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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 my
friend, the founder,
and CEO of startups.com.
Will Schroeder will founders
are probably the only people
I know who can work 80 hours
a week, beat the odds just to
exist and still feel behind why.
Because our expectations are
unhinged, man, like today.
Let's spend some time talking
about like the single fastest
way to improve founder happiness
and decision making, which
is just some recalibration.
Yeah.
Like if you go back in time,
like how reasonable were
your expectations when you
entered the startup space?
I gotta say, maybe by accident
I started with such low
expectations going into my
startup career, like, and I'm
gonna get into some detail
just so folks can really
appreciate that when I say
this, but I started with
such low expectations that
any kind of forward progress
was like holy home run.
So to give you an idea where I
was, by the time I had started
my first company, mind you,
I'm 19, I'm in college at that
time, my thing, I was living in
the, in the dorms at Ohio State.
My thing was I would
write your term paper.
Oh yeah.
Whatever your term
paper would be.
Um, on, on literally any topic
in under a half hour, which is
bananas for the cost of a pizza.
If you would buy me a
Papa John's pizza, it was
like $10 Uhhuh, like that.
That was my going rate
for my consulting output.
Now the irony was I had
never written a term paper
of my own in my life.
Right.
But I was just a good
writer, so I knew how
to write Flower reward.
Yep.
I'll write for other people.
Exactly.
It was always way
better than that
person.
Write for great rates, but
I'll, I'll write for pizza.
Right, right.
And so, uh, anyway,
that's where I was at.
And you know, it's funny
we should say that 'cause
we've told the story before
where like, I had built
a website for ribs for
a $500 gift certificate,
uh, for a rib place.
I did mine for a $1,500 tab at
Victorian's Midnight Cafe, which
never expired because I think
it was, and it never expired.
I think they forgot to
track it at some point.
'cause I was just like,
three years later I'm like.
I'm just thinking about the
price of a grilled cheese.
I must have eaten 500 of
these things at this point.
There's no way I still have
money left with these guys.
There is definitely a time,
it's funny that you and I were
basically selling into the same
local, uh, small business pool
of Columbus, Ohio back then, and
there was a time where, where
I, uh, walked into a restaurant,
it was Damon's, the place
for ribs, and I'd convinced
the, uh, manager to let us
build a, uh, website for them.
This was like in 96 and
uh, in exchange for this
$500 tab, right, for food.
And I remember going back to
the office and explaining to
the team that I had just sold a
website for $500 of rib value.
Yeah.
And it was a high five fest.
Everyone was so pumped up,
like they could not believe
we could make rib money.
Rib
money, uh, with
our capabilities.
Right?
Yeah.
Yeah.
'cause you could see that
story going the other way.
Like at this point, like
you, you founders hearing
this, they're like, oh.
He goes back and he tells
the team and they're like,
it's Jack coming home and
telling his mom he sold the
cow for three magic beans.
Right.
Uh, no sir. Food is food.
No, it was, it was slower.
So I say this to say to, to
put some color around this.
That was my level
of expectations.
Now, the funny thing to
that, this is like circa 96,
going in 97, a year later,
in one of the most dramatic
turn of events ever, we
would have one of the most.
The biggest agents lopsided
agency wins in history.
Uhhuh, we won a quarter
billion dollar a year piece
of business that would enable
us to go public years later.
A of right.
That's a
lot of ribs.
And I remember when I was
up there, I was up there on
stage 'cause this is like
back then big agency pitches.
But I remember being up there on
stage at Eli Lilly, uh, that we
were pitching in Indianapolis.
Thinking, I'm pitching
Lily right now, and this
is a multi-billion dollar,
like top of the food chain
Fortune 500 business.
But like nine seconds
ago, yeah, I was selling
these same services.
Yeah.
For a $500 gift card,
I had to wash a barbecue sauce
off my hands from the ribs I
just ate for my last paying gig.
Uh, it's amazing.
But here's why we're
talking about this.
We're talking about it
because when founders go
into this business, the
business of startups, I
think our expectations
are so incredibly broken.
Yeah.
And they're so malformed so
many times that when we get get
into this business, we start
building these businesses,
we are wildly disappointed.
Yeah.
And, and I think
it's a broken setup.
It is.
I think that's why
it's so important to
talk about this today.
Yeah.
Right.
It's, it's not just that our
expectations are wrong, it's
like, okay, so what, like.
When I think about it, our
happiness is really just kind
of a math problem, and it's
reality divided by expectations.
Right?
Right.
When we get that, we get
the denominator wrong.
It causes a lot of trouble,
and I tell people all
this all the time.
I said, your happiness
is proportionate to
your expectations.
That's it.
If your expectations were
sky high, you're likely not
happy because you weren't
able to achieve that.
Yeah.
Now, I'm not saying let's all
go for super low expectations
just so we can be happy.
There's a calibration
to be had here, right?
Sure.
But that's what
we'll talk about.
And I think for a lot of
folks, there's an entitlement
that comes with this.
I think that's part of it,
and we'll talk through that.
Like, you know, what
are you not entitled to?
What are you entitled
to, et cetera.
Yeah.
But I think overall, if I
look back on, you know, a
30 year plus career, the
highlight of everything has
been, whenever I achieved
something, it was so much
more than I felt entitled to.
And we'll talk about
this, but I have a strong
feeling about entitlement.
Right.
And so for me, you are
entitled to what you earn.
Yeah.
Again, we'll talk about that.
Yeah.
But I think that for me, I
always felt like when I earned
something, I was over the moon
because I'd never thought I
was actually gonna get it.
Right.
If anything, Ryan.
If I look back, and I have
many countless memories of
this, I kept waiting for
the other shoe to drop.
Sure.
I think to this day, I still am.
Right?
30 years later,
years later, I'm still
waiting for someone to,
to come and it all the
way.
Somebody coming to tell
me none of that was real.
You can't have any of that.
Give it back.
I'm going to tell
you a quick story.
About a year or two after
we won that big pitch, I,
um, I bought a Lamborghini.
No, I remember it.
Right.
Yeah.
I, uh, I went in the dealership
and I got so hosed over this
thing, like, it was, I, I was
like maybe 25, I don't remember.
And, and I remember I went
into the dealership and the
finance manager, you know,
has me in his office and he's
like, you know, in price of
the car, blah, blah, blah.
