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The "No BS" version of how startups are really built, taught by actual startup Founders who have lived through all of it. Hosts Wil Schroter and Ryan Rutan talk candidly about the intense struggles Founders face both personally and professionally as they try to turn their idea into something that will change the world.
Welcome back to the episode of
the Startup Therapy Podcast.
This is Ryan Rutan, joined
as always by Will Schroeder,
my friend, the founder,
and CEO of startups.com.
Will, failure is one of those
things that's omnipresent
in the founder space.
We talk about it a lot.
We talk about failing fast.
We talk about all this stuff
around failure, and it's
funny if we think about
it, this podcast is an
exercise in exactly that,
like a founder's willingness
to fail and then to just.
Keep going anyways, because
our first couple episodes
of this podcast, which we'll
never see the light of day,
were abject failures, right?
They were failed, so pieces
of content, but we kept going.
And so as you think about
failure across your 30 plus year
career doing this stuff, how
good have you gotten it failing?
I'm so good at failing.
I'm the heman master of
the universe at failing.
And, and I'm proud to say
that, and I don't say that to
be like controversial, right?
Like, oh, he's proud
to fail, right?
Or like, I'm shielding this.
Like, you know,
otherwise regret.
In fact, you know,
we'll talk about that.
It's the actually the opposite.
Like I say that because you
have to have a lot of balls
to fail and then fail again.
And then fail again and
just keep on coming back.
But if you do.
Keep pretending that
you're sure it's gonna work
the next time, rightly.
Absolutely, man.
Yep.
And actually let me
modify that a bit.
I'm never sure it's gonna work.
No, that's, that's
why I said pretend.
That's why I said pretend.
Yeah,
yeah, yeah,
yeah.
You're telling everybody else,
you're like, okay team, we're
gonna do it this way this time.
And we're like, is it
gonna work this time?
Like, yes, we, it's
going to right.
You have to hope it will.
Yes.
Ly you have somewhat
believe that it might.
Yeah, I agree.
Well, and the truth is
you just don't know.
Right?
And I think that's what we're
gonna talk about is what's
it like for a founder to get
really, really good at failing?
I think I, I would argue
it's maybe one of the
greatest superpowers
you can possibly have.
Yep.
I wanna talk about
where it comes from.
I wanna talk about like how
we've developed it, how we use
it in our everyDay@startups.com
and at some degree
in our lives as well.
And.
Why I think most founders,
especially new founders,
are just looking at
it the wrong way.
I actually, I'll go zoom out.
I think most people in life
have have a misappropriated
version of failure.
They, they logically say, I
have to avoid failure at the
expense of doing anything.
Right?
Yeah.
And I think that's the
real problem, right?
When you spend your
time trying to avoid.
Failure.
You're, you're missing out on
a lot, but you're trying to
optimize for something that you
can't possibly optimize for.
Right.
Which is success, which
is like, if you knew what
to go and do, then Sure.
But we don't, most of the
time, especially in our space,
to me, it's like hearing
a founder say like, they,
they just, they wanna make
sure that they're right.
Like that's not a
lecture that we get.
Right.
Saying that you wanna be right,
which is essentially saying.
I want to avoid failure it
be tantamount to a boxer
saying, I'm just going
to avoid all the punches.
Right.
Yeah.
Right, right.
Yeah.
Your job is not
to never get hit.
Your job is to take the hit.
Right.
Keep your guard up and
finish the damn round.
Right.
That's what you gotta do.
That's what being a founder is.
Yeah.
Let's set the tone.
We always say this,
you're going into a market
that's never existed.
Yes.
With a product that's
never existed, with a
team that's never existed.
Right.
Yeah.
And you also probably
don't know shit.
Correct.
So.
Combine all of those things.
Where is the basis for
certainty in this business?
It does not exist.
We're not in the
success business, man.
We are in the error, rapid
error correction business.
That's what we're in.
And I think like if we, if we
pull somebody into our world,
we talk about this a lot.
Like we transplant someone
from the real world, right?
Yeah.
Into our weird
matrix world, right?
And they look at what
we do for a living.
They're like, this
makes no sense.
Because it doesn't, okay.
But they will logically
say, they'll logically say.
I don't wanna do something
like that because I don't
know the right decision.
Yeah.
I wanna go to my job.
In fact, I was talking
to a buddy of mine.
This is actually just is so
timely over this weekend.
I was talking to a buddy
of mine that I've known him
since middle school, right.
Uhhuh.
So a very long time.
He started out in
the startup world.
He was one of the guys that,
uh, helped start price line, if
you remember Price line back in.
Yeah, yeah, yeah.
You know, wait,
you went to middle school
with William Shatner?
Me and Billy.
Me and Billy.
And so he's clearly, you
know, had that, that side.
Yep.
But he works for McKeson now.
He's a corporate
attorney for McKesson.
He has the safest
job in the world.
Yeah.
Yeah.
