Startup Therapy Podcast

Episode #92


Ryan Rutan: Welcome back to another episode of the startup therapy podcast. This is Ryan Rutan from startups dot com joined by Wil Schroder, my friend and the founder and Ceo of startups dot com, well, we get together with lots and lots of founders and one thing that tends to happen, um, whether it's, you know, individually or in small groups or even large groups of founders, whether it's a formal gathering, informal gathering, there tends to start to be some, some measuring that occurs right? People start to talk about their startup companies and they, you know, start to draw comparisons, you know, not necessarily externally, but as you're listening to everybody else talk, you start to kind of see where you fit in this ranking system. You're, you're seeing the same thing here, right?

Wil Schroter: I think we're seeing it everywhere. I mean that's such a perfect example. I mean it's so deliberate in that case where let's say in a founder group, we're all giving our status updates to how things are going and then each person is saying, okay, well things are going really well for you, but they're going shitty for me. So I feel bad about my update, you know, because I'm really specifically comparing to you, but you know, I don't think it, it starts and stops in that setting and I think we're doing it every time we scroll through a facebook feed or a social media feed, I think we do it every time we read business news about some company that exited or something like that. I think we're just constantly doing this in life, but as startup founders, the idea that if my startup is bigger than yours, I'm somehow better or if it's, you know, it's not as big, I'm somehow worse. It's just a name, it's everywhere. And I think today it would be helpful to talk about kind of where that comes from to talk about really why it doesn't matter. And it talked about kind of how to get off that train, if that makes sense,

Ryan Rutan: makes sense To me. It's not a train worth riding.

Wil Schroter: And so I think where it starts is that we build up this early conception that the performance of my startup versus other startups is somehow in competition, which kind of doesn't make any sense. Like if they are in competition, if, if you're a startup is Uber and the other one is lifted then yes, but that's rarely the case. Right. We end up creating all

Ryan Rutan: of these

Wil Schroter: kind of pseudo competitions with people we don't compete with in any meaningful way. They could be, you know, our friends in some cases or witnesses quite often,

Ryan Rutan: that is the case. In fact, those are the ones that you're going to hear the most, you know, the most updates from those, the ones you're gonna have the most inside baseball with.

Wil Schroter: So one of the things, you know, Ryan, you and I do is that during our founder groups that we host and these are seven person cohorts of founders, uh, as we give an update on, how are you guys doing? You know, what's going on and, and everybody provides their update and Ryan, tell me if you see this, I tend to see two ways this can swing. If the first person that gives an update gives a really positive update, things are going well, you know, not we're crushing, We tried to kind of avoid that terminology, but you know, just things are going really well, you know, just landed a big client, et cetera. But the next person actually, things aren't going well. They will often kind of change their narrative to focus on what's going well and kind of ignore the not going well because someone set the tone. Conversely though, if the first, the first person starts with, I'm so funked up right now, then invariably everyone just opens the floodgates talks about how messed up things are, which is always the case in some capacity.

Ryan Rutan: There's, yeah, I was gonna say you don't have to look too far into a startup to find problems. So if if somebody shares, you know, a kind of a man my week has just been, you know, total craft, you know, everything's everything's going sideways. It's not hard to construct a narrative, even if it's not, you know, completely accurate, you can always sort of just for commiserations sake, right? Just to not make that person feel bad, you can sort of say, you know, yeah, it's basically the same thing for me and I do see a lot of that, I'm not sure that I've seen the other scenario that you talked about whereby the positive lead gets everybody else to follow in kind, I've definitely seen the opposite, in fact, where like the second person still was like, nope, nope, totally not my story, my week has been absolute shit, and in fact you could tell that that it bothered them to some degree that that first person got to lead off with with a win and you know, the best they can do is sort of like, well I'm still here, it's going well, but but I'm still alive, you know? But there is certainly some sort of some level of group cohesion and groupthink there, but I see it far more on the negative side, I think it's just because it's far more common that we can all find that, like yeah, something was screwed up this week, whereas we can't always find the, like the thing that went really well, One of the things I've I've started trying to kind of do is just get a quick poll before we kick off with, like, you know, who's having a really good week, who's not, and then trying to start with some balance and kind of going back and forth and back and forth, so we don't get too much momentum in one direction or another because I think it can turn into a pity party really quick and again, not necessarily externally, this is a funny, funny thing for me because I built and sold a cafe a long time ago, there was some internal story around this, where it's like I want to do something non tech and it felt really good to do something non tech and I really enjoyed it. But there was a part of the narrative where I had wanted to scale this thing and had done a lot of work to kind of want to grow this and, and do something a bit different with it had even, you know, gotten some letters of intent to go into some very large businesses with small footprint locations, it was going to be fun, I was having a lot of fun with the expansion plans ultimately didn't end up happening, partner decided didn't want to do it, end up selling instead. And so it just, it stayed a single location 10 years later to tell you how deep the ship runs within us. 10 years later, I'm talking to a very successful cafe owner in, in ST pete who has gone from one location to like 14 and now he's going to international airports and and he's just blowing up and I was happy for him and I really like this product and he's a really nice guy and I've done everything I could to support him, but there was like a little bit of like measurement there and I was thinking like, man, why didn't that happen for me, Why wasn't I that good? Why didn't I achieve that same thing? And this is 10 years later and it was completely fucking

