Why my best move as a founder was giving up
Reflections on the impact of my toughest decision, almost two and a half years later.
Hi - I’m Mike Wilner, the writer of this post which is part of my weekly newsletter, Getting Shots Up. The newsletter includes essays, interviews, and more about building entrepreneurial careers. This isn’t startup advice – it’s a zoomed out view of how entrepreneurial people can think about constructing a career that results in a lot of high quality shots on goal. I’m a former startup founder, the co-author of a book on seed fundraising, and am on the Early Stage Startup team at AWS.
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Why my best move as a founder was giving up
One day, I noticed my co-founder wasn't being as enthusiastic as he usually was about small victories, and I could tell something was bothering him. I took him to lunch to try to tease out what was wrong, and next thing I knew, we were debating shutting down the company over burritos.
Founders are glorified for their grit and resilience – necessary traits for building startups from nothing. Stories about successful startups feature forks in the road where founders considered giving up but kept pushing and ultimately found success.
Early in my life and career, I’d been praised for my grit and resilience. That praise was part of what gave me the confidence that I could start my own company in the first place. While running my startup, I was fully bought into this narrative – that if I just kept pushing, eventually things would work out.
But in January 2018, I found myself at that fork in the road. I had been running my startup for 3.5 years. We’d raised ~$1M in funding, experienced growth followed by a crash and pivoted to a new business (from a marketplace to hire web designers into a software product for freelancers).
My co-founder argued that we were out of gas and that we didn’t have a compelling thesis of what would make our product different. He pointed out that I was so laser focused on trying to make something work but that we no longer had the compelling vision that got us started. Billing/Accounting software for freelancers was a competitive space in a fickle market, and we were differentiating from well-funded competitors on the margins with small features like recurring ACH payments.
I wanted to keep pushing. In my head, that was always the only choice. I had our investors on board to invest in a bridge round if we hit certain metrics in the next few months. I figured we would hit those metrics, raise a bridge round, keep going, and then we’d be able to raise a Series A and be on the path to growing the successful startup that I’d been envisioning.
It took some convincing, but I eventually saw that he was right. We decided that it was time to wrap it up, sold all of our assets, returned as much money as we could to investors, and moved on from the startup that had become such a core part of my identity – both professionally and personally. It was the hardest thing I had to do.
Two years later, I’m so thankful that I made that decision to wind down and move on rather than to keep pushing. It’s a decision that I see a lot of founders struggle with – avoiding making the hard decision to embrace failure and move on. I’ve seen startups stay on life support much longer than they should, and it ends up being a detriment to the founders’ career and long term entrepreneurial prospects.
In today’s post, I’ll unpack some of the benefits I’ve experienced from moving on from my startup and why it’s something I recommend more founders embrace.
Time is your most precious resource as an entrepreneur
In the conversation with my co-founder that led to the decision to wind down, he said, “My biggest fear is that you’ll find a way to hit these milestones that will get us to a bridge round, and we’ll spend another year of our 20s working on something that still isn’t going to pan out.” I remember that quote vividly because it knocked me off the hamster wheel of trying to make my startup work. He revealed that my grit and persistence – the two qualities I valued most which helped us start the company in the first place – had begun to hold back my co-founder and my employees’ careers. Before he said that, my biggest fear was failure. Once I heard his words out loud, I realized that I had a fear bigger than failure which I’d not acknowledge. My biggest fear was wasting my time, my co-founders’ time, and my employees’ time.
With failure no longer my biggest fear, I immediately gained the capacity to look at my startup objectively and unemotionally for the first time. Later that day, I asked him to grab a drink with me for happy hour. As he sat down, I asked, “what do you think I’m going to say?” He chuckled reluctantly and said, “that we should keep pushing.” I took a drink and replied, “Nope. It’s time to call it.”
He was right. 8 months after that conversation, I had grieved the death of my startup, gotten healthy (mentally and physically), crystalized some of the invaluable lessons I’d learned from my startup experience, moved to New York, and wrote a book on seed stage fundraising. I started a dream job on the AWS Startup team where I’ve been for the past two years, working at the center of the startup ecosystem while learning from the most operationally proficient company in the world.
Had my stubbornness prevailed, we would have spent the next 8 months still in the hamster wheel of trying to make our startup successful. If things still weren’t working out after another 8 months, it would have taken me even longer to recover, and I probably would have lost another year of my 20s.
I’ll likely start another company in the future. Getting out when I did and moving on quickly means I’ll probably start my next company 2-3 years earlier than I would have if I had stuck it out.
Operating a zombie startup traps you in a local maxima of professional growth
One of the amazing things about being a founder is you get to promote yourself constantly. You may start out as CEO of a 2-person startup. Then if things go well you essentially promote yourself to being the CEO of a 5-person startup with some funding, a 20-person startup that’s growing quickly, and on and on. As a founder, your professional growth – both new skill development and experience – is tied to the growth of your startup. A fast-growing startup can rapidly accelerate your professional development.