It's, and he was talking
to me about how proud
he was of his safety.
He knows better.
Right?
He's like, I've been on the
other side of things where
like I have no idea where
my next meal's coming from.
And he's like, I'm in
my fifties now, dude.
I'm not even trying to do that.
Right.
That is a very logical way
Sure.
Of looking at the world, right.
Our version of looking
at the world is we run
the other direction.
Yeah.
Right, and, and I think when
people start to do that, and
a lot of the folks that are
listening to this podcast,
you know, for folks listening,
if this is one of your first.
Time's listening to the
podcast, we have two
segments of our audience.
One segment of our audience
just decided they wanna build
a startup five seconds ago,
and that might be you and the
other segment of our audience
are very, very, very senior
and seasoned, and they just
listen to these episodes,
just nodding their head the
entire time, and it's a bit
of a trip down memory lane.
Yeah,
so I, I think, Ryan,
let's speak to both of
those folks for a second.
Sure.
For the folks that are
the grizzled veterans,
you know exactly what
we're talking about.
There's no way you could have
become a grizzled veteran on
the, I only get a right move.
Right.
That doesn't happen
on a whiteboard.
It does not.
And for the folks just
getting into this, I think
this is an important episode
for you because I think
it's important for you to
understand how important.
Learning failure is okay.
Yeah.
And so, Ryan, when you
think about like, the
problem of avoiding failure
as a concept, right?
For, again, these younger
folks, how would you
describe that problem?
What, what is the problem when
you start avoiding failure?
You're steering a
parked car, right?
Like nothing's gonna happen.
I will spit my drink out.
Sorry about that.
I've never heard that term.
I didn't intentionally
time that, I promise.
Yeah, that was well done.
So, but that's
what it is, right?
Like you're just sitting
around, nothing's gonna happen.
Right.
I hate seeing and I watch
it happen a lot, right in
my getting customer session
on Mondays and Fridays, it's
a constant refrain because
nothing stalls a startup
like founders who need like
perfect information before
they make the decision, right?
They want to know before
I decide that this will
be the right decision.
It's not how it works, right?
I've realized lately that
so much of my feedback
that I'm giving people
has this undercurrent of,
and you're probably gonna
fail, and that's okay.
And that's okay.
Right, right.
And like things like people
trying, like belaboring
the point of we just, we
figured out like these five
ICPs, we don't know which
one to go after first.
I'm like, put 'em in a hat.
Draw one doesn't matter.
Right?
Pick somewhere, rule
'em in, rule 'em out.
You gotta start somewhere.
The minute you're wrong
about one means you can
move on to the next one.
Means you can move on to
the next one, means you can
move on to the next one.
If you just sit around in
your boardroom talking about
which one you think is maybe
gonna be the best choice,
nothing's happening, right?
Nothing is happening.
It's amazing because again,
we come from worlds where
you don't have that luxury.
Okay.
Yeah.
No barista at Starbucks can
just start making all the drinks
and see which one works and
just hand them to customers.
Correct.
And be like, oh,
well, uh, didn't work.
Didn't work.
You'd be fired in a day.
People don't like
scalded milk latte.
Got it.
You like, you just
don't get that luxury.
Now in our world, it goes
the polar opposite direction
of what people are used
to and what their logical
comfort zone would be.
We look at a problem and we
say, okay, there's 10 different
ways we can go with this.
We actually don't know which
one is the right answer.
Yep, we're smart.
We can kind of say, yeah,
this is probably more likely
to be right than the others.
So
we often don't know and,
and we're talking about.
Everything.
Just so like, it's not
amorphous in what we're saying.
We're talking about hiring
decisions, co-founder decisions,
investor decisions, product
decisions, marketing decisions,
HR decisions, like you name
it, there is a tremendous
amount of uncertainty.
And if in every case you're
like, well, we can't get
it wrong, you will lose.
You will lose, and
you'll, you'll lose too.
You and I because we are
willing to make bad decisions.
Exactly.
And we know how to come back
from 'em, which is interesting.
Yeah.
I think that's, that's
an important part of it.
To me, again, it's so painful
to watch because indecision
in a startup earns interest
and it compounds daily.
Like the longer you go without
making those decisions,
that the worse it gets.
And I think that one
of the things that,
that I've always found.
Is for me, like the thing that
can make me more comfortable.
If I'm really looking at
a decision, I'm like, I
really just don't know.
Ask yourself what the
consequences are gonna be.
We've talked about this
a lot on the podcast.
It's like sometimes that monster
you think that you're gonna
face just ends up not being
that big of a deal, and most
decisions aren't irrevocable.
Right.
It's like we're not
asking you to put a
tattoo on your forehead.
Right.
And even that is
replicable, right?
You can, you can change that.
So I think that one of the
things that you can become a
little bit more comfortable
in terms of failure is knowing
that you don't have to continue
a long way down this path.
And so for me, it's
breaking that down and
saying, okay, I don't know.
