Phew, there I said it.
Even though Silicon Valley and the startup culture in general celebrates failure and preaches how founders shouldn’t hide behind their mistakes, it’s not an easy thing to admit or talk about. Naturally, we tend to put our best face on in public and act like all is well even when it’s not. And when it becomes too overwhelmingly difficult to face publicly, most run and hide and miss the opportunity to help others by addressing challenges openly and honestly.
Well, not me. I believe in telling the truth and having an authentic discussion around the not so celebrated aspects of entrepreneurship.
Taking more than enough time to think about what I just experienced and how I should respond to it, I feel it’s time to talk openly about it hoping maybe I can help someone else be more open with their failures when their time comes. Failure is hard to cope with no matter how strong you think you are and by opening up and examining the lessons that accompany failure we can all walk away better, not bitter.
“Just dust yourself off and try again.”
That is what you hear from others when you fail at something, like they know exactly what you are going through and how you feel. “Yea, sure… thanks man, but you have no idea.” That is my internal response. If only life was that easy.
There’s no way another person understands the dynamics of a founder’s mental processes during the moment they realize it ain’t working. I sure as hell hate to hear someone relate to my experience to something as simple as a kid tripping over a crack on the sidewalk during dodgeball at recess. So much emotion, time, money and energy is wrapped into the entrepreneurial journey, especially when it turns out not as one expected or wanted.
Yet, during my time of reflection I have been able to separate the wheat from the chaff, come to understand some things are under our control and many things simply aren’t. This is my attempt to dissect and relate back to the world some of the things I could have done differently.
The experiment failed. Seconds, my mobile payments startup here in Seattle failed to attain a level of usage and customers to become sustainable. What’s more, we failed to secure outside investment to capitalize our company for the near/mid term in order to grow into a sustainable company. We simply came to the end of the runway (cash) and have now decided to navigate the next direction of the team and product.
To say I earned all the gray hairs I now have in the last 15 months would be an understatement. I dealt with a cofounder and CTO of the company leaving 6 months in because he realized it was going to be tougher than he thought it would be, leaving me with a tech startup and no technical leader to write any code.
This sucked. Since I had to spend most of my energy in finding the right replacement for this critical puzzle piece during the middle of 2012, we failed to gain any momentum in on-boarding more customers and making necessary product improvements.
I should be more proud in retrospect, I was able to find a new CTO and thus pulled the plane out of a downward spiral and at least leveled it off into a smoother glide. But as a result of the slow glide we found ourselves in a foggy, hazy and scary place. In nowhere land, we became a not-dead-but-not-really-living company.
A zombie startup, as they are now calling them.
I, as the CEO, take full responsibility for the outcome of Seconds. Although not the person responsible for code and development, I was the person responsible for leading the team, driving the customer base and growing the operation. I failed to uphold my end of the bargain and in the end the company’s fate went down with it.
Given the fact we failed at growing Seconds into a successful mobile payments company, it’s important to remove the layers and find lessons applicable to my life and future companies I will inevitably start or join. Steve Blank says failed founders are actually “experienced founders”. I agree to an extent. More important is the ability to evaluate your failure, pick it apart and glean nuggets of wisdom to apply to your life. That, or all is a waste.
Below are a few things I now realize in hindsight led to the demise of our experiment.
a) jumped to quick – I was recruited by one of my co-founders to join as the CEO in fall 2011. I jumped too quickly into the company and within 2 weeks of meeting the team I was full time and ready to take on the world with people I had never met before. I didn’t know their ups and downs. Nor their gifts or their faults. In retrospect, I am not sure this was the best decision and probably would have benefited from a longer deliberation and research of the team I was joining as well as the market we were attacking.
b) didn’t obsessively focus on customers – We didn’t focus enough time and energy outside the office talking to non-customers, potential customers and existing customers about their specific needs and how our product can help them. Even more basic, although it’s easy to preach about lean startup methods and customer development principles, it’s quite another to get your ass out of the office and into uncomfortable conversations with people who will inevitably knock down your idea and hypothesis. We didn’t validate the problem/solution clear enough. Yet that is the only way to go from an erroneous hypothesis to a more valuable one; one which can then use to grow into a sustainable business model.
c) Underestimated fundraising - ha, I actually thought it would be easy to raise money. Boy did I get that one wrong. Investors are very strange creatures and at the end of the day they really can’t tell you why they invested in one company and passed on another. It’s a tough nut to crack – especially for a first timer lacking glorified credentials like Stanford or Ivy League degrees or a past (successful) startup experience.
I figured we would lean on a quick seed round of funding for the first year or so and go from there. I figured it would buy us some time to dial in the revenue model. That wasn’t good enough. Founders must figure out how to build a sustainable operation from day one (or until investment does finally hit the account) or they risk losing it all. (read: once you perfect your business model on a spreadsheet you actually have to execute on it and bring in a critical mass of ongoing revenue or the game is over before it starts. See b above.)