Wil Schroter: irrelevant, like had nothing to do with

Ryan Rutan: my life anymore. And I'm still like, I'm still measuring against that, which just shows you like how deep this stuff can run for us.

Wil Schroter: It's bananas that so much of our self worth in our identity gets wrapped up in our startup. Now to be fair, some of that's very justified. This is quite literally a creation and an extension of us in many ways. I think sometimes we, we attempt to decouple it to say, hey, it's just the job. And I think there's a certain version you can look at in all of this and agree with that. But I also think that almost be like saying that our kids are just other humans. Yeah. Yes, that's true. But we feel pretty attached to them. And so I think there's some point at which it doesn't make sense to kind of ignore how attached we are to these things because I think that's destructive in some ways. But on the other hand, we also have to realize that our comparison of our performance to someone else's arbitrary, you know goals and performance really doesn't make any sense for sure.

Ryan Rutan: We've talked about that in a couple different ways to write and just circle back because you're making an excellent point here where like we are not our startups, we did an entire podcast on that right worth listening to. But to your point we aren't entirely our startups nor are stirrups entirely, but we are definitely connected especially early stage like when there's nothing but an idea, it literally is just you, but that there is a healthy level of connection there, that that needs to exist.

Wil Schroter: I think what it throws us off though is to your point, you were saying how you had built this cafe and you were happy with the outcome and then someone else comes along and build something bigger and all of a sudden you kind of feel worse about your outcome and I see this a lot early in my career, I just simply believe because I had nothing that if I was ever successful in any capacity and my bar was really, really low and if I was ever successful in any capacity, like I just had a profitable business that I would be on top of the world and everything would be awesome. And that happened, you know, I built a profitable business and it was great, I appreciate it a lot. But then this weird thing happened, I met someone else who built a more profitable business in a bigger business and I started thinking well if my business isn't bigger than her business, then I guess I'm not doing a good job, I guess my goals didn't matter, I get like and I just started in this weird headspace and I remember it very distinctly Because I remember sitting across from another agency owner and her her agency at the time was maybe 4X bigger than mine. And I remember thinking I'm forex shittier, I can quantify how terrible I am and I was so blown away by it because up until that moment, I remember we were at lunch, up until that moment until that lunch, I felt great. I was good and then I sat across from her and she didn't mean to do this like this, you know, this isn't unearthed this on me and and I was like, what the hell just happened? I walked out of lunch being like why? How did I just become a total loser? And where did that come from? Right? Like who lit that fire? And the truth is it's me. But what happens is the ability to kind of stop that fire out before it it becomes a fire is also on me.