But here's how I can go
find out in the shortest
period of time with the
least amount of resource
and all that stuff, right?
And then it's just iteration
is the, is the tuition
we pay for learning, man.
This is how we get to understand
what is actually gonna work.
We, we pay in small failures
so that we can earn really,
really useful truths.
And if we don't do
that, we're dead, man.
We're just dead in the water.
You said something interesting.
You said, you know, this
concept of slaying the monster.
Yeah.
I think early on, if you haven't
been put in that position where
you've been required to fail
on a regular basis, or more
specifically, like most of the
world does not come up in a
society that rewards failure.
Correct.
There's no version where
the teacher gave you the
test that you got an F on.
Trust me, I tried and
was like, congrats.
You've nailed failure,
right?
Yeah.
You, you now know
how to not algebra.
Awesome.
Yeah, exactly.
Exactly right.
Like there's, there's no
version of that barista making
all the, the coffees wrong
in being like, you know what?
You've learned so much today.
Let's, you know, let's,
let's promote you.
Right?
That's right.
You a manager.
There's no version of our lives.
And even in, and I would,
I take this further
in our relationships.
When people are dating or
trying to find their, their
mate or your parent of
their children, whatever.
Yep.
Now, those are big
decisions, don't get me wrong
a
hundred percent, but
they're so, so fearful of
making the wrong decision.
Yep.
They never make
the right decision.
And again, I think
this permeates all
aspects of our lives.
I say this as a prelude.
I think that as humans, we
are conditioned to not fail to
fear failure in that monster
that comes with failure.
It's fascinating when you
start to conquer that monster.
Right the first time,
you know, you get knocked
down and you get back up.
You're like, wait a
minute, I can get back up.
And it's this really
fascinating mentality.
You know, people call
it resilience, eh,
that's part of it.
Right?
Resilience.
You could be really resilient in
an environment where you didn't
necessarily always fail or that
everything was on the line.
Not a lot of consequence.
I think about my kids being
resilient and they're not.
But I think about they would
be resilient and I think like,
well, they're in a consequence
re environment, like no
matter what failure they had.
They'll always be taken care of.
Yeah.
Yeah.
Yep.
There's a safety net there.
So it's, yeah, it's
not real failure.
They haven't learned
real, real failure yet.
But when you have all the
consequence, like you tend
to have in a startup for
the first time, you're
really looking failure,
like you're looking down the
barrel of that gun being.
Holy crap.
Like if I get this wrong, the
consequences is all over me.
Right.
And I think that prevents
a lot of people from
starting from challenging
failure or like from, you
know, like Dede defeating
that beast, so to speak.
The monster that as
you described it.
Yep.
Which I think is really AP prop.
Yeah.
So go back in time a little,
I'm trying to do this right now.
Go back in time a
little bit and, and.
See what you recall.
Like this is a muscle, but I
think there's also, there does
seem to be a little bit of
founder, DNA attached to this.
Mm-hmm.
But I've definitely seen people
turn the corner on this too.
Like even if they weren't
comfortable with it, I wasn't
to the point we were making
before, like I've realized that
this is baked into my feedback.
I'm unintentionally doing it.
It's just such a part of
how I think in startup mode.
Yeah.
That it just comes through.
And so clearly, like
it's a well-developed
muscle at this point.
It's just muscle memory.
I'm just, it just,
it just happens, but.
If you go back far enough
in time, like do you
recall when this was?
When this was still like
something you had to force
yourself into or It felt really
uncomfortable because at this
point I don't even notice that
there's a discomfort around it.
Yeah.
It was Jason Barker.
Remember the Jason Barker
story where he used to beat
me up every single day.
It's really strange
'cause we had a kid,
did we talk about this?
Yeah.
There was like the
tough kid in the school.
I wasn't there yet.
I was still outside of the
school system at that point.
But the tough guy in the
middle school was Jason Barker.
What, what is going on here?
I swear it was, it was
just a pseudonym, right?
And so
badass name.
So Jason Parker used to
beat me up every single day.
I was probably first
or second grade, right?
Yeah.
I was like very young.
And every single day I would
come home crying mind, like,
this is like back in the
eighties where like parenting
worked a lot differently.
Yeah.
And, and I would come home
crying and my dad would
be like, you know what,
you're a wimp, right?
Like, come back to me
like when you won a fight.
Like that, kind of
like tough love.
Right?
And so obviously I was, there's
no helicopter parenting that
hadn't been invented yet.
So every day, like it was his
job, Jason Barker would just.
Beat my ass.
Right.
Every frigging day
for a very long time.
I'm, I'm guessing it was at
least a year, and every day
I would go home and every
day I'd be like, well, I
can't beat him, so I'm just
gonna take the L. Right.
Yeah.
Every single time.
One day, not any specific day
or for any specific reason.
I remember I was getting
my daily ass beating, like
adrenaline pumped through my
little body for the first time.
