Ryan Rutan: Welcome back to the episode of the startup therapy podcast. This is Ryan Roam from startup dot com. Joined as always by my friend and the CEO and founder of startups dot com. Will Schroeder will. There's this whole thing in, in founder land, right? Like we're all working hard, we're all struggling. We're all trying to do the damn thing. And then we get to this point where maybe, you know, we, we get to an exit or good things start to happen. We have some success and then uh we're labeled as having gotten lucky, right? So, what I'd love to hear is your take on good luck versus good fortune. And where we actually fall on the spectrum as founders who have been successful.

Wil Schroter: Well, I gotta tell you nothing frustrates me more than when people say they got lucky, you know. Oh, they, they got lucky. It's as if you bought a powerball ticket and that was it. That's all you did. It, it's all you did to, to earn

Ryan Rutan: your fortune. Drop. My $2 went and waited around. Yeah, I, I was actually a little disappointed that your hat didn't pop off when, when when I mentioned lucky.

Wil Schroter: Uh but I feel like we live in this world where the people that have an exit, the founders that have an exit get treated akin to Powerball winners. You know, people that somehow bought a lottery ticket. Look, if you bought a lottery ticket in powerball and you won, you're straight up lucky if you ground out for 10 years and you sold your startup. There's no luck involved in that. I think it's offensive. But beyond that, beyond, you know how I feel about it, I think what it creates is this internal understanding from the founders themselves that they were lucky in some way. And by way of that, they don't entirely deserve what they got.

Ryan Rutan: Yeah, they feel guilty about it. They're guilty about it, which is crazy.

Wil Schroter: It's crazy and it's a lot to wrap your head around. And I think again, we should very much distill the difference between good luck and good fortune. We should talk about when you have this good fortune. When you have this exit or this wealth event, et cetera, how you can think about it because people are gonna look at it very differently, then you want them to what? Regardless of what you do. Exactly. Regardless. Again, I, I think that to kick this off, let's talk about good luck first. Good fortune.

Ryan Rutan: Sure. But before we do that, I just want to point out that this isn't just about exits. This isn't just about maybe hitting a really high level of profitability where you're starting to bank a bunch of money. I see this happen day in day out with founders even at the lowest levels. So I'll give you an example a week ago, talking to a founder who's part of our founder group community. And he had a really exciting announcement about a big client that they landed and was really nervous about sharing it with the rest of the group because he's part of a group who are all working like 24 7, just grinding it out, all trying to nail customer acquisition, right? And they're all struggling, right? As every startup does at that early stage. And he was asking me, he's like, I don't know how to bring this up with the group. I don't know how to tell them. I'm like, you just tell them he's like, yeah, but like, you know, some of them are still working really hard. It's like, and they will continue to work really hard. They have to, right? What happened to you isn't what's happening to them? It's OK. But my, my point here is that this isn't just about the the big, big things that happen, this feeling and this guilt that gets built into us as founders starts from the tiniest of little wins, right? It's like when you hire your first employee and those two other startup founders you've been hanging out with in the coffee shop are still grunting it out on their own. That can make you feel a little guilty that all of a sudden you've got some help and they're still there, you know, coding, you know, designing marketing, selling, doing all of it on their own. Right? So this begins from the very beginning, I just want to make that subtle point that we're not just talking about founders at Exit. This is all the way through the process.

Wil Schroter: It hit me personally for the first time, early, early in my career because it was like the early nineties when things went well, for me, there wasn't any way for anyone else to actually know it. People forget about this stuff now. But at the time again, this is probably like 95 let's say people generally didn't have cell phones, they didn't have email in any meaningful way. There's obviously we didn't have a social network or anything. Google didn't exist. There was no way to find out about what happened to that person. Unless someone told you you didn't have their landline, they did not exist. And if they weren't standing next to the phone when you called, they did not exist. The reason I say that is because we had some really tough years and then all of a sudden things turned and we had some good years and I had a lot of friends and family that came to visit me. I'm in Columbus, Ohio now. But I didn't grow up here. I grew up in Connecticut. So a lot of them came out and visited me and when I left Connecticut, they saw this kid who like failed at everything. It was the polar opposite of good, right? My trajectory was not very high, right? I think it was actually trending negative.