Ryan Rutan: Yeah, I mean, well but easier said than done right? Like as humans, we're constantly comparing ourselves. I mean like, and you want to talk about a really, really unhealthy version of Keeping Up with the joneses, It exists within startup companies big time, right? I mean it's it's pervasive, we talked about that, right? It's not just in the conversations we have, it's also in you know the social media updates we get, you know when we read Techcrunch all of those places, you know, just tend to have this narrative that if we choose to you can make us feel a lot worse about what we're doing. But something else that that is important to point out there. And again, easier said than done a lot of times we're getting that instagram version of you know, how well they're doing right, We see these outcomes, right? She had a forex, bigger agency. Did she have a forex worse off personal life? Right? It was her house for X. You just don't know right? You don't ever get to see or rarely get to see what fully goes into it, right? We'd all, you know, like to shoot like Steph curry, but the reality is very few people are willing to put in the work and do all the things that he did to be able to shoot like that, right? It's easy to just look at the outcomes and say like you're you've said it before, but like you know every overnight success that we know took 10 years to build the same thing, right? Like if you are going to fall into this comparison trap, compare all of it, right? And if you realize that you can't compare all of it, realize how poor of a comparison. It actually has to begin

Wil Schroter: with. I had a different founder group. This is about a week ago and one of the interesting commonalities with this founder group was that everyone was dealing with $100 million plus problems, problems in quotes or in some cases billion dollar problems. You know, this is a very accomplished founder group and uh, and one of the founders had asked, what are your growth goals for startups dot com. Now, here's what's interesting about that. We don't have a billion dollar business. So in your right, right. Yeah, just a minute. And so I knew from the get go that the size of our business wasn't, you know, at that level, so to speak. And here's here's how he responded. I don't care. And this really starts to delve into my journey to try to kind of shore this comparison game up. And again, this had nothing to do with the person asking the question. It was a very fair question and it was asked in the right capacity. The reason I said this is because over the years I've started to realize that no matter how well I do how well the company does, it just doesn't matter. And when I say that, I'm not saying there there are no outcomes that are meaningful. If we sell this company for a lot of money, it'll make a lot of people wealthy and that's meaningful to me. So I don't mean it in that capacity. I mean it in the terms of It doesn't matter at this point, we've built a successful company that we're proud of. If it becomes 10 x more successful, there are some benefits there, but their marginal by comparison. Yeah, you're

Ryan Rutan: Not gonna feel 10 x better

Wil Schroter: correct. And that's the part where boy, it's taken me almost 30 years to figure out is that there is a point where once you get past, you know, sustainability in the company can kind of, you know, run on its own and you've got unlimited runway, it's called profit. That yes, you can get bigger. But at that point, all the hardship that you were actually worried about on the way to get there, it's kind of been solved for. And so it goes back to me the, the young version of me at that lunch, at which point we're having that discussion, my agency had become profitable, right? We're doing actually fairly well and the fact that I walked out of that lunch kind of broken about how well things were going, that was the problem. It had nothing to do with how big we would get. It had to do with how I was perceiving where we needed to go, you know, or kind of what our success was

Ryan Rutan: and it can really skew your thinking about the path to getting bigger because you were still at a point where you did want that business to grow, you did have growth goals in mind and, and now you walk out of that lunch demotivated right and downtrodden and now using a measuring stick, that's not accurate and you're gonna make decisions based on that, which is really problematic, right? So now this may actually impact your growth. You know, we've, we've talked about this in a number of ways to, but you know, you gotta be really careful what you use as your North star when building your business because if you pick the wrong one, you end up doing the wrong things. We talked about this in the context of thinking about being rich when we exit and right, that that's the only outcome that matters and that that can really color your decisions and and change how you proceed down the path of your startup. And quite frequently to the downside, right? It doesn't, it's not to say like, well, you know, in order to get high, you have to aim high, that's not actually true, right? And in the same way, it's not like I have to compare myself to somebody who's already bigger for me to get bigger. Absolutely not true.

Wil Schroter: And this isn't about a lack of motivation, right? This isn't saying, you know, I'm not ambitious enough or I'm I'm hanging up my skates, so to speak, that's not what we're talking about, what this is saying is to your point about that you're your own internal compass and North Star, we have to have a good sense for what is victory to us correct, right? We can't keep saying my victory is in comparison to what other people have done because it actually just, it really, really doesn't matter. You know, a good example of this is if you're Elon musk and you say I have to beat Jeff Bezos as the world's richest man, right? And in current times when we're recording this, this keeps going back and forth between the two of them and we'll see how time perseveres with that. And one day you find out that in fact you are the world's richest man. Wonderful. And then what? Right? In other words, it doesn't really matter if you win this game because you actually don't win anything either.

Ryan Rutan: You don't win anything. And it's and it's not a state of permanence, right? Like someone will want up both of them at some point.