And I remember flipping
Jason over and just
getting on top of him.
Just wailing him, right?
Yeah.
And I was like, oh.
Lemme try that again.
Right?
And, and I say that
because I remember like
the level of adversity.
I mean, when you're that
young, it's like your
whole world is right.
Your whole world
is being pummeled.
And I remember the
visceral reaction Yeah.
Of finally getting
on top of my failure.
I mean, quite
literally in this case.
And, and beating that monster.
And I remember I got
plain as day man.
I remember that feeling.
Like, if I can do this
Yeah.
Then what else can I do?
Yeah.
Yeah.
Right.
And at the time it meant
up beating up other
kids in the playground.
But, but I remember it,
it's still the sense of,
it was the first time
that I felt like, man.
Like all that failure, which
was really me learning to defend
myself turned into a strength.
And it did.
It did.
And I've never
lost a fight again.
That's good.
I, I don't imagine that
happens very much anymore.
I mean,
thank God.
No.
'cause I, you talked to Jason.
I did not get very big that
not offended Well, for me, but,
but I guess what I'm saying
is when I think about that,
again, you know, when, when
you're asking the question,
the first thing that jumps
in my mind, that was exactly,
you know, what that personal
kinda like failure felt like.
Yeah.
And again, overcoming
that failure.
Now kind of a weird and a
very eighties way to do it.
Still,
yeah,
it taught me like it was
getting beat all those times
that taught me how to win, and
once I did and I had conquered
that failure, it was like
a superpower in something
that I would reach back
into, not the fighting part.
Time and time.
In time.
Again, there's a confidence
that comes with beating failure.
There is, and I think it's
very interesting because in,
in that case, you were sort of
forced into that failure, right?
You didn't choose, you
weren't like, I think I'm
gonna go try this fight
every day of the week.
That fight came to you was not,
but here's what's cool about it.
Here's what's interesting.
I've seen this with a lot of
founders, myself included.
At some point you turn
the corner on that and all
of a sudden you go like,
you can be proactive.
You can choose to
go and do something.
Yep.
That you will probably fail at.
Right.
But without that fear,
without the hesitation.
Right.
That's, I think that's the
really amazing thing that
starts to happen, and I've heard
you say this before, but it's
that failure breeds success.
It does.
And let me build on that.
So as I'm going through
those, you know, formative
parts of childhood,
yeah.
I had a tremendous amount
of failures and hardships.
Sure.
But because I was able to kind
of fight through and overcome
them, and a lot of times when
people kinda like talk through
that journey, when you hear
like overcome, you think of like
rocky at the top of the stairs.
Right.
Do an eye of the tiger.
Overcome is sometimes
far less glorious.
Yeah.
Most
overcome is sometimes
fro across the beach.
Right.
You know, to get the
other side right.
It's not as glorious as
it sounds, but when you've
put yourself in a position
where you are in a position.
Where you've gotten through
that, you actually do
know what the downside is.
Yeah.
You actually do know what
that monster actually is
versus what you put it
together in your mind.
And I think when that's
the case, you're like, man,
I've started with nothing.
I've started with
less than nothing.
Yeah.
So I know exactly what it
means to go back to that.
And I don't want to,
don't
want to.
I can't.
Yep.
How did it work for you?
When, when, when you look back,
uh, please don't tell me that
Jason Barker also beat you up.
No.
When you look back, when you
think about, uh, where you were
in life and, and like where the
first time you had a failure
meaningful enough that at the
time you didn't think you'd
come back, but you did, and
all of a sudden it clicked,
you know, something
that's really.
Funny about everything
we talk about here is
that none of it is new.
Everything you're dealing
with right now has been done
a thousand times before you,
which means the
answer already exists.
You may just not know
it, but that's okay.
That's kind of what
we're here to do.
We talk about this stuff on
the show, but we actually
solve these problems all
dayLong@groups.startups.com.
So if any of this sounds
familiar, stop guessing
about what to do.
Let us just give you the answers
to the test and be done with it.
It's funny, I'm gonna go back
to probably very similar age.
I would've been 10, and
this was a, this was a
very personal failure.
I failed to do some of the
things I was supposed to.
I failed, was trying to.
Expand my little growing
cattle business at the time.
Right.
And I loved your
farm stories, by the way.
They're great stories.
They're super, like for me,
I mean, of course it's super
visceral, but like, I think
it's something that just like,
they just feel easy to me.
They just feel
easy to understand.
Right.
There's just something so
basic about what happens there.
And this is one of those like
life and death stories, right?
So I had tried to expand and
I, I wanted to grow the, the
operation a bit bigger because
I started making fairly.
Good money at that point, right?
Yeah.
At 11 or 12.
And like the, the cash had
gotten real to the point
where I had to file a C corp
the, the year after because
I needed a tax shelter.
Wow.
So, which is great, right?
That's fun.
But what happens is I start to
try to expand this thing, right?
