one cares, right? Because google has already been built, google is going to be fine with or without you. It actually doesn't matter what you do there. And I'm I'm not saying that it's, it's so fatalistic. I'm just trying to say you singularly don't have enough power to do to dramatically change the outcome of that of that company. Maybe you can improve things. But even if you're the worst person ever will be just fine. Conversely it will be a couple couple of

Ryan Rutan: comments in an HR file and then it ends there. Yeah,

Wil Schroter: exactly. Right. Your footnotes somewhere a cautionary tale maybe at a lunch room, but that's it at

Ryan Rutan: best,

Wil Schroter: But once you leave Big Co and you're running your own show, you know, you're running your own startup. The mistakes you make are going to be plentiful because you're trying to make decisions with data that doesn't exist yet. So you're going to make lots of bad decisions. You have to and there's kind of no way around it. You're going to have to hire people. There were clearly the wrong people, not just because maybe their skill sets didn't fit up, but because you had so little data about exactly what you're going to need when you hired them. That by the time, yeah. By the time the rubber meets the road, you're like, oh well that was a bad hire. Okay, well that's tough to build a good reputation when you're letting people go. It's tough to build a good reputation when investors are giving you money and you're not giving it back. And then they're like, you know, you're on your second or third and

Ryan Rutan: it's very easy to build a reputation that way. Not a good one. But it's very easy to build a reputation based on that

Wil Schroter: data, right? Yeah. Um And and the list goes on. But the point is, and I think this is what we need to be very cognizant of is that the business of starting a startup is going to make it is going to put our reputations to the test because lots of negative stuff is going to happen and how we handle that negative stuff is going to define who we are. I'll give you some examples early in my career when when I'd run into different problems, I was so tunnel vision around solving that problem for that moment. It didn't occur to me yet what the ramifications of doing the wrong thing we're going to be. And to be fair, I didn't even know I was doing the wrong thing. I just, again, I just didn't know. And so maybe I fired someone to quickly right? Or maybe I didn't, you know, let them go in in the proper way. Again, nothing totally horrible. But the point is, it sort of doesn't matter. Um Ryan, what I didn't understand was, let's say when I was letting someone go in my mind, again, being very myopic and very young at the time, uh, this person didn't do a great job. I had full justification for letting them go. Um and that was just a person that was in our P. And L. That wasn't getting paid anymore. That was my version of it right now, not being totally dehumanized here, but by the way, I'm just saying that like the the the level of of pain and suffering seemed to be relatively specific. What I failed to understand this again, All maps back to my reputation is that for that person, that might be the only time in their life they've ever been fired. And so while that was a blip in my calendar for the day, That was at the top of their highlight reel, I was, I was waking them up 10 years from now. You know, having recurring nightmares. That's how significant that event was to them. Now, the trick with that is everything that I'm doing, every decision I'm making while it may not look like it has a lot of importance to me has a lot of importance to them. And that's the mouthpiece of my reputation. I didn't understand that at the time. I definitely understand that now.

