Startup Therapy Podcast

Episode #203

Ryan Rutan: Welcome back to the episode of the Startup therapy podcast. This is Ryan Rotan joined as always by my friend, partner and the founder and CEO of startups dot com. Will Schroeder will. It is no secret that sometimes startups fail. And when that happens, sometimes there's some guilt involved. But who is it that ends up feeling guilty when their startup fails

Wil Schroter: all of us? Like there's like, there's like, not a single person that has that fate. And I think what's interesting about it, I think what the psychology of it's amazing and that there's only levels of guilt like everybody has it and some people are a little less guiltier than others. But for most of us, for most of us, it's kind of a crushing guilt. Like it's a brutal, brutal, crushing guilt. And what kills me about it is, it's so destructive to us and it's almost entirely fabricated. It's a prison of our own making.

Ryan Rutan: It is absolutely. I, I watch feminist because all the time I've been through it, I'm sure you've been through it where you just allow this to bury you. I mean, there were, there were, I remember and look, this is in the middle of a start up. It, it actually didn't fail when we lost a bunch of clients revenue went to zero, but we didn't actually end up failing. It felt it was, it was failure for the time. It was a temporary failure. And I think I've shared this before but there was a point at which where like my phone would ring and I would immediately get tired like my phone would ring and I would just be like, oh, and it was just anxiety and depression, right? And the guilt of what had happened to the startup. And I didn't have good answers for anything at that point other than just like, try to keep plowing forth with zero revenue and a bunch of liabilities. And it was awful and you know, that was, was less guilt than just abject, you know, fear and worry. But we watch founders go through this all the time and they end up putting on this guilt show, right? That I'm not really sure who benefits from. I think the founders believe because I know they, they, they tell us this and like, you know, they feel like they can't feel good, they can't like, because sometimes I've talked to founders but they're like, man, we failed. It was like, and I feel really guilty about it, but I also feel a little bit relieved, but the relief never shows through, right? The relief never shows true because they, they don't feel like they're allowed to feel relieved because they let all these people down and like, if anybody sees me smiling, somebody could send a photo of that to my investors and then they're gonna come and shout at me. I don't know what they're actually scared of, but like this is what it feels like. Right.

Wil Schroter: Well, let's talk about who we were guilty to, ok? You know, who are the parties? So it's always the same folks. It's always starts with the employees, right? Because you know, we let them down, we were responsible for them and we are, we are responsible for those folks, right? So that's an obvious connection. If you had investors, people are always feeling guilty with the investors because it felt like five seconds ago, you were just standing in front of them telling them how big of a vision this could be and how exciting this could be, etcetera. So in relatively short order and funding rounds typically last 12 to 18 months. So it's pretty short order. In relatively short order, you're, you're having the opposite conversation saying that everything went to hell. So, you know, that contrast is pretty intense, fairly stark and then you've got customers, you've got what I'd call the community. Sometimes people aren't necessarily customers but they follow what you do. You know, either in social or something like that. You've got what used to be the media, which is really now the community now. But you, you have a lot of stakeholders that you were accountable to both directly and implicitly. And we are incredibly good at being certain that all of them now are doing nothing but wringing their hands with how much they despise us. Which is, you know, we've talked about before. It's not really the case. No,

Ryan Rutan: it's not. Yeah, I mean, we're, we're the ones that dwell on it. Nobody else really. It's a blip on the radar for everybody else. And it's, it's a big deal for us. You know, why founders feel this need to feel this guilt is beyond me. You know, does, does every barista in L A feel really guilty that they didn't live up to the potential that they said they were going to live up to when they moved to L A. Like I'm gonna be a big star. I'm gonna do all these things like, no, maybe not, right. The guilt isn't there? I analogized it with a founder a couple of weeks ago. We were, it wasn't even an analogy. We were just talking about previous life experience. And I was asking like, did you ever get fired from a job because of performance? He was like, yeah, you know, like three jobs out of, out of school and, you know, I wasn't living up to expectations and, you know, we had to have the hard conversation and let me go and I was like, OK, so you failed and people underneath you probably suffered because that, like things happened. Right. Did you feel guilty about that? And he was like, God, I was pissed. Right. It was like, I was pissed at them for, for not, you know, helping me to, to succeed. I was pissed at myself for not for not doing it, but the guilt wasn't there. And I was like, ok, so why do you feel guilty that you're thinking about shutting down your, this is this is somebody who's not even hasn't done it. They're just like they're looking at the macro economy and they're saying like, look based on everything that's happening right now, you know, in the limited runway that we have failure feels imminent. So this fella, you know, preemptively feeling guilty, which is even even worse for you, right? Kind of dictates the outcome.

