Ryan Rutan: Welcome back to the episode of the Startup therapy podcast. This is Ryan Rotan joined as always by my friend and the founder and CEO of startups dot com. Will Schroeder will we are also joined by a live, well, technically zoom audience today. Uh So this should be a fun one. All right. So let's dig in. We like to ask a lot of the questions aloud that founders have stuck in their heads. And one of the questions founders routinely ask themselves is, is this thing dead? Is this thing dead, right? Is this thing dead, right? Or they're asking somebody else? They got, we get this a lot in office hours. Like is this thing beyond the point of resuscitation? What's the general answer there will? Well, I

Wil Schroter: think the idea that the fantasy I think that we have is that this is all about a bunch of wins until it becomes this penultimate moment where we're ringing the bell at NASDAQ and it's actually the opposite. This is just an infernal shit show that continues in many, many, many different forms until one day it doesn't or does it less. And so today we're gonna talk about basically how many deaths can a startup survive? How many times can something go wrong and, and have me still be alive? Like, you know, Jason from Friday the 13th style because that's actually how this thing goes. And I think it's worth having that conversation instead of the feel good, you know, the, the made for TV, founder story where it just, there was that little bit of hardship and then everything was just, you know, a montage of wonderfulness, cocktail

Ryan Rutan: napkin idea, late nights at the office, NASDAQ. Right. Yeah, it's not quite how it works.

Wil Schroter: I think it would be kind of more interesting to talk a little bit about not only what kinds of deaths we endure along the way and I don't know, it sounds a little bit dire but it's true, but also what it actually looks like. How does that stack up over time and how do we motor through all that? You know, when people talk about going through a startup, like Ryan, if you were to pitch somebody on the idea of doing a startup, and we've talked about this before, when we talked about if you were interviewing someone for this job, they'd never take it. It sounds awful. Um But at the same time when you talk about what the founder journey will be like for people, like when they're doing a startup, they have a lot of wins in mind because there's an optimistic kind of interpretation of it. It's very glorious. But if you think about how this actually works, I would make it akin to how playing a video game works, right? So go, let's go way back. Let's go. A A N E S style Super Mario Brothers. It would be imagining playing this game for the first time, picking up your controller and saying I'm gonna play it all the way to the end without dying. You're not, you're gonna die 10,000 times. You're gonna mostly be blinking and half alive through this whole journey. And when you explain it that way, people are like, God damn, that's just way less exciting. So again, I think we need to consider this as like how much am I really gonna have to absorb here? You know what I mean?

Ryan Rutan: Yeah. No, it, it's a lot right? We know that like as you said, this is, this is really, yes, there's a series of victories here. But in addition to that, there's a series of just recovering from the deaths, right? This is, you know, it dies and we have to kick off of it. We just have to regain the momentum and, and keep moving. That in of itself is often a victory, right? Sometimes it, it comes in the form of a pivot. Sometimes it's not right. It doesn't have to be that complicated. It's not like every time the thing stalls out dies, whatever you wanna call it that there's some sort of existential recreation sometimes it's just a hiccup. Right. It doesn't mean that we have to make some fundamental massive change to move forward. Sometimes it's, well, we didn't have any sales for six months in our E to B business. So it's kind of dead in the water right now. And then we get another sale and then things are moving again. Right. So the resurrection takes a lot of forms as well. And I think that's important to note the deaths are many and varied and so are the rebirths. Here

Wil Schroter: are my first deaths every time. Oh my God. This is a great idea. Google it. 20 other people are doing it. OK? Well, that died, right? In a domain for it. Every possible domain is taken. OK? That died, right? Tell my friend about it. He thinks it's a terrible idea. OK? That died like it's just a series of these. And I think, you know, I've been doing this for 30 years. So for me, I'm so used to it, right. I'm like, pick up Super Mario. I drive straight into the coach but I'm dead. Like, I it's like, like no, like no other version. I'm just so used to this. But if you're not and you're like, damn, what am I doing wrong? Is this like a bad idea or all these signs telling me I shouldn't do it. Probably the point is we kind of have to do it anyway. One of the first hard misses that I used to think was just me. But it turns out it's just every business I've ever done is we have a vision for what we think the product should be and we go all down and dirty and we start building it and we see it all pumped up about it and we hit the launch button and no one cares. We hit the launch button and everyone's like, that's the dumbest idea. We run our, our old school Google ads to a landing page and no one clicks and we die yet another death. And that's where it begins. And that's one of many, many, many to come except we don't think of it that way. We assume that was supposed to work and we're shocked when it doesn't, you know.

Ryan Rutan: Yeah. And I, and I think that it takes a lot of resilience and energy, especially at that, at the early stages. I think that, you know, there's two things that happen, one that is kind of within a single startup. And then there's the entrepreneurial journey and career, like you said, you're so used to dying. It doesn't even phase you anymore. You don't even notice right after you've done this about 100,000 times, the deaths don't have the same level of impact, right? We don't feel those little losses quite as much. And, but also within a given startup, it happens. I think the the challenge becomes when all you have is the idea and the hope and you're excited to share it with everybody and that doesn't work. There's no momentum, there's nothing to keep you moving forward. And a lot of things die at that point because you don't have anything to say like, well, ok, yeah, they didn't like it, but there's all this other evidence that it's the right thing. Like we, we're five years in and we have paying customers. And so this new thing didn't work, but on the whole, we have some momentum, right? When it's that really early stage, you know, setbacks, I think those are the hardest to, to decide and to be able to have any objective evidence to say whether you should keep doing this or not. And so my general thought is don't look for objective evidence. It probably doesn't exist at this point, right? If you're looking for the calculus that says this is a good idea, great, good luck. I've never encountered it. You just have to keep trying, right? And then eventually you're gonna move forward or you're gonna really hit a wall that, that you just can't get past. And at some point you give up my whole