And I, at the time, I didn't
know anything about car
leases, which is ironic
considering I'd be a CEO
of a car leasing company.
But, uh, but anyway, he's
like, and your payment will
be like $6,500 a month.
You're like, deal.
Just
pause on that.
Yep.
My mortgage at that
point was $1,475 a month.
Yes.
Right.
To give you an idea of,
of like the disparity here
and rates weren't all that
good back then, right?
No.
And, and, and I had no credit.
Right.
I was so young.
Right.
And so I remember my
rate on that was like 9%.
Just like expensive
car, insane rates.
'cause nobody was financing
a 25-year-old back then.
Right.
And I remember a buddy
of mine from back home in
Connecticut was with me at
the time to do this deal.
And he was like, are
you out of your mind?
And I was like, honestly, dude.
I probably have this thing for
three months and they repo it.
Right.
There's, there's no way
a guy like me right.
Is ever gonna be able
to, onto This's, gonna
make, yeah.
I'm not gonna have to worry
about what tires cost.
We're not gonna get that far.
I was like, it doesn't, I'm
gonna make a difference because
there's no way I'm ever gonna
be able to hold onto this.
Right.
Yeah.
And I just, but it goes
back to my expectations.
Yeah.
My expectations were this is
way beyond what I deserve.
Yeah.
And so when it didn't get
repoed, like amazed, right?
Yeah.
Feels great.
It feels great.
And so I have always
been very mindful of not
only my expectations, but
everyone else's as well.
And I think where this starts,
and I wanna dig into this first,
what I call the snowflake myth.
The snowflake myth is basically
saying, I'm a special snowflake.
I'm gonna start a company and
it's gonna become IPO, you
know, Uber, Amazon, or whatever.
Right?
I deserve that.
Yeah.
Right.
How do you think about when
you talk to founders, do
you see the snowflake myth?
I do, and I think it comes
from a couple of places.
I want to talk about
expectations and optimism.
Okay.
So I think that there is a
required degree of optimism
when we're founding something
because it doesn't exist yet.
We have to be optimistic
that we can figure out the 8
million problems that we know
about in the 15 million that
we haven't thought about yet.
Right.
And generally speaking, I
don't think that founders
suffer from a lack of optimism.
I think we suffer.
From unpriced optimism.
Right?
And that's where those
expectations Love that phrase.
Yeah.
Yeah.
Come into play.
So I think that this is where
things start to go wrong,
and I think that somehow we
confuse those unreasonable
expectations with that optimism.
And when those two things start
to get conflated, then all of a
sudden what seemed like, okay,
this is what's gonna drive us.
This is gonna be the
force, this is our vision.
Unreasonable expectations
aren't motivation.
They're, they're self-sabotage
at some level, right?
They push bad decisions
and then they punish you
for just achieving what
you were otherwise going
to achieve anyways and
should have been happy with.
And so I think that's
where this begins for me,
and there's a lot of this in our
world, in the startup community.
I mean, it's.
Infiltrated with it at
every possible level.
Yes.
Right?
Yes.
So one of them is the defacto
that when I go to raise money,
I've gotta be able to show
investors that this could be
that snowflake opportunity.
That's
it.
Right?
I've gotta show them that.
It could be the, the big IPO,
but I've run the numbers on this
every year just to see if, if
this number has changed, but
essentially the probability.
You'll be able to get
a company to the public
market versus the number of
people that start companies.
Yeah.
In just the US alone,
which is by far the most
fervent market, where you're
probable to do it is 0.000.
3%. That's the probability that
you're gonna do what you said
you're going to do, and there's
150 companies a year that do it.
Adding that percent to the end
of it made it hurt a lot worse.
Will that added two more zeros?
I thought we were just a
not enough zeros.
That really sucks.
Yeah, it's a lottery ticket
with a pitch deck attached.
The reason we start here is so
we can just use hard economics.
It's like when somebody says,
I wanna grow from be president,
you're not going to Right.
Well, I can you, you
can, but you will not.
Right?
Yeah.
Like, or I wanna
play in the NBA.
You can, but you will not.
When people hear me say
that, it pisses 'em off.
They were like, how, how
dare you question someone's
ability, you know, to whatever.
And I'm like, look,
I'm not saying, I don't
hope you get there.
Right,
right.
And I'm not saying don't try.
Right.
What I'm saying is don't expect,
don't expect it.
Right.
That's the danger.
Yeah.
Because when you set
the expectation, you
then are are accountable
to the failure of it.
Okay.
Yeah, you are.
I mean like, and I think maybe
I should have said aspiration
before when I said optimism.
I think optimism plays
a role in this too,
but aspiration is fine.
Aspiration is fuel.
Right?
But expectation becomes
this debt, this blocker.
Exactly
what I was, I was gonna
use
the word debt.
Yeah,
yeah.
It becomes a debt, right.
And I think that hope is
fine, but certainty in
most cases is delusion.
You can't be certain
about anything, and I
think that's expectations.
Based in certainty, right?
I should have this, therefore
I will have this right.
I want this and therefore
I, I will get that.
And that's just not the
way this thing works.
And look, on the one hand,
I love the fact that the
snowflake myth exists because
the idea that, you know,
we're all special in some
way is wonderful, right?
I think that's wonderful.
However, the difference
in the startup world.
What you just said,
it becomes a debt.
And here's specifically the
moment it becomes a debt.
When you go to an investor
and say, give me money
in exchange, I'm going to
give you back this return.
You know, this return
being the IPO, et cetera.
Yeah, yeah.
And now you owe that
expectation when you give
stock options to your staff.
Right now you owe
them that expectation.
Yeah.
That locks it in.
And we're in a world exactly
where it changes the calculus.
Yeah.
Because you are accountable
to that expectation.
That's it.
One of the things that I
think, Ryan, we've done
well@startups.com, is
we are very incremental
in those expectations.
Right?
Yeah.
You know, uh, we look at
the expectations and say, we
would love to get to that,
you know, to that point,
oh oh, oh, you know, 3%.
However,
yeah,
here are the other
milestones that would
also make us very happy.
That's it.
Like being profitable, making
payroll, you know, crazy stuff.
And I think because of
that we don't tie up.
