Investing in a startup and having it fail is the sort of experience many high-profile companies look for.
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I will never forget the day we met. It was in the meeting room of a tall inner-city skyscraper. I had a date with a training session and he was the facilitator.
His job was to tell us what the future of our industry might look like using the evidence he had collected of emerging technologies. What was so enduring about him is that he always wanted to build people up. A conversation with him made you feel awesome and like you could do anything.
As my career continued, he kept appearing from the sidelines with small gifts of wisdom. There were other times where he would appear secretly to do massive favors for me, which I wouldn’t discover until later. We worked together for a few years until one day, he tapped me on the shoulder while I was walking briskly through the lobby to grab some lunch.
He told me that he was leaving his career behind to create his own business.
He was in his 40’s, had two kids and a wife that depended on him bringing home the bacon. Many people thought he was flaming nuts.
He wasn’t your typical social media entrepreneur type with the laptop under his arm, board shorts on, and selfie by a newly rented Porsche parked on the cliff of none other than the rich and famous paradise of Malibu.
Like any good mentor, we stayed in touch. He spent lots of time building his product with a small team and pitching his idea to businesses who might be interested in his fresh approach to education.
Over the two years he ran his startup and didn’t have any money coming in, he spent $250,000 and struggled to make any money at all.
One day I gave him a call for some career advice. My naive assumption was that he was on his way to a Unicorn Exit with some Silicon Valley Tech Company and getting ready to set up his own venture capital firm. This assumption was wrong.
As soon as he picked up the phone, something was off. The usual positivity in his voice was overshadowed by something darker. I knew what it was because I, too, had experienced it: startup failure.
After spending everything he had to build the business and running out of money, the look of desperation on his wife’s face and small children was too much for him to bear. He made the brave call to shut it all down and suck up the $250,000 loss he had created.
It was tempting to ask him what went wrong, but what I realized is that everyone has their endpoint. You can always keep going and the question becomes “for how long?” That answer is different for everyone.
There is only so long we can chip away at something and decide that the pain of continuing outweighs the relief and potential payoff of starting a brand new life in another field.
Afew months after this phone call, he landed back in a corporate gig working for a large American Company. Around the same time, I was trying to reinvent my career and rang him for advice. He was a different person.
He wasn’t broken from his startup failure; he was better for it.
The experience of running a business allowed him to learn what it’s like to have skin in the game and risk everything. By attempting a startup and having it not work out, he was able to get a much better corporate gig that encouraged him to take his entrepreneurial experience and use it in new creative ways.
The reason this was possible is that you don’t have to own a business to be an entrepreneur. Entrepreneurship is a way of life and a mindset which can be applied to any aspect of life.
The conversation with him was refreshing and what he taught me was this:
You will never know unless you try
If you have that burning desire to start a business and be solely responsible for your output and income, do it.
The alternative is to sit and wonder what it’s like and end up regretting your inability to try it for yourself later on. You can exit the workforce for a year if you choose and return later. You will not be banished from traditional work just because you risked your savings on a startup.
Side hustle vs. going all-in
My friend went all-in on his startup. The other option would have been for him to do it on the side until he had enough traction. Both strategies are valid and have their benefits.
Side hustles allow you to dabble in business and work on it after hours. This is a softer approach, but for some people, it can cause them to never fully commit while for others (like me), it can work extremely well.
Going all-in on a business and quitting your day job forces you to find a way to make it work. It gives you skin in the game and urgency to test ideas and get some traction. The desperation of not having an income, though, can force you to make dumb decisions or give up too soon.
$250,000 invested in a flop is an excellent investment in your education and resume
Shhhhh….let me tell you a secret.
Investing $250,000 in a startup and having it fail is the sort of experience many high-profile companies look for. Having entrepreneurship listed on your resume is that tiny little skill that is slowly becoming in demand.
In the old days, entrepreneurship could be perceived as a threat; in the new world of work, entrepreneurship is viewed as a superpower that you can’t buy for a six-figure cheque made out to a university.
The best education is experience and being the founder of a startup that loses six-figures is the equivalent of the Hell Week training the Navy Seals do to build the mindset required to endure the toughest situations known to humankind.
I can hear Jocko Willink right now shouting in his raspy army voice, “This is the best learning you’re ever going to get soldier!”
You can still help someone when you’re at rock bottom
While my friend was dealing with the transition from losing $250,000 on his startup and returning to corporate life, he decided to help me.
My career had taken a turn for the worse and even though he was in a tough position himself, he showered me with phone calls and SMS. He gave me advice and did countless introductions for me without ever asking for anything in return. I realized that the greatest thing he taught me was that we can still help others when we are at rock bottom.
It’s embracing the suck we have created for ourselves and helping someone at the same time that miraculously causes our luck to change. You create your own luck by helping someone else.