Wil Schroter: thing is you're gonna hit a ton of walls. This is nothing but walls, right? But again, if you don't know it, you're like, oh shit, what am I doing wrong? Like I, I thought this was a good idea and now somebody else has it or we launched this thing? And now no one cares about it or I hired some people and now I have to fire them all. Like there's all these different versions. And again, we tend to tell the story from like the best of mix tape of how things happened. And every now and again, we'll have one or two things that you were big setbacks and that's a pivotal part of the story. But I'm like, you know, how many startups have gone out of business, come back, gone out of business, come back, gone out of business, come back before they actually became something. We just don't hear that part of the story. But Ryan, you and I talked to founders all day long and a huge percentage of those conversations, especially now, especially now with where the world is, et cetera are like, dude, I'm ready to like close up shop. I'm ready to kind of put this thing on ice. And our advice is this won't be the first or last time you do that. And I'm like, wait, what I thought that like, you know, we miss a funding round and I guess that's just it. We all go home like, no, that's not the way it goes. You miss a funding round. Things suck for like 18 months and then you figure it out. Then the difference is you never know whether this is the, the beginning of the end or the actual end. So we're running around like the walking dead half the time. No idea with where we are in the process.

Ryan Rutan: Yeah. I mean, this is such a common state for founders, right? We're, we're walking dead for so many reasons, right? Like the, just the, the emotional energy drain, the physical energy drain all of it. And then we're getting smashed in the face with this kind of stuff all the time, right? We're constantly hitting these walls, these speed bumps, these necessary pivots, these un necessary pivots. And like you said, it's really hard to know whether we're really up against a real wall like a true hard stop. Like fundamentally, this thing isn't going to work. And let's be honest about that one though, because there are very few businesses that can't find a way forward. It's whether you're willing to put in the effort to make the fundamental change in the business to make it work, right? Because, you know, we can, we can pivot our way and just keep changing and keep moving and keep changing and keep moving if we believe in the vision and there's enough of a problem there at some point, the two shall meet, right? The question is, do we want to wait until we're in our eighties, uh to see that happen? No one's gonna tell us, no one's gonna tell, nobody has the

Wil Schroter: answer. I'll give you some examples. So when I started my first company I'm three years in, I'm $100,000 in debt. I have no chance of ever paying this off. Like $100,000 is a lot of money to begin with. But I was like 20 years old, 21 years old, maybe. And my alternative was to make $5 an hour at the local Best buy, which at the time, like, seemed like a pretty viable option, but I couldn't even do the math. I explained ever getting to pay that back. And that was like real debt that I actually owed. So things are going horribly. We had a whole bunch of clients that stiffed us on bills because we're a web design agency. And I remember getting the whole team in a room and I said, guys, this is gonna suck, but this is your last paycheck. Like right now, whatever I just handed to you is the last money you're gonna get. I'm closing down the office, I'm closing down the company and we're taking it back to my campus apartment and I'm just gonna figure something out while I work out this Best Buy situation. And I just assumed that that was it. I just assumed that like, that's how the story ends. And lo and behold, we had this other partnership we were working on with a local ad agency that I didn't think would ever materialize. We end up partnering with the agency like three or four months later, we end up winning a quarter billion dollars a year worth of business. Like one of the most lopsided agency wins in history. Who saw that coming? No one. I got a, a buddy of mine a few weeks ago. He's at one of our in person founder groups in Columbus. And uh he shares with the group that in October of last year, he had to lay off 40% of his staff just like brutal, right? He had pitched 100 and 20 investors. Every single one said no, my limit was 80 in one of my last companies of going to 80 actual like legit V C pitches and getting told no, which is brutal. It was the longest year and a half of my life. People don't think it's a long time, try living it every single day being told no cons it was awful. The first

Ryan Rutan: couple like this, let's put that in context. So let's, let's talk about where the death occurs there in, in terms of that particular process, right? The first couple of times you get to know you're like, ok, I'm probably still honing my pitch. I'm still figuring this out. I'm talking to the wrong people when you've heard 15 2030 you're pretty damn sure at that point that it like there's something really off, right? Like at some point you're like, ok, like why am I still doing this? So to get to 80 to get to 100 and 20 just it takes, it takes a lot of grit to keep going in the face of that. But in those moments like when you're looking at that, yeah, that feels like 100,000 little debts occurring over and over and over again, but it avoids the big one. Right? You're still moving, you're still going, you gotta die each time you have that meeting, get up and do another one. But that's what keeps me going. And so in his case, you know, what was the end of that story? So,

Wil Schroter: right. So, so the 121st pitch, that investor thinks it's the greatest thing that they've ever heard and gives him $58 million. What the right? Like, I mean, if you ask the same guy

Ryan Rutan: can't see these things coming. There's no way to predict that there's no way, no way to predict

Wil Schroter: it, right? And we've talked about this before on the show. And in that example I gave of when I was $100,000 in debt, closed up shop, put it back in my campus apartment and was trying to figure out how to go work at Best Buy. That was the same year, probably the same month that we had sold one of our web design packages for food, right? Like that's kind of where we are at. We like we sold a web design package to a restaurant. They couldn't pay us, but they gave us $500 in gift certificates for wings and it was like a billion dollars to us. We were, we were probably just as excited about that as when we actually got a quarter billion dollar because relative to where we were at and both of those things, it was pretty important. And so the problem is when you're in the middle of it, you know, kind of like what we talk about this, this walking dead. You don't know if you're about to be that story that we just told where it's the turnaround that everything goes great or the cautionary tale where it's like, oh man, remember that guy Ryan that you, you know, had run around everywhere and like, you know, went through all of his home equity and sold everything. He owned 100

Ryan Rutan: and 20 pitches later and he couldn't figure out that nobody wanted to invest, right? Like what an idiot. And that's the insane thing about it, right is because there's no visibility on when the wins come. Had he given up at 100 and 20? That would have been the narrative. People would have been like, it wouldn't have been this Survivor story. It would have been, why the hell did he get to 100 and 20 pitches? Like wasn't 40 enough, wasn't 60 enough, wasn't 100 enough. Like, and yet you get to the 121st, you get the 58 million, you walk away smelling like roses and yet you had no idea you were in a garden until the minute the check arrived, right. There's no way of seeing the shit.

