Ryan Rutan: Welcome back to another episode of startup therapy. This is Ryan Rutan with Wil Schroder Ceo and founder of startups dot com. So well today we're gonna talk about what a shit show a startup can be. And it's a question that we get a lot right here. This, we hear this, we hear this all the time. You're like, oh my God, this is pure chaos. Um, you know, everything is just insanity right now. And of course the founder that's saying this is thinking that they're the only person in the world that this is happening to, but we sort of know that not to be true, right? This is a chaotic environment and, and it's not necessarily true that problems are just going to go away with time and we hit this, this kind of smooth spot and let's talk about why that's true.

Wil Schroter: Well, I think the expectations aren't in line and we've talked to thousands of founders and dealt with this ourselves and our own businesses. Everyone thinks that to your point that they're the ones with chaos. Like, you know, you know, I know startups are kind of chaotic, but boy ours is particularly bad because jen comes into work drunk all the time and it's like there's a genin every company and they're all drunk, right? Just

Ryan Rutan: as, just as a caveat here, just as a side note, I'm gonna, I'm gonna put this in as a footnote to this podcast. We do have a gen actually we may even have more than one, she does not come to work and we're not actually talking about you, jen, Okay. Just to, just to be clear. Yeah, okay, carry

Wil Schroter: on. Anyway. Uh, what I meant was Ryan routine, Ryan routine comes in drunk all the time. But, but like every startup is thinking at the time again, what a disaster this is. You know, we're dealing with financial problems, we're dealing with personnel problems where, where customers are leaving us, who can't figure out what the product is, all these things.

Ryan Rutan: Right? You and I are hearing that and going, oh, so you're a startup?

Wil Schroter: Yeah, I was like, okay, this is exactly how it goes. But the real question is, when do these problems start going away? Like how long is this journey? And what I'd love for us to talk about today is not about how the problems are going away per se, but why the problems exist at each stage, how they change over time in how we as leadership in the organization change with them. So it's not a matter of problems going away. It's about how they change. And I think we can kind of walk through a progression of what that looks like. So, so if you're a first time founder, you know, if you're in a startup right now and you're working on the team, you can start to understand how this progression goes. I think we use the, the example of, of being in high school, if you've never been to high school before, freshman year is a disaster then by senior year, you sort of know what's going on for some of us, we've done this so many times that like, yeah, getting stuffed in a locker, freshman year is still tough, but you know, it's coming, it seems that on you

Ryan Rutan: don't wear anything with buttons on

Wil Schroter: it. And so I think probably we'd open up, let's talk a little bit about the fact that every startup is total chaos at the beginning and why? You know, Right, Right. How do you see it? Like when you think about like, hey person comes in and says, this is total chaos, what's your reaction?

Ryan Rutan: Of course it is, right. Because in most cases we're doing something we've never done before, right? When we've talked about the fact that, you know, a startup is you're trying to solve something under terms of almost complete uncertainty. Right up your startup, you're trying to solve a problem that's not been solved, at least not been solved in that way before. And certainly probably something that you've not done before. Alright. So as you build out the team, you've got all these new dynamics coming together, you've got, you know, an uncertain customer base, you're uncertain about your product. Everything is in a state of change, right? And I mean, if you could design a perfect breeding ground for problems, that's probably what you have built, right? You're like, okay, let's make everything a variable, let's have nothing constant and let's see what happens when the problems will manifest everywhere, right? I mean, it's funny because when we start a startup were often what do we always ask people? Well, what's the problem you're going to solve? Right? We're literally starting with problem solving in mind. And yet then when we start to encounter problems and solving the problem, we think that this is something very strange and unusual. It's not right. You're out to solve a problem, right? And that problem is just a whole series of little problems that stack up into the big one, right? So this should be the expectation, right? It is chaotic. It is uncertain. You often refer to it as running into the abyss. Um I would say it's running into the abyss while stacking up eight coffee cups and you know, it's it's insanity, right? But it is, it is

Wil Schroter: what it is. Ryan. The visual I always have in my head and this always makes me feel, I guess better or maybe more terrible in some way is I want to build a house and I call on all the people I think that can build the different parts of the house, architects plumbers, etcetera. And everyone just gets shoved onto the job site at the same time told to build the house by the end of the week. Along the way. You start to realize that some people probably shouldn't be foreman that the blueprints were written upside down or read upside down. There were blueprints. Yeah they're blueprints right? There's their chicken scratch and that all of the people that we brought on hate working with each other. They all found that out over the last few days. There are so many variables to getting a startup running properly that there's no way to start without chaos. But listen, a lot of people aren't coming from that environment. A lot of people are coming from a startup where it was pure chaos. So they show up and they add to the chaos Because they're still trying to make this thing work like that like big co like Big Fortune 500 that they worked at before. They don't get the chaos. When we say, okay cool this landing page isn't working, let's scrap it and and work on this next one by the end of the day tonight or any night tonight. They're thinking no we have to collect data. We need to write a report, we need to get a meeting together. We need to do all these things were like no we're just gonna run it. And I think when you're getting all these disparate personalities but more specifically different backgrounds and expectations,

