> When I was raising my first round, it fell apart because
> an A-list investor who had given us a verbal commitment
> backed out. He did this because he had heard from his
> friend, who I had went out for beers with, said that we
> were struggling and unsure of what we were doing. I don't
> blame the investor for backing out and I don't blame his
> friend for relating his honest opinion he took away from
> our conversation. But I will tell you that I now never
> share my struggles with anybody I think might be even
> remotely close to affecting my future opportunities. And
> in San Francisco, that pretty much means everybody.
And so founders who want to have the best chances at "winning" have to create an aura of momentum, of inevitable success, around themselves and their companies. That's perfectly understandable too.
How would you even fix that? How do you even define the problem you're trying to fix?
The name of the problem is "uninformed decisions". Lacking real information about startups, the VCs rely on signals - social signals, their own prejudices, "common sense", that sort of thing. Had they had understanding of the field, or understanding of the emotional rollercoster that is building a new business, there would be much less reading of tea leaves. In fact, a hypothetical competent VC would inquire until he finds the weaknesses both in businesses plan and the team approach and morale, so that he knows what the problems are, rather than run away when he finds some.
To put it shortly, the problem is "dumb money".
The answer to this problem is "smart money". Raise funds from the insiders of the industry you're working in - at least they know half the game. And also from the startup veterans, as they know the other half of the game.
Dumb money has no place in the early stage business funding. The reason why dumb money saturates the startup discussion is the same reason why the interest rates are low - dumb money is at oversupply, so they are trying to get into every credible investment opportunity.
The hard part is finding those people :)
Not that this is necessarily a good idea, but in terms of psychology it makes sense to me. Plant a kernel of doubt so that people ask real questions, and if they don't get honest sounding answers hit the door. Gives an incentive for founders to be honest with both themselves and others and less downside to doing so.
I was definitely told by several VC folks and by even the NSF grant office that if they get "overly optimistic" coming in the door, they tend to ignore what they say. Having a realistic appraisal of your problems and advantages is a sure sign of delusion and lack of maturity.
If you're down, that's fine. Everybody has rough days.
Depression, the kind that leads to suicide, is very different.
I've spent quite a bit of time around depressed and suicidal people: My brother (whose son committed suicide), both of the first two girls I fell in love with, and more than a handful of friends. So while I'm not a psychologist, I can speak from some experience as to what they go through.
A friend of mine once described depression as being this massive black ball that hangs in front of your nose that nobody else can see. It blocks out almost everything else in your vision, but nobody else believes it's there.
When you try to talk to people about it, they treat you like a crazy person, because they can't see this massive thing that is impacting your life.
The people that suffer from this are treated as if they have some type of permanent crippling disability, rather than a treatable medical condition. Oftentimes when they try to get help, they're ostracized by their peers because they're a "crazy person" because they've got a mental illness.
Mental illness. The label obliterates the person underneath.
People that talk about it, that try and get help, find that they've got fewer friends than they used to. That fewer doors open, because nobody wants to hire or invest in a crazy person, and even after that person gets the treatment they need, the stigma remains.
Many startup founders and Silicon Valley hotshots exhibit the signs of severe depression, but it's completely taboo to talk about it. Admitting that you're spending time working with a therapist or taking medication is effectively a career death sentence (unless you're already a success). And so the problem stays buried, and every now and then we hear about another bright mind that just couldn't take it anymore.
More people need to come out with these problems, so that we can talk openly about this as a community, but that process needs to start from the top, from the investors and the big-time successful entrepreneurs.
VCs may find overly optimistic people suspicious, but I think overly confident is met with boundless praise in most spaces.
The first is about the project and the latter is about the person. Someone can say, "Oh you know, we have x, y, and z obstacles, but I know we're going to beat them." That's admitting there's problems. But if they said a word about doubting themselves, well, no one ever applauds that. And the inability to be truly open and vulnerable as a human being seems to be the stuff that leads to desperate loneliness and suicide.
However, there's an optimal amount of humility and self-doubt that people are looking for. Deviate too far away from it, and people run for the hills. It's just another pattern-matching tool.
I think you meant "Having an unrealistic ..."
The competitive nature of the marketplace has inherent perverse incentives. It doesn't get fixed, people just tend to adjust their world view in one of many potential ways that allow them to stop seeing it as a problem.
Well, we can't all be Bill Fucking Nguyen thank goodness. I suppose it's expecting too much for people who are responsible for investing millions of other people's dollars to realize that sometimes people who appear "driven" and "visionary" are actually "full of shit" and "criminally insane".
