May 26, 2025 • 29 mins
The realities of evolving a startup. Ryan and Will discuss how the first idea is rarely the final solution, sharing insights on how to navigate the pivoting process. Using Uber and their own experiences at startups.com as examples, they explore the dangers of clinging to an initial plan and the importance of staying open to change. They also touch on overcoming ego, internalizing market feedback, and avoiding self-sabotage to ultimately achieve a more successful and fulfilling business.
Resources:
Startup Therapy Podcast
https://www.startups.com/community/startup-therapy
Website
https://www.startups.com/begin
LinkedIn
https://www.linkedin.com/company/startups-co/
Join our Network of Top Founders
Wil Schroter
https://www.linkedin.com/in/wilschroter/
Ryan Rutan
https://www.linkedin.com/in/ryan-rutan/
What to listen for:
00:51 The Myth of the Perfect Plan
02:04 The Uber Example: Evolving Business Models
03:55 The Importance of User Feedback
04:48 Facing Investor Expectations
07:44 Ego vs. Agility in Decision Making
08:47 The Afford It Story: Lessons Learned
13:21 Conclusion and Final Thoughts
13:53 The Original Plan and Its Challenges
14:25 Admitting Mistakes and Moving Forward
15:10 Evolving as a Founder
15:58 The Birth of Startups.com
17:26 Learning from Market Feedback
20:45 Detaching Ego from the Product
23:14 The Importance of Adaptation
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back to their episodeof the Startup Therapy Podcast.
This is Ryan Rutan, joinedAs always by Will Schroeder,
my friend, the founder,and CEO of startups.com.
Will, it's no secret at thispoint anybody that listens
that you and I spend most ofour days talking to startup
founders about businesses, newand old, you know, gone and,
and imagined and yet to be.
How often is it that the veryfirst idea that we come up
(00:23):
with the very first plan isthe one that's gonna get us all
the way to the promised land?
Damn near never.
Ah,
never surprised
me.
Right.
We wanna have thefantasy of it, right?
Yeah.
The fantasy is this, likewhen people say like, Hey, you
know, you started a successfulbusiness, you know, how did
you come up with the idea?
And I always tell the, the, thesame thing I said, I didn't,
I. Like, oh, would you meansomebody else came up with that?
(00:43):
I was like, no, the idea forthis business didn't exist.
So I came up with a dumb one.
Yeah, yeah.
That, that got us here.
Yeah.
Um, and I always use that asa way to explain that, that
the businesses we're supposedto build are an evolution.
Learning about what'ssupposed to be built.
Yes.
Like it would sound awesomeif it was just like,
Hey, here's exactly whatI'm supposed to build.
(01:05):
Yeah.
And I'll just go do that.
It reminds me of like, ifsomeone was just starting off in
their life and you're like, Hey,I'm not gonna make any mistakes.
I'm just gonna start withexactly what I'm supposed
to do for every decision.
Yeah.
And.
Execute perfectly.
Right.
And by the way, you're aboutfive years old at that point.
Right?
So you've got all thelife experience you need.
Exactly.
You know everythingthat's coming.
Yeah.
It's funny that, but butit, it is sort of par
(01:27):
for the course, right?
Yeah.
This is most ofthe conversations.
We end up having foundersbelieve some version of that.
Here's what I think theproblem is, you know, kind
of what we'll unpack today.
I think because we get so soldon this idea that the product
has to be exactly this way.
Yeah.
Yeah.
We prevent ourselves fromkeeping our minds open saying.
Does it?
(01:47):
Or like, are we actuallyholding the startup back?
Yeah.
Because we'reunwilling to let it
evolve.
Oh, that's an interestingway of looking at this.
Yeah.
Yeah, yeah.
So to what extent are wenot, not just that we're not
moving it forward as fast asit could be, but that we're
actually holding it back.
Okay.
I like that.
I like that.
Here's a dumb example'cause it's probably not
even true, but I just, butI, I wanna point it out.
(02:08):
When Uber started, if yourecall, way back in the
day, Uber started as a,a way to basically make.
Black cars, right?
Like private black cars likeLincoln Town Cars accessible.
It wasn't intended to overturnthe taxi industry at the time.
It was very hyper specific.
It was everyone'sprivate driver.
That was the initial tagline.
That was the taglineThat's right of of Uber.
(02:29):
Right?
And so in that initial.
Reckoning if you were, uh,Travis and Garrett from
Uber, the, the, the founders,and you were thinking to
yourself, okay, this is it.
We're gonna be all aboutgetting all these black
cars that are typically Unadaddressable and you like,
it's very hard to get them,hard to find, hard to book.
Yep.
Tons of downtime, and we'regonna give you essentially
a quasi taxi, but a limo toget where you want to go.
(02:51):
And we were like, no,that's the business.
It's not another business.
Think of what was lost,what would've been lost if
they stuck to that model.
Dude, I would've walked somany more places in life.
If Uber hadn't existedas it does now, it
would've been awful.
There's a million casesand, and I bet a lot of the
folks listening, they'rea case of this right now.
Yeah.
Where they're sayingto themselves, but this
(03:12):
model's not working.
This model has to work.
And it's like maybe, or maybethe model that's supposed to
work, lo and behold, isn't aboutgiving people access to limos.
Like, like maybe there's adifferent version that would be
a hundred times more valuableif we just let it evolve.
And I think we have a hardtime letting it evolve because
(03:34):
of, you know, this kind ofmyth of the perfect plan.
You know what I mean?
Yeah,
for
sure.
And, and I think that's,that's where it starts.
It's like we, we spend somuch time thinking about it
that of course we must havethought everything that we
need to at this point, nowwe're gonna start building it.
So we've made some plansand I think you're, you're
right, like part of thatchallenge then that perfect
planning that we've done.
Actually starts to blindus to, to real feedback.
(03:55):
Like, and it's so funnysometimes man, like I'll, I'll
talk to founders like my gettingcustomers, um, sessions that
I do on Mondays and Fridays,we run into this all the
time where they're like, andthey're just not getting it.
And I'm like, okay,what are they getting?
What are they takingaway from this?
What are they telling you?
They're telling me thisand this and this and this.
And I'm like, okay.
Have you, if that's what they'retelling you over and over again,
are you starting to internalizeany of that feedback?
Like or are you justsaying No, they're wrong?
(04:17):
Yeah, like, because here'sthe deal, they still have
the credit cards that theyneed to vote with to prove
that you're right and they'recurrent, consistently voting no.
So let's go with maybethere's some validity to that.
And, and it's just tough.
And I get it.
Like, you know, after you putso much time into it, there's
the whole sunk cost fallacy.
There's the, I don't wantmy baby to be ugly thing.
I've already told everybodythis is what I'm building.
How could I possiblybuild anything else?
(04:39):
But man, the, I cannot overstatethe necessity of like that early
and continuous user validation.
Let give you an example.
The most common scenario thatI hear, and I'm sure there's
folks listening that, thathave been through this, the
most common scenario I see is.
But I just raisedmoney with this idea.
There's nothingmore humiliating.
(05:00):
Okay.
And I'm just gonna callbecause I've been there.
Then saying to investors,this is the future.
Going and proving that thisis the future, only to find
out it's not the future.
Right.
In fact, you were wayoff and having to go back
and say, just kidding.
Now this is the future.
That's hard to do.
It is.
It's hard to do, butit's important because
what's the alternative?
If you've realized that's notthe future, you're building
(05:22):
towards a future that youalready know doesn't exist, at
some point are the investorsgonna be happy that you go
back to them and tell them, Iwas super wrong and I already
have your money, so I'm gonnago try to be more right now.
Right?
Not exactly the kind ofthing that inspires a vote
of confidence at a lot oflevels, but on the other
hand, like that is what givesthem a chance at, at getting
a return on their money.
So it look, they maynot be happy to hear it.
(05:43):
But they're gonna be happierthan you just plowing
forth into something youknow is not gonna work.
This took me a long time tointernalize, because early
in my career, whenever I wasmaking any kind of decision
for the company Yeah.
And, and I was communicatingthat to my staff and I had
to change my mind later,it made me feel weak.
