CRASHED AND BURNED A STARTUP
IT’S IMPORTANT TO KEEP a positive attitude when running a failing startup, lest your employees, customers, or partner get a whiff of where things are heading and decide to bail. That leaves 4 a.m. as an ideal time to stare wide awake at the ceiling and give panic and despair free rein.
Where did I go wrong with this can’t-miss idea? (Everywhere. Really.) How can I save the company? (Zero ideas.) How will I explain this to everyone who trusted me? (Uh.) How will I bounce back? (I can’t think about that disaster until this one is done.) Is today the day I throw in the towel? (No—just sweating it seems far less daunting.)
It wasn’t supposed to be this way. Just two years earlier, a successful health-care executive asked me to partner with him to launch a website aimed at helping companies expand overseas.
The offer surprised me: I was a journalist, not a business guy. But after years of covering innovative entrepreneurs, how could I resist the chance to actually become one myself? Plus, here was a chance to make some serious money.
I did my homework and picked the brains of founders, investors, would-be customers, even competitors. All offered sound, mostly encouraging advice. Then I talked with a highpowered venture capitalist: “Don’t do it. You’ll be miserable. And you’ll fail.” The only people who should start a company, he said, were those who were so obsessed with their idea that they were incapable of doing anything else. That didn’t describe me, but I plunged ahead anyway.
I hired five smart young staffers, and we built a great website. Soon we had hundreds of influential readers at major organizations. They loved our work. Now we just needed to turn them into paying customers. But no one wanted to pony up, and we were burning through funding.
It was a miserable death spread over half a year. I was letting a raft of people down in slow motion: my investment partner, who sunk money and passion into the venture; my wife, who was nothing but supportive as our savings dwindled; my employees, who worked hard for less than they deserved. The physics of commerce let you delay pulling the plug on a dying company for only so long. Then, suddenly, it’s over. You can sleep again. You can start to appreciate what a wild adventure it was, and what your team pulled off under, or in spite of, your guidance. You can marvel at all you learned, even if it came too late. Then you can get back to doing something—anything—else. —David H. Freedman