Wil Schroter: Let's picture a spectrum because I think you and I can set up what guilt means versus other emotions and talk about how guilt specifically triggers some really bad behaviors that are dangerous. So let's use a spectrum and let me know if, if you think this makes sense on one end of the spectrum is disappointment. We lost the game. I'm disappointed on the other end of the spectrum is guilt, which is, it's all my fault kind of thing right now. Sometimes it's just all your fault. Sometimes you actually did all of that shit and, and that is on you and even then there has to be some threshold where you have to let go of it. Ok? And that's really a lot of what we're talking about. But let's make sure before we get into it that we say disappointment is, makes sense. Of course, you're gonna feel disappointment. Why wouldn't you? And, and that's self realized in everything else like that. It's when you start to code down this other chasm, which is guilt that brings with it. It opens up so many potential wounds, not just in the past, but in the future. That's the side of it that I'm a little bit more concerned about. How about you? Yeah, for

Ryan Rutan: sure. I mean, yeah, of course, we're gonna be disappointed and yeah, and then there's a whole host of emotions that go through that, right? We can be, we can be angry, we can be sad, we can be disappointed. But I think when it starts to manifest as guilt, this is where to, to your point, the, the bad actions start to start to come. Exactly. Exactly. And we see found go off the rails in all sorts of different directions. Once guilt becomes the main driver, right? Once you fall into that guilt trap, then we see, you know, anything from depression to substance abuse to just like floundering for long periods of time, not knowing what to do with themselves because they can't get away from the rear facing, sort of, you know, guilt. You know, throwing salt in their own wound and just continuing to revisit that well, beyond the point of like, look, there, there is some value in doing the postmortem on. We want to learn from it, we want to learn from the failure, right? But we don't need to wallow in it. Right. There's, there's no version of pickling yourself in failure and being a better founder the next time. Right. That's not, that's not how it

Wil Schroter: works. What's dangerous about going to the guilt side is guilt brings with it. Liability.

Ryan Rutan: Yeah. Yeah, I agree with him. And

Wil Schroter: it's the liability that spills bad behaviors. And again, when we zoom out a little bit and we say, hey, I'm guilty because we fail. It's important that we state that you are going to fail. Failure is the default state of startups. Success is the outlier.

Ryan Rutan: It's so true and it's so funny. Yeah, you and I know that, I think it's one of those things where it's like once, you know, you know, and you never forget it. Like, yeah, you're most likely not to succeed. Right? And it's one of those things where like you and I talk to all these founders, we have to not let that come through most of the time because we also don't know which ones will or won't make it and we're just there to support everybody however, right. Everybody should know. Right. It's like that, that whole thing, right. You know, there are 10 of you here. Now, by the time we come back, there are nine of you will, will, will not be returning of you are not gonna be coming back, right? Like it's a big deal. And so the fact that we feel guilty over what was the vast majority likelihood is a bit silly, right? Not that we can avoid it because, right, we still want it to be the one out of 100

Wil Schroter: always in, in our minds. We genuinely believe that if we aren't successful, then we're guilty. Right? We, now, here's what I'm saying. Going back to that continuum, which is why I used that. We can feel disappointed. That is, that is a very real feeling. Right? And again, and we can actualize it and say, OK, that was terrible. But the moment we go further and we start to basically beat ourselves up, that's when shit gets dangerous. And a lot of times because we don't understand the failure rate of startups or how that is the default condition. We keep thinking that we must have done something astronomically wrong. Yeah, exactly. From my standpoint, I've been doing startups for 30 years. I've done nine startups. I've had four that worked well and I have the rest that have not every single time it didn't work well. I felt awful. People think differently. People think well, if you've had success, then the failures don't matter. Trust me, the failures matter. Yeah.

Ryan Rutan: Ask Tom Brady how much he likes losing football games. Right. Yeah. Exactly. Exactly.

Wil Schroter: And so again, the difference though, in those losses, if you will was how you treat them if I treat him with disappointment. And again, you know, very self aware of what happened. Great, like you said, lessons learned. But if I start to basically misrepresent what startups are, and I look at them as they're all successful, but mine wasn't and I'm now guilty and by way of that, liable to all of these people, I have just set myself down a very dangerous path.