Wil Schroter: The problem though is we hear enough of these stories. And so we just assume that we're gonna have this, you know, fairy tale ending. So I gave the story of where I go back to my campus apartment and things turn around, you know, will become this big company. Cool. I also have a story where it didn't happen, which I just alluded to a moment ago where all I did was pitch 80 investors burned through all of my time in cash for years and years and years and came up with nothing, right? There's no cool end to that story. It was just awful. I came with a heart attack is actually what ended up happening was my heart stopped at the end of that story quite literally. And so it's so tricky for us because on the one hand, even if we know that this is the way that this thing is gonna be endless, endless, endless hardship, it's kind of hard to know whether this is one of many or one of the last, you know what I mean? Like it's, it's hard to be able to see where you stand.

Ryan Rutan: It's one of the worst states to be in as a founder and it's one of the worst challenges to try to help somebody through and, and in this last year with 2022 being what it was. We had a lot of these conversations, uh, and they're, they're still going on right. There are a lot of people who are in some form of limbo where they're kind of in that walking dead and they're trying to decide like, am I throwing good money after bad or am I about to hit that 121st meeting? That gives me what I want and need. And it's so hard because on one hand, you know, you're, you're kind of afraid that this is the end, right? This is the signal that I need to interpret as stop doing what you're doing, pack it up and go home. On the other hand, you're sort of afraid that, well, maybe this will just tease me into doing a little bit more. Right? I'll get pulled forward and I'll keep spending more time. Right. So, it's like, should I just cut my losses, should I? And the reality is there's no way to answer that question. Right. We'll never know what would have happened in the future until you get there. And we can't really do a whole lot of analysis on what you've done in the past and say, well, yeah, based on what's happened so far, it's time to throw in the towel. Right. It's, it's really, really hard. That's more of a founder decision honestly than a business decision, right. It's, can you keep doing this

Wil Schroter: a great question I give to founders though, that I think resonated well with me and I think it's been a good tool for other people at some point where you're just grasping at the final straws and just trying to like, pull every last thing out to make things work. Question I always ask is, are you doing this to avoid failure or to optimize for success? Right? Are you at a point in the business where you're just more concerned about it failing, then you actually have a chance of success because you know, when you're at that point, when you're like, you know, I there's no reason for me to think this is gonna be successful. My ego just can't stand failing. Right? That's where I was with my 80 pitches. I could have dropped out earlier and did something else. But my ego was so bruised from failing that I continued to drag myself through the mud and create all this stress and do all these awful things to my, to my body. Really, when really if somebody would have pose that question to me, somebody that I cared about, you know, that I would really take that seriously. No way I wouldn't have gone another day. I'd be like, you know what I'm optimizing for failure right now. And that is, that never wins.

Ryan Rutan: It's so hard though. I mean, like I hear what you're saying and I agree and yet on the other hand, look at the other case. Right. What if somebody had posed that question at the 80th 90th, 1/100 meeting, 120th meeting? Would he have said the same thing? Right. Would he have come back with? Yeah, I'm, I'm probably, I'm probably just running away from failure rather than chasing a win here. It's so hard to know in the moment. Do you think if you go back in time as you were somewhere between that 70th and 80th pitch, what specifically would you have been able to point to if, if you can still recall, what would you have pointed to? That would have said this is ego, not me chasing a good idea. Like there's enough evidence here that says this thing is dead in the water. The funny

Wil Schroter: thing is, it was a great idea. It was a company called afford it dot com. That doesn't exist anymore. It was essentially what a firm is now, right? It was by later uh commerce uh for e-commerce, except I did it 10 years prior to a firm wrong place at the wrong time in the midst of the financial crisis. Whatever point is, it was a good idea. I knew it was a good idea, but all of the signs were just absolutely black. Right? It was 2007 financial crisis. All the V CS had retreated doing a higher risk. Consumer finance was not fair, right.

Ryan Rutan: Even risk consumer finance was high risk consumer finance in 2007, right? It was all a mess. It

Wil Schroter: was brutal and yet I kept thinking that I'm just going to be able to kind of like, push beyond that. And this is where the founder mythos kind of comes into being. We're like, oh, well, that founder had it so hard and they just worked so hard and made it through. That's gonna be my story. Probably not, statistically

Ryan Rutan: speaking. No, sir.

Wil Schroter: And so what I would have said to me, aside from the fact of, hey, are you playing to win or to lose at this or not lose would be, do you have more downside or upside? For example, when you get to the point and I'm sure some of the folks that are on the podcast with us right now are at that point, we're beyond burning through savings. You are burning through savings, beg borrowed, steal, stolen, et cetera to even just stay alive right now. You are. And it happens all the time. But you're at a point where your downside is starting to get outside of your upside that you can only lose so much. And the recovery from that is brutal. So even if you do recover and get back on top of things, the probability of losing it is brutal, right? It's just not worth it. My buddy that we were talking about the founder that raised 58 million, had he and I been sitting across from each other in December when actually everything changed and I was just, had the 120th, uh, meeting my advice would have been the polar opposite. I would have been, like, listen, you've got to protect your family, you've got to protect your downside. This was fun. Get out. Right. And you look at that and go say, well, you know, if he'd taken your advice, you know, he wouldn't have gotten that. Yeah. The 1% of the time that that actually happens, right. It's the 99% of the other cases that I'm trying to help avoid. And often we're not willing to have that conversation, you know.

