October 10th, 2018 | By: Wil Schroter
When we talk about building startups, we talk about lots of costs: Staffing costs, the cost of capital, cost per acquisition, and opportunity cost.
But we never talk about the biggest cost – the emotional cost.
Imagine if we could put a numeric value on how much “emotional capital” we have in the bank. The amount of stamina, the amount of positivity, the amount of physical wellness we have left. Startup Founders don’t just run out of financial capital – we run out of emotional capital.
Running out of emotional capital isn’t something we talk about, and that’s a problem. That’s because the cost of capital in this case is our well-being, our relationships, and ultimately the startups we sacrificed it all to build.
This needs to be a more open conversation where startup Founders talk not only about what costs they are paying emotionally, but what they are doing to manage those costs. There are a few areas where we’re all feeling the pain so it’s worth addressing a few head on.
If you worked at a company previously, you had two things that you probably took for granted – co-workers and peers. You showed up, met new people, went to lunch and happy hours, complained about your boss, and generally enjoyed being able to commiserate with others.
Being a startup Founder is like starting a job where you are the new kid in the lunchroom, yet no one ever really comes to your lunch table. It’s incredibly lonely.
You don’t really have peers – you have employees. You can’t complain about the boss because you are the boss, and talking about yourself in the 3rd person would make you seem crazy!
And that’s if you’re lucky enough to even have co-workers. Most of the time it’s just you, or at best a co-founder, and the long days and nights of never really being able to communicate and share can really add up.
When you go home it often doesn’t get any better. Your better half (if you have one) may not understand what you’re going through. Your friends and family still don’t know why you went down this road to begin with, nor do they understand what you’re going through because they aren’t startup Founders.
The emotional cost of being alone takes its toll on each of your relationships. It’s assumed that you’re alone, but that’s not 100% true. Some of the best medicine for being a “lonely Founder” is to talk to other startup Founders. Most of where that anxiety builds is from not realizing everyone else is going through the same thing. Just being able to talk about it in the open makes a world of difference.
When you launched it felt invigorating, like the gun going off at the start of a marathon. You’re full of adrenaline and you can’t wait to sprint. Every single task completed feels like progress – “Yay! We registered a domain!”
The first wins come rapid fire and they are all awesome. But then the low hanging fruit wears off, you quickly realize that this isn’t just a bunch of wins. It’s a bunch of waiting for wins. And you’re not sure if those wins are going to come again. That first customer that signed up was awesome, but boy it took a while for the second customer to sign up. And where is the third?
Weeks turn into months and months turn into years as you find yourself constantly waiting for that one victory that’s going to turn things around.
No one ever told you how ridiculously long this was going to take. You thought startups were fast-paced (which they are) but no one mentioned that fast-paced doesn’t necessarily mean all growth and gains. It’s just a clever euphemism for a boatload of work.
The cost of waiting is often exacerbated by our own expectations. You never expected to graduate college in a year because you were told it would take at least 4. Yet somehow with a startup you believe that your journey should set the land speed record of growth.
The only way to mitigate this feeling is to reset your expectations. It takes ten years to build a company, not ten months. While waiting is never fun, the only way to keep yourself sane is to understand that this is a long game, not a short game.
The problem with that long game is that even if you have the physical stamina to go the distance, you likely don’t have the financial stamina to back it up.
That’s when the initial pixie dust wears off and you’re sitting there at 2 a.m. with two browser tabs open. One is showing your bank balance which is sprinting toward zero and the other is your credit card balance which is gobbling up the difference.
You’re past the point of “we’re investing in the future!” and onto the point of “I really have no idea how I’m going to pay for food soon.”
What makes this emotional cost so much worse is that it never seems like everyone else is having the same problem. Everyone else seems to be doing great – look at those Instagram posts! You told everyone you were going to be that super successful startup Founder and instead you’re trying to figure out how many meals you can make out of a single box of pasta. (Or “Obama O’s if you’re Airbnb Founder Brian Chesky).
There’s simply no version of building a startup and getting rich at the same time. You need to think of your startup the way you thought of your crappy job you had in high school or college – a means to an end. The end is a startup that will one day put food on your table, but the means right now are doing anything and everything to keep the lights on at home until that day comes. Sometimes that means a side hustle, sometimes that means just living way below your means. Either way, it’s how every startup is actually funded.
If all of those other massive costs don’t add up, the one that tends to clear out your emotional bank account is the cost of relationships.
There’s never been a startup Founder who’s said “Look I’m working 80 hours per week while burning through my kid’s college fund and boy my marriage has never been better!”
Startups are to relationships what Emperor Palpatine’s lightning hands were to Luke Skywalker – a painful, non-stop, bolt of life force draining energy.
At the outset, everyone says they will support you. That’s because they haven’t had to pay the “startup tax” of your relationship yet. They saw you at holidays, they enjoyed time with you at cookouts, they appreciated all of your hilarious Facebook updates.
But now they just get the cardboard standee version of you. A likeness that sorta looks like you, but otherwise is devoid of character because it’s been sapped by the anxiety vortex that is startup life.
If there’s an emotional bank account balance that you have, there’s also a relationship bank account balance, and that starts becoming nothing but debits the moment you start down this path. When you had more time and less anxiety you were able to create some credits that built that relationship but now you’re mentally and physically drained. It’s hard to make deposits.
There’s basically a two prong approach that startup Founders tend to use to mitigate this a bit. The first is to be very up front about the fact that you are less available and that you realize you’re relying on credit “in the bank” to get by. More often than not this just goes unsaid, and that lack of understanding is what causes the most amount of friction.
The second part is to recognize that there’s no version where you can maintain the same types of relationships you did in the past. You basically have to pick your battles, and sometimes that comes at the cost of consolidating friendships or at the very least recognizing how much investment you can afford to make going forward.
All of these costs add up to what a startup Founder really pays to keep their business moving forward.
When you sit across from your friend who’s into year 3 of their startup, you’re not looking at a person who has burned through venture capital, you’re looking at a person who’s burned through emotional capital. And that’s where we, as members of the startup community, need to be spending more time openly discussing these issues.
We need to stop pretending that we’re all superhuman machines that can build these companies from nothing without a massive toll along the way.
We need to recognize, in the few and far between moments when you see someone succeed that it wasn’t free. It wasn’t easy. And whatever you think they may have risked in personal capital, they spent 10x more in emotional capital.
We need to consider that our startups and their teams aren’t just the people that work at the company, but all of the people they go home to and the lives that are impacted. It’s not just about asking your team to work 40 more hours per week, it’s about asking your team to spend 40 less hours with their loved ones.
We need to set realistic expectations around how long it takes to build a startup and how much personal runway is really required. It shouldn’t be about “do you have 3 months of savings?” as much as “how can you keep your bills paid for the next 3 years?”
The conversation and the questions isn’t limited to just those topics but if we could even begin to have a conversation about these things more openly it would do wonders to help drive down the emotional cost of starting a startup.
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.