Yeah.
It made me feel like, uh, asa weak leader, which to be
(06:03):
fair, I was like 22, 23, 24.
So were you.
So that's kind of whatwe were a work leader.
We were weak leaders.
Right.
Like that was, thatwas just an accurate
assessment of the situation.
I felt, rightfully so, thatI had to overcompensate for
my clear lack of experience.
Right.
Especially, again, back then,different era where like young
CEOs didn't exist and so youwere a sideshow at best to
(06:27):
begin with and you, you wereexactly what people expected to
fail, like for all the reasons.
Okay.
It was really hard for meback then to be able to say,
Hey, that was a mistake.
Let's move left insteadof right, kind of thing.
Because at the time I wasso preoccupied with me being
wrong that I wasn't willingto let the product or the
(06:49):
organization be right.
I got a piece of feedback earlyon that was so beautiful and I,
I probably didn't appreciate itfor what it was in the moment.
Early, early, early.
I, I wanna say, I don'tremember what they were calling
him at the time, but early,uh, it was a, an uncle of
a, a close friend of mine inuniversity early at Salesforce,
like really early, likechief revenue officer before
that's what they called it.
(07:09):
Something like that.
Right?
Just somebody came in, Iwas trying to explain to
me and he was debatingback with me and, and you
know, he was significantlymore experienced and just
super, super smart dude.
He said he is like, look.
I'm hearing what you're saying,but at this point it feels like
you're trying harder to be rightthan to find out what is right.
I love that.
I love that.
Right.
And I was
like, in the moment I was like,Ooh, that stings once the sting
(07:31):
wore off probably years later.
I mean, it's something Istill hear that at times now.
Yeah.
When I find myself pushingback against something, I can
hear his voice saying, areyou trying harder to be right?
Or find out what'sactually right?
I'm like, dammit, Ithink I'm doing it again.
And what's interesting tome about that is it's, it's
all tied back to our ego.
Yeah, right.
A hundred percent.
We have this sense back whenI was making those moves early
(07:53):
in my career and, and I hadto make a change of sorts.
My issue, I would say waslike 80% my own ego, like
how it affected me in 20%.
My concern as to how itmight've affected the
business, I don't know thatI could have changed that.
I mean, part of that wasjust my own evolution.
I, yeah, I think it isbecause in the beginning,
(08:13):
a pivot feels like aconfession of failure right?
To ourselves, to anybodyaround us, and I think
that that can't be ignored.
I think what you eventuallyrealize after you've
gone through enough ofthem is that it's not a
confession of failure.
It's, it's a calibration towardswhat might actually work better.
And once you realizethat you become a bit
more comfortable again.
There's still times wherelike that's uncomfortable.
(08:36):
Particularly if you've justbeen out, like shouting to
the rooftops on LinkedInor you've raised phones.
The articles have beenwritten about it, right?
Like you've gotten somepublicity and now you're
going, well shit, that'snot exactly what we're
gonna go do now, but, right.
We had this happen with a, acompany we did called Afford
It, and it was essentiallywhat Affirm is today.
Oh yeah.
Um, buy now, pay paylater years before Affirm.
(08:56):
And, uh, we gotinto the business.
And it was going great.
Like we were selling tons ofproducts, but then there's
the part where, where youhave to pay later, which
means we have to collect.
And any kind of creditbusiness isn't a credit
or banking business.
It's a collections business.
Yes, a collections business.
It's all what it comes down to.
It's not hard to getpeople to take free
money, to get cool stuff.
A hundred percent right.
Like, like any loan is aboutcollection, not disbursement.
(09:19):
Anyway, we got into thecollections part of it, and
all of a sudden we're onthe phone collecting from.
Single moms who were usingthis to, and, and this wasn't
like a story, this just kepthappening, that were using this
as a way to like buy an Xboxfor their kid for Christmas.
I grew up with a singlemom and so like I knew
this process really well.
Yeah.
(09:39):
And the last thingthat I wanted to do was
collect from single moms.
Right?
Hey, you're behindon your payments.
Oh, what?
Oh, oh really?
I'm, yeah.
Nevermind.
Bye.
Just kidding.
Right.
And so, so, okay, so,so here's the thing.
We had raised a bunch ofmoney from really prominent
investors on a very bigconcept that was working.
That's the worst part.
That was working.
And we had a bunchof term sheets for a
(10:00):
Series A at the time.
At the time, I'm like.
Oh shit, how do Iget out of this?
Like, I don't wannabe in this bit.
I don't want to.
I don't wanna
do this anymore.
I was like, now to be fair, thatdecision got made for us because
we were headed right into thefinancial crisis, like 2007 era.
Yeah.
Everything driedup over overnight.
(10:21):
And like we couldn'traise any more money.
Wasn't
that, wasn't a whole lotof money being tossed at
subprime lending at that.
No.
There, there were, unlessyou were the governments
of Iceland, really?
Ireland and Cyprus, who werelike, it was not real possible.
We'd love to buy somede class repackaged
debt.
That'd be great.
Right, right, right, right.
And so anyway, none ofit was, I wasn't willing
to let go even though Ididn't even wanna do it.
Like that's the worst part.
(10:41):
I didn't even wanna dothat business anymore.
I just raised a bunch of money.
I'd just gotten to LA at thetime and I was everywhere at
all the events and everything.
Talking about this business.
I put my entireego into it, right?
Yeah.
My reputation and everythinginto this business, and
overnight I was like, Ijust made a giant mistake.
(11:01):
I wasn't willing to letit go because of my ego.
Yeah.
I, I think that's it.
It comes down to like, if,if I'm thinking of it from a
spectrum perspective now, andit's got, you got ego on one
end and you've got, I'm gonnacall it agility on the other.
The closer we can get awayfrom, you know, the further
we can get from, from egoand get closer to agility, I
think we're, we're better off.
But it's hard, right?
It is a struggle to let go.
(11:22):
And I think to your point, it'sreally hard to do that until
we've sort of gotten punched inthe face by, by getting it wrong
with ego and maybe accidentallygotten some wins from agility
and your case, like you wereforced outta the business.
And, and look, you don'tneed to spend a long
time answering this, but.
What do you think wouldhave happened had we not
run into the, the, the wholefinancial crisis, right?
Like had more capital havebeen available now, you
(11:44):
were already kind of like, Idon't wanna do this anymore.
What's the crystal ball?
Like the, whatwould've happened?
Would you have continuedwith the business?
Yeah.
Wouldn't it become a firm?
I
mean, no.
I, I would've, I wouldn't havebecome a firm and again, I,
when, when people are like, oh,I had this idea before that,
I did this idea before that.
Sure.
That was the easy part.
What Max Lein did, youknow, with Affirm was a
hundred x what I would'veever done with afford it.
(12:05):
Uhhuh.
I mean, to, to be fair,that's like me saying, well,
I had a pretty good gameand so I guess I'm Tom Brady
right in, in this equation.
He's Tom Brady.
I'm some idiot that playsflag football with a
bunch of 50 year olds.
Right?
Like not to same athlete.
Yeah.
So my point is Affirmwould've been just fine.
Who knows what would'vehappened to us.
But I can tell you, and, andI'm, I don't like to admit
(12:26):
this, I don't like to admitthe fact that I would have
pressed forward and did.
Not because I thought it wasthe right thing for me, the
market, the world, et cetera.
Yeah.
But because my ego was soattached to it, because I
had so many people that Ihad committed to that I,
I wasn't willing to stop.
And it, running out of moneywas kind of the only way that
was gonna get me out of that.
(12:47):
And, and eventhen, I spent like.
18 months, 24 months nonstop,banging my head against the
wall to try to like, get capitalbefore we eventually gave up.
So I didn't go out easy either.
Like it was guns blazing.
That's, I mean, that's theparadox, man, of, of building
products versus buildingyour identity into it.
That's a big part of this.
(13:08):
At that
point where we're so wrapped upin it, it's like we, we can no
longer isolate ourselves from itmakes it really hard to let go
because we're essentially sayingI'm killing off a part of myself
in order to kill this thing off.
That's a harddecision to get to.