Ryan Rutan: the expectations I think is that is the the big one, right? It's that that sort of defines how you're gonna react to the experience. And if your expectation is going to be this will be just like when I worked for corporate best buy it's going to feel very, very different, right? Your expectations will not be met and it's going to seem extra chaotic because of that.

Wil Schroter: Yeah. And here look, I think that for the folks that are, that are joining, particularly the leadership and they're doing it for the first time, it's probably the first time they've had the ceo job or you know, or whatever, sea level job within the company, it's probably the first time the stakes have been all about them, right? Where if this doesn't work, this is my money on the line that kind of raises tensions whole other level on top of that. If we haven't been through a full cycle of what it means to build ideally a successful startup, because building an unsuccessful one is usually just chaos the entire time, you never really see what comes out the other end. But unless you've been through full cycle, it's hard to really understand the difference between some of this is bad leadership, bad participation, etcetera. And some of it is just the way it goes, you stick a whole bunch of random people in the same place at the same time and ask them to build something that's never been built before. Yeah, I think

Ryan Rutan: having, you know, that lack of context around how different this is right. Even if you're coming out of a corporate environment or nonprofit world somewhere else where you were used to a more typical corporate governance structure, you know, just kind of normal operations then this is going to feel very different, very stressful. It's good to know that's part of the game, but you know, I'm not sure this is one of those where I feel like you kind of have to experience to really get it, but we can tell people if you're sitting out there, you haven't started your first, your first startup yet, hearing this will be good for you. Maybe you'll have a better bit better expectation of what's about to happen. I still feel like this is one of those where you just kind of have to go through the trial by fire and hopefully you come out with eyebrows.

Wil Schroter: Yeah, well I'd like for founders to know that this is part of the process now, in some cases, maybe you actually are as founder doing a really bad job. Okay, You're probably the first time on the job too. So you know, not unusual, but a lot of the challenges, let's say that that Ryan you and I have run into when we've been building companies, we still faced in successive companies, the differences, we knew it was coming. So as an example, uh, startups dot com wasn't our first rodeo. You know, we've been done lots of startups before that, but here's what's interesting, all of the challenges we ran into in our formative years were similar to challenges we ran into with other businesses. The difference is we knew it was coming. Yeah, right? When we had this person just quit out of nowhere, I was like, okay, we didn't know that person who's going to quit, but stuff like this does tend to happen, right. Or if we're like, hey, we spent all this time building this product launched it, no one cared. Guess what kind of, the way this works right? It sucks by the way we were high fiving about it, but, but at least we understood it because we've been through the war a few times before.

Ryan Rutan: Yeah, it's funny. And even when some of these things get validated, I actually found that to be more frustrating sometimes. I remember reaching out to a mentor when when I was frustrated that we were, you know, we're on boarding clients and then we were off boarding, just like, we couldn't, we couldn't seem to hit this cycle where we were retaining people in the way that we wanted to and expanding the client uh, footprint. And I remember him saying, so you're doing this, yes, you're doing this yes. And then this is happening. Yeah. He's like, yeah, that's pretty much how it goes. And I'm like, but but I don't like that. Like I wanted, I wanted a different answer. I wanted him to say like, oh, you're doing this wrong and this wrong and I want to be told I was doing something wrong so that I could go and change the behavior and therefore change the outcome. And his response was, that's pretty much how this goes. And you know, it's funny is that at that time there was no relief in that for me, it was like that was more of a slap in the face because I wanted something to change. And in that case it was really just a matter of sticking at it. He was like, you just kind of have to keep going and eventually you're going to learn what that ideal client profile is, what, what the best service mixes and you'll land on it. But like this is how you get there. There's no version of you sitting in a room with a whiteboard and a couple of smart people and figuring this out, you've got to keep bouncing it off the clients and eventually it'll stick. And he was right, but it took a lot longer than I wanted it to.

