Long after our startup is done, no matter what the outcome, our Founder reputations will live on.
And for many of us, that could actually present a real problem.
Unlike our resumes, which present essentially one dimension of our lives (our job performance), our Founder Reputation is built on how our performance affects so many people — employees, investors, customers, the media, and even our personal relationships.
From the get-go, we have two huge obstacles working against creating a great reputation.
First, we're about to build an organization that will likely (statistically) fail. It's sort of hard to build a winning reputation on the back of a potential failure that could result in the loss of jobs, the breaking of a ton of contracts (sorry, landlord), and losing money for so many people (sorry investors).
Second, we're building into the unknown. We're going to hire people we've never worked with (unproven at this startup), building a product that's never existed, with a company that we just invented. All of these variables will lead to their own failures, which in the end, lead to sore feelings about the idiot who made them happen (that would be us).
There are so many things working against maintaining a strong reputation as a Founder that it's almost disheartening. Yet it's also the most valuable currency we will ever develop.
A strong resume may get someone a job, but once they have that job, it doesn't really factor in much more. A strong Founder reputation, on the other hand, gets put to the test daily.
Our Founder reputation is what gets us meetings with investors, customers, and most certainly great employee candidates.
It's the meeting that happens before we ever get a meeting (without us being present). Building a strong (positive) Founder reputation is like a virtually bottomless debit card that we can use for the rest of our lives. Building a shitty reputation is like having a bankruptcy on our credit report and trying to buy a house. It can be done, but it's a total nightmare.
It would be great to say that our Founder reputations are built by just being good people every day, and there's some truth to that. But the reality is, our Founder reputations are often built most profoundly by the best and worst situations we are a part of.
Think of the reputation of Adam Neumann at WeWork before and after that debacle. Prior to the IPO he was considered a genius. Afterward, he was considered a huckster. By the way — he was the same person, in the same year — the only thing that changed was his reputation.
How we handle firing someone affects our reputation. How we treat investors in a down round affects our reputation. How we spread the credit when we absolutely knock it out of the park affects our reputation. Every single day our stock price that is reputation is adjusted.
Early in my career, I didn't understand how important my Founder reputation would be. I would make harsh decisions because at that moment it seemed like the right move. Later on, I would learn that each of those poor decisions (even if well-intended) would forever change my ability to operate in the future and how people interacted with me before they even knew me.
It works the other way too. I've had countless opportunities afforded to me — key introductions, special treatment with vendors, and preferential press, not because of who I am today, but because of what my long-term Founder reputation afforded me.
We need to think not only how our decisions will affect our Founder reputation today, but how they will be each of the bricks we will need to use to build the reputation we want to live by for the rest of our lives.
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.
Every entrepreneurs struggles. Yes, even Elon Musk. Heading both Tesla and SpaceX was never the original plan, and unsustainable at that. But, by building a stronger team and selectively adding talent and expertise through levels at both companies, Musk was able to maximize his productivity and have some semblance of work/life balance.