Wil Schroter: Yeah. Where's Bill Gates in this conversation? Alright, somehow left in the dust. He held that that title for a very long time. My point is, there's no way to win this game. And in many ways the only way to win, so to speak is to not play it. However, however, we're all going to do it right. You know, none of us are quite that zen. Hopefully some people listening are going, this isn't a problem for me at all. I don't do any of this, in which case awesome. You can fast forward probably through this podcast and and we have nothing to tell you at this point, but for the large majority of folks who I think are very much dealing with this. Uh, listen on the, the first thing that we talked to founders about this is again, the comparison game always results in a loss, right? In the event that you do the rock paper scissors with some other founders success and you're doing better than them. That feeling will be amazing for .9 seconds and think of what it took to get that feeling right. An extraordinary amount of heartache. And, and to be fair, you've earned it. But this isn't really the way you want to, you know, take that victory. On the other hand, chances are just statistically you're gonna be on the wrong end of that rock paper scissors and you're going to feel terrible about your success or your status. You know, even if you don't call it your success Ryan, I think where this breaks down for most founders, you know, where they kind of start to go astray is to your point. They don't have the North Star, They don't know what their success is, but they don't have that moment where they can say if I get to this point. And somebody asked me that question, I'm good. Right? Yeah. They

Ryan Rutan: haven't, they haven't set up the conditions for winning and we've, we've kicked this around a couple of times too. We're not operating inside a system with set rules for winning losing or anything really, it's, it's all under conditions of uncertainty. And I think recognizing that and saying that like each of these journeys is going to be significantly different, right? We're not playing chess against someone else. We're not even really playing chess against ourselves. That would still imply that there are right decisions and and wrong decisions, Right, Good execution. Bad execution does exist, but it's it's not quite that simple, Right? And so, again, comparing yourself to another startup, um particularly you're just looking at like some single vanity metric, like, you know, they're total top line revenue. There's something along those lines, right? I think there are healthy comparisons you can make. I think you can look at somebody else's company culture and say like, you know, I really like the way their teams interact. I really like the way they communicate with each other. And that's something we could strive to do. I think where it breaks down is when we start to compare ourselves in ways where we don't have enough information to replicate the scenario. Right? I can't say like, well there for x. You know, they're making forex more money than we are. We need to make forex more money. Right, okay. Well, what did they do to get there? It's gonna be really, really difficult to figure that out and their path is going to be extremely different. And if you look just look at what Brazos did to grow his business verse. What Ellen did to grow his right One guy is selling books. The other guys selling trips to the moon, right? Pretty different businesses. Very different models. And so the only thing that they compare and this speaks to the fallacy of doing this at all. The only thing that they compare is their total net

Wil Schroter: worth. And that's that's where it breaks down. And so when we were picking up that conversation about hey will you know what's your what's your growth goals and how big do you want to make the company? And I kind of responded with I don't care. We dug into that a little bit because I wanted to make folks understand why that aspect of you know my success so to speak as it relates to that discussion. Um wasn't important to me. And actually this is funny epilogue to that discussion I had with the the agency founder where we sat down at lunch. It would just so happen that that my agency Blue Diesel would wind up winning a huge account and becoming 10 X. Bigger maybe 100 X bigger at this point. And what I found is when we hit about 700 people give or take. I hated working there. It was terrible. I felt like I was working at somebody else's company. I'd be in the elevator with 10 other people. I don't even know who they were. And and I realized I can't stand working in a big company. I don't like the culture. I don't like the focus when the company gets substantially big, a lot of people don't realize this. The focus of the company goes from, what are we doing for our customers to what are we doing internally? It's staffing, it's hR its policy, it's just day to day management, etcetera. And large companies spend a ridiculous amount of time doing basically internal politics, you

Ryan Rutan: know, having meetings about meetings and so forth.