So what happens when your startup stagnates? So does your professional growth. This is something founders don’t generally care about when they’re in the arena (I didn’t), as the focus is on surviving and advancing at all costs. If you’re stuck pushing a boulder up a hill, you’re demonstrating your grit and perseverance, but you’re not facing new challenges. You’re not growing.
This is actually something I accidentally did well with my startup. Compass started as a marketplace where small businesses could hire web designers to build them websites. In the 2.5 years building that service, I learned a ton – from marketplace dynamics, to solving chicken-and-egg problems, to hiring, to building an inbound sales engine and more. When we hit the point where the model broke and we didn’t have an answer for how we would scale Compass, we ended up pivoting to SaaS billing and accounting software for freelancers. This pivot forced me to grow in new ways, including SaaS product management, marketing for pre-launch SaaS products, and the nuances of Fintech startups. After we achieved some moderate traction but couldn’t see a path to growing the business in ways that were exciting, we wound it down.
I didn’t know it at the time, but not having a path to growing the business meant not having a path to growing professionally, and I was stuck in a local maxima of professional growth, meaning I had reached the peak of my professional growth within that environment. Had we continued for another year, I’m not convinced that I would have grown much professionally, though I would have burned a lot more energy pushing a boulder up a hill.
Shedding your first-time founder skin early in your career
When you’re laser focused on survival, it’s hard to have the perspective to learn from your mistakes and crystallize them into evergreen learnings. While operating my startup, I was learning from some of my mistakes, but I didn’t have the breathing room to reflect, learn, and grow. Once we wound down, I gained the ability to objectively reflect, assess my decisions as a founder, and understand why certain things worked and others didn’t. I reflected through writing and published posts about starting with more focus, how progress for early stage startups is stepwise and not continuous, and how relying too heavily on my startup for my personal identity ultimately made me a worse founder. In the month after winding down my startup, I accumulated more startup wisdom through objective reflection and self-inquiry than I had in the previous year running my startup.
I view that month after winding down as a process of shedding my first-time-founder skin. Despite not becoming a wildly successful founder, I’ve been able to coach and mentor hundreds of founders over the past 2.5 years. I’ve been able to lean on reflections on my own experience and help founders understand the mistakes I’ve made and what I’d do differently. I’ve also applied many of those learnings to my new job, even though I’m working at a big tech company. I force myself to be more disciplined and focused with launching new projects and constantly questioning what the next milestone should be for an initiative rather than continuously pushing the boulder up a hill.
Learning what varsity looks like
Growing up, I wanted to be a college basketball player. I thought it would be great to play for a school in the Ivy League so I could leverage basketball to get a better education than my high school GPA might allow. After my sophomore year of High School, I went to a basketball camp at UPenn, thinking I’d be able to get on the coaches’ radar. I went into camp with some swagger and was swiftly administered a rude awakening that I was not the caliber of athlete or player that could play at an Ivy League school (I ended up playing D3 basketball for a few years, so i wasn’t a total scrub).
This is a lot like what happens when you’re a founder. Unless you have exceptional, highly engaged mentors and advisors, you’re going to do things to the best of your knowledge and abilities – not necessarily based on how things are done at the highest level. From hiring, to strategic decision making, to product launches – you’re going to be doing the best you can with the information and resources that you have.
When I wound down my startup, one of my biggest insecurities was that I “didn’t know what varsity looked like.” Sure, I read First Round Review articles to try to fill in my blind spots, but I had only ever worked at small startups and never spent time in environments like San Francisco or New York. I didn’t have much context for what it looked like to do these things at the “varsity” level.
For me, the answer was moving to New York and joining Amazon. My past 2 years at Amazon have felt a lot like going to that UPenn camp, except instead of “wow – so D1 shooting guards are 6’4” it was “wow - so this is what a high performing culture looks like.” The cocktail of my startup experiences mixed with exposure to what operational processes look like at the highest level has been potent for my growth and will make me a 10x better founder when I start my next company.
True grit is measured over the course of your career
If you want to have an entrepreneurial career, failures big and small are going to be part of it. But the biggest failure you could possibly make is wasting your precious time and stunting your own growth as an entrepreneur. Maximizing your chances of success requires that you maximize both your shots on goal and your personal growth.
When I made the decision to wind down my startup, I was really scared. I was making a choice to lose a big part of my identity, admit defeat, and face the unknown of the next chapter of my career.
Looking back over my career, that decision to give up was the moment where I demonstrated the most grit. I was able to see that entrepreneurial careers are long, and while my first attempt at building a successful company didn’t work out, it wouldn’t be my last. I was able to face that hard truth head on and focus on continuing to grow as an entrepreneur. When it’s all said and done, grit is measured over the course of your career – not based on how long you withstand pushing a boulder up an endless hill.
For me, making that decision when I did propelled me to the next chapter of my career. My chances of building a successful company in the future are much higher because of it.