You know, something that'sreally funny about everything
we talk about here isthat none of it is new.
Everything you're dealingwith right now has been done a
(13:30):
thousand times before you, whichmeans the answer already exists.
You may just not knowit, but that's okay.
That's kind of whatwe're here to do.
We talk about this stuff onthe show, but we actually
solve these problems alldayLong@groups.startups.com.
So if.
Any of this sounds familiar.
Stop guessing about what to do.
Let us just give you the answersto the test and be done with it.
(13:53):
Let's stick with this.
This goes back to the dream.
The dream is, hey everybody,this was the original idea.
This was the original plan.
This was the reason you quityour last job and joined to
work for equity or whatever.
You know, it's the reasoninvestors put money in.
It's really hard to saythat that plan didn't work
and expect the same levelof enthusiasm for new plan.
(14:14):
It's so much easier tosay It's tough, man.
Let's just stick with old planbecause it was the oldie timey
original and force that through.
It takes balls to beable to say I was wrong.
Okay, let's fullstop right there.
I was wrong and that's okay.
I wasn't willing to do it.
I am now, but at thetime I was not for sure.
It's,
yeah,
and man, and again, likein hindsight, way easier to
(14:36):
see, but like clinging tothat original version isn't
loyalty, it's not toughness,it's not strength of character,
it's potential self-sabotage.
Right.
But being able to see thatin that moment, it's up
there amongst, I think, thehardest of the challenges
that we face as founders.
Particularly 'cause it oftencomes at such an early stage.
Yeah.
That we have so little elseto go on other than our own
(14:57):
enthusiasm, our own ideas, ourown thoughts, and a little bit
of feedback from the market.
And then that little bit offeedback from the market is
going counter to what we hopedit's brutality at its finest.
Well, okay, solet's build on that.
I wanna talk a littlebit about why I don't
have the same issue now.
Where was my evolution sothat I could get to the point.
Sure.
And hopefully other founderslistening can kind of get to
(15:19):
that, that same, uh, point.
This came from a fewdifferent places.
One, it came from once I startedto understand that clinging to
the original idea, just 'causeit was the original idea mm-hmm.
Was just dumb.
Like it wasn't, I couldn't comeup with a good reason all other
than it sounded cool that itwas actually the best, most
strategic, most mature way.
(15:40):
Again, in most cases, Iwas attaching it to ego.
Now when I tell peopleabout this ego, et cetera,
invariably I'll hear a lotof people say, yeah, well I
don't have the same ego to it.
First off, bullshit.
Okay, second off, second off in.
Is that your
ego talking?
Yeah.
This kind of is, but okay,so, but here's what's changed.
Fast forward years later.
And we start fundable.com, whichwould later become startups.com.
(16:03):
Now, by this point, I had seenin a bunch of my own businesses,
things just evolve, right?
Yeah.
Things just go a differentdirection and that be better.
So we launched fundable.com.
It's a crowdfunding platform.
This is like 20 11, 20 12.
It turns out.
It was just a bad idea.
And, and Ryan, obviously I'mnot saying this to you 'cause
(16:23):
you were there, you knowexactly what I'm talking about.
A bad idea being, it justwasn't like that viable
equity crowdfunding wouldnot go on to be as an entire
market.
Correct.
Wasn't, wasn't, wasn'twhat everybody thought
it was gonna be.
But even,
especially back then.
So with that said, becauseI had the benefit of seeing
what happens when I don'tevolve that time, me and
(16:43):
certainly you and the restof the team were very open.
To trying something else.
That's essentially what led usto startups.com, which is, you
know, much different, much, muchbetter, more viable business
that is about to celebrate.
Its start of its 14th year.
Right?
Wild.
Absolutely wild.
Two deals from now, I think.
Yeah, right.
Exactly.
But stick with that fora sec. Had we been like,
(17:04):
no equity crowdfunding.
You know, once you start,start a plan, you don't change
it and you see it through, wewould've gone outta business.
Yeah.
We're like, come hell or highwater, we would be sitting in
high water and hell right now,like 30 other companies who
who tried the same thing did.
And the only differencebetween us and them was our
willingness to be able to say,what if it's something else?
(17:25):
What if the answer is elsewhere?
Go back in time.
'cause for me, therewere a couple of specific
things that happened.
I think that thathelped me with this.
One of them was, a fewsituations started to
appear partially just fromexperience, partially just
from time in the game where theadaptation became proactive.
The evolution wasproactive, not reactive.
(17:45):
I think part of it was early onI was being told I was wrong.
I was, whether it was themarket investors, people around
me, whatever it was, I wasbeing told, you are wrong.
So the evolution wasbasically somebody else
telling me I needed to evolveor something else telling
me I needed to evolve.
I think as I grew and as Ibuilt more and more, what I
(18:06):
started to see was, there'sactually some signals of
this from the market, right?
Things like going out anddoing customer interviews
before you start building shit.
Really talking to the peoplethat you're building for
making sure that you filterthis down to a really like,
not just ideal client profile,but like early adopter.
The people who are really gonnago after this thing at an early
stage, knowing that we'll movebeyond that, but to gather
that feedback and so that thepivot would become sooner.
(18:29):
Before I had decided and doneso much and become kind of
fixed in my thinking one, butalso because it felt proactive.
I had gone out and discoveredreasons why maybe I needed
to evolve as opposed to beingsmashed in the face with a
sign that says Evolve or die.
And I'm like, well,then I quit on dying.
Well, let's talk about that.
Let's talk about likewhat letting it evolve.
Actually looks like, youknow, what does that mean?
(18:51):
At the, the very least, it'sabout giving up some control
over what you believe theidea absolutely has to be.
Right?
It's, it's about stepping backand saying, look, I think if
we really wanna see this thingsurvive and thrive, yeah.
We have to let it growinto what it wants to be.
Now.
Now sometimes what it wantsto be doesn't look like
what we wanted to build.
(19:11):
Of course, man.
Like your first plan is,is, is a guess at best.
Right.
Only the market canconfirm or deny that guess.
Like we can't sit aroundand think through it
and be like, okay, yes.
Now we're right.
Will and I have sat downand we thought it through,
and now we know we're right.
Bullshit.
You can't do it.
Well, you know, and again,sometimes what it wants to
be a collections businessfor single moms now you want
(19:34):
it to be right, not only not
what you wanted it to be,but something you won't
even tolerate it being.
That's what I'm, it's
like, okay, I'm done.
I'm out.
I've seen a lot of cases wherepeople build a product and
there's some services to helpget the product to go, and after
a while they're like, yeah,it's kind of just a services
business that kind of has likea product tchotchke to kind
of get it started and I don'twanna service the business.
That's okay too.
Meaning that if that's notthe business you want, if
(19:56):
you don't wanna collect from,uh, payments for Xboxes, for
single moms, don't do it.
Right.
That would've been a greatpitch deck, like intro page.
Right.
Collecting from single moms.
People been throwingmoney at you.
Yeah.
Putting the screwsto single moms.
Yeah.
Actually, you know, I. Wehad a couple of investors
who, while we were on thecampaign trail raising money
kind of said exactly that.
They were like, Hey, wellat the end of the day, won't
(20:18):
you be collecting from peoplethat couldn't otherwise make
their payments, et cetera.
Right.
Which is a reasonable question.
And my whole point was, yes,there are people who need to
buy things that don't have thatamount of money, but we're gonna
do it in payment terms thatthey can actually afford, like
on very tiny payments over,over a, a short period of time.
And that was true,but that doesn't mean
everybody's gonna pay us.
Right.
And so at the end of the day,you're still gonna collect from
(20:39):
people that just didn't wantto pay you, whether they could
or not put on your loan sharksuit, start knocking on doors.
Yep.
Exactly.
What it's so part of it forme, as I've been, you know,
involving myself, has beentaking my ego down a notch.
Yeah.
Being like, I don'thave to be right.
The product has to be right.
I don't have to be Right.
Which is the advice thatyou got, and I think part
(20:59):
of it too is detachingyourself from the product.
Meaning like, if this doesn'twork, it doesn't mean I suck.
It means a product Ibuilt isn't working.
Not the same thing.
