Rule #17 – Your little “Startup” adventure is probably going to ruin your life

Relax, Ferris. I’m not trying to rain on your little startup parade. This will all make sense shortly. But I’m being serious. People that are more positive and cheery then I would probably use a word like “change” instead of “ruin,” but that would be dishonest. And if anything, I’m going to be honest with you here.

Defined (essentially) as “an irrecoverable state of devastation and destruction”, ruin is most certainly on the horizon. You can not be totally prepared for it, but coming to grips with that fact that it is on the way will help you deal with it in a satisfactory way. Managing the devastation is a huge victory.

There are dozens of forms which the devastation may take. It could be cloaked in a shroud of “you’re going broke trying to fund this and it will take the rest of your life to get out of debt.” Perhaps the destruction will be a wave of “I’m married to my computer, not my wife.” Or, you could find yourself with an old fashioned case of “my friends and family are mad because they invested in this company a few years ago and they haven’t been repaid a dime.”

While it’s easy to think catastrophe’s like the ones I mention above are not going to fell you, you would be wrong. Sure, they may not be EXACTLY as I’ve detailed above, but your quest to start something from nothing will have consequences that you are not remotely prepared for – at least not yet. Starting a new business venture is exciting, challenging, rewarding, and fun. But it’s not all dancing unicorns and rainbows. Even if you find success – however you define it – it is near impossible that you will do so without suffering along the way. Working all nighters to code your application is not “suffering.” Getting fired from your job because your employer finds out about your venture – that is suffering.

So, what can you do about it? As William Hurt said in Body Heat, “when a person commits a murder, there are 50 things that can go wrong. If you can think of 15 of them, you’re a genius.” As you continue down this road, you need to keep a scratch-pad of everything associated with your business that could lead to ruin for you personally. No, I’m not talking about things like a meteor crashing on your house (there will be time for that later). I’m talking about things like…

  • My spouse could leave me because I become too consumed with my company
  • My family could disown me because I take their retirement money as capital and now they’re broke
  • I could end up bankrupt because I’m pouring every dime I have access to in to this venture
  • I could have a nervous breakdown and end up in the hospital when we lose our biggest customer
  • I could get fired from my day job, meaning my startup will have to be put on hold while I figure out how to earn a living
  • My life could become a different version of the same grind I’m desperately trying to escape

If you think I’m asking you to write up a list of horrific, worst-case scenarios, then you would be correct. And if you think this exercise is unimportant, then don’t come around here complaining when something terrible happens to you.

Now that you have your list in hand, you need to come to grips with the fact that you haven’t thought of everything, but you’re way ahead of the game to have thought of anything at all. Furthermore, there is a nugget of good news in all of this: by having these things on paper in front of you, dealing with them is a breeze. Seriously, all you need to do is recognize that the problem exists and take steps early on to prevent it from destroying your world. Let’s take the list from above…

  • My spouse could leave me because I become too consumed with my company
    • Talk to him/her about the commitment this is going to take; find ways to get them involved so they can understand what you are trying to accomplish; define what hours you will work, better yet, a time each day or each week where you will turn off the phone and computer and unplug from your venture. Stick to it.
  • My family could disown me because I take their retirement money as capital and now they’re broke
    • We’ll talk about raising money later, but one of the worst things you can do is take money from people that they can not afford to lose. While the temptation will be great to take every dollar possible from every source possible, the government wisey has restrictions in place to protect companies and investors alike. You should do the same; be honest with yourself about the money being offered, and be honest with the potential investor about the risks involved. If you can’t look the person in the eye and tell them, “There is a chance I will lose every penny you are about to give me”, then you are not being honest with them.
  • I could end up bankrupt because I’m pouring every dime I have access to in to this venture
    • Under no circumstances should you start a business on credit cards. Period. If your response is that credit cards are the only way in which you can fund the business, then you are not being creative enough or thinking very deeply. Do not use credit cards to fund your business.
    • Like the friends and family you are hoping to get investments from, do not put money in to your business that you can not afford to lose. I can not stress enough that for every “Kevin Rose took his last $5,000 and turned it in to Digg!” story on the internet, there are hundreds and hundreds of people who took that last $5,000 they had and turned it in to nothing. Just as you would probably never wager your rent money on a hand of blackjack in Las Vegas, don’t wager your savings on an idea that may or may not pan out.
  • I could have a nervous breakdown and end up in the hospital when we lose our biggest customer
    • This potential problem alone should have you lying awake making sure that your company isn’t too reliant on one person, one product, one company, or one customer. You have to diversify in some way. Don’t mis-read this and think I’m encouraging you to be scatterbrained or to try to do too many things at once. I most certainly am not. But all sales cycles are cyclical, and someone out there wants your best customer to become their best customer and they are working hard to make that a reality. All Eggs. One Basket. You know the drill.
  • I could get fired from my day job, meaning my startup will have to be put on hold while I figure out how to earn a living
    • Carefully research and understand what your current employers policies are with regard to other ventures. Most non-compete clauses aren’t worth the paper they are printed on, but a lot of companies require that anything you work on during company time and a company computer belongs to them, not you. I assure you that is a battle you do not want to fight.
    • If you feel like you’re on pretty good footing at work, consider talking to your employer about what you are working on outside of your day job. You’ll likely be surprised at how supportive they’ll be. I know a number of people who received an investment from their employer, took on their employer as their first customer, or both.
  • My life could become a different version of the same grind I’m desperately trying to escape
    • I’ve said this before, but if you aren’t sure why you are trying to start a company, then the other problems listed here will appear trivial in the long run. Make sure you know what it is that’s so great about what you’re trying to do or where you’re trying to go. I know a few folks who have launched successful companies and said, “I realize now that I only started this because I knew I could do it and the money would be good. But now I’m stuck doing this because the money is good when I really wish I’d started something else.”

There are slews of things that can go wrong in business with your business. As I said earlier, these problems usually start small and are very manageable if you pay attention. There are even more things that can go wrong in your personal life as a result of your business. These things usually start small but grow very quickly if you aren’t constantly paying attention to them. Friends, family, partners, cash, and credit-status are things you risk losing irreversibly and completely as a result of starting a business.

My advice is to start writing them down, and start solving them long before they appear on the horizon.

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2 Responses

  1. Great reminders about the problems of personal problems of startup businesses. Here are some others:

    • I could fail (and lose a lot of face)
    • I could fail (and hear a lot of “I told you so”)
    • I could wind up a grumpy old man/woman
    • I could forget my dream
    • I could forget to listen to others

  2. Thanks for the input Jay. I particularly like the “I could forget my dream.” Losing focus is extremely easy to do, and getting “lost in the forest” is very easy to do. I’ll have a post on that shortly.

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