All of our happiness to a
likely incalculable goal.
Right.
And again, to your point,
doesn't mean we're not,
we're not aiming for that.
Right.
My right.
I have to, I have to bring
back my dad's quote, which
was, you know, aim for
the moon, clear the fence.
Yep.
Right?
Like it's fine to have that
aspiration, but you still
gotta put in the work.
And I think the minute
you replace, we're going
to be a unicorn within a
year or two, we're gonna
earn our next three wins.
All of a sudden you're actually
gonna start to make progress
because they don't think that
anybody knows what it actually
means to go be a unicorn.
Like what?
What exactly is the
checklist to get to that?
Whereas go get next three
clients has a checklist.
We know what to
do to go do that.
Right,
right.
Well, and let's
separate these two.
'cause I think this is
where folks may be missing
the point aspiration.
Yep.
And expectation.
Yes.
They're not the same thing.
Not the same at all.
Aspiration is where
I'd like to go.
Expectation is where I,
where I expect to go.
Yep.
Right?
Aspiration is it might happen.
Expectation is it
better happen right now.
It doesn't have to
be one or the other.
For example, I can say this.
I would like my company
to be a unicorn.
Right.
Yeah.
Cool.
That's my aspiration.
Nothing wrong with that.
We're, we're not knocking that.
The difference is we're saying,
but right now I need to get
to the company where it makes
a thousand dollars a month.
That's it,
right?
Yep.
My expectation is I, this
thing has to get to a thousand
dollars a month of revenue.
It's the equivalent of saying,
I need to score a home run.
But saying, but don't you
want get on first base first?
Yeah.
Nope.
Just want, just want home runs.
Yeah.
Right.
It doesn't quite work like
that, but here's the difference.
When we say, Hey, if we get
to a thousand dollars a month
in revenue, which again I know
is peanuts, which is why I'm
using that number, it's not that
we pack our shit and go home.
It's that like, okay, this
is what a thousand dollars
buys us, doesn't buy us, you
know, not paying our salaries
or anything else like that.
Right.
It's proven the
market a little bit.
It gets us, you know, to product
market fit maybe, and it allows
us to start playing the, does
it scale game a little bit?
Yeah,
but that's an expectation.
My expectation right now is
I just wanna make payroll.
My expectation right
now is I just wanna
get product market fit.
My expectation right now is
just, I wanna make enough
money that I'm getting
paid more than my last job.
Like to me, those are very
reasonable expectations.
Right.
Even if the aspiration is,
you know, shoot for the moon.
Yeah, and that's the thing.
You can have really, really
high aspirations and then
simply just base the work
around practical things to get
towards that, that outcome.
When do you think that dreaming
becomes most dangerous?
What are the triggers?
Is it fundraising?
Is it hiring, social comparison
with other, with other startups?
Where do you think this
starts to go off the rails?
I think it starts with time.
And you know, you and I
deal with this all the time
when we're working with
folks and we deal with it
in our own expectations.
Sure.
I think founders, because
they don't understand how
this business works very
well, why would you probably
doing it for the first time?
This stuff takes a lot longer
than people think it does.
Yep.
The myth around time, of course,
is that, oh, well within a
year we'll have product market
fit, or the month we launch,
we'll know right away whether
the product's working, which
is works, never, or you know.
Within a year we'll be
profitable, or within two years,
you know, we'll have raised
our next round, et cetera.
I was like, look man, I've been
doing this for over 30 years.
Yep.
It does not work
like that.
Doesn't work.
You know what I've started to
do Will, every time I hear these
numbers from founders, I just
apply dog years math to it.
I'm like, okay, just I think
you multiply by seven the first
year six, this ain't right.
Just like that's the
sad reality of it.
My rough math that I always
use for people is what I call
the three x rule of time.
Mm,
however long you think it's
gonna take, just multiply
it by at least three.
Yeah,
and I'll give you a,
a couple of things.
When I ask people how fast did
it take, the fastest growing
companies to get to the level
they're at, Uber was one of
the fastest growing companies.
A lot of people didn't realize
LinkedIn was one of the
fastest growing companies.
Yeah, it was.
Google was one of the
fastest growing companies.
Right?
I mean, these are the best
of the best of Airbnb, right?
Total juggernaut.
Do you know the time it took
those companies to get to to
IPO was all over 10 years.
Yeah.
Right.
Every one of them
passed
the decade
before getting to ipo,
growing companies
in frigging history.
Yeah.
Right now, but
somehow five years is your plan.
Cool.
Yeah.
Right.
Cool.
Look there.
There's all kinds of reasons
why that happens, but when
people are like, Hey, we're
starting this thing, we're
six months into it, we
don't know if it's working.
I get that like in six
months you usually don't
know that it's working.
Yeah, but you
need at
least
a
couple more years.
Are you?
Why are you worried
about that at that point?
To be my
question?
You don't know any
better, and so I think
this is an expectation.
Hey, I'm already 18
months into this and we're
not making any money.
Yep.
Yeah, you're not supposed to.
It'd be great if
you could, right?
Yeah.
But it takes way longer to be
able to turn this thing around.
Yeah.
But people don't
really know that.
No, we don't talk
about that much.
And that, and that's why
like the startup timelines,
uh, from the early
founders, they're fantasy.
It's not, they're not forecasts.
It's fiction.
Right.
And, and that's okay.
Their job is to
go make that true.
But I think the, the problem
becomes, again, when there's
expectations aligned with that
and the sense of entitlement
that, because this is what
we set out to do, this
is what we're gonna do.
Again, you've gotta believe that
you're gonna hit it, but you
have to plan for not hitting
it, because statistically
you're not going to.
We're also in a business where
time is a a very critical
element in as much as when
we go to raise capital.
When folks raise capital,
they're typically raising
capital for an 18 to
24 month window tops.
Yep.
Right?
And the idea is that
you're likely gonna be
out of money by then.
That puts a very specific
constraint on time.
Dude, you're about to
run outta money, right?
Like this thing either has to
be successful or you are effed.
Right?
And I think that puts us in
a, a weird spot where we're
constantly under the gun.
We're also in a business,
particularly among like a
lot of the faster growing
startups where you happen to
be competing with everybody
else with the same idea
at exactly the same time,
same time.
Yep.
Let me zoom out a bit, Ryan.