Ryan Rutan: Yeah. Yeah. And I, I think that there's, you know, of course, it depends on the stage, the startups in, it depends on how far down the road you are. If you've already raised funds and you've already brought a big staff. But one of the things that I think is important to remember here is that your startup staying alive is very different than you being personally solve. And this is something that you've said so many times in the past. Well, but that's that, you know, founders run out of money, businesses don't run out of money. Your business doesn't actually need any money. It can go into mothball mode, it can sit there, you can find a way to skeleton crew the thing or mothball it for a period of time and it can keep moving as long as you can keep moving. So I think that's where, when we, if we want to start to figure out, like, how do you do the math on? Am I at that point where my upside is starting to outstrip or my downside is starting to outstrip my upside. It's, are you going to be able to maintain this at any level, you know, into the future based on what you're doing right now? Right? So sometimes this doesn't mean stopping, but this may mean really, really changing how you're approaching the business, right? This might mean going, getting a job and making this your side hustle again. It may have started as a side hustle. It may have turned into a full time thing. It may go back to being a side hustle you and I both have dozens of examples of businesses that have gone through these undulation and still come out the other side, right? You know, sometimes we have to retreat a little bit before we can move forward. That's ok. Right. As long as this thing doesn't kill you, it can't actually die, right? The business isn't going to die, you can bury it, you can choose to end it, but you have to take care of you, right? You as the founder are the most important asset this thing has because without you, it's definitely going nowhere. There's

Wil Schroter: also a part of it too where if this is the only time you've done this, it's your first at bat. You tend to forget that most founders who do something successfully. It's not their first attempt. It's sometimes it's their sixth attempt. It sounds sweet that it would be your first attempt. That would sure be pretty convenient. But a lot of us have a few at bats where we strike out big time. And the idea is that this might be one of those, this may not be the hit that we expect it to be. So we have to be able to recover, reset and restart again if I put myself in $100,000 of personal debt at the time where I would have been making $5 per hour to pay it back. I can't get back in the game, right. I'm screwed forever at that point. And so when I'm talking to my buddy in December and I'm saying, hey, you need to eject. What I'm really saying is you need to protect yourself so that you can be around long enough to do whatever next act there's going to be. And that, like you said, that could mean taking on another job. It's a great idea. By the way, it could be taking another job, it, it could be mothballing the business for a while running its skeleton crew doesn't matter. There's nothing to say that our businesses are only viable. If they're constantly just growing in the direction, we expect them to it's just not the way it works. Yeah.

Ryan Rutan: If that was the metric for whether or not to continue there'd be no businesses

Wil Schroter: totally. And I think the other thing is we're a little bit spoiled over the last 10 or 20 years in the startup world where we get to have success in such short increments. Right. Like, you can be successful within two years. The rest of the world kind of doesn't work like that. Like I look at all my neighbors in my neighborhood, right? They all build old school businesses that took the 20 or 30 years to come around. And like when I talk about, oh my God, I've been at this 18 months, you know, part of my friend is like, go fuck yourself like that. What are you even talking about? And again, I think we're spoiled because our cycles are so, so small and so tight. We don't understand how long it takes to build something truly great and we can get put out pretty quickly thinking, oh my God, I had so many deaths in six months. And you're like, dude, that's a day's pay for what most people do to build their businesses.

Ryan Rutan: That's right. I, I think that's a really important thing to remember though, right? It's that yes, success can happen very quickly in this day and age because of technology, because of our ability to reach customers of scale. It can, that doesn't mean that it will and that doesn't mean that if you don't, that something is fundamentally wrong, right. We know plenty of businesses that have just slow and steady growth and plenty of people who are, you know, have immense wealth based on that. Right. It doesn't mean that in order to grow big, you have to grow fast. There is nothing that says that in fact that the vast majority of businesses that you look around and see that are enormous are 20 plus years old, right? This is how it goes in most of the cases.

Wil Schroter: There's also a concept too that like during those down periods, there are periods where it kind of just sucks for everybody. I say that because guess what guys, we're in one right now, this is a year that just generally sucks for everybody and not to be negative about it, but it just is what it is. And so we're wondering why we're not pulling rabbits out of hats and funding isn't falling out of the skies and customers are. It's because the world's kind of messed up right now and it's gonna be like that for a minute. It was like that in 2001. It was like that in 2007 during these different epics. And that's just kind of the way things are right now. You're gonna see people dying a lot more deaths for a minute in order to be able to make it through this, right. Now the world is in defense mode. If you were a startup founder, you are playing defense, why are we seeing all of these layoffs everywhere? Because everyone's playing defense, we're all circling the wagons so that we can make it through this so that we're around on the other end of this to go build when we want to. And again, if ever, there was a time to feel like you were dying 1000 deaths. This is kind of like the epicenter of that. This too shall pass. There will be another side of this where a year and a half from now things start going the other direction, the markets start exploding again and everyone's all fiery. You just got to make it through.

Ryan Rutan: Right. Yeah. And I think it's so important to remember. Right. And these things do feel awful as you're going through them. And I, I talked to a founder two weeks ago who had to let their entire staff go. Right. Not some of their staff, entire staff. It was about 12 people, which isn't huge, right? But when you go from 12 to 1, it's a big deal.

Wil Schroter: So many. Those personal relationships.

Ryan Rutan: Every that's a thing like and some these they were deep personal relationships he brought friends in, had a brother-in-law working for him. They were just, it was, yeah, it's a mess. It's a mess and now it's back to, it's not like now that that's happened, everything is easy. In Shangri LA, this founder is now answering all of the customer service requests, you know, handling product features himself, like doing everything alone and, but it's still moving, moving forward and it's still, it still has customers. It has a chance to continue to grow, but it's not dead and yet, man, it's the, the death of the founder soul, right? Like, unfortunately, we get to experience that kind of as many times as we need to. There's no limit on that. Unfortunately, it's not like contra where even with the cheat code, you only get 99 lives, you can die 1000 times in the, in the course of

Wil Schroter: a startup. 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. Well, with that said, let's talk to our, our beautiful founders here now that we've depressed and terrified all of them,

Ryan Rutan: that's just the setup. We're gonna tell you. We're just kidding. Now, this is all good news. Just kidding.

Wil Schroter: It's, it's all rainbow and, and uh seashells. So let's start from the top Ryan. You want to take us off?