Wil Schroter: I think in the early years when I was first doing startups, I really wanted to believe just like you did that, I could just solve all the problems that right, that, that I could just pick them off one by one methodically and just make them all go away. And I always held this panacea that if we could just solve X, y and Z problem, then things would be cool right? At that point. Yeah. Now, now we can proceed with the business and run big and professional and everything will be wonderful and we'll be able to sit back with with our vodka gimlets and let the thing right? And the truth is, and I would come to learn this later problems never go away. They just change, they change you trade one problem for another. There's a great

Ryan Rutan: training simulator for this, um, that, that they used to have and it was, it was a very inexpensive training program. They had it at chuck e cheese. It was called whack a mole.

Wil Schroter: Um,

Ryan Rutan: yeah, that was pretty much everything you need to know about how to solve startup startup problems, right? You just, you just keep swinging and missing most of the time and then you make contact very briefly and three more pop up, right? That's just how it goes.

Wil Schroter: And I bring this up because I want you to keep your sanity and all of this, right? You know, you're like, okay, I just got rid of that one person. That was just an absolute pain in my ass, right? Wait, now this person, what, what are you doing over here? Right? Like, like it's hilarious to me because if you haven't been through it before, it's an indictment on you. Oh my God, this this problem happening and this problems happening, I must be doing everything

Ryan Rutan: wrong and don't get me wrong,

Wil Schroter: maybe you are

Ryan Rutan: right, right? We're not, we're not saying you're not doing anything wrong.

Wil Schroter: We're just saying, however,

Ryan Rutan: not always what creates the problems.

Wil Schroter: That's also part of the process as well. I'm an inexperienced founder. I maybe have been an executive at another company, but I haven't been a founder before. I'm going to make mistakes. Right? So that adds to the chaos. I think that when we ran startups dot com, you know, my case, I'd done eight other companies, I had the benefit of knowing that when dumb stuff happened, you know, whereas we made a mistake or the company was chaotic in some way, I could at least say that's pretty much how it goes, right. I want to be clear. I didn't go home at the end of the night, even having done it eight other times. I don't go home at the end of the night and say to my wife, yeah, no big deal. You know, it happens all the time. I was still stressed out about it, but it still affected me, but I at least knew it was coming, right. It's like if someone says I'm going to punch you, it still hurts, even though, you know, it's coming. But I think what I started to learn was I can't blow all of my energy on this one problem because no matter what I do, I'm just going to trade it for another problem tomorrow. Yeah, I gotta pace myself

Ryan Rutan: spacings. It is, it is, and I think that's, you know, we we've talked about this before, but one of the things that that does change, right. problems don't really go away over time, they certainly don't just stop happening. Like you said, they changed names, they change shapes, but what does start to change? Um and I'd like to unpack this a bit and I've got a question for you here in a second, but it's that we start to change a bit, right? Are reactions to things, you know, we know it's coming, it doesn't necessarily mean we can even avoid it, right? Like we know that things will happen, um, just because, you know, the punches coming doesn't mean you can duck it. Um, but I think that there is, you know, a case to be made that over time we get better about how we react to them, you know, treat them with appropriate urgency, but not more than they deserve, right? And I think that's something that early on, every problem is the end of the world. This is, you know, it's it's all the depths of despair and we have to, you know, run like crazy to solve this this very minute and we just end up running ourselves ragged, chasing down a bunch of problems that could just be handled in a slightly more methodical and calm manner. But what I wanted to ask you, I have an opinion about this, but I want to hear yours first. Do you think that that cycle repeats itself, right? Like, let's assume that there's some truth in what I'm saying that we do get better about how we reacted to problems, but I feel like this is something that does kind of repeat itself startup by startup, even if I've done this two or three times before, I may still overreact and be a little more cagey early on in that startup than I am later in that startup, not just necessarily like, oh, I've grown up and transcended as a founder now, but I'm doing this again. Maybe for the third time. I still feel like I'm more reactive at the beginning.

Wil Schroter: Yeah, well, I'll tell you the biggest thing, I think that that have left a mark on me and it's kind of hard not to, is in dealing with people people, but by the way, the team. So I'll give an example in the early stages of my career when someone that I've been working really close with left, it was just devastating because it wasn't just that they had left it and it replaced them or anything else like that, I felt like it was a massive indictment on my ability to lead on my ability to be a teammate. And and by the way, there's, there's always some relevance or causation there, so I don't want to take myself out of the equation. I think that would also be appropriate. But I took it so personally and over time, you know, across different businesses hired thousands of different people? I started to learn something. People leave. That's just part of the process doesn't matter, doesn't matter who they are, people leave. And while I could try to do my best to make sure good people don't leave because of me, people are going to leave either way and in this time around, um I also realized, you know, in this startup dot com and really maybe the last company or so I did before that it took me a while to ramp up whoever we hire for a role is likely going to be the first of five hires pisces people off when you say that right little bear, bear with me though, but I'm taking this from an honest place. The probability that whoever I hire for a role is exactly the best person where it fits everything that they want, everything that I want, no one will ever fit that role again is like zero. Especially when I'm in like the first year of running this company. What are the probability that all those stars are going to perfectly align?

