How I feel quitting my own startup
aquiles.me
aquiles.me
My co-founders (and business partners), who are the majority shareholder, made it abundantly clear that the company was 'theirs'. They made decisions behind my back although I am the only founder working full time on the company. I felt alienated, undervalued, and frankly quite miserable for a while.
At some point, when this behavioral pattern started affecting other team members and I realized I had nothing left to do, it was time for me to move on.
I tried to write down how I felt, keeping it politically correct.
I tried twice to start software companies with people I knew. Both times the other party didn't invest nearly as much time as I was putting in. And in both cases I figured this out fairly early and started to match their drive and investment into what we were building. As you'd expect, the companies folded within a few months.
What's interesting to me is that one of the guys I'm still friends with and the story he tells for why it folded is very different from my view. To him, it was me backing away and causing it fail and from my experience, it was I switched from working on it 7 days a week to working on it two weekends a month. I don't think he's being mean spirited here - I think he is just that clueless about what was going on.
My current start-up was founded differently. My partner and I did multiple smaller projects together to see if we could work together. We also went through a deep dive on "past traumas" (key life defining moments for us) along with exercises on what sorts of values we want to inject into the company (ranging from how we handle feedback, to how we respond to failure, to what our employees would say about us and the company 2 years in the future, etc.). This allowed us to understand where we are coming from, figure out if our values aligned, and help lean on each other when things got hard/stressful. It really does make navigating building something together. Basically "wtf?!" reactions can easily be replaced with "uh oh, is everything okay?"
Then you can still work with them as long as their incentives are aligned with what you need them to do. That is the intended behaviour fits within their perception.
Yes that's basically what happened. I get that this is their perception, but find it funny how much self-awareness is lacking as to what they contributed. I'm still friends with them and still like them, but they are firmly in the camp of "nope" moving forward.
> Maybe they were doing more than you realised, or maybe they were just freeloading.
I'd love for it to be the case where they were doing more than I realized, but considering we're all engineers and I'm the only one working on designs and implementing code...and driving all the discussions...you get the idea.
FWIW, it's not just you; these seem to be non-rare things to happen.
One can guess at the likelihood that egos, differing understandings/philosophies, or just plain greed are likely to become a showstopper problem.
But, unless it's obvious that the showstopper problems are likely (some people telegraph warning signs heavily), if one is ever going to do anything, one has to guess and sometimes take a leap of faith.
This is the chief reason why I'm the sole founder of my current venture. I'm not militant about avoiding cofounders (and I have actually scouted), but it would have to be a unicorn who is exceptionally good at the exact things that I'm bad at. Even then, I'd only do it after dipping my toe in over a number of months with smaller projects to gauge their personality and level of commitment.
This is also why I went the solo route for #2 (ignoring the investor/"expert" insistence on multiple founders). 10+ years later my bootstrapped (non-tech) company is profitable, has a strong dedicated base of customers, and allows me a degree of flexibility in my company direction and life that I would not have otherwise.
The betrayal weighed on me for years, especially since I eventually had to involve lawyers. I think the most important thing you can do is find new opportunities to occupy your mind so you can learn from it but not dwell on it.
Legally speaking, my business partner secretly created a small equity pool for all co-founders excluding himself. There was no reason to believe we were in a pool, since co-founders split the entire pot.
This caused the percentages to seem about as expected. To the best of my knowledge, there were only two tells in the written contract:
1. The total shares were listed as ~1M, which at the time sounded perfectly logical. Unbeknownst to me, this was only the shares in the pool. I now know that startups often first allocate 10M shares, apparently for psychological reasons.
2. The vesting documents were titled an "equity incentive plan". At the time, this made perfect sense to me; the entire reason for us all reverse vesting is to provide incentive to stay. However, I now know this specific phrase often indicates an equity pool.
I recommend all founders speak with the lawyers jointly, instead of delegating it to the CEO. Ideally, also pass the contract by a startup-savvy lawyer. (In our case, one of our co-founders showed a CPA who said everything looked normal.) I recommend not signing until the exact cap table with zero errors is jointly signed. (As I mentioned above, I pointed out a mistake to my business partner then signed after he replied I had the most equity.) I also recommend contacting your business partner's references if you haven't worked together, especially since they will be providing those to VCs later.
Or were all communications referenced verbal rather than written?
That makes them personally liable iiuc...
