How to Get Your Series A Mojo Back
Editor's note: This article first appeared on Mark Suster's blog.
Last year I wrote a blog post on entrepreneurs with a chip on their shoulders.
I think it’s an important read. A chip on one’s shoulder as in, “Fuck the system, it’s broken and I want to fix it” is exactly the energy I look for in entrepreneurs.
My internal compass says that “country-club” entrepreneurs struggle to make as big of an impact because it’s really hard to totally change a system that you’re part of and have a vested interest in. It’s hard to be a rebel when upsetting the apple cart affects a bunch of people like you.
Take Maker Studios. What I loved about the founding team from day one was that the founders were all people who tried to break into Hollywood and found the system closed. So their view was, “Fuck the system, let’s create a new one on YouTube.”
On the other hand, if the chip on your shoulder is, “I’m not treated fairly by the system, boo hoo, I’m different and that’s why you aren’t helping me” that chip can be a big negative.
I see this a lot in funding where an entrepreneur has struggled to raise money and spends all their time lamenting how lame investors are.
My friend Seth Levine covered this well in his blog post on “Handling Rejection” which you should also read. (and if you haven’t seen 20 Feet From Stardom, which this founder talks about in his letter to Seth, you must. It’s this year’s Searching for Sugar Man. I loved, loved, loved 20 Feet).
Seth responded to an entrepreneur’s request for financing and the entrepreneur wrote back a nastygram. Nothing good ever comes from that - even if you are right. Seth is one of the most decent human beings in the venture industry so the rant was off base. But even if a VC is nasty a rant email back isn’t the right way to channel your frustration.
The best revenge for rejection is success. The best lesson learned for yourself is self reflection. “If my objective is raising capital and I’m struggling, what can I learn about those who do get funded and how can I improve my odds by changing?”
They often come from the experience of being kicked, rejected, shunned, beat up. Then the victim looks around and sees everybody else is having it so easy even though I’m better than they are. So it’s “poor me, the system is fucked.”
But there is another more prevalent emotional swing than the hero to chip angst. And that is the “loss of confidence” vibe. It’s the puppy-who-was-kicked-and-now-walks-around-with-his-head-down syndrome.
And it’s everywhere. I could link to a bunch of blog posts that come across this way but prefer not to single anybody out.
Here’s the deal.
When you started you had the youthful (from a company perspective not age) energy, enthusiasm and naïveté that comes from actually thinking you can change the world. Nobody goes into a startup expecting to fail - we all imagine the next big startup movie is going to be about us. Our inner script is heroic and the struggles are mere battle scars on the inevitable journey to slay King Joffrey.
But reality sets in after the first few battles. You raised your seed funds. You got your tech press and your parents are proud. You old high school friends suddenly reached out on Facebook. You build a team, ship your product, more tech press, more funding.
You get invited to speak on panels. You attend speaker dinners. You have dinner outside at a quarter mile dinner table. You’re on top of the world.
Except that building a successful startup is hard. And back home when you land and come into the office on Monday your staff still knows the truth. Your app isn’t getting enough repeat visitors. Your churn rates are too high. You have an eCommerce company and have to much unsold inventory. Your lead developer quit to join the new hot thing.
It happens to nearly every startup. Nearly every one. I had lunch last week with the CEO of a publicly traded tech company. We shared stories about our past rejections, about our inability to raise money in down markets, about the weeks left in cash, about how we were sure we were dead. We found a way through it. He did even more so than I did.
I had a similar chat with Matt Coffin of LowerMyBills (blog post & video here) where he tells his similar story. Nearly bankrupt. Begging for money. And a few years forward and he sold his company for 100′s of millions of dollars.
We’ve all been there--every entrepreneur. You start off by believing your own hype, drinking your own Kool Aid.
And then you meet reality.
And some entrepreneurs can maintain their enthusiasm, optimism and energy: Working hard and staying positive.
But that’s hard.
Many still put in the hours but you can see the stress in their eyes and hear it in their voices. In stead of telling people how they are going to change the world they start to show self doubt. They qualify every initiative with, “well this didn’t prove viral adoption last time so I don’t expect a silver bullet this time.”
Sometimes the silver bullet does come. Often it doesn’t. Usually success is about working hard enough and long enough and eventually getting a lucky break. Another meeting last week with a different founder who sold for 100′s of millions and is not an active angel, “Startups are hard. I don’t know if I should keep investing in them. So many are struggling I feel like all I’m dealing with are problems. I wish more young people understood what a role luck plays into a huge success.”
And of course--the harder you work, the luckier you get.
But in order to make the magic work another few months, years, you need to keep up blind belief in yourself. Confidence is THE single most important attribute in being able to attract money, hire staff, stave off creditors, get press, do biz dev deals, close big sales and one day sell your company.
That magic you had at your Series A.
You need to dig deep.
As a friend who is running a startup focused on “the mind” said to me (my words), “why is it that it is accepted wisdom that atheletes need to visualize and focus on positive energy and confidence and when we say this to business people they think it is self-help, airy fairy stuff?”
Mental toughness matters. A lot. Confidence matters more.
I personally am not prone to depression or substances but I know many who are. Depression isn’t talked about openly enough in our industry. Nor is general mental well being.
I wish more startups would get personal coaches so they could let out their angst to neutral people - not staff, not investors. It’s why YPO is such an important organization.
If you’re in a startup that has struggled know that you’re not alone - we’re all naked in the mirror in the morning.
If you’re in really bad shape (10% of you) - seek help. Life is more important than your startup and there is always another day. Your reputation won’t suffer if your business does. You can evolve.
If you’re in the norm (85% of you) please think about how to let out your steam, talk to others, get mentors, re-find the energy / confidence, or bring in new staff who can help re-energize you and/or your business.
If you plan to raise more money, improve your business ops, or sell your company you need your Series A mojo back. You need to rekindle that feeling, rediscover that belief in you and your company’s mission.
If you’re crushing it (5% of your) mazel tov.
And finally …
Since I have this conversation private all the time …
No. I’m not talking about you.
post script: I wrote this in one sitting before racing out the door on a long-weekend vacation with the family. No edits / no spell check. Apologies for any rambling, incoherence or typos. I may try to come back and edit later but want to get back to the family!