05/25/11 | Uncategorized

How to Survive and Thrive Post-Startup Failure

By Kaitlin Pike (Marketing & Community Manager, Web 2.0 Expo)
If you’re founding or running a startup, there’s a bit of an open secret I need to share with you: You’re going to experience some painful failures. Not necessarily as dramatic as a complete company shut down, but as you grow into a more experienced entrepreneur, you’ll certainly bump into some awful scenarios.Epic Fail

Thankfully, you’re not the first founder to come across these challenges. I recently spoke with three veterans of the startup scene who offered poignant pieces of advice for up-and-coming founders: Cass Phillipps, executive producer of FailCon and founder of the now-defunct startup Trogger; Leah Busque, founder and CEO of TaskRabbit; and Edith Yeung, founder of BizTechDay and SFEntrepreneur.

Here are six ways to prevent, prepare for, or survive epic failure (and thus keep your sanity) —

Expect some failure – and be prepared for a total flop.

Cass Phillipps of FailCon recommends putting checkpoints in place as an objective means of showing how well (or poorly) things are going. On top of this measurement plan, consider what actions you should take well in advance if things start to slide: “In a certain amount of time, how many users should you have? How much money should you have? If you haven’t reached those numbers, is it a fail point that you should start letting things go? Are there some steps you can start taking to try to bring it back?”

Leah Busque of TaskRabbit agrees: “Setting goals and defining success ahead of time definitely helps to quickly understand if something is failing. Staying in close contact with customers is also key. If something is failing, they’ll be the first ones to tell you.”

Before you even venture forth with your idea, Edith Yeung, founder of BizTechDay and SFEntrepreneur, recommends using the lean startup approach: define a clear hypothesis and validate it in a very short timeframe. She practiced this method on Dazzles, a newsletter about local date ideas: “For example, ‘I believe that people who date in San Francisco (potential customers) will need to read Dazzles newsletter (solution) because they run out of good dating ideas (pain).'”

Edith terminated the project after seeing that it didn’t attract enough users in the timeframe she had set. “At the very beginning of your venture, you work hard to prove if this is a worthwhile problem for you to solve in the next five years,” she said.

Your worth and your company’s performance are NOT the same thing.

“Business inevitably has failures; it’s just part of the game. You can’t take it personally and you always have to be looking for the next five things to try. There is no time for unconstructive emotion.”
— Leah Busque,
Founder & CEO,

Two types of founders typically come to mind for Cass: Those who are in love with their startup in a healthy manner, and those who are freakishly obsessed with them. One of her partners at Trogger, her past startup, unfortunately fell into the latter category: “He was judging his merit by how well his company did,” she said. When the startup failed, he “lost it.”

Have structures in your life that aren’t related to your startup.

Getting into the startup world? Make sure you have a firm foot in a separate scene, an organized activity you have to be at outside of your startup responsibilities such as a gym class, improv, or yoga.

“It’s called a rut because you’re thinking in circles,” Cass said. “You escape it by going to something that is in no way related to it.” If your startup fails “you still have a structure. You still have something you’re going to, where these people don’t judge you. They don’t know your company just failed. You’re just there for your weekly jujutsu lesson. It adds a sense of normalcy back to your life.”

Delaying the pain makes it worse.

Once the failure hits, don’t dwell on it. “Wrap it up as quickly as you can. Sit and powwow about what went wrong. Go to your VCs and explain what went wrong; apologize to them. Write to your users and explain to them what went wrong; apologize to them, and then shut the damn thing down,” Cass advised.

Once failure is detected, you have to be able to shift gears quickly. “It is so important to
move quickly beyond any failure, understand what you needed to learn from it, but refocus your energy almost immediately into trying the next thing — Iterating quickly out of failure is the only way to move forward,” Leah said.

The Taboo Many of Us Secretly Break: Getting a Therapist… er, “Life Coach”.

Ever listen to your startup friends and idols talk about their weekly meetings with a life coach/advisor/mentor? How many of them also talk about their therapist?

“It is something taboo that I bet almost every single founder does. I bet many founders have therapists and none of them talk about it,” Cass said.

No one in reality can work 80-hour weeks eating ramen with high stress at length. Sometimes you need a break – or a new perspective from a paid professional.

“If you think the life is hard because you’re starting a company,” Cass said. “Just wait until you raise that VC funding and you’ve got 30 employees.”

Friends exist for a reason. Talk to them.

A paid therapist will give you all the perspective you need, but sometimes you just need to whine at a good friend who knows you better. “Make sure you have a safe space. Make sure there are one or two people that you can sit down with [and say] ‘I am bleeding users. My revenue is in the gutter. I don’t know what to do,” Cass Phillips said.

Trusted people know how to keep your secrets, and how to help pull you out of a tough spot. Be proactive and address the failure before it gets a chance to rear its ugly head.

Please add your own suggestions for surviving and thriving in post-startup failure in the comments below!

About the guest blogger: Kaitlin Pike is the Marketing & Community Manager for Web 2.0 Expo. She’s worked for/on three startups (including one miserable, awful failure), and works on a consultant-basis for startups in need of copywriting, marketing plans, or social media advice. She’s also the charming organizer of SF Nightowls, a late night coworking group (sfnightowls.org). You can bug her about startup failures, late night coworking, and whatever else is on your mind on Twitter @kcpike.



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