And it came with all kinds
of challenges, right?
I got myself cash strapped
in the beginning 'cause I,
I overbought and then there
was a, a longer winter.
All these things happen, right?
So everything's going.
I love that
you're leveraged
on inventory at 11.
Right, like
classic founder story.
I did, I leveraged myself,
and then we had a longer
winter than usual, so I
had to feed longer than
expected and it, it got ugly.
I was literally shoveling
driveways and plowing people's
driveways to make cash to
pay for feed for cows, right?
That's where I was at,
so I had to have a side
hustle for my side hustle.
What ends up happening
is that because I, I was.
Over my toes and
all these things.
I wasn't paying
as much attention.
I probably wasn't caring for
things as much as I should.
One of them got sick and then
spread some sickness, the others
and two of them ended up dying.
Right?
And that was one of those
moments where like, I failed
and I failed hard, and it
felt really bad, right?
These things weren't.
Pets, but they all
still had names.
At that point.
You're 12, right?
Like you don't, you don't
know how to completely
disassociate from that.
And so that was one of those
things where then I was like,
I really questioned whether I
ever wanted to do that again.
Right?
Because I'd put myself
through all this hardship.
Everything just
felt like it sucked.
Then, you know?
The spring eventually came
and things got a little bit
easier and I, I made peace
with the mistake I had made
and I told myself I would never
compromise like that again.
I would make sure that I
planned all that stuff, but
it was one of those learnings.
Right.
I understood now about
like cashflow management.
I understand now about
inventory management.
I understand now about Yeah.
Right.
Planning for contingencies
and business stuff, right?
Yeah.
So lots of little, little
lessons came there from
that failure and it sucked,
but like I never would've.
Come to that same
conclusion just by sitting
around and like planning.
Right.
You, you can't ab test a
thought experiment, right?
It doesn't work.
Right.
The, the deltas that we
create and start a plan don't
come from brainstorms, man.
They, they come from bruises
in most cases in your case,
quite, quite literally.
Uh, in my case, it was an
emotional bruise in your case.
Uh, it was one
straight in the eye.
But yeah.
And it's funny 'cause they
so many of these lessons
and I think when we talk to
lots and lots of founders,
a lot of these lessons.
Came at early ages, and a lot
of them weren't necessarily,
mine happened to actually
be related to a business I
was running at a very young
age, but a lot of times they
were just, it was just some
other version of getting
comfortable with some version
of ass whooping and failure
and overcoming it and then
saying, Hmm, if I can do that.
I can probably just do
whatever else I want to.
Let me just keep trying.
I agree.
I also, Ryan, I don't
wanna overlook the fact
that you have to do this.
Yes.
Like it, this isn't like
a luxury, like you can't
run a startup and just
always get it right.
You can't even run a startup
and get it half right.
Correct.
And I love when people look
at successes of companies, you
know, successful founders, and
they're like, oh, they must have
made all the right decisions.
Show me any successful
founder and I will show you
a trail of tears a mile wide.
Right of all of the things
that that went wrong in
order for them to get there.
And you get this later on
in a cute documentary or
how I built this podcast
or something like that.
And you get the real story
when you actually meet that
founder over a couple drinks
Uhhuh
and you get the unfiltered,
you know, not safe for work,
not safe for television story.
Yeah.
And it is way more graphic
and it is way more awful and
you see it very personally.
I think that for the founders
that are out there that, that
are in our category of kind of
doing this for the first time.
When they hear something
like embrace failure,
it sounds like a trope.
Yeah.
Yeah,
right.
It
does.
Yeah.
But I don't wanna do that.
Uh uh Like I just wanna do
all the successful stuff.
Right.
And like you don't
have a choice.
Yeah.
Like the reason we're saying
embrace isn't 'cause we love
getting punched in the face.
It's because getting punched
in the face is the job.
Yeah.
Right.
That's literally what
we do for a living.
And if you can't learn to
get good at it, I think your
boxing analogy was phenomenal.
If you can't.
Like take the hits, you
won't win any fights.
It's that simple.
That's right.
Now if, if we get out of, you
know, metaphors and analogies
and things like that, if
we get into really specific
things, if you're gonna do
marketing as an example, yeah.
There are 20 different
things that you need to do.
Yeah.
Only one of them is correct.
There's no goddamn way
You are gonna know which
one of those is correct.
When I used to run an ad
agency, one of the things I
used to say to my clients is,
you pay me to be less wrong.
Right.
I never said, you
pay me to be right.
Right.
Like, you know, if
you gimme money, we're
always gonna be right.
You pay me because I know
how to be less wrong than
you would be on your own.
But both of us are
gonna be wrong.
Yeah.
You'll just pay to be,
to be hopefully less
wrong.
I'm gonna be wrong for less
time than you would've been.
Exactly.
I mean, every breakout we've
ever had started as some version
of like an embarrassing version
one that we shipped anyways.