I know that I'm well off. I know I'm incredibly lucky to be working on exactly what I want. I know what I'm working on matters and will have a huge impact on the world eventually. And yet, the uncertainty of success (or at least its timing), and the inexplicable daily feeling of unworthiness/ineptitude combine to put stupid mental roadblocks in my path.
While unsurprising, it saddens me that an investor would pull away from a founder because they found out he was human. Silicon valley's greatest strength is accepting and embracing failure, I hope that strength will begin to extend to embracing the humanity of founders. If you expect founders to be perfect models of confidence, skill, willpower and brilliance, you will be lied to and eventually disappointed. It strikes me as part of our culture's maturation process that we begin breaking down these myths and replacing them with understanding, compassion, and realistic expectations.
Without it, we'd still be living in huts and hunting prey, because on an absolute basis that is way better than sleeping under a tree in the cold.
It's the thing that lets a child enjoy watching a lion at the zoo, behind glass, angrily advancing and pawing at them.
It's the thing that makes a billionaire keep working hard at the next big thing, despite them having enough money to not care.
Our inability to be perfectly happy and content with our situation, in an oddly confusing way, is what makes us so great, what makes us continue to strive to make things better, and get out of bed every morning to continue advancing humanity.
They don't care if you are happy or not, as long as you are potentially reproductively successful. They are so stupid they can't even tell the difference between drug-based euphoria, or other addictions, and genuine success. And our genes don't even care if the entire ecosystem collapses underneath us, because the whole species is acting the same way.
Sometimes this restlessness does "advance humanity", but that's not inherent in what our genes want. It's only because we have carefully set up institutions and practices such that the best way to compete is to serve other people.
But, barring the discovery of some infinite source of non-polluting energy and materials, at some point - either tomorrow or in a thousand years - this restlessness will have to be tamed. In short, there are limits.
And for individuals, those limits are much nearer, and the benefits of controlling your desires are as well.
Under its other name, the ability to adapt to misfortune, this inability has been a very useful thing for humans to have.
If I could play the devil's advocate for this story--we've only seen the founder's side. In this blog post, I see no description of what the pitch to the VC was like. It's possible that these doubts and struggles were not discussed between the founder and investor. If this is the case, the investor has a reasonable stance for re-evaluating the verbal commitment. Why expect full disclosure later when you're not getting it now?
For me, I wouldn't even share my struggles with my best friend. It's hard to explain exactly why that is, but I don't think I could do it. Some things it would be easier to tell a random stranger at a bar... maybe because they don't have any expectations of you, and you don't have to worry about a feeling of letting them down, or disappointing them or whatever.
Having to maintain a never-ending facade of success and happiness really is draining.
No doubt.
Learning to be able to confidently say "I'm very concerned our company might die if we don't do X by Y because of Z" was one of the hardest and the most rewarding things I learned how to do.
I found that skillfully expressing my real feelings leads to much better results than not expressing them at all. If you pay careful attention to how politicians speak, they often utter phrases like "I'm very concerned about..." It sounds odd at first, almost fake, but when done genuinely it can be a source of great strength. You don't need to fake things in a time of crisis. You can share your darkest fears with people while maintaining a confident demeanor, and it does wonders for how people perceive you.
Of course this is harder to do than to say. I'm still learning, but a while ago I resolved not to hide my feelings from people anymore.
A few years ago I ran a phone/email group of some fellow entrepreneurs to help support each other - it ran its course and people moved to various stages of life and business at different rates, but was extremely useful for me to help put perspective on issues I was having in business.
I've also recently found a 'support group' of sorts in a local business group in town. Most of the businesses aren't tech related at all, but the support and being able to just be honest about issues 'in private' is very useful for all of us.
EDIT: If anyone is interested in starting/joining an informal support group, ping me at mgkimsal@gmail.com.
One reason, I think, that I don't use my best friends for a sounding board on this, is that they are too likely to be supportive and encouraging like that, and I don't think I want that kind of talk. For one, I'm too old and there isn't enough time left for that kind of thing. If this startup fails, it's pretty much "game over" for me, as I see it. So any talk that isn't "fuck or walk", "do this or hit the bricks pal", "do or die", etc. is counter-productive to me.
Rational? Probably not. But I don't want any fatalistic talk, or overt acknowledgement that failure is even a remotely reasonable option, because it might give me an excuse.