(1) it was only a year and many startups go bust anyway;
(2) the best people spend their energy on the future, not the past; and
(3) regardless of the facts, many people are wary of working with someone who sued his business partner personally. (As Trump shows, portraying yourself as the victim of a baseless lawsuit often elicits sympathy, while justifying bringing a lawsuit often requires a careful factual explanation.)
Even if it didn't help you personally, having pursued it more vigorously would have been a public good as it would ensure a documented record of the misdeed which future prospects could use to avoid the bad actor, as well as discouraging new bad actors from developing as they would see the loss rate as exceeding the win rate etc.
As long as everyone keeps letting shit go, letting bad actors off without penalty just because it would take more effort than it was personally worth, then we will continue to see these behaviors manifested and likely at an increasing rate as it proves it's effectiveness.
Heh. My company has exactly one (1) share, probably also for psychological reasons.
The lawyer preparing the corporate documents is the corporation’s lawyer. That person cannot also be your lawyer. Every founder should have their own lawyer review and advise them on the paperwork.
You've gotten much further than most ever will. Good work aqui!
Keep moving, Inward onward and upward
Seems like they get what they deserve...
You work and sleep.
2 weeks ago I signed the contract to "sell" my shares for my startup of ~7 years. I'm just now starting to realize how utterly miserable I had been for a long, long time.
It's a very difficult decision, but it gets easier every day (on average, some days can still be tough).
It's only going to get better.
At some point they forget that the value others brought to the table was a big part of what made them participate in the first place. Now they devalue all of those other players.
It also reminds me to only work on startups with someone who you really know and trust, like a best friend.
To try and mitigate this my #1 question each time I meet with the founders I invest in is "how's your relationship with your cofounder(s) going?". If the answer to this question is anything less "fantastic!" we have a long conversation about why, before we talk about anything else.
A low cadence of communication between founders is also correlated with higher failure rates, so another fun question is "when was the last time you spoke with your cofounder?". Again I've stopped being surprised by the amount of founders that answer with "last week/month", which again needs to spark a conversation about why.
Can you comment on the most common cause of conflict? You mention something trivial to make the point that they can be over trivial things, but what is the most common cause of conflict?
What IS common amongst terminal cofounder conflict is a series of ruptures in the relationship without any corresponding moments of repair. Over time the ruptures build up into complete relationship breakdown over an issue that seems trivial. People gradually work themselves apart and can’t come back. Some of my biggest failures as an investor have come from not understanding this dynamic.
What I’ve observed is that great cofounder relationships display a pattern where conflict is followed by a moment of restoration so that a strong positive relationship builds over time. The biological analogy of this is muscle hypertrophy. You repeatedly lift something heavy and your bicep muscle fibers are damaged. Under the right conditions of rest your body repairs the damaged fibers by fusing them, which increases muscle mass and so you get stronger over time. Or you don’t have a repair cycle and instead keep lifting heavy things without rest until you eventually get a traumatic failure and can’t lift anything for a long time (if ever).
In the stress of a startup conflict is inevitable, and to a certain extent at times it’s also required for progress. So the insight here is not “great cofounders have zero conflict”, but rather “great cofounders follow conflict with moments of repair”. If you consider each conflict a small tear in the relationship with your cofounder then for every tear their needs to also be a compensating motion of repair.
What I’ve learned to do now as the investor in the loop is to help cofounders notice early when ruptures are occurring without repair. Most of the time merely drawing attention to this dynamic is enough for them to course correct.
For me it was as close as I could imagine giving up a child would be like, but in hindsight it was the best choice and I grew hugely as a result.
But at this point it feels like the product is going nowhere fast. I'm worried about my career (i don't have much else on my CV) but being the very first hire I'm afraid quitting would kill any confidence remaining in the company and trigger an exodus.
That makes it fine to quit. You'll stop getting salary, but that equity is your stake in the future as things unfold.
If you don't have any equity after 6 years then it's time to bail anyway.
After a while, same thing started to happen, promises were made these platforms can deliver even though technically is impossible (so you can guess later when the client know these promises were BS), not getting invited to critical meetings, sales team (grew later than one guy) is gatekeeping the communication and only dripping to engineers the client requirements after they add their own unrealistic expectations, started to exclude me for training clients on how to use these platforms as only sales team are doing those (funny as most of the time, the first question they get asked and they are stuck, and ended up they calling me during the session remotely), and after long discussions that it isn’t possible to be carried by sales and need a technical team, they quickly hired a co-op to act as one during these sessions… among other issues, I call these situations are simply sabotaging the company/startup based primarily on greed, in this case it was by the sales and CEO followed later.
