My last post on this site is dated 2013-09-26 which should tell you everything you really need to know. Now a disclaimer and background - we're not a startup in the traditional sense of a VC funded software product company. Around the time of my last post, I formally founded a software R&D and corporate skunkworks program. We also dabble in our own products. Now if this sounds complicated, it's not. We help large organizations build software like a startup. We focus on software from the very fringes of technology like AI and robotics to helping companies validate early-stage ideas with well-established platforms like the web and mobile.
Making a long story short(er), I started the company because I saw how broken corporate innovation is. I thought it was insane that a company would need 2 years and $10 million to build a product that their customers may not even need. So we set out to solve it. Apparently some people inside these large companies agreed because here we are 2 1/2 years down the road with 100% year-over-year growth. We aren't a massive team - hovering between 13 and 15 employees - but we're profitable and we're working on a lot of really cool stuff.
I wanted to write this because we're located in Miami where the "startup bug" is past its incubation phase and is a full blown virus. Miami is something like #2 in startup activity, whatever that means, however there is a ton of fluff and immaturity as I've written about on our company blog. I've run a very unscientific study where I've observed people and drawn completely subjective opinions about them. Startups seem to be the modern-day get-quick-rich scheme. Movies are made about startup founders (Jobs and Zuck), large amounts of press is doled out (even to rather ridiculous startups), and we've generated this almost rockstar mentality about what it's like to be the CEO of a startup. Well I'm here to tell you it's bullshit.
I enjoy what we're doing and for the time being I honestly don't know what else I could be doing rather than working on software products, with great people, and learning a ton along the way, but if you're in it for fame or even for money then you're barking up the wrong tree. Money and fame are not powerful enough drivers for the amount of grit, determination, and pure willpower that it takes to simply keep your head above water. You'll not survive on the dream they've been selling you.
Let's start out with how emotionally and physically hard it is. Get ready to sacrifice almost everything in your life for your company. My days start at 6 and end at 7. I have a brief break where I play soccer for an hour and take a shower, but a 12 hour day is normal, a 14 hour day is not uncommon, and a 16 hour day happens on occasion. There are times (gratefully not anymore... touch wood) where you'll be eating rice and beans for month or two because you have to make sure your employees get paid -- especially in the beginning. Weekends are just another work day. You'll go through some of the biggest lows and points of self-doubt in your life. You'll lose touch with friends because there just aren't enough hours in the day. You'll probably gain some weight, find a few health problems, and generally just be run down. You'll have to fire people -- sometimes people you like. You'll have the weight of not just your own survival, but the survival and financial well-being of several people on your shoulders. You'll lie awake at nights figuring out whether building up cash for a rainy day ("Cash is king") or making an investment/hire is more prudent to your success. Vacations and holidays? Ha! Even if you're lucky enough to take a vacation, you never can fully step away. Something will come up and your family or SO will be wondering why you're on your phone at the beach. You'll fail...a lot. Man will you fail. Your failures will cost you a ton of money. They will cost you a relationship or two. They'll cost you time. You'll fail at nearly everything you try at least once.
Mentally, being the CEO of a startup is no cakewalk either. A normal CEO of a large company is in charge of the company's top line growth, delivering shareholder value, and setting the vision for the company. You have all of these responsibilities PLUS you're going to have to learn how to be the best HR/recruiter you can be. You'll need to be the bookkeeper (hire an accountant for the big tasks, but you'll still need to know how to work Xero/QB). You'll be collections. You'll be fraud prevention. You'll be customer service and accountant executive. You'll be in charge of sales. You'll be in charge of marketing and messaging. You'll need to write processes that the rest of the company can follow. You're the CEO, CFO, head of HR, VP of Sales, and the list goes on. You're going to learn more in 6 months as CEO (of an operating startup with revenue and employees) than you'll learn in 4 years at B-school plus an MBA. And you'll need to learn all of it FAST. The free market doesn't care about your excuses and it won't wait for you to "get up to speed."
But this hard work will result in you getting rich beyond your wildest dreams right? NO! It most likely won't. 90% is a common failure rate that is often thrown around and it's pretty accurate. For some reason people still seem to believe that statistic is for "other people" and they won't fail because they're smarter or work harder or whatever factor they believe will prevent failure. Here's the skinny though: I've known brilliant founders that failed. I've known rather dense founders that have succeeded (despite of themselves). I've known people that work insanely hard and never give up and eventually fail. Of course there are things you can do to mitigate failure, but sometimes you just have bad luck. Anyone who tells you that luck doesn't have a bit to do with it is delusional. It's not all luck, by any means, but even the best sailor needs a bit of wind.
Does it get any easier? Yes it does. You begin to hire people as you grow that are smarter than you and have more expertise in all of the different areas that are required for a company to operate. You build processes that can be followed so the next time you perform a task better. You learn time management (and mindshare management). Once you've covered your bases, it's easier to just improve on things rather than starting from scratch. The company gets momentum and something like sales, which once were a struggle, now are refined and easier processes. You start turning a profit and paying yourself a decent wage. You learn to laugh at utter disasters and not sweat the small things (although possibly because now there are bigger things to sweat).
And is it all bad in the beginning? Of course not. This won't be my last company. It's a kind of masochistic addiction. Once you're in, you're hooked and you'll probably feel bored doing anything else. I wanted to write this to demonstrate that this fashion/trend/fad of being a startup founder and all the glory/money/fame that comes with it had better not be your raison d'etre. I hope that I can set some reasonable expectations and albeit a rather blunt post, encourage people to evaluate their reasoning for building "Facebook for dogs" or "Uber for babies." I want others to really understand what they're getting into instead of the fairy tale that is ritualistically sold to many budding entrepreneurs and startup people.
If your motivation is money or fame, this is not the life for you. Invest in real estate or take acting classes. Apply to an executive program at a prestigious school. If you were inspired by "The Social Network" or the hit TV series "Silicon Valley" then this is most certainly not a career path for you. (One of those shows is a 1 in a billion occurrence and the other one is satire.) If none of this has scared you and your motivation is building great software, creating something people love, solving a really big (and hopefully important problem), and you believe in what you're doing then more power to you. You'll probably do alright -- if not your first venture then for sure a later one. I wish you the best of luck.