Yeah.
I think that that separationof self is one of the hardest
things to do depending onwhere it comes from, right?
Like I think there are timeswhere like you build something
more opportunistically andmaybe you're not as personally
(21:20):
attached to the outcomes.
I'd argue that's a badbusiness to build in the
first place because you'reprobably not gonna survive it.
But like I, I think that's.
It's a necessary piece, right?
We have to be able to,to, to separate ourselves
to a healthy degree.
At least say like, look, Iwanna be involved in this,
but I'm not this, right?
Right.
There's an old farm jokethat talks about involvement
and commitment, the pig,and it's, uh, it, it
(21:40):
goes to breakfast, right?
It's like the chicken isinvolved, the pig is committed.
Committed.
Yeah.
You gotta be the chicken, right?
You gotta be the chicken.
In the startup case.
Within our own company though,Ryan, one of the things I'm
very proud of that we'vedone culturally is while we
all, you know, have a millionopinions, strong opinions on
things of, of what we thinkshould be right, what the
product should be, et cetera.
I think partially becausewe've worked together for
so long and we've seen this,you know, work so many times,
(22:03):
we're naturally slightlyless committed that way.
In other words, we're like,like you and I yesterday,
we were talking about, um,landing pages and, and what the
messaging should be, et cetera.
We both have ideasof what could work.
Yeah.
But we, we've both donethis enough to know.
Hell we know, right?
Like put it up
for some testing
That's I'm saying market,like try everything, try
everything and, and, and,
and separate ourselves.
And that's the thing, likeat the end of the day, we've
(22:25):
gotten to a great place where wewant to find out what's right.
I don't care whichone of us is right.
I'm not like, oh, another checkon the, on the wall for me.
What was wrong and I was right.
Like, who cares?
We just want to get to Right.
But that goes backanother couple steps.
That goes back to the pointwhere we're saying what matters
most to us in this businessand, and it was something
(22:46):
that we fundamentally,early on we said like, do
we care about crowdfunding?
No.
Do we care about customeracquisition for startups?
No, not, not really.
Right?
Do we care about any of theother things that we built?
Not in that sense, but whatwe care about is the, is the
outcomes created and for whomwe care about founders, right?
So at the end of the day, likewhen, when we can separate all
that and just go, is this gonnabe the best thing for the people
(23:08):
that we're trying to reach?
It's gonna help 'em understandwhat we do so that they can
get to value quickly and goon and do what they wanna do.
This makes it a hellof a lot easier.
Right.
But that goes back to thecore principle that you talked
about, which is not beingstuck on whatever that first
thing we thought was, andthen trying to force function
that into people's lives,whether they need it or not.
Disaster.
Another way to be saying like,like if someone were to say,
Hey, this is, you know, thisbusiness I'm building, it's
(23:28):
going great, et cetera, andmy question would always be.
Compared to what,what else did you try?
What else have you doneto prove that this is
the best thing for you?
Uh, like, I'll, I'llgive you an example.
When people talk about thestartups.com model, like
what we do, they couldpose the same question.
They could say, well, youknow, aren't there other
things you could be doingthat would make more money?
And my answer is yes, ifthat were our only selling
(23:49):
Xboxes to moms, right?
Single moms, right?
Yes.
There's a lot of other thingsyou could do that would make
more money that we ne don'tnecessarily want to do.
C selling Xbox to moms, right?
Yeah.
Like, so it's not alwaysabout, again, uh, the
answer is always what makesthe most money, right?
Sometimes the answer is,is what makes you happiest,
makes you most satisfied.
We believe the customer, uh,deserves things like that.
(24:10):
But what's important isthat you're challenging
yourself, right?
That, that you're saying,Hey, we believe this is the
path, but have we challengedother paths to confirm
that this is the path?
Because I, I think that's,I think that's where.
Companies lose their edgewhen they say, Hey, this is
the way we've always done it,so this is the way we do it.
Which is exactly how thecompany that's gonna eat your
(24:32):
lunch right, gets introduced.
I always think of companieslike, this is maybe a
bad example, maybe not.
I. Of Intuit.
You know, Intuit's actuallya phenomenal company as far
as its performance, likethe, the fact that it was
able to buy companies likeCredit Karma or, or MailChimp
and things like that.
Yeah, yeah.
Just shows like howmuch strength there is.
Yeah.
These weren't smalltransactions either.
They
were not small transactions,but at the same time, here's
(24:54):
a company that still buildsTurbo TurboTax, like it's being
installed on Windows three 11.
Right.
It's not like nobody there islike, Hey, shouldn't this be
like a super cool like Web30.0 style ux or something?
Like, they're like, Nope, nope.
Windows three 11, right?
Yep.
That's 14.
Plop install it.
Right?
They, they still use thesame jokes when it's loading.
(25:14):
I love Turbo.
I, I love the idea of TurboTax.
I use TurboTax, but it is easilythe most outdated piece of shit
software I've ever seen, and.
I can't figure out how thatisn't a call for literally a
million other companies to beable to dominate that space.
But, but my, but that's my pointhere is a product that clearly
has not evolved, uh, which tome is dying for a competitor.
(25:37):
Yeah.
And yet for whatever reason,I mean, I guess part of it,
there's just, there, there's,there's a lot of, a lot of
weight to the incumbency there.
Right.
So that, that's part of it.
But Yeah.
But if they don't change, yeah.
They haven't evolved.
Right.
Yeah.
But if they don't change,and I think for many of us.
Change is scary.
Uh, change is not only scarybecause it's tough for us
because as leadership, youknow, we're taking a gamble
every time we make a change.
It's tough for us to be able totake the entire organization,
(26:00):
all the people associatedcustomers, investors, right.
And get all of them tochange and get all of
them on board with thatchange because they look at
change being scary as well.
Yeah.
I think in general,this kind of.
Comes back to the factthat founders, if, if, if
we're gonna evolve, right?
If we're gonna, if we'regonna change who we are,
you know, we've gottabe willing to evolve.
(26:20):
Ryan, I can't think of anybodythat has done really well that
hasn't been willing to kind ofburn it all down at least once
to do it differently, you know?
Yeah, yeah.
No, for sure.
In the startup space,absolutely not.
It's uh, it's part of it,I think, you know, but, but
let's, let's stick on that.
The, the burn it all downand start again thing, right?
Where do you stand on.
Small versus radicalpivots, right?
(26:43):
Like, I feel like this isin, in the startup space, we
often just see like there'sthese wholesale changes and
sometimes that works out.
We hear the storieswhere it works, right?
And the ones that, thatwhere it doesn't work, we,
we don't hear about thembecause they just disappear.
But like, I. How can we tryto approach these things
from a minor tweak versus atotal overhaul perspective?
Because to me that's alwayssignificantly easier, right?
(27:03):
Behavioral change,the fear factors, all
that stuff goes down.
But how often in your, in yourrecollection was it sort of,
I. We can do this by making abunch of little turns versus
trying to shove the Titanicall at once past the iceberg.
I think that's a great point.
I think that the, the bestway to start is by showing up
today, tomorrow, and openingthe conversation with your
(27:24):
team about whatever topicit is, no matter how minor.
Say, Hey, let's level set here.
Uh, step one.
None of us knows the answer.
We all have opinions.
We all have strong opinions onwhat we think the answer might
be, but the answer itself,we can't know until we've
taken action and responded.
So if we're gonna pivot to anew product, you might have a
strong opinion of why it won'twork, but let's both agree that
(27:45):
neither of us actually knows.
Right.
So we can't argue this orprevent ourselves from evolving
from a position of certainty.
You can't possibly do thatbecause blah, blah, blah.
Right?
You can't possibly do that.
And there might be risks,but it doesn't mean you
can't possibly do that.
And so I think for, forall of us as founders.
If we're going to evolve,if, if we're going to be
(28:07):
able to adapt and change theorganization or maybe prevent
ourselves from staying on thisridiculous path that is not
getting us any further, that'sputting us kind of like out to
pasture as we speak, or it'snot making any money or not
keeping us viable if we can't.
Take our ego off the table.