Right?
Yep.
That's the key.
We shipped it anyways.
You just going back to the
whole, you know, trying to
steer the, the parked car
until we're in motion, nothing
is actually gonna happen.
Right.
I have bet To ship a page that
converts it 0.3% rightly, and
then, then two weeks later it
needs to be converting at three.
Right.
I'm never gonna figure that out.
Just by sitting there and
extrapolating or simulating
or guessing, right.
You just have to put
rubber to road before
anything's gonna happen.
It's the same response I give
people when they're talking
about bringing on a co-founder.
You know?
Yeah.
The, the most tired one now
is I'm trying to bring on the
technical co-founder, and I'm
gonna say, I'm, I'm worried
about hiring the wrong person.
And I was like, you probably
are hiring the wrong person.
Yeah.
And that is part of the process,
which is why I always talk about
vesting and cliffs and how to
unwind this thing in the divorce
papers before you get married.
Yep.
Because.
Like, there's no way you
could possibly know this
is the right co-founder.
You can run all the checks
and be totally wrong.
In the same way, if
investors really knew how
to make good investments,
why do they make bad ones?
Yeah.
If they're so good at making
good investments, why do
they ever make a bad one?
Yep.
Right.
And why is it the, the
portfolio strategy suggests
that you need to make 20
investments to maybe have two
uhhuh,
why don't you just make
20 good investments if
you're so good at this?
Right.
It's not the way this works,
not how it works,
not the way this works.
And because of that, we're not
in the business where we get
to say, oh, I'll just, I'll
just hire the right people.
I'll find the right
co-founder, I'll get the
right investors, et cetera.
So I think that brings
us to the next thing.
Which is okay, we get it.
You've pounded us over the
head that like you can't
make the right decisions.
So then what?
So I just go around making
a bunch of bad decisions.
Doesn't that like
totally lead to failure?
It does sort of, and what I
would say is building this
skill of failure is maybe one
of the greatest skills I know
personally that I've ever built.
And I said that, you
know, at the top of the,
the show is like, I'm
really good at failing.
And what I really mean by
that is I'm really good at
recovering from failure.
Yeah.
Yeah.
Yep.
Very few people have both the
ability and more specifically
the confidence to go into
something saying, yeah, I'm
gonna take a bunch of hits.
Doesn't matter.
It does not matter.
I gotta say, and, and I
referenced this, you know,
because, uh, we write, we write
like a newsletter paper about
this before, you know, we do
these episodes and I said, it's
the, uh, the closest thing to a,
uh, a potion of vulnerability.
Which brings me back to my
Dungeons and Dragons years.
Uhhuh
and being able to be good at
failure means not that I have
like this displaced confidence
that's is like, I just somehow
for, for no reason believe that
I like will always be right.
Right.
That I already know
I'm gonna be wrong.
That's the big difference.
Yep.
I already know I'm
gonna be wrong.
So I focus on the fact that when
I am, which is likely going to
happen, here's how I'll recover.
Yeah.
And I think that's the
mastery of the skill.
That's how it's tooled.
And I think over time, you know,
uh, it becomes a reflex, right?
Recovery becomes a reflex
because again, it's anticipated,
it's expected, and then,
you know, we just get used
to that bounce back, right?
Yep.
We, we know we're
probably gonna be wrong.
We wanna find out.
How we were wrong, why we
were wrong, which direction
we were wrong in, and
then we adjust, right?
Like I think back to,
just like to, to go
back to childhood again.
One of the, the, the comments
that I would get over and
over again, one of the
reasons I was a desirable
player on, on a soccer team
wasn't because I was faster
than most of the other guys.
It wasn't because I was,
uh, more skilled than the
guys I recovered faster
than my competition.
Yeah.
One of the comments that we get
all the time is like, my output
was nearly the same regardless
of how well I was playing or
poorly, like didn't matter
if I was having a bad day,
didn't mean I would continue
to have a bad day, right?
Coaches would constantly
comment on this like,
you know, you can make a
mistake and you get right.
Your head gets right
back in the game.
You can burn yourself out in
the first half, but you'll get
back in in the second half.
You'll keep coming back in.
It's because maybe I was
just too dumb not to.
I don't know.
There's a point at which we
just go like, and I heard
you say it a minute ago.
This doesn't just mean I'm have
misplaced confidence, right?
But we decide where to
apply our effort and then we
recover as quickly as we can.
And we get back in, we see
like, okay, that wasn't working.
Let me, let me, let
me try this again.
And I think that's again, to, I
think it has to become a muscle,
it has to become a reflex
really, that we just recover.
Resilience is one
of those things.
I've, I've heard that before.
You know, I'll take
resilience over brilliance
and, and particularly like
when the clock runs long.
I think that does matter.
Uh, but I, I think that to your
point, that's what starts to
decide the difference between
a, a founder who's really going
to lament and failure, and
one that's just gonna be like,
this is part of the process.
