Insights | 22.02.2021
What it takes to build a startup
Clubhouse has been a great tool to catchup with founders for a virtual whisky and pizza to talk shop. It’s one of my favourite things to do, because I think when you get a group of fellow founders in a room together, there’s instant fraternity among them. People let their guards down. When surrounded by peers, Founders talk about things that no one else can appreciate or understand.
After enough whisky, the conversation gets very, very honest.
Some of the founders present had already grown and sold companies, while others had just gotten started. Despite the wide spectrum of business stages, the sentiments shared were universal — no matter what industries their businesses were in, or how much they had accomplished.
The reality is great highs, terrible lows and unrelenting stress. Don’t think people want to hear about the last two.
01Being a Founder is Lonely
You don’t hear this a lot publicly, but man, being a founder is a lonely affair. By definition, you don’t have a lot of peers. When people at your company go to lunch, they have a common theme — they can complain about management. But you are management. You can’t go to lunch and complain to anyone.
If you’re lucky, you have a spouse that truly understands what you do and can be someone you confide in. Few people are that lucky. This leaves most founders with no one to talk to at work and on one to confide in at home. Considering the incredible degree of personal emotion invested into a startup, it’s very difficult to be isolated when dealing with those emotions. Not an awesome feeling.
02Being a Founder Is Riddled With Doubt
There are generally two types of founders — those who have no idea if things are going to work out, and those that are lying about it. None of us have a crystal ball. We have no idea whether or not what we’re doing is going to work. That’s part of being a startup founder. But to the outside world, you need to project 100 percent confidence in your approach.
Building on a foundation riddled with doubt creates an anxiety funhouse of emotions. There are only hints of positive progress, like signing up a new customer or launching a product. Beyond that, it’s just a constant stream of problems and challenges that rarely come with a prescription for fixing them. It’s incredibly draining and wears heavily on you.
03Being a Founder Bankrupts You
On top of the emotional roller coaster comes an absolute torrent of debt and financial stress. Founders are the last to get paid, and by the time the company ever makes it to a point where it can start paying the founder, it’s typically at a cost of that can almost never be repaid.
You hear about founders cashing out for millions, an end that clearly justifies the means to get there. But what about the period in between? What does it mean to invest everything into a company and have no idea if it will ever come back? What does it mean to not be able to plan on ever having income, but knowing that you have serious looming expenses? It’s brutal.
These aren’t problems people like to share, but they exist. And they suck. Very few people will ever have a big payday, and even when they do, its comes long after you’ve already lost everything you had. People with steady paychecks would think that’s an insane path, and they would be right.
04Failure Haunts You
The overarching theme to everyone’s story was that of pending failure. I think we tend to downplay the failure of a startup because “it happens all the time.” But so do car accidents — they just happen to be visibly damaging, and harder to minimize.
The problem with failure isn’t the failing itself, it’s the shroud of anxiety that precedes it. It’s a constant reminder that you may have made a mistake, lost money, wasted time, and ruined your reputation. It haunts you endlessly, and it rarely stops when you have a breakthrough moment.
05It Can Feel Inescapable
When things are going well, it’s great to be the founder. But when the ship is sinking, the captain has to go down with it. And that fact isn’t lost on any founder.
You don’t hear about too many startups where the founder leaves to get another job while the rest of the company sticks around to see if they will ever make it. Well, maybe in a venture-backed startup with lots of cash left over, but there aren’t many of those out there.
More likely, if everything goes south, the founder will be the one left holding down the fort while everyone else flees. Employees can get other jobs, probably with better pay. But the founder’s name is on the office lease with three years left to go and zero revenue. Knowing you have set ties that cannot easily be broken weighs on you constantly.
I have been very fortunate (and very thankful) in my journey with a very supportive family, forgiving friends and our first investors AirTree and now Advent International are second to none. Just remember if you have conviction about the thing you are doing if you’re solving a problem you’re really deeply passionate about and, you’re so deeply passionate about building the company for a reason, you will be ok.