Ryan Rutan: You, you did a good job of setting low expectations for them. That's,

Wil Schroter: that's the way to do it. right? And so when that happened, and again, nobody was expecting much. All of a sudden they come out with no idea what to expect or what might have happened. And I've got a house and I've got, you know, nice cars and all this crazy stuff and they're like, what the hell happened. How did you get so lucky? How did you get so lucky? And the way they treated it had nothing to do as if I put no time into it as if I woke up one day and the past four or five years of not sleeping to make this happen just ceased to exist, right? Have money just fell out of the sky, just

Ryan Rutan: out of the sky. Had nothing to do with you, grinding it out with coming up with a concept with working it with not understanding whether it would work or not with having side hustles like being a paralegal 400 words a minute uh till endless hours of the night, right? All the shit that we put into these things that somehow on the outside is molded into something that everybody sees as luck. Like, go screw.

Wil Schroter: And I was so confused. Yeah,

Ryan Rutan: that's the thing, isn't it? You're like, wait, wait, what, what the cognitive dissonance the first time you hear that word, luck is amazing. You're just like, no.

Wil Schroter: Well, I also had nothing to compare it to. I'm like, am I lucky? And like, but it started to really grind on me because what happened was when they saw that I had money that they didn't have or some success, they didn't have their first thought was how do I get some of it? Right. And we should talk about that as well. But what really threw me is I didn't understand the difference between luck and good fortune because I kept getting told over and over that I was lucky. And so I kept thinking about it in terms of, well, I guess the work is the work and you're just either lucky or you're not. And that was a really big pitfall for me because when you think that you're lucky again, you get into this place where you don't feel like you deserve it. Lucky is something that just happens to you. Not by you. I think that we have to distinguish the two and I think that we have to distinguish it both from the founder perspective. So we can have some peace of mind there. But also the people that are looking at other founders being, oh, they're so lucky. We were talking about a company that, you know, had, let's, I'm gonna call it luck and then take that away. Zoom during the COVID era. Right. The timing was fantastic, but it's not like the founders woke up one day and just magically had zoom. Right.

Ryan Rutan: They had been building it for years before that came along. Right. So yet, yes, it was fortunate. I mean, it was unfortunate that we had a pandemic. It was fortunate for them that it drove a bunch of people online and that they were well positioned through a lot of hard work and a lot of spending on engineering that they had a tool that was not only what the world needed, but they stepped up. Right. Because we also saw some companies who given similar good fortune did not manage to do the same things. They had a tragedy of riches where underneath the pressure of that growth, they collapsed. Right. Zoom. Ok. There were some hiccups. There were definitely some hiccups along the way. But for the most part, they took that good fortune and compounded it against all the hard work that they had done.

Wil Schroter: You bet we're putting in that work nonstop all the time, whether people recognize it or not. And that's the part that frustrates me because by the time things were going well for me, I hadn't slept in five years and so to be written off, like, none of that mattered. Like, like I was just somehow lucky and I'm like, didn't feel very lucky. I gotta be honest. It's like, I'm, I'm so unhealthy at this point to call what just happened. A bunch of luck is straight up offensive. I mean, I don't really have another way to say it.

Ryan Rutan: No, it is. It's absolutely offensive. A friend go through a similar process a couple of years ago and he's just finally finished his, his earn out which talk about adding insult to injury. Not only was he being told by everyone around him who had only been really aware of his business for maybe 18 months, he'd been working on it for like 10, 12 years. They were telling him that he was lucky. Meanwhile, as part of that luck that he was now experiencing, he had a 24 month earn out where he had to spend time with the new owners of his company, which if you've ever been through that, it's a very specific kind of hell that Dante left out of his, his levels of inferno. Yeah. So again, like it's super offensive. It gets compounded by the fact that not only was it not easy to get there even once you get there, it's not easy after the fact. Right? It continues to be difficult. Right. So while everybody's looking at him going, oh, you're so lucky. He's like, yeah, I'm really lucky. I get to go hang out with my ex partner's new partner. Right. Like, sounds sweet. This is exactly where I want to be spending my time,

Wil Schroter: but build on that. So, not only, not only are we in a position where we have a lot of people looking at us going saying we're lucky they associate luck with. I should have some of that because they don't associate the hard work that comes with it. Imagine if I said to a doctor, you're so lucky that you get paid so much. And he was like, have you seen how much medical debt I have? Do you know how long it took me to become a practicing doctor? Doesn't feel very lucky

Ryan Rutan: 20 years into my education? Right. Right.