If we can't get to the pointwhere we're willing to make
a wholesale change for thebetter of the company, even
(28:28):
if it's at the expense of us,then we're never gonna adapt.
We're never gonna evolve,and we deserve that fate.
But if we can change that, ifwe can change that process,
if we can change that processourselves and be open to
making those changes andevolving the way we need
to, then our business couldbe a hundred x what it is
today if we just let it.
Overthinking your startupbecause you're going it alone.
(28:50):
You don't have to, and honestly,you shouldn't because instead,
you can learn directly frompeers who've been in your shoes.
Connect with bootstrapfounders and the advisors
helping them win in thestartups.com community.
Check out the startups.comcommunity@www.startups.com
to see if it's for you.
Could be just thething you need.
I hope to see you inside.
Welcome back to their episodeof the Startup Therapy Podcast.
This is Ryan Rutan, joinedAs always by Will Schroeder,
my friend, the founder,and CEO of startups.com.
Will, it's no secret at thispoint anybody that listens
that you and I spend most ofour days talking to startup
founders about businesses, newand old, you know, gone and,
and imagined and yet to be.
How often is it that the veryfirst idea that we come up
(00:23):
with the very first plan isthe one that's gonna get us all
the way to the promised land?
Damn near never.
Ah,
never surprised
me.
Right.
We wanna have thefantasy of it, right?
Yeah.
The fantasy is this, likewhen people say like, Hey, you
know, you started a successfulbusiness, you know, how did
you come up with the idea?
And I always tell the, the, thesame thing I said, I didn't,
I. Like, oh, would you meansomebody else came up with that?
(00:43):
I was like, no, the idea forthis business didn't exist.
So I came up with a dumb one.
Yeah, yeah.
That, that got us here.
Yeah.
Um, and I always use that asa way to explain that, that
the businesses we're supposedto build are an evolution.
Learning about what'ssupposed to be built.
Yes.
Like it would sound awesomeif it was just like,
Hey, here's exactly whatI'm supposed to build.
(01:05):
Yeah.
And I'll just go do that.
It reminds me of like, ifsomeone was just starting off in
their life and you're like, Hey,I'm not gonna make any mistakes.
I'm just gonna start withexactly what I'm supposed
to do for every decision.
Yeah.
And.
Execute perfectly.
Right.
And by the way, you're aboutfive years old at that point.
Right?
So you've got all thelife experience you need.
Exactly.
You know everythingthat's coming.
Yeah.
It's funny that, but butit, it is sort of par
(01:27):
for the course, right?
Yeah.
This is most ofthe conversations.
We end up having foundersbelieve some version of that.
Here's what I think theproblem is, you know, kind
of what we'll unpack today.
I think because we get so soldon this idea that the product
has to be exactly this way.
Yeah.
Yeah.
We prevent ourselves fromkeeping our minds open saying.
Does it?
(01:47):
Or like, are we actuallyholding the startup back?
Yeah.
Because we'reunwilling to let it
evolve.
Oh, that's an interestingway of looking at this.
Yeah.
Yeah, yeah.
So to what extent are wenot, not just that we're not
moving it forward as fast asit could be, but that we're
actually holding it back.
Okay.
I like that.
I like that.
Here's a dumb example'cause it's probably not
even true, but I just, butI, I wanna point it out.
(02:08):
When Uber started, if yourecall, way back in the
day, Uber started as a,a way to basically make.
Black cars, right?
Like private black cars likeLincoln Town Cars accessible.
It wasn't intended to overturnthe taxi industry at the time.
It was very hyper specific.
It was everyone'sprivate driver.
That was the initial tagline.
That was the taglineThat's right of of Uber.
(02:29):
Right?
And so in that initial.
Reckoning if you were, uh,Travis and Garrett from
Uber, the, the, the founders,and you were thinking to
yourself, okay, this is it.
We're gonna be all aboutgetting all these black
cars that are typically Unadaddressable and you like,
it's very hard to get them,hard to find, hard to book.
Yep.
Tons of downtime, and we'regonna give you essentially
a quasi taxi, but a limo toget where you want to go.
(02:51):
And we were like, no,that's the business.
It's not another business.
Think of what was lost,what would've been lost if
they stuck to that model.
Dude, I would've walked somany more places in life.
If Uber hadn't existedas it does now, it
would've been awful.
There's a million casesand, and I bet a lot of the
folks listening, they'rea case of this right now.
Yeah.
Where they're sayingto themselves, but this
(03:12):
model's not working.
This model has to work.
And it's like maybe, or maybethe model that's supposed to
work, lo and behold, isn't aboutgiving people access to limos.
Like, like maybe there's adifferent version that would be
a hundred times more valuableif we just let it evolve.
And I think we have a hardtime letting it evolve because
(03:34):
of, you know, this kind ofmyth of the perfect plan.
You know what I mean?
Yeah,
for
sure.
And, and I think that's,that's where it starts.
It's like we, we spend somuch time thinking about it
that of course we must havethought everything that we
need to at this point, nowwe're gonna start building it.
So we've made some plansand I think you're, you're
right, like part of thatchallenge then that perfect
planning that we've done.
Actually starts to blindus to, to real feedback.
(03:55):
Like, and it's so funnysometimes man, like I'll, I'll
talk to founders like my gettingcustomers, um, sessions that
I do on Mondays and Fridays,we run into this all the
time where they're like, andthey're just not getting it.
And I'm like, okay,what are they getting?
What are they takingaway from this?
What are they telling you?
They're telling me thisand this and this and this.
And I'm like, okay.
Have you, if that's what they'retelling you over and over again,
are you starting to internalizeany of that feedback?
Like or are you justsaying No, they're wrong?
(04:17):
Yeah, like, because here'sthe deal, they still have
the credit cards that theyneed to vote with to prove
that you're right and they'recurrent, consistently voting no.
So let's go with maybethere's some validity to that.
And, and it's just tough.
And I get it.
Like, you know, after you putso much time into it, there's
the whole sunk cost fallacy.
There's the, I don't wantmy baby to be ugly thing.
I've already told everybodythis is what I'm building.
How could I possiblybuild anything else?
(04:39):
But man, the, I cannot overstatethe necessity of like that early
and continuous user validation.
Let give you an example.
The most common scenario thatI hear, and I'm sure there's
folks listening that, thathave been through this, the
most common scenario I see is.
But I just raisedmoney with this idea.
There's nothingmore humiliating.
(05:00):
Okay.
And I'm just gonna callbecause I've been there.
Then saying to investors,this is the future.
Going and proving that thisis the future, only to find
out it's not the future.
Right.
In fact, you were wayoff and having to go back
and say, just kidding.
Now this is the future.
That's hard to do.
It is.
It's hard to do, butit's important because
what's the alternative?
If you've realized that's notthe future, you're building
(05:22):
towards a future that youalready know doesn't exist, at
some point are the investorsgonna be happy that you go
back to them and tell them, Iwas super wrong and I already
have your money, so I'm gonnago try to be more right now.
Right?
Not exactly the kind ofthing that inspires a vote
of confidence at a lot oflevels, but on the other
hand, like that is what givesthem a chance at, at getting
a return on their money.
So it look, they maynot be happy to hear it.
(05:43):
But they're gonna be happierthan you just plowing
forth into something youknow is not gonna work.
This took me a long time tointernalize, because early
in my career, whenever I wasmaking any kind of decision
for the company Yeah.
And, and I was communicatingthat to my staff and I had
to change my mind later,it made me feel weak.
Yeah.
It made me feel like, uh, asa weak leader, which to be
(06:03):
fair, I was like 22, 23, 24.
So were you.
So that's kind of whatwe were a work leader.
We were weak leaders.
Right.
Like that was, thatwas just an accurate
assessment of the situation.
I felt, rightfully so, thatI had to overcompensate for
my clear lack of experience.
Right.
Especially, again, back then,different era where like young
CEOs didn't exist and so youwere a sideshow at best to
(06:27):
begin with and you, you wereexactly what people expected to
fail, like for all the reasons.
Okay.
It was really hard for meback then to be able to say,
Hey, that was a mistake.
Let's move left insteadof right, kind of thing.