Ryan Rutan: Yeah, for sure. Yeah. The, the problem is that everybody starts comparing themselves to the successful startups as if that's all of them. Right? They're like, well, there's me the failure and then there's all those successful startups. Right. Well, that's if you take the tip of the iceberg there and then take the tip of that and the tip of that, that's the successful startups, right. What about all the ones that never saw the light of day? The ones that never got famous enough for anybody to even care that they failed. Right. There's tens of thousands of those a month. We just don't see all of that activity. They don't make the headlines. They

Wil Schroter: don't. Right. Nobody, unless you fail really poorly. Right. Yeah. But we take this guilt, right? And then we basically sentence ourselves to this prison and this is the part where things start to really get nasty. We create this sentence in our mind. All of these actors, the employees, the investors, the customers, the community have all had this mock trial in our head where we've been put up on the stand and they've all determined that we're the worst person. We are fully guilty and we owe them restitution in some way. Now, here's the funny thing. None of them ever attended this trial because it never actually exists, ever happens and no one ever, no one ever levied that sentence. The

Ryan Rutan: likelihood they feel that way super low. Yeah.

Wil Schroter: Correct. But we feel it. We create it, we straight up invent it, we invent a sentence and then what's worse? We browbeat ourselves 24 7 for the outcome of that sentence and we do it all the time and what's worse is we don't even confer with anybody else to see if that's true.

Ryan Rutan: No, why would we do that? I was an abject failure all by myself. So I will, I will suffer and wonder all by myself. Yeah. Look, some of it's unavoidable, right? Like, of course you're gonna run through the roster of people and, and imagine how they felt and nothing wrong with that, right? Nothing wrong with doing a little bit of extra spec on, you know how this impacted other people. But the problem becomes that we generally get it so wrong, right? You and I talk to founders all the time, right. Like, you know, I'm sure my investor are so mad at me and you're like, yeah, we know them and actually they were surprised you made it this far, right. We've talked about this kind of stuff before the person that didn't know that this was about to happen. And so no, they're not mad at you or are they disappointed? A little too sure? They didn't bet on you to lose, but they bet on you knowing that you probably would, right? That's the thing that's still so important to remember. The investor ones. I I can just kind of shrug off really easily. I think employees are a bit harder, right? Co-founders can be in a harder early team that founding team can be a little bit harder because we tend to know those folks better. And so they're harder to shrug off. I'm not saying that they're any more mad at us than the investors were. But the better, you know, somebody, at least in my case, the better I know somebody, the better job I can do of that narrative in my head where they're super sad, super disappointed, super angry, whatever it is. I know the word choices they'll use to berate me. Right? I know the expression on their face that they'll use to show me how sickeningly disgusted they are with my performance, right? So that makes it that much worse. I think the closer you are to somebody regardless of sort of their standing in the overall organization. It can just make it that much worse. Right. And then, you know, we, we invent this whole army of imaginary dragons that are out to get us at that point.

Wil Schroter: You know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the answer already exists. You may just not know it, but that's ok. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups dots start ups dot com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it. This whole chorus going through our head. People are going to think X

Ryan Rutan: Yeah. Oh Yeah. Oh no, not going to. People think X Right. People are saying X uh it's awful and

Wil Schroter: so there's a few things that, that we miss when we kind of go down this path. The first is if you're going to be a founder, if you're gonna be playing this game, you're going to lose, you're gonna lose a lot. Actually, you're gonna lose more often than you win. It's the equivalent of you mentioned Tom Brady, if you were gonna go play professional football and you're like, I want to play professional football, but I only wanna win. Yeah. No shit. Right. But that's not the way this

Ryan Rutan: works well. It's such a good analog though because you always want to win. But you're also entering the pinnacle of the game, right? So you didn't say I want to go play rec league with eighth graders and always win. That's possible. You can do that. You cannot say I want to play on the biggest stage in the world, meaning, you know, the market at large business at large and I wanna win every time. Right? As ludicrous as it sounds.

