The Benefits of a Hard Reset

"I'm staring down the barrel of having to do a massive layoff at my company and tear down tons of work and decisions we've made. This feels awful. Is there any way to look at this situation as a positive, and if so, what should I be optimizing for (other than hair loss)?"

November 30th, 2020   |    By: Wil Schroter

Sometimes having to burn it all down is the best medicine our startup can take.

It sure doesn't feel that way at the time. When we're sitting across from an income statement that's been decimated and thinking of having to go back to our team, investors, and partners to tell them some truly horrible news, the last thing we're thinking is "Hey this might be great!"

But for those of you that have never been through it, I'm here to tell you, it may in fact be the best thing that ever happened to our startups.

That's because a Hard Reset gives us the one opportunity to go back and reset all of our decisions that we've made, teeing us up to build a far more efficient and capable startup going forward. It sucks — like I said — but it also has some one-time benefits we'll simply never get again.

We get to Pick a New Kickball Team

One of the things that we rarely spend time thinking about is whether or not if given the opportunity, we'd hire back the exact same people for the exact same roles we did the first time. You see, when we're building our startup initially, we add roles on an ad hoc basis based on a ton of assumptions of what the business might do. That means invariably we hire for jobs that never really became what we thought they'd be by people who never quite lived up to their billing. It happens.

The Hard Reset means we get to pick a whole new kickball team from scratch, and only focus on the players and positions that are absolutely critical. We get the benefit of knowing what we really needed versus what we thought we'd need. And more importantly, we get to make those decisions based on real-world experience with people we've had reps with. It's a very different ballgame.

We get to Reset Past Decisions

It's so rare in life that we can basically hit the "undo" button on big decisions like organizational structures, that ridiculous office lease we signed, or the countless vendor deals we did that "sounded good at the time."

The Hard Reset means we get to undo all of that. The fact that there are so many decisions we will never make again, and have a one-time chance to undo them says it all. While clearing out of our once-proud office feels shitty in the beginning, there's no version where this time next year we're going to be looking back at our income statement saying "Boy, I really wish we were throwing $20K a month down the drain for an office no one ever wanted to go to." (I'm looking at you, COVID...)

We Attain Ultimate Efficiency

Resetting our operating expenses for true efficiency is something we end up doing because we have to, but over time we start to realize that it may have been the most productive thing we could have ever done. That's because, along the way, we're rarely optimizing for efficiency. We're optimizing for optimism. We hope that new salesperson will hit their numbers. We hope that the new developer will ship the product faster. We keep hoping that all of these decisions will lead to efficiency. But — now we actually know.

So this time around we have a much more efficient path to profitability. We know what we can live without, and we know what we absolutely must-have. It's the ultimate do-over, and if we look at it in the context of resetting our business to achieve a better future outcome, it just might give us a much better feeling about the months to come.

In Case You Missed It

How Much Should I Be Working? (podcast). Wil and Ryan take a deep dive into the benefits of thinking quality and not quantity when it comes to your weekly punch card.

Optimizing for Productivity. Working through peak productivity is easy. It’s the valleys that we’re concerned about. The key is to plan for and optimize the valleys so we can recharge effectively.

I’m Burnt Out. What Do I Do? When we hit a point of burn out it's important that we understand what to do about it. If we ignore it, the problem only gets much worse. So let's take a look at what Founders do to deal with burnout head-on.

About the Author

Wil Schroter

Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes BizplanClarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.

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