Of course, explaining why I put so much internal pressure on myself is a whole other story. And one that I don't feel like I could ever really tell anybody. It would involve too many uncomfortable truths and too much digging around in my past.
Easier to keep soldiering on, amped up on a steady dose of heavy-metal, adrenaline and caffeine and a mindset that there are two outcomes in front of me:
1. Succeed at this startup, and achieve some things I've been questing after my whole life.
2. Emulate Nick Cage's character in Leaving Las Vegas.
I have 3 friends that are very close to me, and they know every detail of my life (and so do I of theirs), good or bad. When I do need advice, or they do, we can rely on each other to get some feedback on any thing. But I trust them and I know they will have my back, and they wont divulge my personal details.
People that don't form these type of friendships are missing out. It makes the roller-coaster so much easier, and especially when going through life changing moments (job changed, marriage, breakups, etc).
I might have to add though that I suspect the startup community is full of people that are partially inside the bi-polar spectrum. Sometimes it takes a bit of a mania to start something new or crazy, but that euphoric high is always followed by a depressing low. Adding the uncertain nature of the startups, the emotional rollacoster becomes even more crazy and magnified.
....
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Addition: The arm-chair psychologist in me says the author might have had BPD symptoms, (borderline) during his childhood:
"I cried in private, hoping that my cries might just be loud enough for somebody to hear. I hit myself, to create physical pain that might distract from the emotional."
The OP resonated quite strongly with me, and I am neither a founder nor (currently) an employee of a startup.
IMO, the struggle that is described here is inherently universal. It's shared by anyone who has to maintain a facade of success while facing intense insecurity (often financial).
Likewise, the emotions described will ring very familiar to anyone who suffers or has suffered with depression - regardless of triggers.
> My personal bank account & business accounts both overdrawn, tens of thousands of dollars in debt to family members and my credit cards maxed out or closed. I've had no cash in my pocket and a dwindling supply of food in the cabinet.
On a smaller monetary scale, that is in fact me at this very moment. Last week I was de-facto homeless (living in a $10/day rental car). I don't want to wax poetic about my mental state at the time, but it bordered on the worst.
I was eventually able to swallow my pride and confided in some close friends and family that I was tapped out financially, physically drained and psychologically in quite a dark place.
Knowing, viscerally, that I have a support network that is in the know about my situation and willing to back me up was very powerful. If / when I move past this particular time in my life, I know that I most likely could not have done it without them.
I think I used to view that as a sign of weakness and dependence. Perhaps it is, but that's not really something that concerns me any more.
There is so much to say on this subject, from various perspectives. Me, I'm stuck in Europe (offers-a-plenty, no chance for a visa). I am a founder of a start-up here, and I cannot complain about how it currently runs - but the things I've been through to get here ...
A lot about the start-up culture is simply different here in Europe - so maybe I am a little out of place among you. But what I believe is largely the same is the pressure, the stress, and the pretending. There are but few people who really understand what you are going through. "Why don't you just quit and get a (real) job ?" - if I had to raise a finger for how often I've gotten this response in dark times, I would be several hands short.
I believe there may be a need for some sort of chatter group for this. Maybe a tad unconventional, perhaps with a respected gate-keeper (like @Bubs) to check on people before they are let in (prevent moles), but once inside, everybody is anonymous to everybody else, and all conversation is group-private. You could be Mr Brown, I could be Mr Black - as long as I'm not Mr Pink. Perhaps it could have prevented what happened to those two founders mentioned in the article. I would be interested to join it, both for giving as well as receiving support. The good just writing something that the people who read it would actually understand could do.
Take this post for example - http://pastebin.com/BgxFCTEC . I wonder if whomever wrote it read this response: http://swombat.com/2013/2/21/truth-failing-startup and maybe felt better or even changed his view, or never saw any of the response and is sitting at his desk staring at the wall, wondering why (or if) he's still here.
In 2006 we got bigger and reached to about 40 people working in 4 different countries. The financial crisis of 2008 brought us down (by accelerating the damages of our mistakes) and by December we went down to just 10. It was the most depressing Summer and Winter I've had.
In 2009 I worked for bouts of 50 - 60 straight days trying clear up the unfinished commitments we had with our clients and almost burned me up in the process but we got through.
Things went upward trajectory until early 2011 where the country I am located went through a revolution. Our local customers suddenly couldn't pay on time and we have had majority of our pending new contracts cancelled. My girlfriend of 5 years broke up around the same time and suddenly I stared back at the abyss that I thought I have left behind 2008.