If you and I were starting to
call an ad agency right now
Yep.
None of this would
be on the table.
Correct.
Our speed of growth would not
make a lick of difference.
Doesn't Not
at all.
Right.
Think we're the first people
to start an an ad agency.
Right.
Or freaking any
services business for
that.
Any services business.
Yep.
Right.
We wouldn't be concerned
whether we raised them
up capital because there
wouldn't be any, you know?
Right.
Capitalism doesn't
fund services business.
Yep.
And we would just year after
year, month after month.
Look for deals,
try to bring it in.
Clients, try to make money
on it, try to, you know, go
hiring around it, and it would
take as long as it takes.
Yeah.
Again, the reason I'm bringing
this up by comparison, and
by the way, that's a very
healthy expectation and pace.
The reason I bring this up
by startups, by comparison
is somewhere along the way,
we're told that if we're
not right in 18 months or 24
months, that we're a failure.
Yeah.
Yeah.
Not true.
And it's like not really
right.
Not really somewhere
else works at all.
No.
The startups don't fail
because they're slow.
Right.
They fail because founders
panic at what would
otherwise be normal speed.
Right.
Because their expectation
is that they should
be going faster.
And look, and this isn't
about like being productive
in like, you know, in, in
getting your work done.
Yeah.
Yeah.
Ryan, you, me and the
rest of the team, we
are productive as hell.
Yes.
Right.
But we also have a degree
of patience, and I think
this has been a hallmark
for us for a very long time.
We recognize how long things
take to actually build.
Yeah.
You know, we launched a new
product last, last month, and
our expectations for, for month
one growth, I think were very,
you know, conservative, but by
conservative I mean realistic.
Yeah, right.
Realistic.
Yep.
And because of that, we
are happy with it and it's
not, 'cause we, we set
the bar so low that we
could easily jump over it.
Right, right, right.
We know what the bar
was supposed to be
reasonably.
Yeah,
right.
I think look, if you start
to expect miracles on a
schedule, expect to start
making really desperate
decisions on a schedule too.
Right.
You just, this is the problem.
I think people, again,
people's expectations
are just so outta whack.
You know?
I think the good news is.
Getting out of your own head,
getting off the whiteboard,
getting out of your spreadsheet
and talking to some other
founders solves this.
Most of the time when you look
around and everybody else goes,
did you just say three years?
And they're going
like, you plan on six.
And you're like,
well, what about you?
You say, same thing.
Same thing.
Same, same.
Okay, so everybody here
thinks it's gonna take me
six years, it's probably
gonna take me six years.
But when all you have, or
is the echo of your own
voice in your head, how else
are you supposed to to, to
have better expectations?
It's exacerbated by the
fact that the mythology
that surrounds our business.
Yes.
Which is a big part of why we do
this show so folks can finally
hear how things really go.
If you're listening to
a popular podcast where
they're interviewing a
founder, the reason that
specific founder is getting
interviewed is because they
did something out of the norm.
Yeah.
Right.
Like, you know, years
ago when we interviewed
Brian Chesky, right?
Yeah.
From Airbnb.
Yeah.
He was interesting because he
did something out of the norm.
Yeah.
Bringing somebody on a, how many
freaking pitches do we get for
people to come onto our show,
onto this, onto our podcast?
Which is ironic 'cause we
don't have guests, right?
Yeah.
Which what I, I just have to
call this out 'cause maybe
somebody will hear this.
Maybe somebody will hear this.
I love the pitches where
they're like, I absolutely
love the podcast.
Your episode on whatever,
whatever was amazing.
I have this guest that
you should check out.
Like if you love our podcast,
you may or may not have noticed.
You should have noticed.
We don't do guests, but
Yeah.
Right.
Still get up offers every day.
We're flattered, but
we're not accepting.
Yeah.
I love the flattery though.
But, but the point is, what
you're hearing, you know, as,
as the kind of the, the outside
narrative is that startups
grow at these incredible paces.
Yeah.
You're seeing either a
huge funding round or huge
outcomes, et cetera, and that
is true for a tiny, tiny,
tiny percentage of startups.
Yeah.
That world actually does
exist, and I gotta say.
I know a lot of those jokers,
you know, the founders
behind those companies,
and I say jokers because
they're all great people.
I've seen them do seven
other companies that had
nowhere near the growth rate.
Yeah, this one caught heat
and I've been at it too.
I've like, yep.
I've had a moment where
I've had a company catch
heat and do really well.
I'm companies that
went nowhere at all.
It's not nearly as controllable
as people think it is.
I would say reasonable
growth is fairly controllable
hypergrowth, where you just
hit lightning in a bottle.
It's more found than discovered.
Like you just, you
happen upon it.
Right.
And I think for a lot of
folks, the expectation
of how much investment
this takes from a time
standpoint is really broken.
When I sit down with
founders, I said, cool,
you've got this new idea.
It's gonna take you
about 10 years for it
to become something.
Yeah.
Their heads explode.
I know.
They don't want to hear that.
That's a really short
period of time and we're
kind of in a spoiled world.
Yeah.
Ryan, if you went back
to like our parents,
uh, growing up, right?
Oh yeah.
And told somebody you could
be successful in 10 years
starting a business, they
would, they'd be the opposite.
They'd be like,
that's unheard of.
Businesses used to be.
They take multi-generations
to be come successful.
My grandfather started it.
Right?
Right.
My, my father improved
upon it, and we finally
became profitable.
You know, when, when
we took it out, right?
It's, that's the way it was,
but yet now we have this.
This sort of instant
gratification challenge if
you're thinking about like,
'cause there's all kinds
of timeline lies that we
can tell ourselves, right?
Yeah.
From product to marketing to
building credibility, building
team, there's all kinds of
timelines that we operate on.
Right?
Is there one that you think is
more dangerous or more damaging?
Uh, in terms of the timeline?
Lie for founders,
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.
I think how long it takes
to build a self-sustaining
company, like a successful
self-sustaining company.
Yeah.
And my answer is always
five to 10 years.
Five if you're lucky.
10 if you're reasonable.
Right?
Yeah.
And that seems to run in
such stark contrast to
what the expectations are,
which is hilarious because
I don't know where these
expectations come from.
Right,
right.
Again, I equate it to, hey, I,
you know, listened to Chesky
on the podcast, but like.
