Dust Off and Get Back in the Game
The past few weeks have been filled with a number of tough outcomes for some of the entrepreneurs in my portfolio. Helping founders with decisions around what to do when they are no longer involved with their business is a very challenging thing and making sure to be empathetic while at the same time being realistic is a bit of a tightrope stroll. I realized along the way that I have not been giving the direct guidance needed for some of the founders and I need to help steer a course correction in the views I share with them and others in future.
Being a first time founder is an experience. It is guaranteed to be both an exciting experience with wins such as fundraising, building the initial team and building a beta offering. It is also guaranteed to be a slog. There are 100’s of decisions to be made and you have to make them without the benefit of much internal know how as a first timer. This is the insanity of startups.
A reasonable percentage of the time founders will find that they are no longer in charge of their ventures. This might be because the venture has grown to a scale where professional management is needed to manage the business. More likely however what happens is the venture takes a few broadsides and the investors/board decide to bring in experienced talent to right the ship or to change the direction. This outcome generally sucks for the founder as there is a feeling of disconnect, disempowerment and being dissed in general. It’s human and it is to be expected to feel this way.
I remember the experience of a local entrepreneur who lost control of his company after significant investment by inexperienced private equity investors. These investors didnt share the vision or have a fundamental understanding of the business at all. The founders found themselves with no choice but to step away from the management of the business and move on with their respective careers. This particular founder did an incredibly smart thing during that process. He went out and got a job. He became VP of Sales for one of the strongest growth startups in the region and has played a crucial role in building their sales operations to date.
What makes this a smart decision is that this founder had options. He was well respected in the tech community and could have gotten a CEO gig at another startup. He was respected enough that he could have gone out and raised capital for another venture. Instead he took a step back and said that rather than lead he would follow and LEARN for a bit. He focused on his core skill set in tech sales and went out and found a role that would give him exposure to a strong team of tech founders with a good vision and product. He choose to join that team and contribute his skills to drive that venture forward. Over a recent lunch we discussed that decision and he said it was the absolutely best decision he could have made.
The intended takeaway here is that if you are a first time founder who started your venture fresh out of college and you have run into the statistical grist mill of what happens to early stage companies you should consider ALL of the options deeply. Taking time away to rest and then going out and doing another startup may not be the best answer. You might want to go learn how to do something other than raise money and pitch people on your dreams. You might want to go learn how to do something really well. This could be sales this could be product development or it could be marketing. Showing that you have some skill that you are really good at will help you in the long term. Showing that you can follow as well as lead is guaranteed to make you a better leader next time around. I will go so far to say that operating in a vacuum without ever having the experience of working in/with other teams will limit your potential as a future leader especially inside of a startup where experience and knowledge will give you a leg up on when making difficult decisions.
BTW-Taking time to rest is well frankly wussy. It’s cute to say things were hard and I need to take a break before jumping back into things but wake up. Getting pushed out of your business or having it go under isn’t the end of the world. It’s the start of a new adventure. Most of America survives paycheck to paycheck. Most people who find themselves out of work dont get to take a break and chill before they get out there and find another job. I’ve dug ditches, worked as a cater waiter and varied other things between ventures. If you’ve been blessed to have the opportunity to spend other people’s money and try and grow a business be thankful. When it doesnt work out dust yourself off and get back in the game. Show the world that you were worth that investment regardless of how it played out. Taking one month or one year away is weak when you havent actually finished something yet. So get out there rejoin the game and show what you are really made of.
P.S.S.- Congrats to the founder whom I had completely written off who is in the final stages of closing investment with Hummer Winblad Partners. Your perseverance is duly noted and applauded. Hard work pays off in the long haul.