Ryan Rutan: Yeah, now it's so hard, it's, it's impossible to see in some case. I mean with examples like this in hindsight, I think it's easy to see that like there are certain situations where um, you know, we can, we can sort of sort out, there's a best practice for this and there's a way to avoid some of these challenges going back to uh, an interesting kind of case study this in my early career as I was building my digital agency, I started realizing that there was, there was a lot of scope creep happening that margins on projects had had started to fall off. And as I started to dig into some of the projects, I realized that there were things, you know, well outside the scope, um, that we were doing for some of these clients that we really shouldn't have been doing. And you know, as I, as I went to, uh, probably four or five of these clients that were the worst offenders. Um, I started to get this feedback from them. They're like, oh, but Ryan, But that's, that's why we love you guys. That's why we love you guys because you won't say no right? We love you because you'll continue to do what we ask even, you know, if it wasn't originally in the briefing or whatever, you don't usually ask us to pay more. And, and I realized like, you know, so they were taking this as a very positive thing. Um, and so I had this, we had a reputation as a company that, you know, we were very flexible and easy to work with. Um, but that, that turned into us getting, you know, kind of manipulated, pushed around abuse by our clients, right? And so, you know, it wasn't something negative that we were doing, um, but it had a negative impact, Right? So it was, in theory, that was a good reputation, but that piece of reputation had a bad impact to margins into the health of the company. Um, and boy, was it hard to unwind, right? Because as they said, like I heard this from three out of the five was like, we love you for this reason, like, well, that's not why I want to be loved, I do want to be loved, don't get me wrong, but not for that. And, and so it took some some doing to unwind that and some very careful um communication with all future clients to make sure we didn't end up back in that same position. Um and you know, we eventually got around it, but it was one of those things where we didn't see it happening at the time, um but then our reputation, even in this case, it was, you know, a positive light being cast on us by the clients, but it still had negative repercussions in the business. So these things can crop up from so many strange and unexpected places, you've got to be super careful.

Wil Schroter: There's also another part of it too, is like, uh imagine you've read a book and at the end of that book, you know, you read the last words and that's how you remember the book, yep, in our lives, we forget that people remember us based on the last interaction they had with us. Yes, we may have changed dramatically since then, but all they remember is the last page they read in the book, right? So stick with that for a second. Maybe we were an overbearing jerk for years and we just, you know, at the time we didn't understand it. We were um you know, we were young and we overcame it and now we're wonderful, doesn't matter, all people remember is that we were a jerk, like no one is going to take the time to kind of really relearn how we are now to give you a sense for this, this always cracks me up when, when I was early in my career um I was the idiot douche bag driving around, driving to work in a red Lamborghini right with spiky hair when I was 25 years old, right? Having come back from the nightclub,

Ryan Rutan: right? I mean,

Wil Schroter: oh my God, that's a whole other episode. But but uh that's how people remember me, you know, I'm an old man now, right? And and so and but when people see me from that era, that's the last page in the book, right? Um and as far as they're concerned, that's who I am, it doesn't matter that like my life changed dramatically, that was like 20 years ago was longer, right? Uh And I go to bed before dark now um Like my life is completely different, but that was the reputation that I that I forged and what I can't do, I can't undo that, right? All of those things that are imprinted make it damn near impossible to undo. And what's interesting too is it's like the good stuff you don't want to undo, right? If they heard like, you know, you're the you're the high school champion in football or something that you want people to remember those, but those are the things you're you're you're ever trying to undo, its you're trying to undo all the negative stuff which in my recollection with other people's reputations on my own. It's really hard to do, which is goes back to why we need to take it so seriously to begin with.

Ryan Rutan: But before, so I I do want to comment on this and and before we, I don't want to sound like all doom and gloom either. Right? And I know you're not saying that, but because we keep talking about the negative aspects of this, the same is true for positive interactions, right? And, and so while, you know, we made the last interaction with one individual, may have been, may have been negative, may have been poor, we fired them and we were having a bad day. So it was, it was a bad interaction. Um they go and talk to somebody or 23, somebody's that know us if the, if the good interactions were the last ones that we have with those folks those stand up to, right? And I've had this, I've had this conversation countless times and hundreds of times where it's like, oh man, so, and so you know, this happened, he's such an asshole and I'm like, oh yeah, that's interesting because you know, the last time I talked to him, this is what happened, you know, like we were, we had a great time, you know, it seems seems to be and he was in good spirits and you know, it was a good interaction, whatever. Um so you get the benefit as well, right? So I would argue to our point earlier, right? There's a reason that, you know, review sites are named things like yelp because they tend not to be good feedback. So bad news travels far faster, but you do still get the benefit of the long lasting good impressions as well. So, you know, I don't want you to think that like it can all just get blown up in an instant. The good stuff last two.