Now I had my lessons learned in that experience, but I’m sure your situation is worse being the founder, but I felt a good peace of mind after leaving them so hopefully you did the good thing.
Minority shareholding is actually pretty shitty, as I am sure a few people on this thread would agree.
I’m not a founder, but I’m the first hire and the first engineer – there since day 2. Six years in, a couple of pivots, and now we have a team of 100 people with a gigantic series A just closed and an excellent PMF. I built most of the product myself – it’s genuinely game-changing and commercial demand is through the roof. Enough equity that if we were acquired now I’d be set for life.
But I just don’t know if I can hack it anymore. The commercial and product teams are pushing wildly unrealistic timelines for new features, which then the technical teams end up the bad guys for not being able to deliver on. Internal communication is all over the place, with nobody seemingly aware of deadlines and deliverables. The CEO is pretty visibly complaining about some teams not working hard enough, because he doesn’t see them in the office or working evenings and weekends. Meanwhile I’m on 18 hour days, under pressure to squeeze performance out of a team that I already think is delivering good quality at a pretty rapid pace, and being badgered constantly to provide KPIs and metrics for them so that the C-suite can deicide if they’re pulling their weight.
It’s almost exactly the opposite of the culture I’d want to create in an engineering team. Instead of teamwork and transparency aimed at producing a cohesive vision, everyone’s pulling in a different direction. Everyone is overworked and making mistakes, and instead of trying to build systems and processes to avoid these issues, it’s become a blame game. The answer to any problem always seems to be “work harder”, rather than providing the resources and support that teams require. Features are being rolled out to customers against engineering advice before they’re finished, meaning a massive drag factor as we scramble to patch them – and engineering leadership desperately trying to protect the rest of the team from having to pay for these decisions. And there’s this message being communicated from the top that suggests technical teams aren’t working hard enough that just feels utterly toxic. I’m probably making it sound worse than it is, but for certain the last six months have stopped being “I’m excited about working on this”.
How do you make the decision that it’s time to call it a day? Is it practically possible to shift the culture? Or is it feasible to detach yourself a little bit from it – concentrate on the areas you can change, and stop caring about those you can’t? I’m a well-paid engineer in an interesting field, and I’m invested financially and emotionally. It’s hard to be objective about whether it's time to quit.
Basically I can sympathise with the emotions you’re going though and thanks for writing about it. Hang in there!
I say this as an individual contributor though, and I imagine it must be tougher to consider walking away when you're a manager and you have a team of people who will be directly affected if you leave.
user: throwaway778
created: December 31, 2013Communication breaks down completely as you leave the “everybody knows what everybody else is doing” stage and need to figure out coordination across siloed teams and work streams. Many people who were there at the smaller team stage get stuck in that mode of operating and it’s a painful push to formalize communications and build reliable/trustworthy systems.
Someone else mentioned this too but you should be past the 18hr/day phase now. It’s time to start building systems and spreading the work in a more sustainable manner.
Not sure what the situation is over there but it’s common to need to bring in a strong VP Eng who can help firewall the department, push back on unrealistic C-suite demands, counter strong personalities from other teams, and provide more stable prioritization. This is the most effective solution that I’ve seen when an eng team feels under the gun constantly, management is punching through to pressure individuals, people are feeling jerked around, etc.
Not the parent, but I don't see how this is normal. Your sales team giving customers high expectations is a recipe for customer disatisfaction. Releasing broken things binds resources on unnecessary things that would have otherwise been used to stabilize foundations or add new features. So you essentially have a sales teams sabotaging the plans of the engineering team by extorting them with things they promised to customers.
These are the signs of a dysfunctional and badly managed organization. Your sales guys should have a realistic image of your capabilities and customers should get things when the lead of engineering deems them ready. And if you don't trust their judgement on that, it is either a you-issue or a them-issue.
Nobody is intentionally sabotaging anyone else (usually) but everyone stretches a little bit in the name of growth and things break down at the edges. Revenue growth can be life or death for small companies so, even though it sucks, promises are made and things are rushed. A perfect foundation and completely bug-free features don't matter if the business is dead.
