As a CEO, what's it like to know your company is doomed? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.
As a CEO, what's it like to know your company is doomed?
I suspect this is different for every CEO, depending on (among other things) what his or her company has accomplished, the reason it is doomed, and the CEO's personal situation.
For me, strange as it may sound, the primary emotion I remember experiencing was relief. Simply put, that's because by the time I was willing to admit to myself it was doomed, that was bringing to the surface something I (and my cofounder) deep down knew to be true for a long time.
My company was a social lending startup; the idea was to help people with limited credit borrow money from folks they knew (with interest), getting a fair deal for both sides and hopefully leading them to start to build credit for the future. I had been working on it for about 2.5 years when we gave up; my cofounder had been at it for about 1.5, and we had two employees of about 1 year. We had successful borrowers in the low hundreds and lenders in the higher hundreds, and a very very modest (by current standards) amount of funding. We didn't give up because we ran out of money; we gave up because after years of gradually trying to find product-market fit, we finally believed that we had built something very few people wanted and there was no way this business was ever going to become what we wanted it to be.
An extremely prevalent norm in the venture-backed startup community as I experienced it was to be "all-in." It was very important not think about giving up as an option, because in many ways there is something fundamentally irrational about starting a company for most people, and particularly so for folks such as myself and my cofounder who were in the extremely fortunate position of having good pedigrees and prior work experience. All the biggest successful startups had moments when their future looked grim, and accelerators and VCs would make sure you as the entrepreneur were constantly exposed to these data points, and you as a founder would come to reinforce them with your founder friends. If you started to think about the life you could be having as an employee getting a paycheck from someone else, you would waver, give up, and all would be lost, so you tried very hard not to do that.
But, about 2.5 years in, several things happened at once:
- Our latest attempts to find a reliable channel of new borrowers had failed.
- Several other lending-related companies (with completely different customers and models) were starting to go under and the "space" as a whole was starting to sour a bit.
- Related to the point above, I was part of a exploratory pitch feedback process in which I gave a potential pitch to some investor 'judges' and got a very chilly reception, even though the version of the business I presented was (while factually accurate) a lot rosier than I actually felt about how things are going.
- After working constantly including most weekends for most of the 2.5 years, I took a full week of vacation for the first time.
Spending that week on vacation and returning to my startup bubble, it was suddenly very clear to me that these things together (and the general state of our customer pipeline) meant that we were doomed, and a conversation with my cofounder revealed he was feeling the same way. We made plans to "fire our last bullets" as far as potential customer sources and shut things down in a couple of months if nothing went well above expectation.
As these conversations were happening and plans were coming together to wrap this up, that spell of being all-in started to break. I thought about the impact I could have at a company where I cared deeply about what was being done as I did with my startup, but what was being done was actually succeeding. I thought about what it would be like to once again have a job I was at least decent at, instead of have my job be everything (and thus spend the most time on the things that were the hardest for me). While my financial situation was then and is now one of extreme, extreme privilege, I thought about what it would be like to get a paycheck again and stop building up credit card debt myself. And, perhaps most of all, I thought about what it would be like to go back to a life where I could go into work every day and to a large degree say what I meant and show how I felt, rather than having to project success at all times to virtually every party.
There were many reasons to feel sad and embarrassed. My cofounder, employees, and investors had taken a risk on me through their time or money. There were future customers we couldn't help, and current customers we would need to manage. Something we had put an incredible amount of sweat into was going to be worth nothing. And for many founders who had a lot more people depending on them and spent a lot more time and money, I would expect these emotions to dominate.
But my colleagues were great at what they did, and would find work elsewhere. Our investors were, and continue to be, extremely gracious. And I pledged to do right by our customers to make sure their loans got dealt with to the best of my ability (something I manage in my free time to this day, close to 2 years later). And again, once we were being honest with ourselves, this failure of our fundamental idea as a product is something we gradually had been learning deep down for some time that simply, finally, became a conscious reality. So while I did feel sad and embarrassed, the emotion I'll always associate with that process of winding things down was relief. And if I ever do start another company someday, I plan to hold myself to a much higher standard on having the market demand for what I'm doing match the effort I and others are putting into it, rather than getting caught up in the pure moonshot approach that I'm glad I tried once, but I now realize is definitely, definitely not the only way to found a company and definitely not the only way to have impact in tech or in your career overall.
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