Wil Schroter: I'm glad you brought that up because I think we should talk about the other side of it, which is our reputations are ultimate currency. So let's talk about what that currency buys us, right? Maybe I think we can all get a sense for what it costs us. If you have a shady reputation, bad things happen, right? Um, but let's talk about where a good reputation gets used, right? Um,

Ryan Rutan: Yeah,

Wil Schroter: well everywhere you can. And let's let's also talk about the fact that as founders are that currency, our reputation, our social currency is so important and people say, oh, I guess it's it just, it just must be important. No, no. Your reputation as a founder will open up more doors than your resume ever will. Your reputation is why people don't take your, your meeting without even telling you that they're not going to take your meeting or conversely open up your email when they otherwise would have had no idea who you are. Um, So I've seen the the other side of it, you know, the other side of um of found reputation where when things started to go well for me and I and I was known as a successful entrepreneur where people would take my calls, people would take meetings with me, people would want to come work with me that I had never met before because they heard I had a good reputation. Um and that is, there's that's interesting, there's no amount of money or any other kind of resource that I could have used. That has nearly as magical of an effect as having a good reputation that precedes you again, we've already talked about the negative part but a good reputation. Ah good reputation got me intros to almost 100 different venture firms, right? People who didn't know me from Adam, but they knew my reputation and they knew that I had done, you know, had some some success before um and and they wanted to take the meeting just in case I take meetings all the time based on people's reputations, right? Because you know, hey, if if everybody says they're successful, you know, maybe they're successful.

Ryan Rutan: Well, how interesting is that? I mean, think about what's actually happening there will, so you you're allowing somebody to walk in on their reputation, but that reputation is probably based on, you know, if you're being intro by somebody else, it's actually the reputation of the person who's in trolling

Wil Schroter: 100% in

Ryan Rutan: their opinion of this other person's reputation, right? So it's, you know, your there's such an interesting compounding effect there whereby at early stages, if we don't have enough of a reputation to walk into places, we rely on the reputation of people that we know who do have a good impression of us to get us in the door, right? It's it is such a powerful asset.

Wil Schroter: Well actually, but stick with that. Okay, because I I think that's a really important point. Um that goes back to the fact that when we establish a bad relationship, you know, it has this kind of negative cloud, But the good relationships aren't just one relationship. It's a, it's a web of relationships. So I've got like somewhere north of like 10,000 contacts that I've individually entered into my phone over the years. So I mean that's that's meaning a lot of people over a long period of time.

Ryan Rutan: Yes, that means it started back on like a Nokia 20,

Wil Schroter: oh, started on a, an actual Rolodex card. But you know, but what's interesting about that is over the years, that network, um, in that reputation that spread across that network has opened so many doors. And what's interesting, it always ends up opening doors that you don't even know, you're supposed to open, it's someone that out of the blue, like, you know, I was just got off a call prior to this with some, a founder who had had a huge exit works at a private equity firm, you just want to catch up on stuff. Um and I would have never met him in a million years are past, would have never crossed, but because of his reputation and maybe some degree of my reputation all of a sudden, we're having this amazing chat and also what's interesting and again, I kinda want to lead into this as well. It changes how the chat starts. Okay, early in my career when nobody had any idea who I was, I would walk into a room and I'd spend like half the meeting just trying to establish a little bit of credibility, right, and, and and often not get there right, right and fail and fail and fail. And it was such an uphill battle every single time. And the converse of that, having a good reputation, be able to walk in the room and people already like you, like, they already want to say yes and now they're trying to figure out a reason to say no is such a powerful, powerful tool. And again, well you