Wil Schroter: It doesn't feel very lucky. But now if I came to that same doctor and I said to her, I said, hey, I feel like I'm deserving of some of that money. She would rightfully punch me in the face because she's like, how dare you now play this back. So there I am five years into my career. And it was very fortunate that I was building a web design company at the dawn of the internet. Ok. So absolutely great timing. However, I was still working every waking hour of the day. So now when people come to me and say, hey, can you let me borrow some money? Hey, you know, basically implying that again, I hit the powerball that I didn't actually work for any of this. And by way of that, I should basically share some of my good luck with them,

Ryan Rutan: my cup runneth over. Therefore, bring your cups.

Wil Schroter: You know, I gotta say I, I actually won the powerball or, you know, whatever lottery there might be. I actually might feel different because it might feel like I was just very lucky and not that it's their money, but I would kind of just spread the luck. I

Ryan Rutan: think that's only true. If you use the auto select, I think if you pick the numbers yourself, then you deserve every penny of it all yourself. I feel like if that that is enough work, if you actually guess the numbers, you don't let powerball side for you. I think you keep

Wil Schroter: it all. 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 dot startups 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. I think when you call it luck. And again, you equate it to power and you take the hard work, the risk, the ingenuity, all of the things out of the equation and you diminish all of that. Again, going back to the doctor where I'm like, hey, let's pretend that all the time you spent in med school or what it took to even get into med school, not to mention, make it through med school and get your residency and become a doctor, et cetera. I'm gonna devalue all of that and just pretend that now that you have some money that I'm somehow entitled to it by proxy, that's frustrating. And the worst part is for the most part, when I talk to founders that are in this situation, they're guilty, they're very guilty about this. Yeah, that's the

Ryan Rutan: thing. This isn't just an external pressure, right? You feel it internally? It's actually, it's funny, we talk to a lot of founders, we talked to a lot of founders, post exit, a lot of them become angel investors, post exit. And when I talk about why, right, when I really dig into the wild, they're like, I'm excited to get into, you know, some other projects and like, OK, well, why not do something yourself? Well, you know, this, that it always boils down to nearly the same thing which is, they're like, well, I made all this money and I see these startup founders struggling and I know that a little bit of my money can help. And so it amounts to just guilt investments, which is a

Wil Schroter: dangerous place to be

Ryan Rutan: super, super, super,

Wil Schroter: but it's a dangerous place to be because I think we've got this sense that there's nothing wrong with sharing your wealth if you choose to, right, if you choose to, there's nothing wrong with that but being guilted into it or having an external assumption that it's not really yours, that you didn't really earn it. Go to anyone else in any other profession and say I deserve some of your money and see how far that conversation gets you. And yet with what we do again because the outcomes are so visible. We have this other dynamic, this other pressure, the other analog I would use is professional athletes. Yeah. Where it cracks me up because people are like, oh, you're so lucky that you made it into the NBA or the NFL or something like that. I'm like, you know, how hard you have to work in order to get that. Oh, well, you know, well, they were born, gifted and talented. A lot of people are born, gifted and talented. They don't magically make it.

Ryan Rutan: Yeah, exactly. Most of them don't do anything with it.

Wil Schroter: Yeah, it's, it's incredible and having talked to my friends who are professional athletes and talk to them about that journey, it's the same thing. They announce a massive contract and everyone hears about how much money they made

Ryan Rutan: exactly how much they made. Yeah. Which

Wil Schroter: is essentially what we're talking about for founders.