Wil Schroter: Your focus is to try to one up so that your boss will give you a raise and his boss will get all of those things right. And that's what it became and all. They're all good people just when you hit a certain size, those are the dynamics that present themselves. And I hated it. And so I had the advantage early in life of seeing that, realizing I hated it and saying, I'd really like to never do that again. And so one of the funny things was now the question that I asked in the founder group was okay, but don't you want to help more people? And that's essentially what you guys do. And I said, Look, when we first got started, we're able to help, let's say 10 people. And then eventually we grew a bit and we're able to help 1000 And then 10,000 and then 100,000 and then a million. What does it matter at this point? Right? In other words, why would one of those arbitrary numbers be more meaningful than another arbitrary number? And you could say, hey 40 million people start businesses, you need to help all of them. Maybe you know, I think yes growth is a metric of our ability to reach more people which which is great. But growth from a metric where I just want this thing to be bigger just to be bigger for us. That makes sense. Oh

Ryan Rutan: yeah, no, I mean growth growth just for the sake of growth doesn't doesn't make sense. It only, it only makes sense in a few scenarios. And those are contrived scenarios you've taken on venture capital for example, you now have to grow for the sake of growth because it's the only way to create liquidity for yourself and your investors right? But again, that was a contrived condition that you created when you decided to take on venture capital. That wasn't a necessary condition of the business. It's a necessary condition based on how you decided to build the business. And so I think these things are all super important too to remember again when you make certain decisions, it can inextricably change the path of the business and what you have to do and all of a sudden there can be success metrics and so forth that are imposed and enforced on you. And and that feels very different as well, right? In the same sense that you know, you didn't like working at a bigger company now where you know, you don't know everybody's name and people in the elevator of strangers held the fact that you had an elevator,

Wil Schroter: right?

Ryan Rutan: DNA I don't want that, right? I don't want a building that big because it implies, you know, the number of people that are working there in the same way, the minute the decisions are no longer freely and clearly yours to make under your own rule set that you define that stops being fun. Pretty quick to write when it's like, well this isn't really what I wanna do. I don't want to expand into this market. I don't necessarily want to offer this product, but in order to hit the growth that we need to, to be able to get liquidity for investors to to have the outcome we're looking for, we now have to do that, right? And and again, this is one of those things where like this is often an outcome of comparison to other startups, like, well they raised money so we have to, how often do you hear that? Like this is constantly in my ear? Well someone so raise money. So you know, I feel like we could Okay sure you could do you need to do you want to have you thought about what happens after that? Well, no, but they did? Okay. And

Wil Schroter: I think that what surprised folks when I get asked this question, you know, in any kind of typically a founder situation is that we have metrics that are just different than most people's, but more importantly, we actually define them, Right? So we look at the metrics. Yeah. Great. How happy are we actually care, right? How much time do we get to spend with our families? You know, things like that. And a lot of people will say, well, that's a luxury of success. Hell yeah, it is right. That's the point. That's why it was a goal. You know, being profitable was a goal for us. It wasn't like we needed to be insanely profitable. We just wanted to know that we were profitable. So we wouldn't have to worry about keeping the business alive. Right? So a lot of folks, when you ask them, what are their goals or how are they defining their success? They're almost always going to talk about finances, right? And there's the implication that more money equals more success equals more more good. And there's some of that, look if if the business is doing $1 million Okay. You know, we're surprised we ever got to $1 million $3 million $3 million dollars or more ought to be pretty important, regardless of who, who else is doing what. But I think if folks were to be very honest to say these are the things that I really, really, really care about in regardless of how other people are doing. If I'm doing well with these things, then I'm on point, you know what I mean? Yeah,

Ryan Rutan: I go to a very personal example. There was, there was a day where I thought about, I was, I was out in my kayak doing one of those things that I absolutely love to do. I was trout fishing in, in boca Cienaga Bay outside ST pete, really having a lovely day and then a guy came by in a really nice boat, you know, four engines, you know, offshore fishing rigs all over the place. And I looked at that and I thought, man, that's a hell of a long way from this kayak that I'm sitting in and then I thought about it and I thought about what's actually gonna happen next for him. He was going to spend two hours getting to the middle grounds to do some snapper fishing, the fish that I don't particularly care for. Uh spend a bunch of money on gas and not get the exercise

Wil Schroter: was getting. I thought, you know what,

Ryan Rutan: what I'm doing now actually makes me happier. The only comparison I can look at and go like that guy's doing better than I am right now is the cost of his boat. Like what he was actually getting out of the experience in for me now. Maybe for him. It was better and good for him. I hope it was because it certainly cost him a hell of a lot of money to do it. But for me, I was getting the experience that I wanted based on the metrics that I said right, I could do this when I wanted to paddle out under my own steam, catch something really good for dinner and really enjoy myself. And so I caught myself making that comparison in that moment and went, you know what, why wrong comparison? I'm comparing the wrong parts of this. The cost of the boat doesn't matter here, the quality of the experience does

