The Story Of A Failed Startup And A Founder Driven To Suicide
businessinsider.com
businessinsider.com
I only say this because I know someone who seems to be exactly like this. They don't seem to care about being in debt, and they justify themselves for not paying people for their services. They are always positive, but always spinning everything. They don't tell the truth. In short: they are dangerous to be around if you rely on them for any sort of living.
Because I was so badly burned by this particular individual, I'll not be spending any time around those who talk up big and who have a bad track record of paying down debt in a reasonable timeframe. It's as simple as that.
1) Jody was a great person. The reason why I mention this first is to make it clear that the article really strives to show this. And he truly seemed to have a big heart.
2) Always be as open as possible. Many times, we don't want our problems to become others' problems so we hide it. And then it builds and it leads to a large amount of secrecy that could have been avoided. It goes back to the childhood saying we all hear, "No question is a dumb question." This phrase ultimately is saying that you might as well ask a question so that you are not falling behind in knowledge--whether it's academic or not. And please don't assume that I am saying Jody's suicide was purely because he didn't disclose Ecomom's financials; I just believe that if he would have been more open, more help could have been offered--financially and psychologically.
Of course, I gained more takeaways than this but these are the two I thought were most worth sharing.
>One childhood friend recalled a time when Sherman committed insurance fraud. He described driving on a highway with Sherman when they were 16. Suddenly, Sherman told his friend to "buckle up." He slammed on the brakes and caused an accident. Later, the friend says, Sherman would collect thousands of dollars from insurance companies for the self-inflicted injuries.
Fuck the dude.
The guy was 16 at the time. It even says he had a rough childhood. Are you really going to post "Fuck the dude" when you know nothing of the situation or what actually happened? Clearly, he was immature at the time, but I don't think judging a person by what they did at 16 years of age is very appropriate.
A rough childhood is not an excuse, if you're old enough to have a driving license then you're old enough to think through the consequences of slamming on your brakes at highway speeds.
There is stupid and there is malicious, this is way beyond stupid. After all, he did tell his friend to buckle up which indicates he was aware of the risk, did he tell the people in the car behind him to buckle up as well?
No argument there. But I think it's not inconceivable that people who behaved like utter assholes in their youth can still turn out OK in adulthood - especially when "troubled" teenagers are involved who come from screwed-up backgrounds. I believe there are still opportunities to turn your life around at that point, and if that's the case something you did when you were 16 shouldn't really matter by the time you turn 40. We were all different people a few years ago.
You talked about judicial intervention, so think about the fact that most countries have special provisions for young offenders. Often records of things committed at that age are later expunged. I know I'm taking a lot of flak for this unpopular opinion, and it may well be because I disagreed with a minor celebrity, but I really believe that the judicial system is doing something right here (for a change). Judging adults on something they did two lives ago is not helpful.
It was wrong of him, yes. Being young (only 16 years old) and in debt probably took a huge emotional toll on him, though...don't you think? Again, what he did, IF true, wasn't right by any means but be a bit more understanding given the context. At least he went and made a respectable name for himself after. In the world we live in today, there are far worse stories that come from poor financial situations like this, namely crime.
I repeat: one action does not define a person. And for Jody, if we are assuming the article to be true, he seemed to be a pretty damn good person.
I know that's the usual party line, but why?
Most of us have ethical boundaries, such as "Don't intentionally risk our friends' lives" and "Don't fuck people up for money."
If you cross that boundary, even once -- or worse yet, those aren't boundaries for you at all -- that says a lot about you as a person.
A 16-year-old knows that it's wrong to commit insurance fraud. They also know it's wrong to purposefully cause a car accident. It's quite telling, really.
Of course, the same friend told a story about Jody giving boxes and boxes of clothing to homeless people during Christmas. Yet this tale didn't make the cut.
To be fair to the writer, that event was fraud by any definition of the word.
I think it's evidence that he needed help long before he committed suicide.
I don't get it. How can you tell that story in a lighthearted way? It's reckless endangerment at best.
Many people do awful things in the past. Young people (Jody was 16 here?) can be stupid & foolish. Hard to attribute that to the rest of his life with such a simple, "fuck the dude."
I had a wonderful friend who passed away because of this and the one thing that it taught me was to talk about it. I'd urge everyone reading this to at least read up on the wikipedia page on the topic to educate yourself and get an overview:
His story, to me, reminds me as to why the most successful entrepreneurs are not gregarious salespeople who are good at connecting with people, but focused, dorky introverts. Connection leads to social pressure and being good at convincing others that dubious ideas are legit also means being good at convincing yourself that dubious ideas are legit.
I too believe building a company should be a marathon and not a 100m sprint. Trying to sprint 100m puts tremendous pressure on self to succeed and could result in suicide. As Dave McClure said, it is a first world problem in those dark days no matter how dark it is. Founders should look to 9-to-5 and build a long-term company.
Speaking as a former investor regarding the financial situation though...never ever ever ever.