Ryan Rutan: Right. With an exit. It's that obvious, same thing. Right. You

Wil Schroter: get the headline and I think what ends up happening is we look at that outcome and we say, wow, we've had great fortune and we feel obligated in some way and I don't think it's all bad. I mean, it's the good news is it comes from a good place from within us, but we feel obligated. We want maybe share some of that wealth, but we have to be careful because the difference between we have to share it, you earn the money, do whatever you want with it. But the difference when we have to share it and we want to share it is sometimes pretty big. You know, being guilted into sharing, it isn't the same as wanting to share it. It's a huge difference.

Ryan Rutan: No, no. And then it doesn't feel good when you do it at the end anyway. Right. Been there and it didn't feel good. Right? I, I made a couple of, we'll call them charitable donations to friends and family and well, it felt good to help. It didn't feel good because of the way it came about. Right. It was essentially that sense of entitlement that because you've been successful and because I'm struggling that you are the balance in the universe that will help to correct this. Right? And it was just like, you know, at the time and happy to do it. But after the fact it didn't leave me with like the warm fuzzies if I just helped someone because it wasn't really by choice. And if I'm honest, it wasn't the help I would have chosen to provide. If I had looked around and said, ok, let's assume I'm gonna put $20,000 of my money into something. It wouldn't have been those couple of people in reality, it would have been something else, right? There would have been other things I would have done with that that I think would have had more impact. But because they showed up and because they knew that I could and because they had this sense of expectation and because I had just enough guilt, I said yes. And and it's an awful situation to be in that doesn't go away when you do it because now there's a sense of guilt that I feel guilty about it, right? Like, why am I not happy that I did that for them? Why do I, why did that not bring me joy when I know that it fixed the big problem for them? Why? Because it wasn't on my terms, right? And part of that is like, that's just the going back to like the typical kind of a type founder, right? Like we want things to be on our terms. So when they're not, they

Wil Schroter: don't feel good, you know what's interesting to me is most founders and this happens a lot. I'm thinking of three people specifically right now, most founders when they exit, never find an ability to actually enjoy the money because they're so surrounded by guilt by so many different things. So it's hard if you have a wealth event to not look at your peers, family members, et cetera and say they can barely make their mortgage payment and I can go buy a jet. That is a very difficult dichotomy to kind of wrestle with by way of that, regardless of how they treat you. By way of that, you have a very hard time enjoying the money. And it's one of those things that, you know, we're all excited about those exits and those outcomes, et cetera, but we never really have the ability to, to wrestle with what that psychology might look like. Like we all want the exit, but nobody ever stops to think because they haven't dealt with it yet. What if I couldn't actually enjoy it? So I'll give you some examples. I had a friend who exited last month, a great exit and I sat down with he and his wife to celebrate and I asked him, I said, what are you gonna do? You know, with your newfound wealth? And he's like nothing. And I'm like, ok, again, it's theirs to do with what they wanna do with. So I'm the whole point is it, it's it's not up to me, it's up to them. But knowing having had this conversation a million times I pressed it a little bit and I said, do you know that it's your money? And he said, well, yeah, I know that. It's, it's my money. I was like, when I say that, do you know that you earned every penny of it back to the salary a year ago when you got your salary? Did you feel like you didn't earn it? Right. And, and he was like, well, no, did you feel guilty when you took a vacation with that, with that meager salary? You know, because obviously you, you weren't getting paid nearly enough. And he said, no, I'm like, so now you've just gotten paid again with your own money and your own work, but you feel anxious or, you know, guilty about spending that money and he's, huh, when I thought about it in terms of a salary or, or what I've earned, I'm used to earning a salary, but this feels different. I'm like, guess what? It's not, it's still, it's still your money and enjoy every penny and it's hard for them to do. You know what I mean?