Ryan Rutan: touched on something, it's, it's a great point and I hadn't actually considered, I do it all the time, but I had never really thought about, I had never thought about in terms of reputation or really just kind of put a label on it, but I make introductions to people all the time that they're not expecting to go back to your your point about, you know, these, you know, this unexpected conversations, unexpected doors opening. I introduce people all the time based on my impression of their collective reputations. Right? So I'm looking at, you know, john over here and and Gina over here and I'm going, you know what? Based on what I know about these two people they need to meet. They don't know that they need to meet. I know that they need to meet because of their reputations. And it really does. It happens all the time. I do it all the time. It happens to me constantly where somebody like you need to talk to. So, and so you guys are gonna hit it off. You'll be great. You both talk about the same ship, that's absolutely boring to me. Um, so you need to talk to each other. That's actually, yeah, that's how we met. That was his comment to me on the introduction. He's like, you guys both bullshit about startups constantly. You should be talking to each other. I'm a corporate. I don't wanna hear this anymore. Right? And so that was how we got interested right

Wil Schroter: over time. As you as you build this, this solid, consistent reputation as you plant lots and lots and lots of seeds towards positive reputation and you you really curate that reputation and I don't mean artificially, I mean, you take the moment when you can tell that what you're about to do might have a long term negative impact on your reputation and you do something about it, right? In other words, early in my career, I would have said, hey, if someone needs to be fired, the answers, they need to be fired. Right? And I left it at that. And it wasn't, that was entirely insensitive. I just didn't understand the bigger picture. I just did it again

Ryan Rutan: nor nor entirely wrong, right? I mean you're not wrong at all, right. If somebody needs to go, they do need to go at some point,

Wil Schroter: correct? Yeah. Like I was fully justified. Like, uh, you know, in a court of law, no one could question the fact that I was on the right side of it, the person had done something wrong, but you can fire somebody in 100 different ways.

Ryan Rutan: Yes, you can. We've tried most of them. Well,

Wil Schroter: yeah, it's, it's, it's, it's, it's not unilateral, right? It's not like there's only one way to fire people. You can, you can send people out, you know, like an ultimate gentleman or the devil, right? And that's up to you. And um, what I started to learn over time was number one, there's never mileage in being a jerk to anyone. So there's that. But the other side of it is, um, how that person, um departs is a huge deal, right? And again, we keep talking about employment just because that's such a common thing among people. Um but its customer disputes, right? Your customer says, hey you guys are in the wrong, you should make this right. And there's part of us that's saying you know, part of my french chuck this guy right? You know like like he totally screwed us over and blah blah blah. But if you really understand how important your reputation is um you start to say, you know, I'm really grinds me to do this but I don't want to poison the well right? And and maybe maybe this person will never mention my name again and all of my effort is in vain. But maybe not, maybe not. Maybe uh this is the one person that's gonna be the biggest thorn in my side ever. And just by not giving it the consideration that I could have just treating the situation differently, I'm going to kind of take away from you know, my own reputation that of the company. And again, at the cost of a lot of other people connected to this. I think it's just a whole consideration of the mentality that you have to approach this with for sure. And so what I'd also kind of like to get into, you know, we're talking about it's your ultimate currency because it gets you investor intros and and and customer intros and you know, it gets the best people want to come work for you. Um What we tend to overlook is those reputations kinda like, you know, how we, we interact with people. Um, I'd like to say are forged at the extremes and, and here's what I mean by that, it's in the best of times and the worst of times. Um, that's tends to be when people remember us most, you know,

Ryan Rutan: that's why we keep going back to two firing as an example, right? Because it's an extremely personal moment for that person. It will be forever etched in their memory. You never forget getting fired. Apparently it's never happened to me. I have no idea. Um, so, and, and, and that that's why, right? Because it's, it's such a personal moment and it hopefully, you know, in most people's Square doesn't happen that often and it's always memorable. Um, and that's why it's, it's so important. It is one of the extremes, perhaps the most extreme thing that can happen in the context of, of employment, right? So of course, people don't remember that. So, yeah,