Wil Schroter: Right. And so because we don't have that perspective, we don't have the perspective of the fact that startups fail. And if you're gonna be good at this, you're gonna be good at this. You have to be able to take failure. It sucks. There's nothing cool about it. There's there like, right when you and I fail at something, we're not like, oh, it's awesome. We're not worried. It sucks. Right. And we hate it. Glad I

Ryan Rutan: failed fast. That was cool. Yeah, like,

Wil Schroter: like, no, it's not the way it works. But there's a, there's a difference between saying we failed and we're disappointed and time to reload and move on and we failed. And now I'm just going to wallow. Right. We failed. And now I'm gonna create a much greater prison than my situation actually created for me in my head because our own psyche. Our own mind is the worst enemy of all of this, worse than anybody, you know, that actually exists in the real

Ryan Rutan: world. Oh, our imagination is far sharper than, than anything anybody's gonna say in the real world. It's incredible. Except for youtube comments that those, those can be very

Wil Schroter: hurtful. Those are forever terrible, written by terrible people. And so, so we get in this place where we're guilty, we're depressed and we feel like this is an endless sentence. And this is the next part. If you're going to be in this game, you may win, you'll probably lose. But the only constant is you gotta keep playing, you've gotta keep trying. Yes. This one probably didn't work. You know what? The next one might not work too. And it does suck. Ryan and I have been doing this for a very, very, very long time and it does suck to lose. But unless you're willing to reload, right, you're never gonna come back. So, in other words, if we sit there and we just wallow the whole time and all we think about is guilt, all wasted effort straight up. I mean, everybody kind of knows it. The trick is we kind of need to write a different ending, you know what I mean?

Ryan Rutan: Yeah, I, I think this is that moment that pivotal point that founders really struggle with. There's tends to be this like purgatory period between where like they really have decided to let go of the guilt on one hand, but on the other hand, they don't feel comfortable enough to go forward and tell a new narrative yet. Right? It feels disingenuous. This is the thing I hear all the time from founders. They're like, well, yeah, you know, I'm still, I'm coming off the last one and I'm just not ready to go out and pitch because people still remember that. I was just doing that other thing two years ago. I'm like, first off, no, they don't. That was two years ago. What people were doing then was like worrying about where to get faxed for COVID. Um They were not worried about the fact that you start a field. So it just, these things have such a limited shelf life in everybody else's mind, right in our mind. It lives forever and it's a crystallized experience. Of course, it is. Right. It's something big and terrible, but you don't need to carry it with you for the rest of your life. In fact, the sooner you let it go the better. Uh But this is that point where I, I see founders really, really begin that secondary struggle even when they're like, I want to move on. I'm ready. I even know what I want to go do. I just feel now I feel guilty about talking about it. I feel guilty about that instead, like, come on, come on,

Wil Schroter: it's hard for us because again, the founder business is such a one-off. There's so few people like do this for a living. And so by way of that, most founders don't have anybody else around them. It's why we create shows like this to kind of give people a better perspective, but most people don't understand that this is just kind of how it goes. So it's kind of like when you said somebody losing their job, if you lose your job, it sucks. It's awful. But you have, have lots of context for other people that have lost jobs and everybody can relate to you. If you fail as a founder, you're often in your mind, the only person that's failed as a founder, maybe in your circle of friends, you're the only person that's done it. So it's exponentially bad because you assume you're the only one, right? So be it. So what you were saying, we were saying, hey, I'm not gonna talk about it, right? I'm not gonna talk about the, the next company. It's because you haven't been around enough founders to know that that's actually what you're supposed to do. That's

Ryan Rutan: exactly what you're supposed to do, right? This is the healing process.

Wil Schroter: And so what I talked to founders about, I said, when you're in that moment, when you're in this kind of moment to, right? Eulogy, let's say, take all of the energy that you're feeling all of those things that are keeping you up at night all those things that have your stomach and knots and ready to throw up and go find the most positive thing you can point that toward right now and do that more than you've ever done in your life. Now. That could be a couple of things. It could be your next startup. My preferred one is always my next startup. It could be something you enjoy doing that has nothing to do with your startups that it takes you as far from that as possible. It could be something that brings you a different type of pleasure. Like maybe you like writing right? You're just gonna write more than you've ever written in your life. What you need to do is transfer that energy. It's powerful energy. Some of the best startups I've built, including this one have been the direct result of that horrible energy being directed towards something positive because it is a burst of energy. It's just used pretty poorly.

Ryan Rutan: Yeah, that's the thing. And I think that it's, it can be hard to feel the power in that energy because when it's, when it manifests as guilt, it feels like a huge weight. But we, we have to realize that that gravity is created by us, we can reverse that gravity at any point and say to your point, let's turn that energy into something positive. You and I were talking about this the other day, the way I tend to approach, right? Failure tends to piss me off at this point. Right. I tend to be less guilty about it and just, like, get mad and then I channel that anger. Right. I channel that anger into energy and I, I give it a couple of days of being mad and I'm like, ok, now, what can I do to change that next time around or what can I do to change that right now? And that's how I turn that corner, right. But that again, it takes, it takes putting it out there and deciding to go and do that next thing rather than just allowing inertia to maintain its hold on you and just stay in that wallowing guilty admire. Right. It's just an awful place to be.