Because at the time I wasso preoccupied with me being
wrong that I wasn't willingto let the product or the
(06:49):
organization be right.
I got a piece of feedback earlyon that was so beautiful and I,
I probably didn't appreciate itfor what it was in the moment.
Early, early, early.
I, I wanna say, I don'tremember what they were calling
him at the time, but early,uh, it was a, an uncle of
a, a close friend of mine inuniversity early at Salesforce,
like really early, likechief revenue officer before
that's what they called it.
(07:09):
Something like that.
Right?
Just somebody came in, Iwas trying to explain to
me and he was debatingback with me and, and you
know, he was significantlymore experienced and just
super, super smart dude.
He said he is like, look.
I'm hearing what you're saying,but at this point it feels like
you're trying harder to be rightthan to find out what is right.
I love that.
I love that.
Right.
And I was
like, in the moment I was like,Ooh, that stings once the sting
(07:31):
wore off probably years later.
I mean, it's something Istill hear that at times now.
Yeah.
When I find myself pushingback against something, I can
hear his voice saying, areyou trying harder to be right?
Or find out what'sactually right?
I'm like, dammit, Ithink I'm doing it again.
And what's interesting tome about that is it's, it's
all tied back to our ego.
Yeah, right.
A hundred percent.
We have this sense back whenI was making those moves early
(07:53):
in my career and, and I hadto make a change of sorts.
My issue, I would say waslike 80% my own ego, like
how it affected me in 20%.
My concern as to how itmight've affected the
business, I don't know thatI could have changed that.
I mean, part of that wasjust my own evolution.
I, yeah, I think it isbecause in the beginning,
(08:13):
a pivot feels like aconfession of failure right?
To ourselves, to anybodyaround us, and I think
that that can't be ignored.
I think what you eventuallyrealize after you've
gone through enough ofthem is that it's not a
confession of failure.
It's, it's a calibration towardswhat might actually work better.
And once you realizethat you become a bit
more comfortable again.
There's still times wherelike that's uncomfortable.
(08:36):
Particularly if you've justbeen out, like shouting to
the rooftops on LinkedInor you've raised phones.
The articles have beenwritten about it, right?
Like you've gotten somepublicity and now you're
going, well shit, that'snot exactly what we're
gonna go do now, but, right.
We had this happen with a, acompany we did called Afford
It, and it was essentiallywhat Affirm is today.
Oh yeah.
Um, buy now, pay paylater years before Affirm.
(08:56):
And, uh, we gotinto the business.
And it was going great.
Like we were selling tons ofproducts, but then there's
the part where, where youhave to pay later, which
means we have to collect.
And any kind of creditbusiness isn't a credit
or banking business.
It's a collections business.
Yes, a collections business.
It's all what it comes down to.
It's not hard to getpeople to take free
money, to get cool stuff.
A hundred percent right.
Like, like any loan is aboutcollection, not disbursement.
(09:19):
Anyway, we got into thecollections part of it, and
all of a sudden we're onthe phone collecting from.
Single moms who were usingthis to, and, and this wasn't
like a story, this just kepthappening, that were using this
as a way to like buy an Xboxfor their kid for Christmas.
I grew up with a singlemom and so like I knew
this process really well.
Yeah.
(09:39):
And the last thingthat I wanted to do was
collect from single moms.
Right?
Hey, you're behindon your payments.
Oh, what?
Oh, oh really?
I'm, yeah.
Nevermind.
Bye.
Just kidding.
Right.
And so, so, okay, so,so here's the thing.
We had raised a bunch ofmoney from really prominent
investors on a very bigconcept that was working.
That's the worst part.
That was working.
And we had a bunchof term sheets for a
(10:00):
Series A at the time.
At the time, I'm like.
Oh shit, how do Iget out of this?
Like, I don't wannabe in this bit.
I don't want to.
I don't wanna
do this anymore.
I was like, now to be fair, thatdecision got made for us because
we were headed right into thefinancial crisis, like 2007 era.
Yeah.
Everything driedup over overnight.
(10:21):
And like we couldn'traise any more money.
Wasn't
that, wasn't a whole lotof money being tossed at
subprime lending at that.
No.
There, there were, unlessyou were the governments
of Iceland, really?
Ireland and Cyprus, who werelike, it was not real possible.
We'd love to buy somede class repackaged
debt.
That'd be great.
Right, right, right, right.
And so anyway, none ofit was, I wasn't willing
to let go even though Ididn't even wanna do it.
Like that's the worst part.
(10:41):
I didn't even wanna dothat business anymore.
I just raised a bunch of money.
I'd just gotten to LA at thetime and I was everywhere at
all the events and everything.
Talking about this business.
I put my entireego into it, right?
Yeah.
My reputation and everythinginto this business, and
overnight I was like, Ijust made a giant mistake.
(11:01):
I wasn't willing to letit go because of my ego.
Yeah.
I, I think that's it.
It comes down to like, if,if I'm thinking of it from a
spectrum perspective now, andit's got, you got ego on one
end and you've got, I'm gonnacall it agility on the other.
The closer we can get awayfrom, you know, the further
we can get from, from egoand get closer to agility, I
think we're, we're better off.
But it's hard, right?
It is a struggle to let go.
(11:22):
And I think to your point, it'sreally hard to do that until
we've sort of gotten punched inthe face by, by getting it wrong
with ego and maybe accidentallygotten some wins from agility
and your case, like you wereforced outta the business.
And, and look, you don'tneed to spend a long
time answering this, but.
What do you think wouldhave happened had we not
run into the, the, the wholefinancial crisis, right?
Like had more capital havebeen available now, you
(11:44):
were already kind of like, Idon't wanna do this anymore.
What's the crystal ball?
Like the, whatwould've happened?
Would you have continuedwith the business?
Yeah.
Wouldn't it become a firm?
I
mean, no.
I, I would've, I wouldn't havebecome a firm and again, I,
when, when people are like, oh,I had this idea before that,
I did this idea before that.
Sure.
That was the easy part.
What Max Lein did, youknow, with Affirm was a
hundred x what I would'veever done with afford it.
(12:05):
Uhhuh.
I mean, to, to be fair,that's like me saying, well,
I had a pretty good gameand so I guess I'm Tom Brady
right in, in this equation.
He's Tom Brady.
I'm some idiot that playsflag football with a
bunch of 50 year olds.
Right?
Like not to same athlete.
Yeah.
So my point is Affirmwould've been just fine.
Who knows what would'vehappened to us.
But I can tell you, and, andI'm, I don't like to admit
(12:26):
this, I don't like to admitthe fact that I would have
pressed forward and did.
Not because I thought it wasthe right thing for me, the
market, the world, et cetera.
Yeah.
But because my ego was soattached to it, because I
had so many people that Ihad committed to that I,
I wasn't willing to stop.
And it, running out of moneywas kind of the only way that
was gonna get me out of that.
(12:47):
And, and eventhen, I spent like.
18 months, 24 months nonstop,banging my head against the
wall to try to like, get capitalbefore we eventually gave up.
So I didn't go out easy either.
Like it was guns blazing.
That's, I mean, that's theparadox, man, of, of building
products versus buildingyour identity into it.
That's a big part of this.
(13:08):
At that
point where we're so wrapped upin it, it's like we, we can no
longer isolate ourselves from itmakes it really hard to let go
because we're essentially sayingI'm killing off a part of myself
in order to kill this thing off.
That's a harddecision to get to.
You know, something that'sreally funny about everything
we talk about here isthat none of it is new.
Everything you're dealingwith right now has been done a
(13:30):
thousand times before you, whichmeans the answer already exists.
You may just not knowit, but that's okay.
That's kind of whatwe're here to do.
We talk about this stuff onthe show, but we actually
solve these problems alldayLong@groups.startups.com.
So if.
Any of this sounds familiar.
Stop guessing about what to do.
Let us just give you the answersto the test and be done with it.
(13:53):
Let's stick with this.
This goes back to the dream.
The dream is, hey everybody,this was the original idea.
This was the original plan.
This was the reason you quityour last job and joined to
work for equity or whatever.
You know, it's the reasoninvestors put money in.
