Did you read Audrey Gelman’s apology?
Biggest takeaway for me was, “I sought to prove it was possible for young women to be just as successful in blitzscaling a business as men…”
Gelman was apologizing for her leadership after stepping down as CEO of The Wing a few months ago, but even if she were 100% brilliant at her job, “blitzscaling” a business is a bobsleigh to failure for almost everyone who tries.
In his Blitzscaling Toolkit, Reid Hoffman (LinkedIn co-founder and exec chairman) defines the practice as “exchanging careful planning with rapid guesstimates, investing inefficiently instead of cautiously, and letting some fires burn…because the risk and cost of being too slow is even greater.”
This translates to an erratic pressure-cooker of a company destined to explode (in a bad way). Gelman said in her apology that a healthy and sustainable work culture was the tradeoff for fast growth. If the past year’s toxic culture stories (Away, Outdoor Voices, WeWork) are any indication, The Wing and Gelman are not an anomaly.
VC-backed startups usually have two missions at odds with each other: The consumer-facing mission to democratize or disrupt some old model of something, whether its investment banking or high-end social clubs, and an internal mission of staggering unrealistic growth.
This means growth-obsessed startups behave like boiler rooms: Operating on other people’s money with narrow windows of time to sell their story to the next crop of investors and maintain a desperate flywheel of funding simply to stay alive.
Their stories are usually told in slideshow format with carefully curated spreadsheets that reveal how a disruptive, direct-to-consumer brand who is burning cash by the day is projected to be bonkers-profitable very soon. The near-future is all its investors care about because venture capitalism is basically shareholder capitalism at hyper-speed.
When you work for a “mission-driven” startup you’re encouraged to go “all in,” (work nights and weekends) because you “believe in the mission.” And you can pick which mission to believe in, like RobinHood’s consumer-facing mission of lowering the barrier of entry to the stock market, or its partner-facing promise to deliver fresh suckers to options sellers.
If neither of those missions win over employees’ hearts and total waking hours, there’s the vague promise (equity that’s worth as much as Monopoly money) of fabulous wealth when the company goes public and modest wealth if it gets acquired. Never mind that only 16% of Series E startups go IPO, and less than 1% become “unicorns.” Maybe blitzscaling is the fire that needs to burn itself out.
This is a good time for a personal and professional disclaimer: I love startups. I’ve worked for and with tons of them and consider startup environments the best bootcamps for discovering strengths early in your career, because you get to do everything. You won’t find better brand stories and smarter, harder-working people with true purpose anywhere else than a great startup.
But like all good things, greed has gotten in the way and the widely adopted ethos of “move fast and break things” has just produced a bunch of broken things. Something seems wrong when tens of millions of dollars are being thrown at 28-year old CEOs, and they’re put out to pasture before they’re 33.
The Margins newsletter does a good job deep diving into the financial fallacies of VC-backed startups — like the pizza arbitrage they did on DoorDash, and how Softbank and others are literally distorting markets. Sometimes I understand some of it, but you don’t need to be a finance geek to suspect that unprofitable, artificially grown businesses helmed by inexperienced CEOs is a bubble that will go pop. And like all the bubbles that precede it, a very small group of people will get rich while the rest of us pay for it somehow.
If you need a clearer harbinger, look at the human capital of blitzscaling startups, which has mostly been millennials — a generation that’s become less defined by their ingenuity and energy over the past few years and better known for burnout.
It’s unfortunate that fallen #girlbosses have become the face of startup hubris (the guys tend to fail up) but as a small business owner, I hope the extinction gives way to a new era of entrepreneurship for women. Instead of adhering to a tech bro’s idea of professional success and sacrificing ourselves and reputations in the process, maybe we can reclaim time to plan carefully, invest in our businesses efficiently, and (gasp) grow slowly.
I’m guessing Audrey Gelman, Tyler Haney, Steph Korey and their ilk don’t regret the wild rides they’ve “learned so much” from. But I do hope that instead of “inspiring other women to do the same,” they’re showing young women who are thinking of starting businesses that there is another option: to be bootstrapped, profitable, and most of all, patient.
We can have it all, just not all at once.