There's a lot of sub-optimal juggling going on around this growth phase where you sometimes need to just focus on keeping the ship afloat until you hit the next set of milestones -> prove your worth -> raise -> grow the team to help shore up the foundation. Even if you aren't raising VC it can still be a similar grind where you need more cash flow to hire more to meet the exploding customer demands.
I will note that this only applies to high growth companies. If you have a pile of cash, strong product conviction (and skill), and the willpower to keep your feature set limited while turning away potential customers, you might be able to build the solid foundation -> sell the rock solid product. That isn't how most startups operate though and once you take VC the clock is ticking.
Yes. But it requires saying no to lots of things you used to say yes to (and vice versa), which can be extraordinarily difficult
It may not feel like it, but if you have been around since day 2 you’ll be respected enough to try anything you like, as long as you actually do it and don’t complain (not saying you’re a whiner but some people are). You basically have tenure.
And I mean really ask yourself. As you say, teams are scaled now, individual effort has less of a multiplier. In most cases, they'll probably be fine without you. That should feel liberating.
you're on the right track with the detaching yourself, but that can only get you so far. at the end of the day you still need to deliver things that sell. having people who don't know what the fuck they're talking about demand all sorts of wild shit from you is normal.
in the end, it's just difficult. you're being compensated with money and equity - if those aren't up to snuff, negotiate for more. if that doesn't work, you need to make the decision to stay or leave. there's a chance they give you what you want when you threaten to leave - and then you will have some leverage. but just realize this is not ever going to be a walk in the park. millions of dollars are on the line, people are not going to behave rationally because they see you as the limiting factor between them and their riches.
"this rock is hard, and has sharp edges. it will cut you."
"no! that is terrible! rocks should be soft, with round edges! how dare you! nobody should accept rocks that are hard and sharp! that's dangerous! why do you support dangerous things?!"
Simplistic phrases are not going to help in complex situations with lots of details.
> because everyone is too mean.
No, because it sounds like a business bordering on dysfunction. You should know the difference.
yeah, that's what a startup is.
As someone who worked on quite some film sets: Contrary to the assumption many people have, clear roles and responsibilities are good for creativity. In the end the director ans the producer will decide on things, but on a good film set the best idea wins and so the director and producer would be idiots not to listen to their team when they have them.
I can relate to this. No, I didn't leave my startup. I've worked with three startups altogether, including one of my own, which started off with a co-founder back in 2012. In the not-my-own ones, I was once the founding engineer, and once the fourth engineering hire.
Why didn't I leave my own bootstrapped startup despite the amount of pressure, chaos, uncertainty, and pain, all of which were setting in at the same time? Not to mention immense difficulties in dealing with co-founders and all the social pressures (home life, relationships, real day job at a fortune 500) and burning hard-earned cash to keep the thing running in the face of uncertainty and the very real likeliness of failure.
Why I nearly did walk out:
- Extremely unpleasant co-founder. Unsociable, condescending, biased - for instance I'm quite sure he perceived me as being worth less than himself because I had no wife and kids situation going on. Treating me as employee despite having equal shares in the company. - No VC capital or outside funding. The expectation of having close to 0 in the bank account once the pay-day happens from the "real" job (and rent+bills have already been covered) sucked really, really much.
A few things spring to mind as to why I did not walk out:
- Luck. We seemed to have the right timing. There were almost no products on the market which attempted to solve the problem the way we did. There was a tremendous interest in our product, but we just couldn't get any significant number of people to convert, despite seemingly offering the right product.
- Having listened to feedback and tweaking the product (most notably the pricing/business model), we managed to achieve decent market capture (it took almost 3 years from) and that came mostly as a result of persisting through the cash-burn, listening to and evaluating all customer feedback, and iterating on many aspects of the product dozens of time. Fixing broken things and solving weird edge-cases which weren't weird in retrospect pointed to the fact that we were simply inexperienced. We still pressed on and sought to break through this barrier of having no freaking clue about this emerging market.
- The real break was the actual realisation of the for-reals breakeven. It changed the game - the point at which no money needed to leave our personal bank accounts to pay for cloud services, domains, tax accountants, templates, logos, you name it, was one of the greatest feelings ever. At point-breakeven the whole thing went from a "somewhat successful side-project which has been draining our personal bank accounts" to a project which could potentially provide enduring sustenance, and we might be able to take it further. At that point it became all the more compelling to press on.