It's really hard to saythat that plan didn't work
and expect the same levelof enthusiasm for new plan.
(14:14):
It's so much easier tosay It's tough, man.
Let's just stick with old planbecause it was the oldie timey
original and force that through.
It takes balls to beable to say I was wrong.
Okay, let's fullstop right there.
I was wrong and that's okay.
I wasn't willing to do it.
I am now, but at thetime I was not for sure.
It's,
yeah,
and man, and again, likein hindsight, way easier to
(14:36):
see, but like clinging tothat original version isn't
loyalty, it's not toughness,it's not strength of character,
it's potential self-sabotage.
Right.
But being able to see thatin that moment, it's up
there amongst, I think, thehardest of the challenges
that we face as founders.
Particularly 'cause it oftencomes at such an early stage.
Yeah.
That we have so little elseto go on other than our own
(14:57):
enthusiasm, our own ideas, ourown thoughts, and a little bit
of feedback from the market.
And then that little bit offeedback from the market is
going counter to what we hopedit's brutality at its finest.
Well, okay, solet's build on that.
I wanna talk a littlebit about why I don't
have the same issue now.
Where was my evolution sothat I could get to the point.
Sure.
And hopefully other founderslistening can kind of get to
(15:19):
that, that same, uh, point.
This came from a fewdifferent places.
One, it came from once I startedto understand that clinging to
the original idea, just 'causeit was the original idea mm-hmm.
Was just dumb.
Like it wasn't, I couldn't comeup with a good reason all other
than it sounded cool that itwas actually the best, most
strategic, most mature way.
(15:40):
Again, in most cases, Iwas attaching it to ego.
Now when I tell peopleabout this ego, et cetera,
invariably I'll hear a lotof people say, yeah, well I
don't have the same ego to it.
First off, bullshit.
Okay, second off, second off in.
Is that your
ego talking?
Yeah.
This kind of is, but okay,so, but here's what's changed.
Fast forward years later.
And we start fundable.com, whichwould later become startups.com.
(16:03):
Now, by this point, I had seenin a bunch of my own businesses,
things just evolve, right?
Yeah.
Things just go a differentdirection and that be better.
So we launched fundable.com.
It's a crowdfunding platform.
This is like 20 11, 20 12.
It turns out.
It was just a bad idea.
And, and Ryan, obviously I'mnot saying this to you 'cause
(16:23):
you were there, you knowexactly what I'm talking about.
A bad idea being, it justwasn't like that viable
equity crowdfunding wouldnot go on to be as an entire
market.
Correct.
Wasn't, wasn't, wasn'twhat everybody thought
it was gonna be.
But even,
especially back then.
So with that said, becauseI had the benefit of seeing
what happens when I don'tevolve that time, me and
(16:43):
certainly you and the restof the team were very open.
To trying something else.
That's essentially what led usto startups.com, which is, you
know, much different, much, muchbetter, more viable business
that is about to celebrate.
Its start of its 14th year.
Right?
Wild.
Absolutely wild.
Two deals from now, I think.
Yeah, right.
Exactly.
But stick with that fora sec. Had we been like,
(17:04):
no equity crowdfunding.
You know, once you start,start a plan, you don't change
it and you see it through, wewould've gone outta business.
Yeah.
We're like, come hell or highwater, we would be sitting in
high water and hell right now,like 30 other companies who
who tried the same thing did.
And the only differencebetween us and them was our
willingness to be able to say,what if it's something else?
(17:25):
What if the answer is elsewhere?
Go back in time.
'cause for me, therewere a couple of specific
things that happened.
I think that thathelped me with this.
One of them was, a fewsituations started to
appear partially just fromexperience, partially just
from time in the game where theadaptation became proactive.
The evolution wasproactive, not reactive.
(17:45):
I think part of it was early onI was being told I was wrong.
I was, whether it was themarket investors, people around
me, whatever it was, I wasbeing told, you are wrong.
So the evolution wasbasically somebody else
telling me I needed to evolveor something else telling
me I needed to evolve.
I think as I grew and as Ibuilt more and more, what I
(18:06):
started to see was, there'sactually some signals of
this from the market, right?
Things like going out anddoing customer interviews
before you start building shit.
Really talking to the peoplethat you're building for
making sure that you filterthis down to a really like,
not just ideal client profile,but like early adopter.
The people who are really gonnago after this thing at an early
stage, knowing that we'll movebeyond that, but to gather
that feedback and so that thepivot would become sooner.
(18:29):
Before I had decided and doneso much and become kind of
fixed in my thinking one, butalso because it felt proactive.
I had gone out and discoveredreasons why maybe I needed
to evolve as opposed to beingsmashed in the face with a
sign that says Evolve or die.
And I'm like, well,then I quit on dying.
Well, let's talk about that.
Let's talk about likewhat letting it evolve.
Actually looks like, youknow, what does that mean?
(18:51):
At the, the very least, it'sabout giving up some control
over what you believe theidea absolutely has to be.
Right?
It's, it's about stepping backand saying, look, I think if
we really wanna see this thingsurvive and thrive, yeah.
We have to let it growinto what it wants to be.
Now.
Now sometimes what it wantsto be doesn't look like
what we wanted to build.
(19:11):
Of course, man.
Like your first plan is,is, is a guess at best.
Right.
Only the market canconfirm or deny that guess.
Like we can't sit aroundand think through it
and be like, okay, yes.
Now we're right.
Will and I have sat downand we thought it through,
and now we know we're right.
Bullshit.
You can't do it.
Well, you know, and again,sometimes what it wants to
be a collections businessfor single moms now you want
(19:34):
it to be right, not only not
what you wanted it to be,but something you won't
even tolerate it being.
That's what I'm, it's
like, okay, I'm done.
I'm out.
I've seen a lot of cases wherepeople build a product and
there's some services to helpget the product to go, and after
a while they're like, yeah,it's kind of just a services
business that kind of has likea product tchotchke to kind
of get it started and I don'twanna service the business.
That's okay too.
Meaning that if that's notthe business you want, if
(19:56):
you don't wanna collect from,uh, payments for Xboxes, for
single moms, don't do it.
Right.
That would've been a greatpitch deck, like intro page.
Right.
Collecting from single moms.
People been throwingmoney at you.
Yeah.
Putting the screwsto single moms.
Yeah.
Actually, you know, I. Wehad a couple of investors
who, while we were on thecampaign trail raising money
kind of said exactly that.
They were like, Hey, wellat the end of the day, won't
(20:18):
you be collecting from peoplethat couldn't otherwise make
their payments, et cetera.
Right.
Which is a reasonable question.
And my whole point was, yes,there are people who need to
buy things that don't have thatamount of money, but we're gonna
do it in payment terms thatthey can actually afford, like
on very tiny payments over,over a, a short period of time.
And that was true,but that doesn't mean
everybody's gonna pay us.
Right.
And so at the end of the day,you're still gonna collect from
(20:39):
people that just didn't wantto pay you, whether they could
or not put on your loan sharksuit, start knocking on doors.
Yep.
Exactly.
What it's so part of it forme, as I've been, you know,
involving myself, has beentaking my ego down a notch.
Yeah.
Being like, I don'thave to be right.
The product has to be right.
I don't have to be Right.
Which is the advice thatyou got, and I think part
(20:59):
of it too is detachingyourself from the product.
Meaning like, if this doesn'twork, it doesn't mean I suck.
It means a product Ibuilt isn't working.
Not the same thing.
Yeah.
I think that that separationof self is one of the hardest
things to do depending onwhere it comes from, right?
Like I think there are timeswhere like you build something
more opportunistically andmaybe you're not as personally
(21:20):
attached to the outcomes.
I'd argue that's a badbusiness to build in the
first place because you'reprobably not gonna survive it.
But like I, I think that's.
It's a necessary piece, right?
We have to be able to,to, to separate ourselves
to a healthy degree.
At least say like, look, Iwanna be involved in this,
but I'm not this, right?
Right.
There's an old farm jokethat talks about involvement
and commitment, the pig,and it's, uh, it, it
(21:40):
goes to breakfast, right?
It's like the chicken isinvolved, the pig is committed.