Wil Schroter: I find that like when my mind is wound up like this, I like to write, I mean, it's kind of where a lot of our newsletters and stuff come from. They're just kind of an inspiration for something, you know, where I need an outlet in the days before startups dot com again, while I was wrapping up a failed startup prior to this, I used that energy to try to crystallize a lot of my thoughts. And Ryan, you and I have done whole shows about this where we said things like, what am I never gonna do again? I was never more clear or more inspired or more determined to avoid doing shit again, as I was when things just failed doing them, right. Like, for one of the things that I never want to work with people, I don't like now in the last startup I actually did work with people. I like. So that wasn't the issue, but I had opportunities to work with people. I didn't like it. And I felt that gnarly feeling right? Being like, like, let's say it's an investor, the investor is kind of a jerk. And I'm like, oh, well, I guess I have to work with them because we need the money. And it was a horrible feeling and I hated the anxiety that came with it. And I'm like, you know what, I'm never gonna do that again. I'm never gonna put myself in that position again and so on and so forth. I took all of that energy, all that negative energy. And I kind of wrote a eulogy for that chapter of my life.

Ryan Rutan: That's an interesting way of thinking about it. Yeah. Right.

Wil Schroter: To say, here's what happened, here's how it ended. Here's what I learned, but most importantly, here's what I'm gonna do next about it. And it turned out that like creating that new North Star was probably one of the most valuable, one of the most useful exercises in my life because the one thing we never think about it, we've never been more motivated to get this right. You know what I mean? Yeah. Well,

Ryan Rutan: just to change the current state, right, I think that's the part, that's really tough though. I mean, I think that's, you know, getting to that point where you want to change and then doing the things you have to, to achieve escape velocity is the difficulty in all of this because it is far easier just to stay there just to stay and be guilty. That's the easy way out. Right. I'm just gonna keep beating myself up about this in order to do what you did. You know, you've gotta, you have to have a North Star, whether it's the next thing you're gonna go do, but you gotta have something else to think about something else to fixate and focus on or you will just stay right where you are. Right. And that, that's absolutely the worst thing because it just starts to fester and spoil even worse. So, yeah, you know, it's kind of your point earlier. You, you, there are a lot of ways you can look at that. Right. It could just be a passion, it could be a project, could be your family, it could be going, getting a job. You know, it doesn't really matter as long as it's something that has enough gravity to attract your attention and keep it and pull you out of the mess that you're currently in. It's fine. Right? And we see this play out a lot of different ways, right? The founders will go through lots of different, different kind of rebounds if you will, that sometimes aren't what they end up doing. But it's the thing that gets them out of that guilty post failure phase and that's fine. Right. Like, we don't really care what it is, do anything other than sit around and feel guilty and you will be better off unless it's like a 24 pack of PB R and you might be worse

Wil Schroter: off. Be better off for a minute. It doesn't end well. But I agree with you. I think that we have to look at this in the bigger picture. As founders first. We have to look at this as if we lost this game. There will be many more games to come. We can't play this as this was our only shot and this is it

Ryan Rutan: assuming you suit up again. Right. That, that's exactly the point. You have to be willing to suit up again. It's only the last game if you make it the last game,

Wil Schroter: agreed and maybe you do suit up. Maybe you don't. The point though is we tend to look at these chapters in our lives as the, our entire life. You know, this took me seven years. Yeah, you've got 60 years in your career. That's seven of them. Right. Don't worry about the rest of them. And we tend to, to not understand the fundamentals of how this bigger game is played. Bigger game is played like this, we're gonna take lots of shots on goal throughout this life, one of them will hit, it'll likely be the one we expected the least in a way we never expected because you can't predict any of this as much as it sounds like we try. The second is that the longer we wallow in guilt in failure, et cetera, the longer we're taking sometimes our most valuable energy and preventing us from actually getting past it, which is a dangerous place to be. Yeah. At the end of the day, it's about just stepping back saying that sucked. I lost, I don't wanna do that again, but here's what I'd rather do. So, in addition to all the stuff related to founder groups, you've also got full access to everything on startups dot com. That includes all of our education tracks, which will be funding customer acquisition, even how to manage your monthly finances. They're so much stuff in there. All of our software including biz plan for putting together detailed business plans and financials launch rock for attracting early customers and of course, fund for attracting investment capital. When you log into the startups dot com site, you'll find all of these resources available.

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