Ryan Rutan: Yeah, let's do this. All right. So we've got uh we got Derek, I always thought of starting a business more like John mcclain from Diehard, but it sounds more like Bill Murray from Groundhog Day uh spot on. I mean, absolutely. Spot on. Yeah, we get some of those John mcclain moments, right? We do get some of those. But yeah, but the vast majority of our days are spent waking up to doing exactly the same thing Derek, you want to join us live here. Do you wanna give us a little feedback on kind of where you're at and that, do you feel that way now? A Absolutely. I mean, you know, it's interesting as you guys were talking, I thought to uh Moneyball is a movie I like and it talks about how in baseball there's no clock on it, you know, like trying to not die instead of trying to win. And it just occurs to me how much I probably put time frames on what I'm doing that. I'm not sure why I just, they're made up, made up numbers, right? What people tell me happens. It's what I hear on a podcast. So, you know, but in reality to your point, as long as you're not dying, you're moving forward you know, or metaphorically if you die, you gotta rise again. But, you know, I think it's, it's interesting to think about again trying to not die. And if you make it to the end of the day, you've kind of done well and you set yourself up for day two, you know, more of a lifestyle rather than a goal. Well, I think that's where we have to combine the two. Right. Yes, it's Groundhog Day. But we also have to die hard, right? Like we, we have to be, we have to be resilient, right? We have to be able to crash through that sugar glass and get up and fight.

Wil Schroter: Yeah, I agreed. And Derek, you know, the thing too is for a lot of us again, this is the first and only time we've been through this. So we don't know any better. And it's often we're, you know, we're very alone in this process. So it's hard for us to compare notes. It's why we put those founder groups together because you get like eight founders in a room and they're all comparing notes. Now, we did this actually with the founder that I just talked about the one that raised 58 million. And it was funny because we're in the group and he gives us update and obviously a phenomenal update, although heartbreaking because he gave the whole everything leading up to it. And everyone in the room is like, you know, pretty choked up, but a very happy for him, of course, but like half the other people that were giving their updates were all talking about like what the timeline would be to shut their businesses down, right? Like, I mean, that's the shit people are going through. However, when you start hearing other people going through the exact same things. So for example, one of the guys was like, hey, I think I'm gonna have to go back to consulting, which is what I was trying to get away from by building a product. And I think I'll have to go back to it and then he hears the next guy go, that's already what I'm doing. And the next guy goes, wait, I can go back to making money and run my business. Like it's funny because we're all in this, this little world where we think it's only happening to us. You start talking to other founders. They're like, oh damn, everybody's doing the same thing. You know what I mean? It reminds me when parents get together and they're like, oh, your kids a jerk too. Not just me. Yeah. Yeah. Yeah.

Ryan Rutan: Yeah. Yeah. Oh, there's so much power and commiseration, right? There's, there's so much just to know that you're not going through these things alone is a huge benefit, right? And it's so funny how often we and I guess will for you and I, like, we've done this for so long. We talked to so many founders, we know this is the universal experience and yet we routinely run into founders. You're like, it's just me, I'm just really bad at this. I'm just making all the mistake. Yeah, you're making all the same mistakes that everybody else makes. Wait, what everybody else does the same thing. Yes. And then somehow even that is uplifting. Right. Just knowing that you're not, the only idiot has a huge, huge uplifting effect. I

Wil Schroter: mean, the stuff we get like day in, day out and again, this is why we do what we do. This is our dream job. We just get to sit and bullshit with founders all day. But like we'll get on a call with the founder and he's like, you're not gonna believe this. I picked this co-founder gave him 50% and they're not holding their end of the bargain. I'm like, welcome to day two of a startup. Like that's

Ryan Rutan: exactly how I remember my first startup.

Wil Schroter: Yeah. Yeah. Yeah. OK. Moving on, Mike. I love this one. How many quarters do you drop? Trying to beat Blinky Pinky Inky inside. I hope you didn't have to Google that by the way, uh Before deciding it's time to move on to Donkey Kong. Mike. What were your thoughts there? I'll put all

Ryan Rutan: my quarters on Mike knowing the, the names of those without Google. They

Wil Schroter: are, they are committed to memory though. Yeah. You actually, you guys did a really good job answering that question and the answer was there is no answer to that question, right? I mean, you really have to go with your gut. There's no formula to it and you know, see what your own circumstances are. It's just, you know, when you're giving advice to founders, especially startup founders, it's how do you navigate through that? But I mean, you guys gave plenty of examples of it. I think that for most founders, when they're thinking about like, hey, why do I move on to the next thing? A lot of this in my mind is what signals are telling you that it is working, for example, did you build a product that customers love? Right. Yeah, actually, you know, when our customers use it, they really love it. OK. That's a reason to stick around. Did you build a product that no one gives a shit about? Yeah, man, we built this and nobody seems to want it. Good reason to leave right? There are there, there are actual like external signals other than we, we're out of money. You know, the hard ones are always, of course, we're out of money, et cetera, but the easier ones to overlook are and this is actually came up in, in that last founder group. I don't know why I keep bringing this one group up, but one of the founders is like, hey, I don't know if I should keep doing this and I'm like, dude, you have an amazing product, right? It actually happens to be a product we use at startups dot com. It's an incredible product, right? Yes. These are shitty times. This is a tough time for you, but you have a great product. That's the reason to keep going. Like again, that's when you plow through everything short of that. We're like, man, we've tried everything and no one cares about what we're doing. Cool time to move on to Donkey Kong.

Ryan Rutan: Right. Yeah, I think there's also, we don't want to miss the upside verse downside here too. So you're thinking about plugging those quarters and you also want to think about what the upside is. I in 1987 in Philadelphia, we were staying with my uncle. I watched him spend 2.5 hours to beat Pac, man. You know what happened at the end? He beat Pacman like there, there was no penultimate moment. It was like, ok, I don't know if that was worth it. Even as a, as a seven-year-old, I was like, I'm sure this was worth it. Don. I'm

Wil Schroter: pretty impressed with your uncle right now. But yeah,

Ryan Rutan: this was a home system. So it cost him no quarters, probably cost him $25 to buy the cartridge back in the day. It

Wil Schroter: kind of picks up what Romans saying. Roman says, uh what's a death versus falling asleep and then waking up in the morning and starting over like the groundhog day analogy. Like a

Ryan Rutan: simple Roman depends on whether you're at the wheel or not when you fall asleep.