Financial controls aren't important just because VCs are greedy: they keep companies alive and keep you out of court (or jail). I've seen situations in which cash didn't quite reconcile to what was expected; in some, the people involved made restitution and were fired. In others, they went to prison. A company with no effective financial control is flying blind and, someday, will run into the mountain in the clouds.
The article identifies some key warning signs.
1. "...not even sharing the company's financial information with his co-founder, Emily Blakeney. Sources admit that was strange in retrospect. ... Sources say Sherman was the only person with access to the company's bank account and invoices. Only he knew how much cash Ecomom was using up every month."
In many startups, any payment over $X requires dual signatures for exactly this reason. Also, contract bookkeepers aren't expensive (contract CFOs can be, but they're worth it). A second set of eyes--and hands--on the corporate checkbook is crucial.
Also, why aren't investors aren't looking at the cash position every month? That is the one critical number--the only one with sudden corporate death at stake--for every single Board meeting until the company is solidly and predictably cash flow positive.
2. "'There wasn't ever full disclosure, and that leads me to believe there was a reason he didn't want anyone to have full disclosure,' says a source."
Totally 100% unacceptable. The key execs and the board should be looking at the financials, at least at the bank account/quickbooks level, every month and management should be reviewing them more frequently yet. Especially in a metrics-driven business like e-commerce that requires cash investments for inventory and advertising.
3. "He put the company's inventory on his credit card, a black American Express, which caused him to go into deeper personal debt. He refused to get a corporate card, despite complaining to colleagues when AmEx would call and question company expenses."
A huge red flag. If there is intermingling of corporate and personal finances--whether this extreme or just the CEO's sister's law firm does the legal work--investors and co-founders need to fully understand and ensure it's arms-length. Then they need to disentangle the two right away.
If you own 100% of the company, feel free to run it "out of your back pocket." But with outside shareholders, whether employees or investors, such a practice is indefensible. In my experience, intertwined personal and professional finances is often the tip of the iceberg in terms of accounting shenanigans.
I don't mean to imply that investors should have seen this coming or that Jody set out to do this. But every experienced investor who's been burned this way--and many have--makes financial control issues a topic at the first (and every subsequent) board meeting post-investment until adequate controls are in place.
If you own 100% of the company, feel free to run it "out of your back pocket."
The salary I payed myself may have varied, depending on the monthly revenues, but - while being rather chaotic in other respects - I always made damn sure that the company's and my personal finances where strictly separated and that the financial paperwork was up to scratch.
As you aptly point out: The cash position is probably your most critical metric. Losing oversight over the finances can kill your company in - literally - days.
Seperating your own cash from the company's assets is, in my opinion, one of the most important things in achieving financial clarity.
Running a company out of one's back pocket is a very good way to spend a lot of time in the company of IRS agents and enforcement personnel.
in other words if you used your company money to pay for personal stuff or vice versa, "they" can come after your personal money if the company can't pay.
So creditors and other stakeholders are going to be able to pierce the corporate veil, which means you are personally liable. Just like if you were a general partner in a partnership.
He must have been very charismatic to be able to pull off these feats!
And the section on Guatemala is just trash. It culminates in an unsubstantiated and innuendo-laden tale, with none other than John McAffee as the sole source. Seriously? Please. (FYI the source who confirmed the meeting doesn't count. Anyone who knew Jody at the time would have heard about that.)
To the central point: It is good to talk about the importance of honesty and dealing with the stress of a start-up. By all means, let's open up the conversation again. But articles with such innuendo (no evidence, mind you) -- suggestions of sinister business activities and a Central American fraud scheme -- don't help that conversation. It makes Jody's experience seem distant and unrelatable.
Essentially, I fear that an article like this hurts the open conversation because of how crazy the story sounds. An unusual story allows the listeners to reject the valuable truths therein contained.
The reality was a lot less mythic and far more heart-breaking.
Weed can have an incredibly devastating effect when used as an escape. We have all been told that weed has no withdrawal symptoms and is safer than water. This is simply not true.
Being involved in startups can obviously be extremely stressful. Like Jody, I used weed as an escape after a hard day. It allowed me to clear my mind, sleep, and be at peace with the storm that was my life. Over time, the weed worked less and less, I needed to smoke more and more to get the same feeling, and my emotions started to go up and down dramatically, even when stoned.
One day, I had a nervous breakdown over something that really wasn't a big deal. After a lot of introspection and discussion with friends, I realized that weed was making my situation worse. It had turned from an escape to a nightmare. It was like a light bulb turned on and I could see everything clearly. For example, I would get really bad headaches and start feeling nauseous around the time I would usually smoke on weekdays (5 PM). If I was in a meeting, I would usually become very moody and frequently had to leave. I never realized it was from the weed, though. I always wrote it off at every occurrence as a virus or a bad meal or just lack of sleep.
The day came when I decided to quit. I will give a brief outline of what it was like and how it felt.
Day 1: Felt really good and positive about the whole situation. I had cravings at night but was able to ignore them.
Day 2: Started to have a hard time eating. I also felt a bit more stressed.
Day 3: Woke up with my bed completely soaked from night sweats. I was so dehydrated I gagged all morning and then had to go to work. My moods would go from happy to nearly suicidal all day. I couldn't stomach any solid food and sweated all day.