Think about from this, uh,
perspective, think of how
dangerous a competitor is that
isn't worried about failing.
Yeah.
That's terrifying.
Yeah.
A competitor with lots to lose.
Look, it's for as smart
as they are, they have
a weakness built in.
Yep.
But a competitor that's
willing to lose and keep
coming back, that person
is dangerous as hell.
Yeah.
That person is
dangerous as hell.
It's funny, I had this
conversation with somebody a few
weeks ago, was that that classic
thing of one of my competitors,
uh, just got funded.
Now I'm scared of what's
gonna happen with them.
I was like, well, maybe.
I was like, but you've been
around for, for five years.
They've been around for two.
Yes.
They just got But
they just got funded.
Yeah, probably.
'cause they needed it.
Right.
You've established a business,
you have recurring revenue,
you're, you have a more stable
position than they do now.
They have something to lose.
But so does this company.
Right?
They have a, they
have a run rate.
I said actually, of the
competitors in your space,
there's another one that I'd
be more concerned about because
they're more like you, right?
Yeah.
They've been around, they've
proven that they can recover.
They're not moving as fast
as this funded company,
but that's one of those
signals that like everybody
gets really worried about.
They get scared, oh,
they're gonna come.
They're gonna, they're
gonna take us out.
All that means is they've
got a budget to fail against.
So, yeah, there's
some truth to that.
And you know, we've done
whole episodes on this.
It's like, at which point you
think you've seen exactly how
the story's gonna play out.
It never plays out that way.
No.
Again, I'll go back to investors
20 investments, two successes.
Yeah.
If the people who put the
money in all the companies
are always the ones that
are successful, then why are
most of them unsuccessful?
And let's take that a step
further 'cause I can, I never
wanna overlook this one.
Most investors.
Most investors, I'm talking
venture capital investors.
Are unsuccessful.
Right.
Most investors are
unsuccessful at what they do.
They suck at what they do.
Yeah.
Right.
Now, this isn't me
like, you know, bone
to pick with investors.
Just math
numerically.
Exactly.
Yeah, exactly.
You can't fake it.
There is a quadrant that
they all pay attention to,
and in the top quartile, the
Sequoias, A 16 Zs of the world.
Right.
Are there year after
year, all the time.
Right.
And then there's
frigging everybody else.
Everyone else,
right.
Yeah.
In that bottom
quartile of investors.
Are the worst investors.
Yeah.
Now I say that to say they're
probably pretty smart people.
Yeah.
Like generally if you put
them, you know, uh, compared
to other humans out there
doing their job, they're
probably pretty smart people.
However, the nature
of this business does
not breed certainty.
In look, these
investors do diligence.
They try to do everything
possible to hedge for success.
Yet they consistently fail
over and over and over.
They even have the benefit of
only picking the best players.
Right.
Right.
It's not like they get
stuck with like a a 12th
round draft pick kind of
thing.
Yeah,
right.
You gotta take one of these two.
Like, I don't want
either of those two.
Like the top 10% of companies
that are out there raising
are the ones that are gonna
get a check from anybody.
Yeah.
And then a percentage of
those are like the top ones
that'll wind up getting a
check from Sequoia, et cetera.
But Sequoia has a, a list
of failures, a mile long.
Right.
And that's Sequoia, right?
They're by far the
best at what they do.
There is a great VC that
invested in us years ago,
uh, called Bessemer and you
know, very storied fund,
one of the oldest funds.
And I invested in
one of my companies.
And I remember when I went
to pitch them initially,
they had this great thing
and it was basically
their wall of mistakes.
And it was all of the
companies they passed on
and it was on their website
if I, if I recall too.
Right.
And I thought, how smart,
like, how, like humbling.
Yeah.
Um, which you don't see
a lot in the VC world.
Um, how humbling to say
we make lots of mistakes.
Yeah.
But guess what?
The successes we make, the
ones where we, you know, find
that, that success they make
up for, for the other ones.
Isn't that kind of
what we do though?
That's exactly it.
You have to measure
the failures, right?
If you quit after your first
failure, the measure's not gonna
land in in your favor, right?
But if you continue to fail
small, and then eventually you
win big, it bears out, right?
And I think this
is super important.
I'm, I'm always thinking in
terms of like, how can we
create the smallest blast radius
within failure, but at a really
high blast frequency, right?
Like, I want lots of
little explosions and I
wanna limit the damage.
Why?
Because this is
how we get there.
Right.
Right.
I do love to break these
things up and I think this
is part of how you get
more comfortable with it.
Right.
I'd rather push ten one percent
risks than one 10% risk.
Right?
Right.
Like, how can we test really
small and, and again, default
to reversible decisions?
My thinking has always
been, if I can roll it
back, let's roll it out.
Like what are we waiting
for at this point?
If, if we build on that
though, we've also taken
this same skillset and
holy shit, is it portable
to the rest of your life?