Wil Schroter: agreed. And what's interesting about it is most people won't take the time to kind of decouple that and start to say, okay, no, if that guy went out and caught six billion snapper that day, right? Regardless of what, whether that's what you're looking for, how does that change? It literally doesn't affect your life at all. Look, the way I see it, there's really nothing we can do about how everyone else is gonna react to. I've got a bigger startup than you'll get a better start, etcetera. So it starts with us, which I think, you know, we certainly both agree, but I also think that as it starts with us, it sets the tone and gives permission for others to do the same for sure. And I see this all the time, right? Like when I sit down with the founder and we start to give the updates. I now very deliberately talk about here, something's going well and see here are some things that I'm having a really tough time with right, I like to try to bring some fundamental humility to that conversation because I know if I don't it sets the wrong tone and here's the thing if things are going really, really, really well and I also kind of know that the person I'm talking to is having a tough time, I'll honestly just shut up about the things going well. Is that the right answer? I'm not sure. But I find that it's a better conversation.

Ryan Rutan: It is it is it's a better conversation but like there is a fine line here, right? Because we also don't want to just gloss over and avoid the hard conversation that we don't want to make people feel bad by by sharing what's what's going well, we also do want to be able to share what's going well because you can't take lessons away from that, right? As long as I think the part that has to change is the comparison right? We've just got to find a way to get around that because we don't want to start to just dumb down the conversations to where it's like it's the weather version of the startup conversation who needs that conversation. I don't want to have it, you don't want to have, it doesn't benefit anybody. So we we've got to find this balance and I think you know, I think bringing up what's working well and what's not is good. I think being emotionally intelligent enough to sort of see where the other person is and saying, you know what for today, let's focus on them. I can sort of see on their face something's not going well or maybe something is really going well, let's let this be about them. And so I think that just takes some some maturity. I think it takes some emotional intelligence and I think it takes a willingness on the part of founders as we get together. These are the things we want to discuss, right? We do want and need to talk about these things, but I think we we have to be careful, there has to be some implicit agreement that we can do this without it. Turning into the measuring stick,

Wil Schroter: I usually dig into this and I asked this question a lot, usually in one on one situations sometimes when we're a group situation, I asked them based on how things are going, let's say things are going terrible, what part of that matters to you, right? And so when I say that, let's let's say that somebody said, okay, you know, we missed our funding round and obviously that's difficult, obviously need the money to pay folks and I say what part of missing that round really matters to you right now. It's we've talked about this before, it's rarely the event itself, it's all the things that come with it right,

Ryan Rutan: it's we're not gonna make payroll, we can't make that new hire, we can't launch that new product, right? There's lots of things that are attached that the fundraise itself is just a vehicle to get into something else

Wil Schroter: and it could be any number of things and I always say this, that me raising money doesn't affect you, right? You're raising money doesn't affect me at the same time. If we're gonna be able to sit and have open conversations about how are startups are doing and kind of, you know why my startup might be doing this or that. Let's set the table, let's set the table by saying, okay, if things are going shitty for you, let's talk about it, let's open up. You know why you feel bad and and have that conversation versus just the, I didn't raise money or try to exit the business etcetera and get into this weird chest pounding competition. It just goes nowhere. Everyone hates it. Everyone feels terrible about it. And I think between all of us as founders, we absolutely just need to change the entire narrative here.

Ryan Rutan: That's a wrap for this episode of the startup therapy podcast. This is Ryan Rutan on behalf of my partner Wil Schroder and all the startups dot com family thanking you for joining us and we hope you'll continue to join us, be sure to subscribe rate and comment on ITunes or wherever you love to listen to startup Therapy, you can find all of our episodes at startups dot com slash podcast. If you're looking for more amazing resources to launch or grow your startup, be sure to head to startups dot com and check out startups unlimited. It's everything we have to offer from our online university to our amazing community of experts and founders and even all the tools we've built like biz plan, fungible and launch rock. It's everything a founder needs visit startups dot com slash begin that startups dot com slash b e g i N. You'll thank me later.

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