Wil Schroter: Uh Robin, what's your thought there? Give us some color. Yeah. So the question is when you wake up, how do you know if you're dead and you're in heaven? Or if you're just waking up and playing the game over

Ryan Rutan: again? If you ever wake up and feel like you're in heaven in a startup, check yourself, like, pinch yourself. It's, it's probably not real, right? Or hell, whatever it is. Right. One or the other.

Wil Schroter: No, it's a fair question though. Most of our day to day as founders is bullshit drudgery. Right. Again. It's, it's not the cool, made for TV, like uh series that everybody thinks it is, right? It's not that cool montage scene where we're high fiving and, you know, and, and working through stuff. Most of it's just really boring stuff. It's Ryan and I talking through Wild Landing Pages and performing and making one copy change on something. It's boring shit. Right. And most of it is here's why it didn't work. Like, uh sadly, there aren't a lot of times where, right. And I get to have this conversation about why we blew away expectations. 99% of the time. It's like, well, that didn't work on to the next thing and it's like that day in and day out and we're heading into year 11 in our business and that doesn't change, you know what I mean? Like, that's, that's kind of just what the business is. It's hard to get people to understand that. Does that make sense? Roman? Yeah. I guess my question was more along the lines of how do you know if you've actually died and, like, like when it's time to move on or whatever, or if it's, you're still playing the game, you just, I guess maybe the whole concept of dying maybe is a little ominous. Like I, I feel like it's because you're not actually dying, right? You, you may not feel good, but part of it is your perspective and how you look at it. And so the question is, when are you actually dead regardless of how you look at it? Like there's no resuscitation. The thing is that move on very, this is like, yeah, I'm just trying different angles and it doesn't feel good, Ron. I'm curious your thoughts here, but my thought is, it's at which point the founder is taken out of the game. Like when actually I cannot financially or emotionally or anything else, commit any more cycles to that. That's what I tend to see as the last moment. What about you? Right.

Ryan Rutan: Yeah. And I, and I think that is, that's indicative of a lot of other things, right? I think by the time the founder feels like they can't or don't want to do that anymore, that there have been enough other signals, right? That things that just took the energy out of them little by little by little. And when we, when we say death, we're not talking about the founder, we're talking about the startup, right? And there's lots of little deaths within the startup. So I think that's a big part of it. I think the other side of it is there are times where things happen to a business that just sort of force the outcome, right? If you can no longer, the business can no longer afford to keep the AWS payments going, you have to turn off the website, right? If the, the founder doesn't have any say, savings to, to dip in, to do that or can't find any money, there are times where big things happen. Now again, that doesn't necessarily mean that it's dead, but it has to change form at that point. Right. So it has to become a more ethereal being to continue with the analogy here. It might be a ghost for a bit and wait for something else to happen. But I think the other side of that is Roman is that, do you still believe? Right, this comes back to you as the founder. Do you still fundamentally believe you're on to something that you're just still working out exactly how to make flint and steel drive spark into tinder and have something catch fire if you still have the sense that you wanna keep striking flint and steel, then you're still in it, right. The minute you no longer feel like doing that. I think it's important to lean back and say, why? Right. What's leading you to this decision? Because for as much as we've said, it's a really hard year and there's a lot of bad shit happening. I have talked to a couple of founders lately who were going through a rough patch emotionally because of all of this. But their business was actually doing fine and they weren't looking at it that way. They were looking at it through, I don't know, whatever the opposite of rose colored glasses. I'm trying to picture the color wheel and think about what it's not working, but whatever, the opposite of rose colored glasses is just a really pessimistic lens. And because they were emotionally drained, they were probably physically drained. Right. And so they're looking at it in a very different way and they're saying I don't wanna do this anymore. This isn't working and I'm looking at it going well based on everything else you've told me other than you don't feel like doing this anymore. The business seems to be ok right from where I sit, the business looks ok. And so we have to be careful of those moments too. And so I think that's why it's important when you get to that day where you're like, you know, I'm not looking for groundhogs anymore. I don't give a shit if that little bastard came out of his hole or not, I'm going back to sleep. Ask yourself why? Right. Lean back and really get a good understanding of what boxes got ticked. That made me feel that

Wil Schroter: way. I think about it in terms of we can point our startup energy as founders toward anything, just like relationships. We can point that energy toward a bad relationship or a good relationship. It's our choice. if we get to a point of the startup where we start to say I have so much to give in this world, so much to create, is this really the highest and best use of that output? Right? Is this really where I should be spending that output because I can restart and go do something else. Maybe not right away, maybe in six months, maybe a year, maybe two years. But there is a point where, you know, the idea of putting bad money over good, where we're just no longer actually using our powers for the sake of good, we're just holding on or again trying to avoid failure. And that's usually a pretty good indicator for me, that