It's been two years since that time and things have gone incrementally worse. It's a drip by drip bloodletting.
These cycles of advances and failures are exhausting. I was supposed to get better at this "be responsible of other people's payroll and livelihood" thing after ten years but I am not.
I still try though - every single day - inch by single fucking inch. I don't know whether this is grit or just denials. It's a close call.
Fame is not real. It is little more than a flash in the pan of mainstream consciousness. As soon as they've discovered you they're looking to move on.
If things are really going well for people they will say things like we doubled our user numbers, became profitable, received an investment, got aquired, had an IPO.
"Killing it" is just a vague thing people say when they have no actual success but won't admit it.
> chartered plains vs first class
> there “limited success."
> either are or we're very depressed
I am thankful for this, very very thankful. I used to be, for lack of better words, a prick (still am, to a lesser degree!). I would spend money on trivial things. Now I know much better the value of a dollar, and have a least a little bit more perspective on the struggle that many people face ($30k in debt might seem trivial, but I paid as much as others with $200k of student loans due to high interest rates). As of today, I am almost debt free.
Startup culture really saddens me, not because of the chase for wealth - there is nothing bad about that. It saddens me because young people get rich really quickly, many times straight out of college or earlier. They never know what it is like to carry debt. They get rich, and they have no perspective. Elitism is not at all uncommon, subconscious or not, and it has nothing to do with how liberal you are, what charities you donate to, etc. Obviously, I do not look down on these people, I just wish they could experience legitimate hardship for their own benefit.
An investor should get a real and full analysis of the business, with accurate numbers, so it should not have come as a surprise or a fallout if someone said they "were struggling", because simply, their numbers and growth should have shown otherwise if they were actually worthy of investment, and no conversation should have been able to sway that.
You should never fear a transparent conversation with others getting back to important parties as long as you really have nothing to hide.
And again, the point of my post is to say... Yes, we're not fully transparent with people because everybody else isn't. We're to blame first for the lack of transparency. I'm making an effort to change this.
I would be very reluctant to share some of my own internal fears and self-doubt with anybody. Some of it is pragmatic (what if that person relays it to an investor), some of it is ego, some of it is, well, who knows?
In truth, there is no place for self-doubt. It shows a lack of trust in your past-self and the decisions he made. You made the best decision that you could. (There is an exception, of course. If you made a decision when under the sway of some passing, mental evil: arrogance, greed, malice, hatred, then you might want to revisit the decision.)
The vast majority of mistakes do not come from some personal lack. They come from bad luck. Which is why individuals, as much as investors, need to diversify. Create more than one path to success.
(This is such good advice, maybe one day I'll take it! :)
Bullshit. I probably won't be able to pay rent unless my client pays my invoice next week. And that isn't very unusual.
I'm not about to kill myself, because I am used to the constant stress and poor health and barely getting by, but the point is, a lot of that post was just bragging, and financial security DOES matter.
I honestly don't feel sorry for rich people who want to kill themselves.
Bubs taught me an important lesson. A lending hand to a fellow entrepreneur can take you a long way. I am sure all of us entrepreneurs can relate to this article very deeply.
Thank you.
http://techcrunch.com/2012/05/28/the-art-of-raising-seed-you...
"While I was in Thailand I got a dotted line tattooed across my wrist as a reminder of all those who didn't get another day, who all would I'm sure do anything to have just a little more time. I got the cut here line tattooed on my wrist to remind myself that if I ever don't fully appreciate the opportunity that I have and the life ahead of me, then I don't deserve it and it can easily be taken away. To me it's a very positive reminder, with a dark but real truth behind it."
I can't help but see parallels here to Hollywood and the struggling actor. "Things are great! I've been in a few indies you probably haven't seen..."
I hope in time, with more stories like this, the mainstream will better understand the more human side of an overly romanticized place.
I think people lose a lot because of this. First, they do not let share their struggles with each other. Where I came from people used to complain and exaggerate about their money problems, but nevertheless they share. Without sharing, there is less emotional and practical support from friends and family.
Secondly, without talking about money there is less chance to learn and cooperate for successes. If my friend wants to do X and never mentions to me that, I have no chance of telling him what I know about it from my experience or from my other friends experience.
I like to think of James Altucher's advice that you will be most happy when there are the fewest amount of people in your life who have the ability to create negative influences. In this case, having that investor mean so much to you that it has a severely negative outcome on your emotional well being is not worth it. I've come to realize that less stress is definitely worth more than extra income, in the long run.
This article is not for them.