Ryan Rutan: It is, it's sad. Right. And again, like, I'm gonna switch back to the external factors. Right. So that, that was somebody, you know, internally feeling this, here's somebody externally pressuring. So friends sold the company about a year and a half ago now. I guess and did quite well. But again, like, has been working on it for 10 years and a mutual friend of ours had reached out and was like, I suppose you heard so and so sold their business. I was like, yeah, it was awesome. He's like, yep. Yeah, went out and bought a boat and you could just tell, like, there was like this, you know, this feeling. I was like, oh, how did you know, he, he bought the boat? He's like, oh, we went out on it last weekend. I was thinking like, so he's shared in his good fortune, like he took you out on his boat. And I was like, oh, where does he have a dog? He's like, oh, he doesn't, he's got it on a trailer. He's like, oh, where did you meet him at his apartment? Oh, the same one he's been living in since he started that thing? That's like $1200 a month. Cool. How did you guys get there? How would, what do you tow it with? Oh, uh, the, uh, the, that old, uh, the, oh, the f 1 50 that he's been driving since he started the company. Yeah. So, ok, cool. Yeah, he went and bought himself a boat after an exit that would have afforded him much more than a, an 18 ft boat that he's pulling with his, you know, 12 year old truck in the same apartment he's lived in since he began this thing. So like are you really giving this guy a ration of shit over enjoying a tiny bit of his good fortune? I it didn't put all this in the guy's face obviously. But as we were talking, I was just making these kind of subtle hints. And I'm thinking to myself like God, like why is this the case? Why do we have to feel bad after working so hard that we get some small pleasures in life like it just does not need to be this way, right? He should be able to go enjoy that boat. However,

Wil Schroter: how he wants the most common kind of purchase post, it is a house and the same refrain I I give to every founder whether they want it or not, whether they prompt it or not is you've earned every square inch of that house, that house enjoy several times over. Enjoy it because now let's talk about the converse because if you had lost everything, if you had lost everything, no one would be sharing in your losses. Yeah,

Ryan Rutan: it's, it's so strange, isn't it? When we're lucky, everybody wants to be there to enjoy that. Good luck when we're unlucky. Nobody's like, hey, you know what, let me share some of my, you know, meager whatever I have right now with you because you seem to be down on your luck, right? It never happened

Wil Schroter: when I was in my first year. I started my my first company. I was working nonstop and I came down with mono.

Ryan Rutan: Oh, sweet timing. Sweet

Wil Schroter: timing. Right. What, what, what a cool way to start a business. Now, the timing really matters here because number one I had no income whatsoever. I was a broke college kid and a lot of times when people say broke college kid, they mean like, oh, you know, I'm, I'm away from my parents and you know, that they would support me. I was as disconnected from my parents as possible. Like my dad didn't even know where I was. Right. So like there was no version where I was coming home or they were sending $1 to me. So I had no backstop whatsoever, whatever I had in my account at that time, which was tens of dollars was all that I had.

Ryan Rutan: I was gonna say, was it even a positive

Wil Schroter: balance? Barely, barely. And so point is at that time, you know, when all that was happening, no one called to check on me. Right. No one was like, oh my God. You know, did you hear Wilkin now with mono? And he won't be able to get out of bed for three months. No.

Ryan Rutan: Right. Such a sweet time to be. I, I feel like I've written that into several of my business plans where it's like, all right, spend six months grinding out getting this thing to some sort of minimum viable state and then take a three month nap. Right. It's definitely always part of

Wil Schroter: the plan. So, I've got another friend right now who, you know, business kind of went the wrong direction. He's kind of going through, uh, both a corporate and a personal bankruptcy to solve for it. Funny thing. No one's showing up.

Ryan Rutan: Like, how can we help?

Wil Schroter: Yeah. Yeah. Yeah. No, no one wants a piece of that. Now, here's the interesting thing. No one says, wow, he's unlucky. Nope, he earned that. You screwed up the business, you earned that

Ryan Rutan: when it goes. Right. It's luck when it goes bad. It's

Wil Schroter: your fault. Funny thing. Right. And I can go on this topic forever because, you know, I, I'm like, hey, if Ryan and I risk everything and things go well, the government wants all of our money but if we lose everything, they're like, go fuck yourself. Yeah, exactly. Right. Good luck. It's so funny, you know, uh with a fair weather fan that everything is in or against us. Here's what I would say for founders, we have this opportunity to do something great and to be fair, it usually doesn't work and when things don't work, everybody seems perfectly content for us to own all of that. Right? You, you've earned all of that. So lo and behold in that one time, that one rare time where things actually go our way, we've earned all of that. We owe no one because it's ours. It's ours if we choose to spread that wealth, that's totally on us. But we have earned every single penny because our good fortune came from our work. There was no luck involved. 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.