Wil Schroter: absolutely. A common one that I see. And I think folks can relate to this nothing to do with employees is your relationship with investors. Uh, again, very similar. Uh, angel investors, let's say, put some money into your company and inevitably you run out of it and, you know, you're, you're struggling to get more and they don't want to put more in and all of a sudden that this is, this is where the strain starts at the time. All we're thinking in our minds are we need more money. They're not giving it to us, you know, bad on them. Um, as the company starts to descend further and we, we can't raise more money and we're starting to realize that that them not putting in more money is actually going to be our downfall and, and, and intentions go up even higher because now it's not only us losing the company, it's also them losing all their money and things get worse and worse and worse. One of the things that, that, because we've never gone through this before that we tend to not recognize is that's just a moment in time, right? This is just one deal that we're going to do and at the time it feels like everything and we put everything we have into this, this was it, nope, this is just one of many years now in that moment when we're all piste off and we say, and do horrible things, um, to kind of damage the relationship and damage where and how we're remembered. And it's not just with investors because if things are going south, all of a sudden things get really tense with the employees, with customers, with partners and everything, everybody else connected to this whole thing, even the press, if it's being reported and externally. Um, if we zoom out, if we can, if we zoom out and say, look, this is, you know, we're about to go through a really shitty period. But I have to recognize that my reputation is going to exist long beyond this, no matter how bad things get for me today, I still need to have a viable reputation next year, the year after and the year after, by the way, regardless of whether I'm going to start another company or not, because my reputation still has the same currency of opening up lots of other opportunities to me. But that's generally in my, in my experience, not how a lot of people treat it. A lot of people treated, hey, this investor owes me, hey, this investor screwed me. And therefore if they don't do what I want them to do, um, I'm gonna go nuts, right? And I'm gonna, I'm gonna burn everything down in my wake. Uh, man, it doesn't work. The other side I was just gonna gonna mention is that when things are going well at a company, you can kind of, you know, build a good reputation. You gave people raises, you know, you did a lot of positive things. But when things are going south, this doesn't have to be the company going out of business. It could just be a bad year or anything else like that. Covid for what just happened, that's when you really get to see who people really are. And by way of that, how their reputations really stand out for

Ryan Rutan: sure. You know, it's interesting is that we've been talking through this, I've been thinking about how many analog there are two to parenting in terms of my, my reputation with my kids, right? And, and those are absolutely forged the extremes. So are other people's reputations. Even like I'm gonna carry the parenting analogy here alright. Like everybody's, everybody's a great parent when things are going smoothly and we're at the picnic and everybody's having fun. Every dad's the greatest dad, every mom is the greatest mom. You know, the minute the ship hits the fan and you get to see how those parents react when their kids aren't being perfect angels or at least they're within your shot so their parents can hear what assholes their kids are being. Um, the reputation can change very, very quickly and I always try to remind myself of this and I think it's a bit easier as a parent, not that it's easier as a parent, but it's easier to see the impact, right? And so because we know, Unlike those, you know, I was talking about early on that the first impressions, the first dates all these one off exchanges you have with people with your kids, you know, you know, you got them for the next 18, you know, 96 years and so I think that it's a little, it's a little easier to remember that what I say in this moment, right? The way that, you know, the way I react to this accident, the spilled milk or the cut on the knee, um that's going to have long lasting repercussions and and how they remember me in this moment matters right, because we have a long relationship ahead of us. Um, and and so, you know, in that same in that same vein, how we react in these these moments of crisis or moments of pure splendor and joy are how we will be remembered, right? Because for everybody, it's those moments to get imprinted on our brains. And so, you know, it is absolutely so critical that that we, you know, we're able to, you know, even in the heat of the moment to stop and say, hey, right, this has lasting impact. This has repercussions beyond the objectivity of this decision. And I think, you know, as parents, it's a bit easier to do as founders were so used to having to make gut calls and quick decisions and act on our instincts when data doesn't exist, that we can forget that we have to go beyond that transactional moment in which we're making decision because a lot of what will happen and a lot of the outcome, that decision has nothing to do with the decision itself. And it's it's how we execute it and it's so easy to overlook. Um, and it can come back and haunt you for damn sure if you do it wrong.

