May 21st, 2021 | By: Wil Schroter
We all want to do right by the people connected to our startup, but when do our sacrifices ever get paid back in kind? Or more specifically, do they?
I recently had a tough heart-to-heart with a fellow Founder where they talked about having to move on personally from the startup. They were burnt out, they had diluted all of their upside in multiple rounds of investment, and they felt "stuck."
They were stuck because they felt that if they left, they would first need to do right by all the people around them — their team, their investors, and their customers. All of these people were incredibly hard to convince to work at their startup, so the idea of "leaving them" seemed like an impossible leap.
My advice was blunt: "Do you really think any of them would put themselves what you have put yourself through for your benefit?"
As Founders, we do this weird thing where we create this karmic-trade system, whereby we believe if we sacrifice for the benefit of others, they will accept that debt and pay it back in some weird way. And some people do — but way less often than we expect, and mostly because they never knew they were creating a "phantom debt" to begin with. We sort of made that debt up in our minds.
So we kill ourselves for our investors. We make endless concessions to accommodate our employees. We give our customers way more than they paid for. We keep thinking that later on, they will reward us with something. At the very least we think will show some level of recognition or appreciation at some point.
But as time goes on, those debts are rarely repaid. In fact, we build up this massive IOU from everyone, and instead of repayment, we're often asked to pay out even more.
All we have to do is ask a single question "Would they do this for me? Would they risk their life savings, overload themselves in debt, sacrifice all of their relationships, their health, and their sanity on my behalf?"
Of course not. They're not idiots like we are!
If we stood up in front of the company today and said that we would have to work for free for a while in order to make our next funding round like Founders so often do, would they sign up for that kind of heartache? Hell no! Most of them would be updating their Linkedin profile by the time we finished our sentence. And they would be absolutely in the right for doing it because that's what rational people do.
Why do we chain ourselves to the obligation to all of these people when none of them would rationally return the favor? It's because as Founders, we invent an unrealistic obligation that not only defies our self-interest, it often works directly in opposition of our self-interest. Don't believe me? How's your mental health, on a scale of 1 to 10, 'ten' being "I've had a stress-free single day in the last 5 years?"
None of this should be mistaken for the fact that we can (and should) sacrifice for our startups and the people connected to them. It's to truly understand that our sacrifices will not be repaid, and nor should we expect them to be.
When I asked that same Founder to think hard about all of the people he was worried about "leaving", but more specifically if they would make the same sacrifice for him, he took a while to respond. Then, shaking his head he said "I can't think of a single person."
There you have it.
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, 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.