Ryan Rutan: Yeah. And that the and that the role is going to stay static or that you're even clear on what the role is at that point? Yeah. I mean, there's there's so much variability that, you know, hiring into a startup is one of the biggest challenges

Wil Schroter: what is and and so my point there is, I look at this and go, when we're looking to hire people, I think I really hope that this is the right fit. But I've been around the block long enough to note it's probably not and there's and I'm going to use my best decision and I'm gonna try to do everything we can to make this a great situation. But there's a fairly good probability that they're going to move on to something else either because they found a better opportunity, which would be awesome or we find that this is the wrong fit for them. Now multiply that challenge across every single person we have to hire just crazy chaos. It took me a long time to understand that. It took me a long time to understand that there was a lot of fluidity in the personalities and life stages and expectations that getting them all aligned in the right place at the same time would be damn near impossible.

Ryan Rutan: Yeah, Well that's an interesting illustration, right? Because you know, we're talking about the problems don't go away. They just they just change over time. Right? And so it's not that the problem of hiring goes away. The problem of hiring changes right? In in the early early stages, you may have trouble finding fit for role or even having enough role definition to be able to pick the right person, right? That can change over time. Right? You can say, well now this is the this is the sixth or seventh person that we're going to run in parallel for this role, let's say it's a sales team or something. Right? We've got this that we're just adding our seventh person. Now it's a pretty stabilized environment and we sort of know what to look for. We know the types of people that we need and so hiring for the role becomes easier. However, there now the seventh person or the eighth person or the ninth person. And so now the personal dynamics of that team, the interpersonal interactions become far more person when you're, when you're hiring the person for a role that's not a consideration, right? The with the team at large maybe, but now you've got a team dynamic, you have to take into consideration and that changes over time. So I think it's a great illustration of exactly how these problems they still exist, right? Hiring is still an issue. It's just a different type of issue.

Wil Schroter: Well, let's stick with that because I like what you're touching on, which is problems grow with time because you have more variables, the more people you add, the more variables to problems you have when we're five people in a room, we may think we have all kinds of problems and we do making payrolls a problem. Keeping cash in the bank is a problem. Getting customers like pretty much everything is a problem but we only have five variables of people to deal with in those problems as you start to add more and more people and I want to dig into this just a little bit those problems actually compound because this really interesting thing happens as the organization starts to go from five people to 10 to 20 to 50 to 80 to 100 etcetera. All of a sudden the internal workings of a company become a thing. Politics becomes a thing, right? And all of a sudden you have this whole new beast, that's the only thing that exists in let's say a Fortune 500 companies is you keep all of your focus internally on how everything you do affects you internally. Where startups tend to get placed externally because they're only existence is outside the company. Once you start to staff up a bit, all of a sudden you're like well I'm dealing with HR issues like that's not helping me get more customers. Like I'm dealing with all these new problems that didn't exist when we were smaller and some of them are pretty significant like in their own right, you know, hard

Ryan Rutan: to solve in some cases and in some cases they are the direct result of having solved another problem I can it was really funny illustration of this when I was running technology for a market research company fairly large, like half of half a billion euro per annum company, a lot of people, a lot of different market level operations. And one of the things we were trying to do was to consolidate those operations, create some central control. Right? So we looked at this and we said, and there was a keynote presentation from the Ceo that year that said, our biggest problem is that we're not working together right fast forward a year later to the, to the next annual meeting. And partially as a joke, but also because it was true, the slide now red Our biggest challenge this year is that we're working together because it creates a whole litany of problems. We had 14 different country market level operations who had been operating relatively autonomously, not necessarily very efficiently, but with very little friction because they didn't have to interact in any type of systematic way. And so there was no politics, there was no friction between the market level operations. They weren't benefiting from each other in ways they could have. And that's what we set out to solve. But by by by bringing them closer together, we created new problems. We created personality conflicts and all this other stuff. So we directly solved the problem that we set out to solve and we created a new one um as a direct result. And so yeah, you can the problems just do continue to change and they continue to scale and again, like a lot of these, we create ourselves right. And to be fair, we were, you know, we were aware that there may be some of those issues, but I don't think that we I don't think we would have guessed that they would be as severe as they were and we were directly responsible for creating that trouble for ourselves.

