Startup fears we really need to talk about but don't
Thanks to Silicon Valley Comes To The UK, I spent last week in London with the most inspirational entrepreneurs, startup founders, CEOs and their key employees. From mentoring roundtables (at Buckingham Palace no less!) to hushed one to one confidences, it became clear that some of what I am writing about in this blog is striking a chord with its intended audience.
As one person put it "you're saying it like it is and writing things I want to talk about but I can't because I have investors and a board and staff and I can't let people know I feel like this."
It's my honour - and because right now I don't have any of those things, I have way less to lose by putting this stuff out there than many of you do! Seriously, I am just glad to find some purpose and meaning in having "got resigned". So here's a post shining some light on a few more of those things entrepreneurs want to discuss but feel they can't.
But before that, it is so important you understand it is OK to not be OK. Don't be put off by your peers' amazing PR and their supposed success - the reality is always tougher and rougher than it seems from the outside looking in. Because getting it wrong is the best teacher and leveller, we entrepreneurs are a supportive tribe that sticks together. So seek each other out, use networks like SVC2UK, talk to each other, or get in touch in and talk to me. Just remember, you are not alone, however lonely you feel:
No one feels like they know what they're doing - at least not all of the time. And we're not just saying that. In a particularly surreal moment last week, my table of female founders and startup employees found ourselves giving peer to peer advice to one of the coolest, most famous, most sorted-seeming and all-round incredible women in IT as she declared "I have literally no idea what I'm doing". A brave opener to a frank conversation that I think we all learned from. It can take significant experience to allow yourself to be that vulnerable, but try it - the generosity of wisdom and support you will receive as a result may surprise you.
The flip side, it's OK to be comfortable that you don't know what you're doing, as long as you don't blindly assume that another's around you do. Especially those who simply by their job title are presumed to be wiser than you. A classic first-time founder/CEO mistake is to surround themselves with boards, advisors and other older and supposedly wiser heads, who confidently declare that they know exactly what they're doing, whereas you clearly know nothing and are unlikely to survive without them. They may not even explicitly say this - you may have the entire imagined conversation in your head. But your lack of confidence combined with their arrogance or reputation can take you on a costly and unhelpful path.
I would say the majority of first-time CEOs I have spoken to admit the mistake of ignoring their own instincts in the face of "adult supervision" or "advisors" who confidently declared they knew best - but didn't.
Don't be broke for a moment longer than necessary. The stress of personal finance, or more specifically the lack of it, can become crippling for an entrepreneur. Anyone who hasn't been involved in this up close has any idea how flat broke entrepreneurs tend to be - or how long that goes on for. In the beginning you bootstrap, you put your own money, sweat and every waking moment into the business. Super frugal becomes normal. Then a few years go by and you've raised money and you have a team and yet, you're still broke and still super frugal. It feels counter-intuitive to take any money out of the business, even as others all around you do. Then one day you're out of the business - by choice or otherwise - and either your replacement is on 4x your salary, or somehow everyone made money but you.
At some point, as early in as possible, you need to transition on to a fair wage and benefits because it makes no sense at all if your personal finances are a unnecessary distraction from your performance.
I don't know the right answer to this one - but I know did it wrong by paying myself significantly less than all of my executives and not sufficiently leveraging my success outcomes into additional equity-based rewards at each stage, rather than deferring to an ending that never came. The consequences of that approach meant that after five and a bit years of earning half of some of my employees, and just a third of my market rate, I left my own business with no payoff and nothing in the bank. Fortunately, we entrepreneurs are a resilient bunch! Still, I wholeheartedly agree with Debbie Wosskow who said at SVC2UK last week that we need to start being open and specific about our personal numbers, as we'll all gain from a frank and honest conversation around pay and terms.
You're not evil for resenting your team. Let's be totally honest here - when you are all in, not sleeping, the money is running out and the sky is falling in, how damn annoying is it when your team is happy, relaxed and not showing any sense of having a care in the world, let alone a sense of urgency? They're eating donuts and laughing and chatting. You're not sleeping because you're wondering how on earth you're going to ensure they get paid and they're wandering in late and generally having a great time.
Even the most emotionally intelligent entrepreneur may feel inclined to throw a hissy-fit at their every now and again. The incredible culture you have built, the happy environment you have carefully created - at great personal cost - can suddenly become a source of irrational but intense resentment when everyone gets to play but you. As a leader, you cannot discuss this with your team - though you must take urgent and pro-active steps to address any genuine productivity issues. (A post on that theme coming soon!) This is the time to let off steam with your peers.
Interestingly, it is my experience if you are truly a trusted leader, and if it really is the last roll of the dice - as in an actual existential crisis, rather than one mostly in your head - then being honest with your team can unleash productivity, camaraderie and genuinely brave feats of "getting stuff done" that had previously seemed impossible. But... see all the above caveats. You can't demand it, only inspire and earn it - and remember what happened to the boy who cried wolf!
