In 2016, I sold my startup for seven figures. Here’s the brutally honest truth that no one talks about when running and selling a business.
The low-confidence cynic in me wants to tell you that a seven figure exit isn’t really that much. I have friends who have had eight figure exits, and I’m met multiple people who have had 10 figure exits. This is my experience as a guy who started a business with $10k in personal credit card debt and $200 in the bank, and accidentally ended up a millionaire.
Truth #1 — it’s fucking hard to get there
The house has a significant advantage on this bet. According to Forbes, 8 out of 10 businesses fail within the first 18 months. In his amazing book “Mastering the Rockefeller Habits,” Verne Harnish points out that of all businesses in the United States, only 4% make it to $1M in annual revenue. Only 0.4% of all businesses make it to $10M in annual revenue. We made it almost halfway through.
It is an impossibly hard venture, however an estimated 543,000 new businesses open every single month. 75% of them will never have a single employee. When I sold my startup, we had 100 people working with us. I’m glad we got the stats out of the way. Now I can speak from the heart.
Truth #2 — money changed me for the worst
I love people — I love hanging out with them and I love making them happy. I love being around good people and the times I’ve truly had non-blood family have been some of the happiest of my life.
Unfortunately, I no longer have very many friends. I worked so hard in my 20s and early 30s that I let my closest relationships lapse in the name of making money. It’s tough to keep friends around when you’re either working, or work is on your mind 24/7.
Of the small amount of friends that I’ve maintained, there are two distinct groups — those that met me when I didn’t have much money, and those who met me when I had money.
The friends that I’ve maintained all along (and many of them are former employees) understand me. They understand my insatiable drive and the effort that it took to build a business and then sell it. They understand that every action and everything I do is with the greater good in mind — that’s what made me a successful leader.
The friends that I have made in the last few years do not understand (and that’s 100% my fault). They see a spoiled, tone-deaf asshole who they can’t identify with. Success is intimidating to others. When you roll up to someone’s house in a Tesla, how can they help but assume that you’re just a judgmental asshole?
Things like $300 pairs of jeans, $450 pairs of boots, concrete countertops in your house, or trips to New Zealand no longer bother me. That’s great and all, however when someone with money talks about these things to someone who is struggling to pay rent, you come across as a tone deaf asshole.
I continually hurt those that I love most with my actions and words. Money isn’t the root cause of this, but the fact that I have money and do not have to worry about paying rent or getting my car fixed, puts me in a position in which I have a very hard time identifying with those that do. I’m working on it, but it’s fucking hard. And I continually hurt those around me — just by being myself-and it’s beyond heartbreaking.
Somewhere along the way, money truly changed me for the worst. I hope my experience writing this helps other successful entrepreneurs realize that family and friendships are what really matters in life. Not an ever growing bank account.
Truth #3 — the skills that make you a good leader DO NOT transfer to social settings
When you’re a leader and you’re constantly learning from others, you start doing things like hiring to your weaknesses while focusing on your strengths. You get really good at a specific skill set — in my case, this is hiring and retaining great employees, visioning, strategic planning, and company culture development. That’s it. I’m not overly good at anything else.
What I ran my business, these specific skills were very valuable. If I were to step into another CEO role, I would use these same skills to (hopefully) be successful in that position.
Here are several real life examples as to how trying to use this skill set in the real world backfired and I ended up looking like a total asshole (though I meant nothing but the best in each situation).
- I joined a local nonprofit board. They were struggling with some employee issues, while I owned a business that was not only growing but had the lowest turnover in an entire industry. I consider myself an expert in hiring and retention. This nonprofit did not see the value — I repeatedly heard from them that I was just a “boss” and that things were different because they were a nonprofit. I got frustrated and quit the board after a year. I should have stuck it out and learned to work with the group for the greater good.
- Since selling my business, I have been playing full time in a touring band. Our band got serious about strategic planning and role delineation. I consider myself an expert in these areas, so I took the reins and set some very aggressive goals. I did this largely without the input from the rest of the group, because I am confident in my strengths and thought that they respected my experience.
As with example #1 that wasn’t the case. I was overly-aggressive and my strengths that I value in myself weren’t seen by others. It led me to deeply hurting those that mean the most to me in life, all because I was trying to use my previous experience to benefit the group as a whole.
In addition, these specific skills are all “soft” skills. I also play the violin. You either play the violin, or you don’t. When it comes to hiring and treating people right, there are many grey areas. I’ve spent a significant amount of time and money developing my leadership qualities, however many people in my life do not understand that these skills are very learned.
Anyone can start a business. Not anyone can hire and retain employees, set clear vision, and execute on that vision. It’s a learned skill that takes ridiculous amounts of practice. Just like playing the violin.
Truth #4 — the same charismatic attitude that makes you a good leader also makes you an asshole
Yesterday, I got told by someone I really care about that I looked at her “like a little girl” when we were having a conversation. The day before that, one of my very closest friends and someone who I love like family told me that she didn’t feel her opinion mattered around me because she hadn’t “made a million dollars.”
The horrible truth to being a formerly successful leader is that many things you say in a social setting will be analyzed in ways that you don’t intend. I’m a good listener overall (not great, but pretty good), and the fact that my actions were making these very respected and talented individuals feel worthless was not okay.
Listening is an art. Talking over someone because you’re an expert in an area and they are not is not okay.
Truth #5 — life post-exit is not all happy times
A successful business with great employees gives you a purpose. You have a responsibility to those who choose to spend their lives working with you. Your efforts are literally supporting entire families and when there is a mutual appreciation, not only is it extremely rewarding, but everything else tends to fall into place.
Now that I don’t have a business, I used this as an opportunity to jump into playing music full time. I joined a band and attempted to use the same skill set that I’ve spent my entire adult life refining. And it did nothing but cause pain.
When you have no purpose, life is fucking empty. I have an amazing wife and a newborn who I adore with all my heart, but I’m not cut out to be a stay at home parent.
To my fellow entrepreneurs out there — I know you’re constantly burned out. I know that you’re dealing with the exact same shit after 10 years that you dealt with on day 1. I know it’s incredibly lonely at the top. It sucks and it’s challenging.
However, please learn from my mistakes — try to enjoy the moment.
Write the “story” of your business and your life. Keep your friends insanely close.
Do whatever you need to do to prioritize a work-life balance (or as Zappos says, a “work-life integration”).
REALLY consider that buy out offer and if you will be truly happy after the fact. Material things do not make people happy, at all.
The sad reality is that you can accomplish all of your goals and become a true expert while building incredible teams of employees and friends along the way.
But the rest of the world doesn’t give a fuck about you or your experience.