By the time chess, he
went public, he had
been at it for 12 years.
Right,
right.
It didn't happen overnight.
Right.
The overnight success.
Right.
We, we, we went from not being
on the NASDAQ to being on the
NASDAQ overnight, but the path
up to that was quite long.
And even then, you know,
someone's gonna be more cynical
and they'll say, yeah, but
you know, uh, that was when
we went public, but they
were wildly successful five
years before that, or six
years before that, so it was
really only a six year run.
I'm like, cool.
Yeah.
And how many people actually
get to that threshold?
It's the Powerball mentality.
Yep.
Well, you know, uh, I only
need one ticket to win.
Yes.
But the probability
that you're going to win
it is incredibly low.
Yeah.
So you don't wanna invest
all of your expectation
on that outcome.
You need to dial it back
and say, what's a reasonable
outcome for where I am now?
And set the expectation
around that.
Yeah, I think if I'm forced
to pick one, it's the
funding timeline, and I
think there's two challenges
with the funding timeline.
It becomes a foregone
conclusion that we will
raise in 90 days and it
becomes a foregone conclusion
that we will raise, right?
Neither of those two
things is certain, and
yet I watch founders.
Plan around this stuff.
And I think to me, that can
be one of the most damaging
lies that, that founders tell
themselves when they're, they're
planning for those, those
outcomes, both the timeframe
that it takes and the fact
that they are certain to just
go and raise that capital.
Because then they build the
business around it and they're
like, well, who cares if the
runway goes past 90 days?
Because that's all we need.
That's when we're raising.
And, and it's, it's certain,
I think this is where
people fall into one of
many entitlement traps.
I'm a huge fan of the, uh,
philosopher a Rand, the
author of Atlas Shrugged
in
a few other books, and, and
she was as shrewd as they come.
Like, when you go back
and, and you listen to her
interviews and stuff, I
mean, she's painfully shrewd.
Yes.
But one of the things
that she would always say
was, check your premises
Uhhuh.
You know, whenever you're
not sure where you're
at, check your premises.
Like, how did you
arrive at this place?
Yes.
Right.
Like, what are the things that
you thought were foundational
knowledge that you based all
of these expectations on?
And were they actually true?
Right.
Check your premises.
Hey, I think this thing should
be successful in three years.
Based on what?
Based on what?
Right, right.
Where did you get that
foundational knowledge
that sounded like it was
statistically relevant?
That you should be comfortable?
Yeah.
With, with that decision,
it was, it's grounded in
a very specific theory.
Will it's, I have exactly
three years before my spouse
will kick me out of my house.
If it's not working by then,
I didn't get that far.
That's actually very reasonable.
Yeah.
But I think here's
what ends up happening.
We get into what I'd
call an entitlement trap.
Yeah.
An entitlement trap to me.
Is, I deserve my expectations.
Yeah.
I deserve my expectations
because I expect them.
Right?
Yep.
And I, uh, I was telling you,
uh, before the show that I
was talking to my, my wife
about this last night and
I was talking about like
the expectations and the
entitlement of our kids.
Yeah.
And I said that I get the
fact that, you know, where
I came from, you know, being
a poor kid and where my kids
are coming from, being a not
poor kid are very different.
Yeah.
And so.
I don't have an entitlement trap
because I don't feel entitled
to anything, but they do.
They do.
They're great kids, right?
Like incredibly kind
and sweet and honest.
Right?
But their expectation,
their baseline is so much
higher, just by definition.
Yep.
And so when they go into this
world and they have these
expectations, and again, a
lot of it's just implied, like
we go on nice vacations, so
when my kids go on a shitty
vacation, which isn't even a
shitty vacation, like right.
They're gonna be
like, what a dump.
Yeah.
Right.
Not because they're in a
dump, probably back then
would've been nice contrast
vacation I ever went.
Right, right.
But that's, that's
their comparison.
I think the same thing
happens with founders.
I think founders are like, well,
I believe this is gonna be the
next big thing, or I wanna be,
you know, this next big thing.
Yeah.
So they feel entitled
to that outcome.
Sorely disappointed when
they don't get there,
which is most of the time.
Yeah, that's, I think
that's the challenge.
Right?
And And unfortunately,
startups don't reward efforts.
Right.
There are no payouts.
It doesn't guarantee
any kind of an outcome.
Startups pay for results,
not your suffering.
Right.
If only it were the other
way around, we don't be rich,
let's call on that.
We're used to jobs.
Yeah.
Where you're supposed to
be rewarded for hard work.
Yeah.
If you work more hours,
you get paid more.
Yep.
So I think.
At a societal level, we
are absolutely, we feel a,
a absolute entitlement to
compensation for effort.
Yep.
If that's the way you feel,
you are in the wrong business.
That's exactly it.
Yeah.
Time invested does not
equal value delivered.
And if there's no
value delivered, your
startup's not gonna grow.
It's not gonna, it's not
gonna achieve anything.
Right.
It's also your fault.
Yep.
Which I think a lot, a lot
of people have a hard time
wrapping their heads around,
like they're like, but I
worked really hard at this.
Yeah.
Did it work?
No.
That's your fault.
Right,
but Will, but you just
stumbled across it.
There is one thing
we are absolutely
entitled to as founders.
Accountability.
Accountability, right?
Yeah, exactly.
That you are entitled to 100%.
I don't have like a, a lot of
very strong ideologies, but
one that is very, very strongly
about is you deserve nothing.
You didn't earn.
Yeah.
You deserve nothing.
You didn't earn.
Yep.
Uh, and I gotta tell you, not
popular at cocktail parties.
Uh, probably not.
Yeah.
Depending on who, who
your friend circle is made
up.
Yeah.
I was gonna say, there's
a lot of people with
shit they didn't earn.
Right.
And I feel I'm not
a jerk about it.
I'm not trying to like
berate anybody about
it, but conversely, I,
I also feel very serious
about what I have earned.
Yeah.
Right.
In other words, I've put in the
work and I've had the outcome
and I've earned something.
I feel a hundred
percent entitled to it.
Yeah.
What I don't feel entitled
to is anything I didn't earn
anything else.
Yeah.
Yeah.
And, and I look at it from the
standpoint of this recently come
up in, in my life inheritance.