4am fear. A real and recognisable thing for many of us - almost comforting in its predictability. Until it gets out of hand or gets earlier and earlier, consuming more and more of the night (see the next point) I personally think the best you can do is recognise your own version of the 4am fear and manage it to your advantage. I found it helped to note down the first fear that came to mind, acknowledge it as a priority then try and go back to sleep. If that didn't work, I'd make a cup of tea, acknowledge that I needed to schedule time first thing to tackle or think about this, then try and go back to sleep. So much more effective and less exhausting than trying to do all the thinking there and then. It can also be a useful tool for prioritisation or hearing - unfiltered - what your gut/heart is trying to tell you. Until it starts a feedback loop you can't break...
We all lose our mind at times. The scary thing is just how dark those dark places can be. I have previously written about being so tired, stressed and having a meeting so awful that I willed my plane to crash, as that genuinely seemed my least bad option. From the very private stories many of you have subsequently shared, I now know that I am not alone in that intensity of dark feeling. Thank you all for your openness because I no longer feel like the freakish failure that I previously did! And neither should you.
So if you ever feel you can't or don't want to go on with your startup, or that it is all too much to cope with, know that this crazy intense roller-coaster of entrepreneurship is one you are not alone on. Share how you feel with someone who is well outside your business (eg not your board, chair, business advisor - they cannot really take your side even if they want to). But someone with a bit of distance and experience who understands. A fellow entrepreneur, a coach, a therapist, a friend - just don't stay in that dark place alone. It does, it will get better.
Board battles can destroy your company and destroy you. I know founders hospitalised from the stress of board tensions, and it certainly had an extremely negative effect on my personal health and ability to execute effectively. Boards are supposed to support the management - well right up until they don't, and they replace the CEO. Yet frustratingly, especially in startups, there is scenario and after scenario where the management is headed on one path, the board on another, and there are insufficient skills, experience and emotional intelligence on either side to come up with a suitable win-win that is appropriate to the company and founders' stage of development. And the power sits with the board, so it isn't an equal battle.
We are not talking FTSE 100 companies here, yet startup boards frequently execute a governance heavy playbook that is in my view often deeply inappropriate. It is hard to downsize or fix board hiring mistakes after the event - but getting it wrong doesn't tend to end well for the founder/CEO. There is a difference between letting go of control and letting go of power. I'd caution every founder and entrepreneur to never give up power carelessly or prematurely and to take advice from their peers and experienced startup lawyers prior to forming the body that will control their company's fate.
Being visionary/strategic doesn't always happen on demand. Whether you are the founding visionary, a strategic genius, or are moving into a new role where you are supposed to suddenly slot strategy alongside all your non-stop, every day operational stuff, it can be terrifying if you don't feel the burning clarity of doubt-free vision at the moment when it is most demanded. There are those times when fear, exhaustion, data-overload, people-overload can make you feel like you are thinking through treacle - if you are thinking at all. Doubt may be a whole new feeling for you - especially if that doubt is in your path or vision.
When your head is working against you, you need to switch off and reboot to be able to work past this. From the mythical trip to the mountains, to simply blocking off some thinking time in your schedule so you can doodle in a darkened room, you have to make the time, space and conditions that let you reconnect with yourself, so you can be your brilliant self again. You are not flawed or a failure, you are operating in horribly sub-optimal conditions. If no one else is doing it for you, carve yourself out a sliver of whatever you need to find you and run with it.
All the endings that are not so happy. From fire sale exits to, well, firings - unhappy endings don't make good PR clippings or LinkedIn updates. That means what you read about is massively biased toward a reality that if it exists at all, is far more nuanced than reported. Founders do big raises, but lose their job and can't convert their own equity into cash. They have big exits and yet make no money. They get bought in aqui-hires that really don't workout for them or their team. And that is OK, it's reality - they learn. But unless we talk about it, no one else will. We should be proud, not ashamed, of being a walking cautionary tale! And hell, statistics suggest your chances of success improve with every failure!
The #*!# list From potential investors behaving highly inappropriately, extreme toxic manipulators, liars and frauds, to incompetent and greedy consultants exploiting cash-starved young companies for their own gains. It is a small enough world that serial abuse should not be possible. We owe it to each other to share our experiences. Informally, via WhatsApp, in huddled corners, over a call or over coffee - I don't know the answer, I don't have a manifesto. But I do know I cannot stand injustice and I don't want to see toxic, corrupt, incompetent or abusive people hurt and keep hurting my peers, colleagues and friends. Ask, tell, warn in a way that keeps more of us safer.
Sometimes there are simply no good choices. When there are only horrible choices, I believe you should do what it takes to let you look yourself in the mirror in good conscience and stay healthy enough to live to fight another day. Play all your moves until playing on is the wrong move. I turned down investment with just £200 left in the bank because taking it would be wrong - I thought the company would die as a result of my decision, but it was still the right decision. Later, I resigned rather than pursue a path I fundamentally disagreed with.
Giving up, walking away is not a remotely an easy thing to do - especially if it involves abandoning your own creation - but sometimes it becomes the least wrong choice and therefore the right and necessary thing to do.
Even a decision as tough as this doesn't have to be taken in complete isolation. At this point you don't need more data, you don't need your staff, investors, board, family giving you contradictory advice. You need quiet human empathy and emotional intelligence. Two mentors with very different but equally inspiring and pragmatic styles coached me into and after my most difficult decision. And for no reason other than they had lived it, they are good people and they cared. Let people like this into your life and don't be afraid to ask for help. It is a sign of strength, not weakness when you let the right people in.