A Brilliant Tech Entrepreneur Gave Up on His Awesome Startup , and I Don’t Blame Him

“Hey, I’ve got good news! I’m winding down my startup.” That hit me hard. Hard enough that I realized my brain had reflexively skipped over a sentence in the middle of those two sentences. “I got a job.”

Well, that makes more sense, but not much more. Why would this brilliant tech entrepreneur suddenly give up on his amazing startup idea and take a “real” job?

Once we talked through it, I can’t say I blame him. At all.

The First Rule of Startups

You don’t talk about quitting. 

“Jack” is maybe my favorite tech entrepreneur, and while you probably haven’t heard of him in the celebpreneur sense, you may have used products or services powered by his tech at some point. He’s a tech-behind-the-scenes innovator, and has been for over 20 years.

Boring tech.

There are, in fact, like five people in the world I would go to work for tomorrow, and Jack is one of them. Just not in his current role. As of last week, he had taken a position as a highly paid executive at a tech company you have indeed heard of.

Look, I can’t heap enough praise on Jack. He’s a genius, a survivor, creative as all hell, and a good dude. He’s got loads of startup experience, with a couple of huge wins and one recent massive failure that he learned a lot from. 

I had been helping him—as a friend and only over coffees and beers—develop the shards of an idea and pieces of new tech into an offering that could change games and disrupt an entire industry. He had customers lined up and, while he doesn’t have eff-you money, he’s got enough to mold his project into a venture that would be founder-friendly fundable.

I am Jack’s beaten-down sense of adventure. 

So why did Jack quit?

It’s Not Security

Was I asleep? Had I slept on a sudden reversal in the job market? Were corporate jobs actually now just as secure and rewarding as they had always promised to be?

“It’s not about the paycheck,” he assured me. “It’s not about job security. Hell, the company is a fixer-upper. It’s probably less secure than my startup.” 

Side note: Today I learned that a tech company I thought was doing well, was not.

There’s a myth around security as it pertains to the corporate world versus the startup world, as in, it’s a myth that there is any semblance of security in either world. When people talk about security in their job, they’re really talking about control. 

Sure, a corporation has stability, cash reserves, long-term customers, and enough resources to be able to sustain ups and downs. A startup has few or none of those things, so corporate life is certainly more secure than startup life.

Until it isn’t. And a lot of folks are finding that out now, with corporate layoffs seemingly happening on a whim.

That’s when you realize the difference is about control. When you’re the one taking the shot, hit or miss, it’s on you. But when your livelihood depends on someone else’s aim, well, to an entrepreneur, that’s the worst feeling in the world. 

That Escalated Quickly

Jack had been running a B2B service, almost entirely on his own, for just over a year. And with the sting of his recent failure still smarting, he had decided to keep his new venture conservative. Instead of hiring quickly and scaling the service rapidly, which would suck all the time and joy out of actually performing the service, he decided to look into these new AI-infused tech tools and automate the parts he could automate.

“I realized pretty quickly that what we’re calling AI these days is more of a nice-to-have. And playing with those tools got me thinking hard about automation,” he said.

That’s when I got involved. And that deep dive into automation turned into experiments with customer self-service, which led to the nascent beginnings of a UX, and then a patchwork of no-code and off-the-shelf tools for a beginner’s UI.

Suddenly, the service was becoming a product. Jack sold his first subscription—for four figures a month—before he had a name for his platform.

And that’s where Jack got stuck.

There’s No Middle Ground

That first sale was when both Jack and I got too busy to meet, so this is where I started catching up. 

“I originally didn’t want to hire because I didn’t want two jobs,” Jack said. “I enjoyed barely having one job, doing what I really liked doing and getting paid. Now I’ve got three jobs. Building a software platform, running a hybrid product and service company, and—oh—[doing the service] for actual paying customers.”

Jack realized he needed capital. He needed investors.

Which meant taking on a fourth job—raising money. That also presented another problem. 

Jack didn’t have a network of investors.

In fact, Jack has never raised an institutional dime. He had built three companies up to the low eight figures in annual revenue, never raising money outside of loans and the occasional quick deal with a strategic partner. 

“I’ve been in this spot before,” he said. “But only [when I needed] to get from one level to the next level. And so I figured I could do the same thing and go from this level to the next, next, next level.”

He started having conversations with venture capitalists. They did not go well.

My Way or the Information Superhighway

“Man, funding is next to impossible right now,” Jack said, something I already knew. “I found out pretty quick that there’s one thesis and it starts with A and ends with I.”

See, Jack even shares my sense of humor. Love this guy.

I’m generalizing the anecdote here, but basically, almost every investor stopped him when he mentioned that he had started using AI tools, and that’s what got him to automation—and then they said:

“Go on.”

Or, “Tell me more about the AI angle.”

And while Jack would go into a tangent—admitting that there were probably future use cases for generative AI—this was more about tailoring an expert service and making it available to more people at a lower cost. 

That’s the part I originally fell in love with. Bigger market, higher margins. But it wasn’t the part investors wanted to hear. In their minds, what Jack was proposing was out of the 1990s. In my mind, this is OK, great even, as long as the business idea is stellar. And in this case, it was. 

The Cutting Edge Cuts Both Ways

I’m not here to bash AI (again). AI is the symptom here, not the cause. The cause is short-sightedness—or whatever is making investors chase each other around in circles. 

The reaction of the VCs was, in that sense, very much like the 1990s, the late 1990s, when money didn’t care what the idea was as long as it involved these new-fangled internets they kept hearing about. 

Flooz. Look it up. 

This behavior is not new. At Automated Insights, we turned down a lot of money that was contingent on our moving to the West Coast. At ExitEvent, I could have raised millions on the “digital incubator” concept. At Teaching Startup, I turned down two different seed investors who wanted me to “become a podcast.”

So Jack, now presented with building his startup the right hard way or the wrong easy way asked himself: Why do it? Why not just do the service instead of turning it into a BS AI product? Then a serendipitous job offer made him ask: Why not let someone pay me to do the service and not have to run a company at all?

There’s Another Way

The all-or-nothing startup game has seen its share of challenges over the past few years. And the true entrepreneurial-minded people who know what they’re doing, honestly, just don’t think the game is fun anymore. 

I mean, to turn a phrase: Don’t come after me because I’m whining about fun. I’m a blue-collar kid who likes computers. Seriously, join my email list and read my stuff.

This swirling of clouds at the top of the private markets—all these billions slammed into one big bet on a technology that those who know are starting to say has cracks. There’s an opportunity here for savvy investors to zig while everyone is zagging and cash the hell in,

It starts with backing people like Jack and their boring but brilliant business ideas.