Wil Schroter: It can. And I also think that, you know, when we think about the long term kind of reputational impact, uh, we also have to consider the fact that we have essentially managed to reputations, we manage our own reputation and the company's reputation, right? So we also look at kind of some of that short term thinking, saying, hey, if we do this, this, this big price change and really kind of like, you know, piss off our customers. It's not just the customers we have now that we're pissing off. It's all the ones that are going to come later that are going to read reviews that are going to, um, to hear about kind of how we act as a company. You know, I don't want to be treated like that. So, you know, uh, so I'm never going to sign up to begin with. And I think if, if we really talk about reputation, reputation isn't just the things that you, you get in the doors that it opens. It's all the things you'd never get and you didn't even know it, right. Your reputation's bad reputation are all the good people that, that would have worked for you but heard about you and never even talked to you. A bad reputation is when an investor gets an email that, you know, you send them an email and say, hey, I'm interested in talking and they ping there buddy and there buddy says, yeah, that person is an asshole. Um, and you never, you never understand why they didn't respond. Maybe they didn't get it. They got it. They just, your reputation prevented you from getting a response and any more with how quickly everyone's connected all the time. You can't escape negative reputations, right? And you know, some of them are warranted, some things you actually did wrong and, and some of them aren't, you know, sometimes there's just one person that you rubbed the wrong way and maybe maybe they deserve to be rubbed the wrong way. Um, and they're all over social media, you know, just, just trashing you and it's, it's not warranted, but it's really

Ryan Rutan: some of that's great, right? The the shelf life on a charlatan is significantly shorter than it used to be for those exact reasons, right? Like if you are acting badly, right? The malfeasance or, or you know, other other immoral or unethical things, um, that gets around pretty quick and people will avoid you. I mean, that's not a bad thing,

Wil Schroter: right, correct? There's some policing to it. Yeah. Yeah.

Ryan Rutan: Right. So, so there's, there's some positive aspects to that, but, you know, even things that shouldn't, shouldn't impact you. Like, again, like maybe you're having a bad day, it's a one off situation that can still haunt you write that may not be your personality, but if that's the reputation that you have with the one person that the contact you need to make reaches out to and they give them that feedback. Like, no, I've talked to that guy, he's an asshole, right? Well you're in a school that day and now forever in the mind of that person, right? And for everybody that they talked to that doesn't know you better. And so yeah, it's so, so important to think beyond the mode,

Wil Schroter: you know, when we were early in our career with startups dot com, um you know, we're small, like, like, like every other startup is when it first starts, and we couldn't pay much money. Um and so most of the folks that were working here, um we're getting paid little to no money, like most startups. Um and I remember in the first few years when we were going to hire people, um they'd come in an interview and I said, honestly, I really love the company. I love what you guys stand for. I love the vision et cetera. But I heard you guys are really bad at paying and think about that. Those are the people that showed up for the interview and said that you got how many people, you know, heard the same thing and never even considered interviewing with us. I mean, kind of why would you? Um but we heard it a lot and we hadn't even been around that long and we didn't have that many people. So like the people that were spreading that information, which to be fair was true. Um we're actually people working here of

Ryan Rutan: course is bad actors,

Wil Schroter: right? But and again, this is one of those things where, um, the people spreading it were necessarily trying to trash the organization. They're just being a matter of fact, I worked, I don't get paid a lot of money, Right? But again, that's us, you know, being smart enough at the time to zoom out and say, man, uh, if we can't continue to pay people well, we're going to be known as the company that under pays everybody and that's going to cost us significantly in trying to get, you know, good talent.

Ryan Rutan: Yeah. At that point you can't get good talent and you're gonna overpay for, for bad talent because you're gonna have trouble getting anybody.

Wil Schroter: Yeah, Yeah. You know, another thing that happened is, uh, we went out and we did all of those startup acquisitions, uh, you know, we, we bought six companies and then, you know, we started to get a reputation where people are like, well, hey, if you've got a company for sale call startups dot com,

Ryan Rutan: the grand inquisitor's. Yeah.