Wil Schroter: Well, right. And so that's what I'm saying. And then the problems really stay the same. The problem exists, I should say they change in nature. And often I see this a lot. We start to hearken back. We start to long for when we had those older problems. You know, kind of those were the good old days

Ryan Rutan: When your mind is playing that 80's montage when it was just the five of us. Right.

Wil Schroter: And so, so here's here's what I hear most consistently because this is so funny. And if you're working in a startup where you feel like things used to be great. Let me just flat out say they probably weren't, which is probably where you're running so fast, you just remember it differently. And even if they were better before there were just a different set of problems. Right? So, so here's the typical thing. This company was so much better when it was just insert a small number of people, uh, and everyone used to go out together and everyone used to do things together, We used to be a nimble etcetera. Now it's insert whatever big number and we've got layers of management and we can't get moving and we can't do this all we ever do when we make that before and after comparison is talk about the stuff that that that we don't like as much, we never talk about how awful it was in those formative years and it cracks me up Ryan because I don't have the world's best memory. But my God, when it comes to like where we came from, I don't forget

Ryan Rutan: any of that. No. And if and if we do it's easy enough just to take it just to pull up a photo of ourselves from that period of time. You can tell we weren't living all that well right.

Wil Schroter: Yeah. And I think that people like, oh man, companies to go out all the time and everybody used to be real like, you know, communal etcetera. And I'm like, even when we were living off of our credit cards and we were settled in personal debt and all we did was complain about how if we ever had a steady paycheck, this would finally be a good business. Like we did it, we did it together and look sometimes the organization changes and and not everybody skills along with it. We talked about organizations, you know, shedding their skin and not everybody kind of makes it. But that's a whole other thing. The point here though is even as the organization grows and as part of that, that charter in that evolution starts to say, okay, well we've got this problem solved, okay, we've got this problem solved like it's time for good times, right? It's like ah all we're really doing is we're graduating from one level of problems to another level of problems there isn't a shangri la level of problems. I'll say this, I'll get a caveat that the part of your problems where you have enough money to pay your bills is much better than the part of your problems where you don't just want to be clear about

Ryan Rutan: that

Wil Schroter: having been on both sides of that equation.

Ryan Rutan: Yeah, of course, man. And you know, I think at this point, let's, let's, let's zoom out a bit and just, and just remind ourselves that right kind of from the beginning, it's chaos, right? It's going to be, there's going to be a lot of uncertainty. And while some of that may go away right there may become more certainty around what you're doing. The problems don't go away. Whether we're talking about, you know, interpersonal, you know, HR issues, we're talking about money and bills were talking about fundraising, there's going to be a litany of problems at every stage from start until if there ever is an end to the company right there ever present. The problems don't really go away. They just continue to change name and shape. And that time isn't really the factor here, You're not going to wait out your problems. And the point that you made that I think is really, really important. That growth Can actually drive new problems and more chaos and that's to be expected, right, anytime you're going to change up the script beginning to say, we're going to go, from you know whatever level of sales were at now, we want to increase that by 20% assume that you're going to increase your problems by fivefold, that you're going to, you're going to double your problems as you increase your sales as you increase your team size. Um, and so just, you know, I know that it's coming and honestly, I would say don't try too hard to head them off at the past because in my experience in 20 years into this, I'd say they rarely manifest exactly how I think they're going to and I've spent plenty of time worrying about problems. I was sure that we're going to come that never did and then got blindsided by something else. And just the fact that it wasn't the problem that I thought was coming pissed me off and made it made it harder to deal with, which is Asinine, but that is, that's absolutely what happens. Like, hey, I wasn't waiting for this problem. I was waiting for the other problem where the hell is that problem? I want that one, right? We don't get to pick them, right, they come and they go much of their own volition and as founders, it's, it's our job to just be ready and try to be as stable as we can in receiving the issues and and moving forward with him. Mhm, that's a wrap for this episode of the startup therapy podcast. This is Ryan Rutan on behalf of my partner Wil Schroder and all the startups dot com family thanking you for joining us and we hope you'll continue to join us. Be sure to subscribe rate and comment on itunes or wherever you love to listen to startup therapy. You can find all of our episodes at startups dot com slash podcast. If you're looking for more amazing resources to launch or grow your startup, be sure to head to startups dot com and check out startups unlimited. It's everything we have to offer from our online university to our amazing community of experts and founders and even all the tools we've built like biz plan, fungible and launch rock. It's everything a founder needs visit startups dot com slash begin that startups dot com slash B E G I N. You'll thank me later.