You know, as I've been building
a house, a house, I should
not be able to build that.
I have no, like, prior
capability to build,
but I designed the
house, I architected
the house to an extent.
I gcd the house.
I was the master
carpenter for the house.
I've never been a master
carpenter for a house.
The master carpenter
builds every single
thing in a house, right?
That's what I did.
And it's a good sized house.
So like when we're talking
about the scale of it, like
if, if you're gonna pick
up like your first starter
project, it ain't a cabin.
And so just the scale of, it's
also kind of overwhelming.
And I say this to say, the
reason I was willing to do
that in a trade that I've never
been in, I mean, I did all of
this for the very first time.
The reason I was willing
to do it is 'cause I knew I
was good at failing and I've
made plenty of mistakes.
Yeah.
No lack of mistakes.
Right?
And some of those, those
are fairly expensive,
but I'm kind of like, so.
I'll figure it
out and go for it.
And all the people in
that world, uh, the other
contractors and all the
folks that are involved in
it are blown away by this.
Like they are blown away that
someone's willing to just roll
the dice on all these things
and figure it out later.
Like, but that's not what we do.
I'm like, that's what I do.
That's what I do.
I'm really good at it.
Right?
Yep.
And what I tell them, I'm
not good at being successful.
I'm good at being,
making failures and
then figuring it out.
These guys are not
good at failing.
Right.
Like, they get one thing wrong
and they're done for the day.
Yeah.
Like, well, don't
know what to do here.
It's time to go in for the day.
I'm like, okay.
And the one other thing I, I
wanna apply this to, because
I still think it, it, it's
important, it's really led to
me having no regrets in life.
And when I say that.
There are situations in life
that turned out regrettably.
Yeah.
But when I say no regrets,
I mean there's never a time
where I should have said
yes and didn't say yes.
Yeah,
right.
There's never a time when I
can look back and say, ah, man,
coulda, woulda, should have.
I said yes to everything.
To everything and lived
a wonderfully colorful
experiential life.
I see you doing it with
your family all the time.
Yeah.
You guys just explore like
it's nobody's business.
It's the coolest thing,
and it comes from
this sense of why not?
Yeah, yeah.
Right.
Why not?
Why not?
Yeah.
I have.
Endless tales that
started off with why not?
And that's the tapestry
of my life and I'm,
I'm very proud of it.
I think one of the other
ways that I've become more
comfortable with this over
time, but before I make
the decision, like before I
dive into something, right?
Like whether that's adventuring
around the world or building
business, whatever it is, right?
I do try to think through, I
may not know what the outcome
of the decision's gonna be,
but there are a few things
that I can control, right?
I can cap my losses in time.
I can cap my losses, losses
in cash before I begin.
Right.
And I can set some kill
switches and I can sort
of decide the stop rules.
Yeah.
Before emotion shows up.
Before anything could,
could kind of take me off
of my game as it were.
Right.
And make me worse at failing.
Right.
So part of being good at
failing is, is sort of having
a plan for how failure happens.
Right?
Right.
You see the same.
I do.
And, and it's funny 'cause
I apply that whenever I'm
gambling, I don't gamble a ton.
Uhhuh.
I always go by the famous
Alex Trebek quote, which
says, uh, winning doesn't
bring me a lot of pleasure,
but I fucking hate to fail.
Yeah,
right.
I hate to lose.
Right.
I, I was like, I just picture
Alex Trebek saying that it
cracks me up every time.
But like when my wife and
I, uh, go to the casino
and we go to the tables, we
play blackjack every time.
'cause we can play forever.
And, uh, we always
be a small amount.
Like we, we never go high stakes
or anything else like that.
Yeah.
And.
I always say the same thing
as we're playing, wanting
to stop taking my chips,
and my wife never wins.
She just takes all my chips.
The, the second is I said,
let's bet small and win big.
Let's, let's make lots
and lots of small bets.
And over time those compound
and that's how we win.
And it, and it somehow works.
It somehow works.
Maybe we're just lucky.
But I'll say this, the
reason it works for me.
And I think for founders in
life is because if you're
willing, like you said, I
love you said the kill switch.
If you're willing to make those
small bets over and over and
over, you know your limits.
You know your, your kill switch
is you become invincible.
Yes.
You become the person that's
willing to go and go and go,
and no one can knock you down.
They can knock you back,
Mario, with the
invincibility star.
Exactly man.
They can never knock you down.
And if you're willing and
able to keep coming back over
and over and over again, no
matter what happens, you are
as close to invincibility
as you can possibly get
in the startup space.
When you show up as a
founder with as Mr. And
Mrs. Invincibility, no
one can stop you ever.
Overthinking your startup
because you're going it alone.
You don't have to, and honestly,
you shouldn't because instead,
you can learn directly from
peers who've been in your shoes.
Connect with bootstrap
founders and the advisors
helping them win in the
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Check out the startups.com
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Could be just the
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