Things fall apart especially in startups

It has been my observation that throughout history in business and life entire civilizations have adamantly refused to live in reality .

As fortunes rise success breeds pride and arrogance. In modern times we build houses , families and businesses. Inside our family’s we have children some may grow up to be doctors and lawyers others Major League Baseball Players.

The recent bull market in private companies has brought about a number of individuals that we shall call startup tourist .

When is was growing up buying a pack of baseball cards for a quarter and selling the 12 cards inside individually for .25x12 or $3 adults said that or thought that child is gonna grow up to be an unemployed loser. Today when a child shows this type of hustle and ambition adults praise them and say this child is next Warren Buffett, Bill Gates or Mark Zuckerberg.

Chaos

If you are in a state of chaos we’ll that’s the norm. The second law of thermodynamics states that the total entropy of an isolated system can never decrease over time. The total entropy of a system and its surroundings can remain constant in ideal cases where the system is in thermodynamic equilibrium, or is undergoing a reversible process. Most people settle for what is expected and their life is tragic. When I was growing up other than aspiring to be a professional athlete or a rockstar most kids eventually aspired to go to an Ivy League college and get an MBA. Many graduates dreamed of becoming an investment banker and working their way up to partner at a prestigious firm such as JP Morgan or Goldman Sachs . Today many college graduates go to Ivy League schools to become a founder of a startup .

Unintended consequences

The result of this phenomenon is enormous competition among the best and brightest minds in the world . The downside to this is so many startups are founded by people who from the outside think startups are glorious because they saw the movie social network.

This dilutes the talent which makes it much harder to succeed . The pool of top engineers, advisors and investors is spread amongst thousands of companies . The harsh reality after 3–5 years of being ramen profitable at best most founders will wanna quit . In this case the best decision may be to sell the company.

The reality

Startup founders often have obligations to many stakeholders, including family, employees, investors, and perhaps customers. So when they are forced to face the reality of their business’s failure or burn out they have a responsibility to these groups to do everything in their power to optimize the process of exiting. This starts with understanding the various paths available to you before you have $0 cash in the bank. By that point, many potential exit opportunities will be off the table.

When you and your cofounders make the decision to exit

This is the time for you enlist the help of your investors and advisors. If if another company is only interested in the technology you have developed, including, perhaps any patents, you can sell them your intellectual property.

There are companies that do nothing but buy patents and you can check with them too.

Sometimes your competitors or suppliers may only want to purchase your customer accounts without purchasing your company as a whole.

Winding down a startup is never fun

Unfortunately, if you decide you need to shutdown or sell your startup , you cannot look backwards. You must continue to look ahead.

Professional investors understand these things happen how you handle the situation will determine your reputation and possibly your future if you ever choose to try again.

conclusion

Being a startup up founder is not, was not and will never be glorious.

Bill Gates , Mark Zuckerberg and Jeff Bezos like professional athletes have relentless focus and extraordinary work ethic .

When they were building their massively successful companies they were not running around speaking at conferences and trying to become media superstars while building the company .