The “throw stuff against the wall and see what sticks” method does not work for early-stage, cash-strapped startups. Got it?
d) didn’t recruit talent – I did not place enough value on recruiting and cultivating talent within our team and personal network. I naively thought discovering dev talent was for the job of a CTO/Lead Developer and I should not really put in the time and effort to find these people. My bad. Whether you are technical or not, it’s the CEO’s responsibility to reach across the isle and get to know as many talented and gifted engineers as he can. Yes, a conversation for me is a lot smoother /easier with a non-technical person, but in the long run a network full of strong relationships with both technical and non-technical people will always be better than one or the other.
Easier said then done but team is most important. You should never stop cultivating relationships and building your dream team, even if it’s just in your head at the moment.
e) emptied the tank – I allowed the tank to hit empty. Empty of money. Empty of belief. Empty of customers. Empty of options. Empty of vision. Empty of energy to keep going. Empty of emotional strength and connection. The determinist would say it ran its course and as the world turns… but in the end we just didn’t execute where we needed to so that we could keep (all) the tanks away from the fatalistic empty point.
There should always be another lever you can pull and pivot you can make to keep it going but… I let myself go first and once the leader’s tank is empty not much else can be done.
More lessons are in there for sure… a lot more. But I cannot find the right words or analogies to make sense in my mind, let alone in this post so these five will do for now. I am sure over the course of the next months/years I will hit upon another revelation and compose a nice piece for all to learn from.
Needless to say I learned a lot in the last year and a half.
Would I do anything differently starting over? Of course I would. If it were Sep 2011 all over again I can’t say I would. It’s impossible. Looking back, these lessons could only have taught me something by living them firsthand. I am grateful of my experience and appreciate what it has taught me.
Failed entrepreneur = experienced entrepreneur.
Here’s where it gets tough. Recent coverage has detailed the fate of a few people in the startup community who – by all means looked great from the outside – but on the inside were tearing themselves apart due to massive stress they were facing in their personal/professional lives. In the end they decided to take their own life rather than deal with their challenges. I cannot (and will not) attempt to defend or attack their decisions, but I can only say I now understand.
I was both terrified and haunted when reading through and trying to understand what had happened.
I, too, have thought about it. I have stood and thought about things I never imagined I would need to think about. Not about ending it all, but about my place in the world and the value I bring to it. I figure someone who follows through with an act such as ending one’s own life must feel as if there’s really not much to live for anymore – or else they wouldn’t have made the fatal decision.
The emotion of a failed startup is rooted in rejection. None of us want to be rejected and we just want to be proud of what we have accomplished. As the plane enters the downward spiral and you as the founder cannot gain control, things (shit) starts to hit the fan.
The scariest problem is how quickly it can turn into a downward spiral.
The fact that these people were driven to and ultimately succumbed to suicide are the true failings of entrepreneurship, the tech community and society in general. If founders feel they truly have no more value to add simply because they didn’t live up to outside expectations and lost investor’s money, we are in big trouble.
And if it has anything to do with media coverage and the resulting negative shitstorm of outside comments we now face when our failure is publicly written about, we are in very big trouble.
Founding a company is one of the most emotional activities people will experience in their lives. Most companies are extensions of their founders, everything from the code created to the core founding principles of the organization. A founder’s greatest dream is to take an original thought and see it spread around the world, influencing millions if not billions. When that doesn’t happen – your vision or idea doesn’t take off and start spreading around the world – you stubbornly start to question yourself and your value.
You also start to slide down a slippery psychological slope that might not have a (positive) end. Once the slide starts, seemingly mundane daily occurrences start to pile up. Problems arise in a founder’s mind when rejection becomes more than just a no. To a rejected founder, an unreturned email from a potential partner becomes more than forgetfulness. A no from a potential investor becomes a fatal rejection, such as a shove off a large cliff meant to kill an opponent. A customer discontinuing their service is akin to a tribe shunning you from their tight knit society.
To an outside individual, these small insignificant acts are commonplace and normal during a business day. But to a founder who is teetering on obscurity and rejection – they can indeed be the straw that breaks the camels back.
By all accounts I am homeless – I find myself sleeping on family/friends couches and spare rooms so I don’t have to deal with rent during this chunk of time. I have been living on a few dollars per day and being really creative on staying alive. I have no car or personal transportation, casualty of my decision to be an entrepreneur. I have strained my family life to a place it has not been before. I also have strained my financial position to a place it has never been before.
Truth be told, it’s a tough time right now.
But I’ll be alright. As hard as it has been the last 6 months, I made the decision I was going to live through it. I have committed to live through the toughest of times so whenever I do get back to normal I will be stronger and more humbled than before. I decided that if I choose to end it now – to quit on life – they will have won. All those people who say it’s impossible, snickering cowardly behind a twitter account or tolling comments on blog posts and news articles will have triumphed over us. That would be the tragedy.
Life is worth more than the ignorant comments from cowardly people.
I remain committed to becoming a successful entrepreneurial story no matter how long it takes, even if it means I need to join another company in the near term. Why? Because the world needs more examples of people overcoming hardships. Also because we don’t need more people driven to suicide purely because they feared what TechCrunch, PandoDaily, The Verge and Business Insider (and the idiotic cowardly commentors) were going to say once it was known they failed.
We’re better than that.
Fail. Learn. Live.