Ryan Rutan: was a delicious segue into, in terms of like choosing where to spend our energy into to a statement, you know, that you're some months into this and you've only got six customers, right? And you know, when you started out, you thought that you'll have 1000 customers in the first six months. Well, you and I have spent some time talking about this very challenge and one of the things that I know is that your energy wasn't specifically spent trying to acquire customers, right? For better, for worse, you've been asked to provide some other things based on the program that you're in and there's been some things that you were told or asked to do or it was insinuated, you should probably do that weren't directly related towards building that customer base, right? It was, you know, financial projections and it was, you know, lots of other things that, that you were working on and constructing, that had nothing to do with customer acquisition. And so to will's point, you know, we choose where we spend our, our, our energy, right? And you can look at that and say, look, customer acquisition was dead and, you know, with six customers in four months, I would tend to agree. It depends on the size of the customers, but in your case, six customers definitely not go going to float the business, but you weren't focused myopically on that. You weren't trying with all of your energy to drive that forward. And so I think that's really important to take stock of and say, why would I expect that I would have 1000 customers when 1000 customers wasn't how I spent my energy day and day out. Right. Yeah, that's true. I was spreading myself so thin and the projections sound great on paper. Oh, 1000 customers. And you can find the only place they sound great on paper. I remember even saying it to you in like our first meeting. I want 1000 customers by March. But, and on paper you can justify anything. But yeah, but, but just getting one customer is actually, it's time intensive and it's really hard because they're taking a chance that early adopter is taking a chance on a business. That's definitely not as glamorous as the other ones currently in the market and is in quite a rudimentary stage. Not, it doesn't even look that great. So, and I'm actually really proud of my six customers. I'm thrilled. It's an infinitely incalculable difference from zero, right? Like you, you, you did it 600% higher. Yeah, or yeah, infinitely higher. Yeah. But with incubators and all those places and potential investors just basically being dead in the water. I have to recalibrate my priorities as well because it's not that easy to start generating a million euros or dollars in revenue. It sounds easy on Instagram and all that stuff. But like even getting six customers and getting them to stay with me for like 10 lessons. That's hard and, and just making sure we deliver the best service for them and yeah, so I think maybe 1000 customers in a year. That would be nice. But yeah, it's definitely, I've had to swallow a lot of pride pills because I like my confident, I feel like such an idiot every single day now because the progress is at a snail's pace. But maybe that's what happens sometimes when you have. Yeah. Yeah. Again, what? You're a snail's pace compared to what? Right. So I think it's important to make sure that we're benchmarking ourselves appropriately, which is generally to say, don't benchmark yourself, right? Like compared to what? Right, who you're comparing yourself to Instagram. Yeah, doesn't work. But I was joking

Wil Schroter: about it before. I was like, people who build businesses like over the past decades are like, wait, you've been at this a year, like it took me that long to get a loan to even open my business for whatever, you know, for whatever that business was like and again, that's all well and good, but it's still our lives and it, it still hurts. But if you were to look at it just a little bit different, if you were to say, OK, this is a 5 to 10 year journey, I'm in year one, let's say, and there's gonna be mostly 99% of the times I'm, I'm going to get negative signals that just the way this works. And so instead of getting super worked up about any of them, I'm gonna look at them and going, I expected this, I knew this was gonna happen back to my video game analogy. I know Super Mario is gonna die. Over and over and over and over and it sucks when you actually are Super Mario, right? And it's not just a game, it's your life, but you've got to understand that all these setbacks kind of are the business. You missed a funding round. That is the business you had to break up your co-founder. That is this business. There's no other version. It's the only version you've seen is the problem. You

Ryan Rutan: just feel so incompetent though when you're, when you're in the thick of it, this part, this episode is great because I just feel like, am I the most world's most incompetent founder and like, am I the like, you know, and I same issue, I had a CTO for a trial. Hasn't done a liquor work for me. So I'm gonna break up with them. Yeah.

Wil Schroter: Yeah. Yeah. Don't do that. When I mentioned that I saw everybody laughing at that because it's like, it's such a kind of funny, like rite of passage, but all the same. That's really where we're trying to kind of change some of these narratives about what it takes to build startups and not that it helps us to know that all these things are challenging. It's kind of like no shit, but it's more so to say, oh man, like these are gonna be like near death setbacks, not just a couple of landing pages that didn't work. Like I am gonna probably have to let go of all my staff restart and come back again. I'm probably gonna miss a funding round. Have to clear out the account and live on a second job until I'm able to bring this thing back around. That is the business. This is how these businesses work. And if you do this long enough, you're gonna go through all of it for better or for worse. All right. Next up, uh, Nick, that's sometimes a tougher question or realization. Is this a real wall? Like what, what were you thinking, Nick when you're thinking, is this a real wall? Like is this something that's gonna doom me? Yeah, I mean, I think that's the theme here, right? Is this a hurdle? Is this a, a wall? It's a perspective and focus and you know, how far back do I need to get to see that this is a hurdle or it is really a wall? Like is this the end? What do I need to consider to make this happen? And maybe it is just a refocusing on something, maybe if it, it's walking around this wall that gets us somewhere else and it's a slightly different path which is a pivot or just maybe a, a different focus on something like Ephrine is saying, like, maybe it's a focus on sales instead of projections and all the other things that we're doing and, and we've faced as well. There's no one size fits all answer. But part of it, you know what we will say. Is this a lot of the stuff where we think? Oh shit, this must be the end. A lot of times I'm telling you, this is one of many to come. Like I said, the whole co-founder thing, you're gonna go through that, right? You're gonna miss funding rounds. You're gonna run out of money. You're, you're gonna launch your product and no one cares and you have to go back and rewrite the entire thing. You're gonna hire a development company to build the M V P. It's gonna be a complete piece of crap and it's never going to get out there and you have to go back and try to find money to hire another, you know, company to do it. Like this is what we all go through like these are all the deaths you will encounter in order to be successful.

Ryan Rutan: Yeah, 100%. Well, yeah, it's, it's, I think it goes back to. So, you know, I'm not sure that there exists a wall that we can't get over. Right? Unless you're trying to violate physics or you're solving a problem that nobody cares about. There's always a solution. Even if you're solving a problem, nobody cares about. You can change the problem you're solving or you can keep moving forward, you find out that's the case. So I would say that it comes down to how much do you want to see what's on the other side? Of the wall. Right. The difference between a wall and a hurdle is our desire to climb it and see. Right. I don't know that I've, I've run into too many scenarios in, in business or in life in general where, like, if I wanted something enough and this isn't just to say, like, you just have to want it, you have to want it, you have to want it enough to try. Right. And if you, if you try, you can find a way to see what's on the other side of the wall. It's not always pretty, right. You might find it, you climb the wall and then you hit a precipitous fall on the other side. But I think that it just comes back to, do you still want to keep doing this, right? Do you keep wanna, you wanna keep moving forward or

Wil Schroter: not? You know, another way I'd summarize this for our own business at startups dot com. I mentioned we're heading into year 11, Ryan and if you and I were really honest with ourselves and we look back at the last 10.5 years and said in all of 10.5 years, how much of that was like we did something, right? My first guess would be around 3 to 6 months of 10 years. We did something, right. You know, like collectively, like anything that worked well for us would have been those few moments where it was like, oh shit, we did something, right. Which generally means we've spent the better part of a decade screwing everything up. I mean, nobody wants to believe that because like, oh you guys have a successful company. It's not the way it felt, right. It's

Ryan Rutan: not the way it looked either, man. Like we must have, we know that we've done some things right along the way because we look, look 12 years younger than we did 11 years ago. Yeah, it's, it's a miracle that we've survived this. That definitely is helping. All right, moving

Wil Schroter: on, Ryan, you want to take us to the next one? Ok.

