What is this?
Do you listen to How I Built This? I do. I love that show.
But I find myself torn. On one hand, I want to believe that the interviews are instructive, that listening to them is good training for entrepreneurs. On the other hand, every founder on the show has very obviously tailored their narrative for a media audience. Huge swaths of time are glossed over; emotions are distilled; details are lost. Revisionist history.
This is an oft-recognized problem of Silicon Valley culture: the founder myth. It’s the reason why, for example, we imagine founders as young college dropouts working from their garages, even though the typical successful founder is middle aged. We all know that myths can be wrong and misleading. But myths - all stories - are negative reliefs. They can only happen because we exclude some truth, a LOT of truth. We strip away the boring stuff, the stuff that makes it hard to see “what matters.”
But when anyone is thinking “should I try building a startup,” the boring stuff matters a lot. Here are some of the boring questions I wondered when I was pondering this choice:
When do I leave my day job?
How do I pay for healthcare?
How do I organize my new start-up workdays?
What do I do in the first week? The second week? The third week?
What kinds of tools are helpful or hurtful?
What books/podcasts are particularly relevant at each stage of the journey?
How do I manage my mental health?
How do I build communities that support my work?
Much of the “how to” content in circulation - Zero to One, The Lean Startup, etc. - explores the product development journey. And rightfully so: product-market fit is the highest priority for a new business. But the body of “how to” literature around some of the boring questions is far slimmer (YC Startup School addresses many, and I strongly recommend!).
In an effort to add to this particular genre of “how to” literature, I decided to write this blog. I want to capture my real time thoughts, my real time process, my lows, my highs. I want to record my story before I have time to polish it, to take away the inconvenient inconsistencies that are a part of the experience but don’t make for a good 1 hour podcast.
It's n=1, but maybe it's helpful to you. Maybe just a cautionary tale.
Who am I?
My name is Nate and I am 27. In January 2022, I quit my job at Silver Lake, a leading technology private equity shop where I worked for several years. My intention was to launch into the world of entrepreneurship.
This might seem random. But it's not. I’ve worked on startups before (Yakd, Steward.... R.I.P.) and designed/built several enterprise tools at Parthenon (my old consulting firm, now EY-Parthenon).
These experiences allowed me to discover something electric: the feeling of seeing someone use something I’d built. There is, likely, a primal nature to it. People in technology talk about the euphoric rush of “shipping product.” But my guess is that this basic joy-through-impact is rooted in the survivability benefits of early tool-use. The Neanderthal who invented the rock hammer probably felt GREAT when he/she saw someone using it: their chance of group survival had gone way up!
But along with this electric feeling, I also discovered that it's hard to do something really well when you only give it your worst hours (late nights, weekends). And my work in consulting and private equity weren’t exactly light loads.
So I am chasing that electricity again, but this time in full earnest.
What is your vision? How delusional are you?
My explicit vision is to spend 6 months grinding on a startup before re-evaluating the decision.
After 6 months, I’ll ask myself:
Have I identified and defined a real problem?
Do I see a path to a solution that is viable and reachable?
Am I good at this?
Do I wake up most mornings and feel glad I chose this path?
Startups have a survival rate of 10%. The actual success rate of individual teams + ideas are likely bell-curve distributed around that 10% mean (success defined as: “starting company that builds a product that delivers enough value to customers such that marginal revenue > marginal cost and LTV>CAC). It’s hard to know what my true individual rate or risk is. The point is that it is low.
But, like all probability-based decisions, looking back on a single outcome is not the right way to evaluate the prudence of the decision. The right way is to use expected value:
E(value) = P(success)*value of success + P(failure)*value of failure
In these terms, a truly low probability outcome can appear foolish based on a single negative result but totally rationale when based on how that decision-making would play out over the long run.
For my personal calculation, even if I choose an arbitrarily low point on the likelihood-of-survival bell curve, say 3-5%, the calculation is not daunting:
E(value) = 3-5%*(dream life that fulfills me creatively, socially, financially, etc.) + 95-97%*(life as is, minus 6 months of salary and traditional career progression).
There are also outcomes that I can’t exactly quantify… or don’t want to. In PE, they call these “unmodeled upsides”:
Knowledge: Accelerated learning about people, technology, and getting things done
Wisdom: Adventure and challenge that sharpen and grow me as a person
Peace: Scratching a mystical “itch” that decreases a sense of emptiness and regret as I age
When I think about all of those elements, taking this “risk” feels like a no-brainer.
That said, this calculation is all just the first 6 months. The downside scenarios get bleaker the longer a founder sticks with a sinking ship. As they say: fail fast!
So thanks for joining me on this journey! And, as I write, do let me know what you find interesting or deathly boring. While this tool is partly for my own contemplation, I also want it to be a tool for you as you navigate risk and wonder in your own life.
Great write up