I didn't inherit anything, but
I, but, uh, we had somebody else
in our family that inherited
an awful lot of money, right?
And, and they were arguing that
it wasn't enough and all these
things, and I'm like, Hmm.
The guy who had to work for that
Yeah.
Felt very differently
about whether that was
enough money, right?
And here you are getting it for
free and complaining about it
at the same time, and it just.
Burns me, man, because I'm
like, you didn't earn it.
Right.
You didn't earn it.
And so you're not
entitled to it.
And I know like, again, it does
make the most charming person
at cocktail party sometime,
although I keep wraps on it.
I just talked to Sarah
about it on the way home.
Here's another example, and this
is really gonna make everybody
hate me when someone's kid
talks about their family's
wealth as if they earned it.
Yes.
Yeah.
Ah, for interesting that
when you say kid, that can
also be like a 45-year-old.
I've, I've run into those kids.
Oh, yeah, yeah, yeah, yeah.
And I'm like, listen, it's
great that you have it.
I don't, you know
Yeah.
Grudge you for having it, but
you don't get to brag about it.
Right.
Yeah.
Like, conversely, there's
another guy that I know, Ryan,
when you're over my house,
did I show you that that house
that got built, like across the
way that looks like a hotel?
You know what's funny?
I was just talking to our, our
mutual friend who happens to
be visiting me right now about
that exact house came up in
an entirely different context
and we were laughing about it.
Yep.
For folks listening.
There just happens to be a guy
that, that sold a company for
like billions of dollars and,
and I live in Ohio, right?
This is in Beverly Hills.
So the, the point is
how, how bizarre this is.
Yes.
And he lives like across the
street, not literally across
the street, but you know,
whatever in, in Sightline.
And he built like a
50,000 square foot house.
It's the pet by this.
Yeah.
I mean it is absolutely.
When you drive by it, it
actually looks like a hotel.
Anyway, that's not
the point of my story.
Last year or year
before his son.
I happened to be
working out with me.
Like me, me and another founder
were together working out.
He joined us to work out.
Nicest guy in the world.
Right.
And what I loved about him
so much, they have this
insane car collection.
It's all over the
internet, by the way.
And you know, he kind of
manages the car collection
among other things.
Right.
He's posting about it on
Instagram and every long time.
But the way he talks about it
is in such reverence to his dad
Uhhuh,
which mad respect.
Yes.
Right.
He's like, here's
what my dad did.
Here's how, you know, he's, he's
clearly so respectful and he
feels so rewarded by his dad.
Yeah.
Not entitled by him.
Right,
right.
And to me, I was
like, hallelujah.
Man, difference.
Yeah.
Yeah.
But I'm gonna take this back
to this sense of entitlement.
We have this feeling that the
world owes us something, that
our startups owe us something.
Yeah.
And that is true to the
extent that we've earned it.
Our output rewards it.
Yeah,
here's an example.
A buddy of mine goes out, he
raises like, I think like $70
million, uh, for a startup,
puts like 10 years into
it, which is a long time.
Yeah.
Right.
And it kind of just goes
sideways, meaning like, it,
it's not that it totally
blows up, but it, it's,
he's never gonna get his
money back out of it, ever.
And of course he's
bemoaning that fact.
He's like, dude, I put 10
hard years into this, right?
Yeah.
Like, I feel like I deserve
a lot more than I get.
And I was like, I love you.
You don't deserve it.
I said It would be nice.
You deserved it
if you earned it.
Right.
Right.
Like if your output, you
and I have plenty of efforts
that we've put into things
Yes.
That yielded zero results.
Yeah.
Which means that's
exactly what we've earned,
what we got back from it,
and that's what we expect
to get back from it.
Yeah.
It sucks, but it also
goes the other way.
It goes the other way where
when you know, I've got
another buddy of mine sound,
a friend of mine that you
also knew sold his company
for a billion dollars, right?
Yeah.
And families are interacting all
the time and every time I I see
him, I'm just so proud of him.
Right?
Yeah.
I'm like, you've earned
every nickel of that.
Yes.
It's an outsized outcome.
You didn't expect it
necessarily, but you
did earn it, and you've
earned every nickel.
One of the things that I
always say to a founder
when they've cashed out.
I always, I'm, I'm hoping,
I'm, I'm not the only voice,
but I get the sense that I am.
Sometimes it feels
that way here.
Like, you're the only
person who said something
nice to me about this.
I'm like, I'm
sorry to hear that.
I need you to hear this
from at least one person.
Yeah.
You deserve every nickel
that you just earned.
You deserve every square foot
of the house you just bought.
Yeah.
You deserve every square inch
of the car you just bought.
You deserve what you've done.
Yeah.
And Ryan, no, it's crazy.
Almost 99% of the time,
they're like, you're the
only person who said that.
Yeah.
Oh, everyone else is
looking at them with
jealousy or skepticism,
or you name it, right?
Like right.
It's tough.
It's tough, but again,
Lord knows how entitled
to that person's outcome.
You're like, why couldn't
that have been me?
Because it wasn't
a lottery ticket.
This wasn't up to random chance.
This was up to somebody
putting their pants on the
line every single day and
doing something to earn it
different if they're a Powerball
winner, but this ain't that.
Right.
So here, here's what I
think, I think the key for
us, you know, uh, as, as
founders is we've gotta set
reasonable expectations.
Yeah.
I think the expectation battle
for founder mentality is real.
I think it's real.
I'm gonna go back to the
thing at the very beginning
about the optimism, right?
You're, you're told,
you're constantly in pitch
mode as a founder, right?
And you're, you're constantly
having to say things that
aren't quite yet true, right?
You're projecting out
to this, this future and
you wanna make everybody
else believe it's true.
And somewhere along the way
you start to believe it's true
and then you start to feel
entitled to, to that outcome.
Question for you will, one
of the things that I, I'm
curious about, 'cause we do
run into this all the time
before we get to setting
the reasonable expectations.
How are we able to help
a founder understand
that they're not entitled
without crushing them?
Because I feel like some of
the stuff we've said today,
it's, it's kind of heavy.
And some of them are out
there going like, well,
how am I supposed to feel?
Right?
Like, you guys are
just being mean.
What am I, what am
I supposed to do?