Ryan Rutan: Let's, let's go to, I'm trying to stave off hiring employees in order to mitigate burning cash. There can be non-financial risks to using 10 99 contractors. Am I going to get blowback or support for this from investors? Yes,

Wil Schroter: thank you. Yeah,

Ryan Rutan: you will. You will, you'll get one or the other. It's almost, it's almost guaranteed, walk

Wil Schroter: us through the situation if you don't mind. Ok. So I keyed in on uh you know, one of the desks being hiring and then firing people, right? And having had to fire people in corporate America, I would prefer not to do that unnecessarily. So, uh we have a mobile app, we launched the M V P in December and we did it with a third party development company, right? So they are going to continue to develop and maintain support the app for about 25 K a month, $300,000 a year. That's probably two I T people. I mean, I'd have a five times that in, in hiring and, you know, I'm, my next round is a convertible. I want to go out for two million. I want it to last for two years. I don't want to add another million and a half or, or three million to that to go and build the team that I would have to build the I T team I'd have to build. So, you know, my thoughts are in order to avoid that wall, potentially of having to raise that much money or that hurdle which however you view it and the, and the death that would come from running out of cash and, and having to fire a bunch of people, how do I, you know, to me, the math seems to work in terms of sticking with the contractors. So to your answer of, yes, I'm gonna get blowback from potential investors. Could you shed some light on that?

Ryan Rutan: Sure. Well, I think it's gonna come down to a couple of things. One, it's, it's a cool scenario. Right. So, and I think that there's, there's an interesting thing that we can explore here, which is just because we avoid one wall doesn't mean we don't immediately run into another. Right. So we can avoid the wall of cost. But at the same time and, and I don't have a way of gauging this right now. Are we saying, you know, what's the opportunity cost of doing that? Right. So we say yes to the contractors, we say no to full time staff. Does that in any way give the perception, let's just stick with the investors. Does that give a perception to the investor that it's gonna somehow hamper growth? Is it going to limit our rate of growth or, you know, product enhancement? What's going to happen as a result of that? So it's not really, are, do they care whether it's a contract or an employee? It's what does that mean fundamentally to the business, the rate of growth, our ability to react to things, right? Is it is the type of outsourced shop that like we get to send, you know, feature requests to once a quarter, there's limitations on that, you know, what are the trade-offs? Right? So that's what they're gonna react to. I don't think it's gonna be quite as binary as contractor. No, light contractors. It's never quite that simple.

Wil Schroter: Yeah, no one's going to care is my feeling. And what I mean by that is right now, everyone's getting as lean as possible. In fact, you're getting dinged if you're not lean right now, which is why you're seeing so many layoffs across so many companies because you look silly if you're not doing it, you know, and there's only only one company that I'm aware of that was able to hold off so far, which has been Apple. And they're like, yeah, that's because we, we weren't irresponsible in good times and they have a quarter of cash. But bigger point is I think showing that you're lean, showing that you're deliberate about making sure that the company has runway. I think you'll be rewarded for it, I think because obviously if you take on capital, you'll be able to, you know, put, bring on full time staff if you need to. Most of the founders that I talked to right now are doing all 10 99 everywhere they can because the only thing worse than not being able to, you know, bring somebody on is not be able to tell them like, hey, quit your job, join me and you may have a job in six months, which by the way is a lot of what we do anyway, but this is a particularly crappy time to be making that call. So getting people on kind of a contract basis is a lot more viable right now. Um

Ryan Rutan: All right, I want Michael to take us home. He's got a nice quote here. He's got a nice mic and he's got a delightful accent. Let's let Michael end this with this delightful

Wil Schroter: quote. He might be putting us out of a job is what's about to happen. I will pressure mic,

Ryan Rutan: I, I will relish having the time back.

Wil Schroter: All right, Michael here. It goes. You started a business. Uh, no, wait, no, that's, I'm reading all your feeling, your thunder. Look at, you can't

Ryan Rutan: read it. He's got to read it. He,

Wil Schroter: ok, you're gonna laugh when you find out who actually said this though. Ok. It's, everything's impossible until somebody does it. Batman picks our quote.

Ryan Rutan: Batman. Yes, we couldn't have ended this better

Wil Schroter: with that. Said we do need to wrap. This is awesome. You know, the cool thing too, like when we're doing this is that I get to steal your faces. And so like when we're saying dumb stuff, I get to see you guys shake your head when I we're saying something hilarious. I see you guys laugh and I'm always picturing this in my head when we're doing the show, when Ryan and I aren't stepping over each other. And it's awesome to see. I just like from my end, I love having you guys out here. I love having you be part of what we're doing. And uh that's awesome,

Ryan Rutan: Ryan that summed it up nicely. I always love these episodes. It's wonderful to have you all here. It really does bring at home to Will's Point. It gives so much energy back to us to be able to kind of see the impacts, you know, when you're just like right now, it looks like I'm looking at all of you. But what I'm actually doing is staring into the barrel of a icon which is about as unfriendly a thing as you can spend an hour doing. And so knowing that there are faces and minds and hearts out there that are absorbing this stuff and either shaking their heads, you know, in, in disbelief or disgust at what we're saying or, or nodding along or laughing along with us makes it worth doing every week. So, thank

Wil Schroter: you guys. Thank you guys. I appreciate it coming out. 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.