Wil Schroter: Well, yeah. And so all of a sudden we start getting all these calls from everyone and their brother that wants to sell us their company, which is wonderful sort of, but that's not what we're trying to do. My point though.

Ryan Rutan: Dude, I got, I got an email once from a guy who said, I have this idea for a startup and then want to know, is that the kind of thing that you guys would buy

Wil Schroter: apparently had a

Ryan Rutan: lot of money, we didn't start this thing and you're trying to sell me, you're trying to sell me something, you haven't even built an amazing ship. That was a first for me. I liked that one

Wil Schroter: at its core. My point is every activity, Everything that you do resonates publicly and it defines you as an individual and as a company. I think collectively, if we just zoom out a bit and we think about um how reputations get built, how valuable those reputations are, how you can open and close doors for us. We start to say man, every single thing that we do needs to really be considered not just for the impact right now but the long term impact, the parts that we can't quite quantify yet but if we're serious about our reputation, we need to get really serious about those outcomes.

Ryan Rutan: Yeah, for sure. You know it's it's dance as though no one is watching, seeing as though no one can hear you but founder like the whole world is scrutinizing every little thing you're doing sadly, that's the

Wil Schroter: reality. Again, if you're programmer number 42,000, that google no one gives a ship what you did right, but if you're sergei brin they're watching paying attention. Yeah, yeah, I mean to be fair, the amplification of our decisions are such a big reason why what we do, even the little things in our minds as founders are so incredibly important, um, because the moment we become founders, all those things that we could have gotten away with or maybe didn't have a lot of impact, you know, under the auspices of a giant company, have all the impact in the world. You know, every single founder that I know, um I know as either a successful founder, a failed founder or somewhere in between, and you say, well that's the whole spectrum, but that's the point. No matter what everyone got a brand, right, whether it's a good brand or bad brand, everyone got one. Now think of how many people, you know, that are just employees of companies, do you really know whether they're successful or not? Like, I mean, you know, maybe they sort of have a good job, bad job, but it's not as nearly as quantifiable as the success or failure of a company, right? You could be a, a crappy programmer and maybe get crappy jobs, but you're still a programmer. If you're a crappy founder, you put everyone out of work, you lost investors money. It is very clear that you failed.

Ryan Rutan: Yeah, it's, it's an unavoidable measuring stick. Right? The minute you declare founder, you're going to be measured as a founder, right? People don't have a way to measure other employees, other, like, like we find ways of measuring other people, right? Like he's, you know, he's fun at parties or you know, she's an excellent golfer, whatever it is, right? We have these other, you know, these other ways in which we characterize or rank people for better, for worse. We do this. Um, but founders unavoidable, right? You will be measured on your capability as a founder once you declare your founder right? No way around it. And there will be a reputation attached to that.

Wil Schroter: And in the bigger piece of it too, is that your startup starts to define your reputation whether or not you deliberately created that outcome or not. In other words, um, Elon musk takes credit for every positive thing that happens at like, you know, Tesla SpaceX boring company etcetera, which so be it, but he's clearly not behind all of that. Like you couldn't possibly be in that many places at the same time. So maybe he can,

Ryan Rutan: if some of the rumors are true. Yes,

Wil Schroter: but conversely if it goes south, um, you know, the the outcome of the company becomes your reputation, right? So if the company has, it takes a serious fall that's attached to you, the folks that work there. Again, it's kind of a resume item. It's not a reputation item. Take we work, we work as a massive downfall. Does anybody talk about the reputational impact it had for employed 950? No, they talked specifically about one person and the impact it has with him. Um, and so we have to recognize that when we're in the startup business that our reputations that are only so critical, they're really impacted at so many levels by so many moving parts and and it's it's tough to manage and it's even harder if you don't recognize uh that people aren't nearly as forgiving as as you think they'd be.

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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