How do you tell a founder that
you're just not entitled in a
way that that doesn't completely
deflate their balloon?
You're entitled to your
next milestone, right?
Yeah.
If you earn it.
So if we're torturing the
baseball analogy right
now, your only focus and
your only expectation is
to be get on first base.
Now that doesn't mean your
aspiration isn't to go further.
Yeah.
Right.
But you haven't even
gotten onto first base.
So talking about how you're,
you've got a home run in
the works is bullshit.
One of the most famous cases I
see on a daily basis is when,
whenever anybody raises capital.
Yeah.
And like, oh, you
know, look at this.
We won with a huge valuation.
We raised a bunch of money.
Yeah.
I was like, you haven't
sold a goddamn thing.
You haven't, and you've just
added a massive liability
and you have less equity now.
Congrats.
Yeah.
I was like, you haven't
earned a goddamn thing.
Yeah.
Now, don't get me wrong,
it's hard to raise capital.
I, I'm not knocking
the milestone.
What I'm saying is.
Don't replace that
with market success.
Yeah.
Right.
Like all you've done
is create liability.
You still have to turn that into
actual success and statistically
you're not going to do it.
Yeah,
right.
So like a typical vc, if they
have 20 portfolio companies,
and mind you, this was the
best of the best of the best of
the best that made it to that
point to get that investment.
Yeah.
18 of those will likely fail.
Yep.
Right.
That's the best of the best,
theoretically, being vetted
by the best of the best.
Right, right.
And still 18 are gonna fail,
not two are gonna fail.
Just like through some
weird happenstance,
right?
No, most of
them, the actual,
the vast majority.
And so in every case they
said, oh, we've got the
money, you know, uh, the
expectations, blah, blah, blah.
IPO.
It's done almost literally
every pitch deck.
But at the same time, I'm kind
of like, you know what would've
been a really cool expectation?
I don't know.
Profitability, self-sustaining,
you know, a business
model selling anything.
Like
selling anything,
generating revenue.
Right.
And I think when we start
to align our expectations.
With what we can
actually achieve.
And this isn't about
lowering the bar, it's
about setting milestones.
Say that again.
Right.
We're, we're not
saying to just aim low.
Aim small.
And you know, because
reasonable expectations aren't
a single destination, they're
just a compounding ladder.
We're just saying like,
you know, build towards
that next point and then
continue to build from there.
I'll give you a real world
example, 'cause you and I
were just talking about this.
We're launching a new product.
We just launched a
new product, yep.
Weeks ago.
And our initial expectation.
Is that we wanna sell $200 a day
a day
of this product.
Yep.
Okay.
Now pause right there.
Most people when they hear
this, in fact, I had to
explain this to my family at
the dinner table, why $200
was so meaningful to us.
Yeah.
Right.
And my daughter, who's, you
know, 14, she's smart as hell.
She's like, dad, that doesn't
sound like a lot of money.
Uh, and I was like, it's
not, that's not the goal.
That's not, I'm not saying
$200 and let's go, go home.
Right.
I'm saying in my expectation
is $200 until we get to $200.
Yeah.
Because me saying
it's $200,000 a day.
Yeah.
Who cares?
Yeah.
Like
funny.
That's
not my problem
right now, think about 200,000.
You have to pass through
200 to get there.
Right, right.
You have to pass that.
So,
right.
I, I think that's
the thing, right?
You know, short windows,
aggressive and, and,
and realistic outcomes.
I'd much rather see
every founder out there
trade one heroic goal.
For 10 achievable wins
because that turns into
heroics at the end.
You know the example I always
use with founders that I think
resonates with everybody,
so I'll use it again.
Whenever I wanna lose weight.
I never talk about a
goal that I wanna lose.
Mm. I never say that I wanna
lose 15 I I know that I wanna
lose 15 pounds, let's say.
Yeah.
Right.
I know that's ultimately
the goal, but I have
to lose one pound.
So I always say this,
whenever I'm trying to go
on a diet or whatever, my
goal is to lose one pound.
And people like that.
Well, that just seemed
like a stupid slow goal
that, that you can't give.
Yeah.
Not if I can't get past it.
Yeah.
Right.
Like it's, it's easy to
say, this is my goal.
Yeah.
A lot
harder to pull it off.
It's virtue signaling.
Right.
I'm gonna lose 50 pounds.
Right.
Not until you lose one.
To be fair, I haven't been able
to lose 15 pounds in 20 years.
So clearly the fact
that I had this big
expectation and entitlement
right, wasn't helping.
The key is to be able to
say, I'm not entitled to
that outcome until I've
earned that one pound, right?
Yeah.
I somehow stopped eating
delicious pizza, and I look
at this saying, it's okay
to have the 15 pound goal or
whatever your goal is, right?
Whatever your goal is,
so long as you understand
that you have to earn it
one increment at a time.
Yeah, and I think
there's, there's so much
to be said for that too.
And it is, it is also, it is
about the earning, but it's
also just about being able to
actually do it and being able
to tell that you're doing it.
I watch.
Correct.
So many founders on a weekly
basis who have set a goal that
is so far away from where they
are now, that they can't tell
that they're moving towards it.
I had two calls, calls
like this this week.
Huge problem where I started
to look at some of them.
I was like, okay, so
you're making progress.
And they went, well, not really.
And I went, yeah, really?
Like last week you
didn't do this.
This week you did, right?
You've got some sales this week.
Mm-hmm.
Yeah.
But the goal is this.
It's like, well, who
set the damn goal?
Right?
Yep.
Like, why is that the goal?
And so it just makes it
really, really hard for
them to even understand that
they're doing the right things
and heading in the right
direction because they've
set the marker so far away.
That the apparent distance
isn't changing at all, and
that's really problematic.
I remember specifically
Ryan, remember when I
moved to Beverly Hills?
I do.
Right?
And I remember sitting
on the, the back porch
with my wife Sarah.
And did
both of you fit out there?
It's not a big place,
but, but we're like on
top of a mountain, right?
Like it's this beautiful place.
Yeah.
But the problem gorgeous
being on top of that mountain.
Yeah.
Right.
Was that we could see the
houses on the other side
of the mountain, Uhhuh.
Okay.
And they were way bigger, like
way, way, way, way bigger.
Yeah.