Committed.
Yeah.
You gotta be the chicken, right?
You gotta be the chicken.
In the startup case.
Within our own company though,Ryan, one of the things I'm
very proud of that we'vedone culturally is while we
all, you know, have a millionopinions, strong opinions on
things of, of what we thinkshould be right, what the
product should be, et cetera.
I think partially becausewe've worked together for
so long and we've seen this,you know, work so many times,
(22:03):
we're naturally slightlyless committed that way.
In other words, we're like,like you and I yesterday,
we were talking about, um,landing pages and, and what the
messaging should be, et cetera.
We both have ideasof what could work.
Yeah.
But we, we've both donethis enough to know.
Hell we know, right?
Like put it up
for some testing
That's I'm saying market,like try everything, try
everything and, and, and,
and separate ourselves.
And that's the thing, likeat the end of the day, we've
(22:25):
gotten to a great place where wewant to find out what's right.
I don't care whichone of us is right.
I'm not like, oh, another checkon the, on the wall for me.
What was wrong and I was right.
Like, who cares?
We just want to get to Right.
But that goes backanother couple steps.
That goes back to the pointwhere we're saying what matters
most to us in this businessand, and it was something
(22:46):
that we fundamentally,early on we said like, do
we care about crowdfunding?
No.
Do we care about customeracquisition for startups?
No, not, not really.
Right?
Do we care about any of theother things that we built?
Not in that sense, but whatwe care about is the, is the
outcomes created and for whomwe care about founders, right?
So at the end of the day, likewhen, when we can separate all
that and just go, is this gonnabe the best thing for the people
(23:08):
that we're trying to reach?
It's gonna help 'em understandwhat we do so that they can
get to value quickly and goon and do what they wanna do.
This makes it a hellof a lot easier.
Right.
But that goes back to thecore principle that you talked
about, which is not beingstuck on whatever that first
thing we thought was, andthen trying to force function
that into people's lives,whether they need it or not.
Disaster.
Another way to be saying like,like if someone were to say,
Hey, this is, you know, thisbusiness I'm building, it's
(23:28):
going great, et cetera, andmy question would always be.
Compared to what,what else did you try?
What else have you doneto prove that this is
the best thing for you?
Uh, like, I'll, I'llgive you an example.
When people talk about thestartups.com model, like
what we do, they couldpose the same question.
They could say, well, youknow, aren't there other
things you could be doingthat would make more money?
And my answer is yes, ifthat were our only selling
(23:49):
Xboxes to moms, right?
Single moms, right?
Yes.
There's a lot of other thingsyou could do that would make
more money that we ne don'tnecessarily want to do.
C selling Xbox to moms, right?
Yeah.
Like, so it's not alwaysabout, again, uh, the
answer is always what makesthe most money, right?
Sometimes the answer is,is what makes you happiest,
makes you most satisfied.
We believe the customer, uh,deserves things like that.
(24:10):
But what's important isthat you're challenging
yourself, right?
That, that you're saying,Hey, we believe this is the
path, but have we challengedother paths to confirm
that this is the path?
Because I, I think that's,I think that's where.
Companies lose their edgewhen they say, Hey, this is
the way we've always done it,so this is the way we do it.
Which is exactly how thecompany that's gonna eat your
(24:32):
lunch right, gets introduced.
I always think of companieslike, this is maybe a
bad example, maybe not.
I. Of Intuit.
You know, Intuit's actuallya phenomenal company as far
as its performance, likethe, the fact that it was
able to buy companies likeCredit Karma or, or MailChimp
and things like that.
Yeah, yeah.
Just shows like howmuch strength there is.
Yeah.
These weren't smalltransactions either.
They
were not small transactions,but at the same time, here's
(24:54):
a company that still buildsTurbo TurboTax, like it's being
installed on Windows three 11.
Right.
It's not like nobody there islike, Hey, shouldn't this be
like a super cool like Web30.0 style ux or something?
Like, they're like, Nope, nope.
Windows three 11, right?
Yep.
That's 14.
Plop install it.
Right?
They, they still use thesame jokes when it's loading.
(25:14):
I love Turbo.
I, I love the idea of TurboTax.
I use TurboTax, but it is easilythe most outdated piece of shit
software I've ever seen, and.
I can't figure out how thatisn't a call for literally a
million other companies to beable to dominate that space.
But, but my, but that's my pointhere is a product that clearly
has not evolved, uh, which tome is dying for a competitor.
(25:37):
Yeah.
And yet for whatever reason,I mean, I guess part of it,
there's just, there, there's,there's a lot of, a lot of
weight to the incumbency there.
Right.
So that, that's part of it.
But Yeah.
But if they don't change, yeah.
They haven't evolved.
Right.
Yeah.
But if they don't change,and I think for many of us.
Change is scary.
Uh, change is not only scarybecause it's tough for us
because as leadership, youknow, we're taking a gamble
every time we make a change.
It's tough for us to be able totake the entire organization,
(26:00):
all the people associatedcustomers, investors, right.
And get all of them tochange and get all of
them on board with thatchange because they look at
change being scary as well.
Yeah.
I think in general,this kind of.
Comes back to the factthat founders, if, if, if
we're gonna evolve, right?
If we're gonna, if we'regonna change who we are,
you know, we've gottabe willing to evolve.
(26:20):
Ryan, I can't think of anybodythat has done really well that
hasn't been willing to kind ofburn it all down at least once
to do it differently, you know?
Yeah, yeah.
No, for sure.
In the startup space,absolutely not.
It's uh, it's part of it,I think, you know, but, but
let's, let's stick on that.
The, the burn it all downand start again thing, right?
Where do you stand on.
Small versus radicalpivots, right?
(26:43):
Like, I feel like this isin, in the startup space, we
often just see like there'sthese wholesale changes and
sometimes that works out.
We hear the storieswhere it works, right?
And the ones that, thatwhere it doesn't work, we,
we don't hear about thembecause they just disappear.
But like, I. How can we tryto approach these things
from a minor tweak versus atotal overhaul perspective?
Because to me that's alwayssignificantly easier, right?
(27:03):
Behavioral change,the fear factors, all
that stuff goes down.
But how often in your, in yourrecollection was it sort of,
I. We can do this by making abunch of little turns versus
trying to shove the Titanicall at once past the iceberg.
I think that's a great point.
I think that the, the bestway to start is by showing up
today, tomorrow, and openingthe conversation with your
(27:24):
team about whatever topicit is, no matter how minor.
Say, Hey, let's level set here.
Uh, step one.
None of us knows the answer.
We all have opinions.
We all have strong opinions onwhat we think the answer might
be, but the answer itself,we can't know until we've
taken action and responded.
So if we're gonna pivot to anew product, you might have a
strong opinion of why it won'twork, but let's both agree that
(27:45):
neither of us actually knows.
Right.
So we can't argue this orprevent ourselves from evolving
from a position of certainty.
You can't possibly do thatbecause blah, blah, blah.
Right?
You can't possibly do that.
And there might be risks,but it doesn't mean you
can't possibly do that.
And so I think for, forall of us as founders.
If we're going to evolve,if, if we're going to be
(28:07):
able to adapt and change theorganization or maybe prevent
ourselves from staying on thisridiculous path that is not
getting us any further, that'sputting us kind of like out to
pasture as we speak, or it'snot making any money or not
keeping us viable if we can't.
Take our ego off the table.
If we can't get to the pointwhere we're willing to make
a wholesale change for thebetter of the company, even
(28:28):
if it's at the expense of us,then we're never gonna adapt.
We're never gonna evolve,and we deserve that fate.
But if we can change that, ifwe can change that process,
if we can change that processourselves and be open to
making those changes andevolving the way we need
to, then our business couldbe a hundred x what it is
today if we just let it.
Overthinking your startupbecause you're going it alone.
(28:50):
You don't have to, and honestly,you shouldn't because instead,
you can learn directly frompeers who've been in your shoes.
Connect with bootstrapfounders and the advisors
helping them win in thestartups.com community.
Check out the startups.comcommunity@www.startups.com
to see if it's for you.
Could be just thething you need.
I hope to see you inside.
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