And I remember I was telling
Sarah, I was like, this makes
me feel like a giant loser.
And I said before we, yeah.
Get to that.
I wanna point out that I'm in
goddamn Beverly Hills right now.
Yeah.
Like I am quite at
the million food
chain.
Literal is so stupid.
Right,
right, right.
And, and I'm like, and
I'm sitting here going,
how messed up is this
uhhuh?
Right.
Like, I grew up on
welfare for Christ sitting
on top of mountain.
Right.
The, lemme play this
out every morning.
Um, we, we had these like
floor to ceiling windows
that overlooked like this,
uh, this, this mountain.
Right.
And again, in all the other
houses, every morning I would
look at all the other houses.
Across the, the,
the Valley Uhhuh.
And I'd be like, no
matter what I do today,
I will never have that,
never have one of
those, right.
Yeah.
That guy has it, right?
Yeah.
And that guy has it, but
it'll never be me, not me.
And it was so disheartening.
Yeah.
And again, I'm a pretty
pragmatic guy, so I wasn't like,
oh, I've, I'm entitled to all.
I'm like, dude, I, I didn't
even know how I got here.
But my point was, I was like,
because it had created this
new expectation that I didn't
have five minutes ago, it
was making me really unhappy.
That's it though, right?
I said at the top it's reality.
Divided by expectations.
Right?
Right.
So if your reality is a $10
million house, that's fine
until you start dividing it
by the $150 million houses.
Yep.
All of a sudden it
seems kind of shit.
Right?
It wasn't until then.
I remember being like, at some
point I was like, fuck this.
Right?
Yeah.
And I knew it wasn't
gonna go away.
I'm sure a stronger, more
mentally stable person
would've just been somehow
like, would, would've
figured it out on their own.
Yeah.
But I wasn't that person.
No.
And we pulled the stakes
and moved back to Ohio.
Uh, I was, I've
never been happier.
Yeah, and it wasn't
because I lowered the bar.
We actually ended up building
a more expensive house.
It wasn't 'cause I lowered the
bar, it was because I realized
that my expectations were
getting far beyond my needs,
far beyond like my capabilities.
Yeah.
The guy that built the house
across the, the mountain,
like founded Disney or found
it had been Walter Disney.
Right.
But like, you know, or
in this case specifically
was, uh, Channing Tatum.
Yeah,
like he and I definitely
didn't have the same career
arc, so that's why he has
the big house that I have.
Right house.
Like there's no way I'm
gonna be able to replicate
what that guy did.
Right.
And again, this mechanism
that artificially changes
my expectations to a point
where I'm making myself
miserable is the point.
I should have been like a pig in
shit over this whole situation.
Yeah.
And I wanted to be, and
I wasn't because again,
expectations were all broken.
Yeah.
Once those expectations are
outta line, then you, you
start to get, you're impatient.
You're dissatisfied.
You become anxious, right?
All these things.
And you, you can't just
be happy with what you've
already achieved or, you
know, and I think that
there's that aspect, right?
Mm-hmm.
Which is, you were sitting there
being like saying, I'm, I'm
not happy that I've achieved.
The one that also saddens me is
when I'm watching founders like
the two that I talked to this
week who had started to achieve
something, hadn't even realized
it because the expectation
that they set was so far outta
line with the reality of their
current business, and so they
weren't even able to see that
they were achieving success,
let alone be happy with it.
Right.
And again, because we don't
have a good barometer, you
know, we don't have a, a good
meter to be able to say, hey,
exactly how far along am I,
you know, compared to others.
We did an episode years
ago on this where we talked
about, it's hard for us to
know whether we're getting
ahead because we can't really
calibrate to our peers.
Yeah.
And in, in the startup world,
even our peers don't know
like how far along they are.
Yeah.
If you are making payroll,
you are geometrically ahead
of most founders most, right?
Yeah.
If you are profitable,
you are geometrically
ahead of those that, that
are just making payroll.
Yeah.
Like, yeah.
When you get to that
point, I think this was the
premise of that episode.
When you get to the point where
you, you've built a profitable
company, you are in a fraction
of a fraction of companies Yeah.
That ever actually
make it there.
But you feel like shit.
Yeah.
Because you're like, ah,
yeah, but you know, we
only make like a hundred
thousand dollars a year.
Yes, I get that.
Yeah.
But you also have to
realize that like that
is a massive milestone.
I understand.
It's not paying all the bills.
I understand.
It's like you being
happy doesn't like make
it worth twice as much.
Yeah.
But under you gotta at least
have some gratitude for.
What that milestone means.
Yeah.
I've found in my life that when
I'm aiming for something bigger,
if I am not grateful for all of
the little steps along the way,
I don't get to that big thing.
I've tried it, right.
I've tried it.
I, I tried to just aim
big and, and only do big.
Right.
Um, and at some point you, you
start to realize that those,
those big outcomes actually
come from just stacking
small earned expectations.
Long enough for the reality
catch up to the dream.
And that actually feels really
good and you get to enjoy
it along the way too, which
is, I think, something that
so many founders are just
not doing right right now.
They're deferring happiness, and
I can promise you there is no
interest earned on that account.
And, and so just, you know,
aim a little small, look
aim big, but act small and
just take those little wins
and keep, stack them up.
Be grateful for
them as they come.
Then those are the springboard.
That is the step that
you use to take the next
leap, and that's fine.
Yep.
And I think we are in the
business of expectations.
I mean, hundred percent, quite
literally, startups are in
the business of expectations,
both for ourselves and
for the people around us.
Now.
I think when we set those
expectations, it's with
good intentions in mind.
We wanna build great
things in the world, and
by all means, do that.
By all means, have
that aspiration.
Yeah.
To build big things.
In order to build big
things, we have to build
small things to get there.
Yeah.
You know, in order to move
a mountain, we gotta do
it one pebble at a time.
And I think part of our
expectations have to
be I will get there.
I will get there through a
series of successive wins, I
will be frigging relentless.
Yeah.
With my successive wins, but
I'm not entitled to the big
win unless I win every single
time, day in and day out.
The way to win the big, big
game is to win every single
game leading up to it, and
that's how you actually become
a champion in this business.
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
startups.com community.
Check out the startups.com
community@www.startups.com
to see if it's for you.
Could be just the
thing you need.
I hope to see you inside.