Day 4-5: Waked up both days with my sheets soaked in sweat. Extremely vivid and stressful dreams. Couldn't go to work. Constant panic attacks. Suicidal thoughts. Even liquids besides water or soda were hard to ingest.
Day 6: Night sweats weren't as bad. I could start stomaching shakes and some sugary solid foods. My moods started to even out a bit and I didn't get the intense lows like the previous days.
Day 7: Night sweats not soaking the sheets anymore. Some food becoming more palatable. Headaches hit me around 5 PM.
Day 8-14: Was able to start going back to work. I had to have a lot of shakes to stay fed. The feeling of sobriety starts to hit and everything seems much more clear and lucid. I feel as if I took a drug that gave me hyper focus and mental awareness. I realized that even when not high, my mind was still very hazy and mentally affected while smoking heavily. I was essentially "always stoned". Getting rid of that haze was like opening curtains in a dark room.
That was about a year ago. I relapsed and am currently going through the withdrawal process as I type this. I have been up all night because my sweats soaked my bed and I don't want to fall back asleep just to wake up in sweat again. This line from the story really hit home this morning:
Sherman had battled clinical depression, and his mind may have been clouded by marijuana, which he often smoked to self-medicate.
Stopped reading at the speculation that marijuana may have contributed to his suicide. The fuck???
100's of withdrawal testimonies: http://www.steadyhealth.com/how_long_do_marijuana_withdrawal...
Some Facts About Marijuana Withdrawals: http://www.choosehelp.com/detox/10-life-or-experiential-fact...
Studies Find Withdrawals Are Real: http://www.foxnews.com/health/2012/09/27/marijuana-withdrawa... http://www.dailymail.co.uk/health/article-2209405/Cannabis-u...
More Marijuanan Withdrawal Studies and Testimonials: http://brainblogger.com/2009/06/15/marijuana-withdrawal-synd...
Chronic Marijuana Smoking Affects Brain Chemistry, Molecular Imaging Shows: http://www.sciencedaily.com/releases/2011/06/110606131705.ht...
I can't find the direct source, but I read that the loss of appetite is due to an "overloading" of the Cannabinoid receptors. Those are the receptors in your brain that marijauna's active chemicals bind to. At some point, these receptors get overloaded and only respond to excess marijuana conception. They get less and less sensitive over time, building up your tolerance to marijuana. Your cannabinoid receptors are what are used to tell your brain you are hungry. When they don't respond to normal body signals and only marijuana consumption, then you are at a state where eating is only possible while high.
People - this is not your grandparents mexishwag anymore with 1-2% thc tops. Today's mega herb breaks 20% in thc easy. During the 60s I imagine weed was not very addictive because it was not very potent, but times have changes.
Today's megaweed has created a new kind of addiction 'cannabis state dependence', and I know because I am currently suffering from it.
CSD is caused by THC's extremely long half life in the body. Frequent users of cannabis have large concentrations of thc and its metabolites in their blood for weeks even months after using. These metabolites dull the stoner's thinking, and pretty soon the only time they can think normally is in the 1-2 hour phase of acute thc intoxication, the rest of the day they are in a cloud.
Quitting naturally becomes terrifying, as Jim so eloquently stated above. The stoner starts to come out of the cloud, but they are immediately beset by a lengthy and uncomfortable withdrawal phase(You can imagine this 'through the looking glass' effect of feeling MORE SOBER while high than while suffering from withdrawal is the root cause of CSD.)
As for me, I have been a pothead for over 11 years. During that time I have had two periods of sobriety > 6 months. For the last 6 years I have smoked daily, often more than once per day.
Before November, I had been sober for 8 months, I had just found a job which I love, and life was looking up. The elections were so stressful, I stopped meditating, and started to drown out my anxiety with alcohol. Why not go back to weed?
The beast inside asked. Weed is safer than alcohol right? In that moment I forgot the past 10 years of struggling to be sober. I forgot waking up after a binge, praying through a foggy brain for some sobriety, the gradual sobering of the mind over the course of the day, the attendant anxiety as my blood pressure - no longer artificially being lowered - crept up.
I forgot the 'one more time's, days turning to weeks turning to months turning to years, I forgot desperately wanting to quit, but literally not being able to. I mean, waking up, throwing out my pieces, my weed, my grinder, hundreds or thousands of dollars worth of drug paraphernalia, and then finding myself back at the dealer's in the evening.
An old friend of mine likened it to going to the carnival with your parents when you were a kid. There is that funhouse right, and you just can't get enough of it. Ooohh the bright lights ooh the distorted mirrors.
So you keep going back again and again and again, and soon the sun is setting and your dad is exhausted. He wants to go home, but you cant get enough of the funhouse. Soon everyone has moved on, and you keep going back again.
Or perhaps you can think of it as lotus isle from the Odyssey. People just spend their whole lives their, eating lotuses, sleeping their lives away, a kind of living death.
Marijuana never gives you a real bottom, it just wears you down, year after year, decade after decade, until you are just a shell where once there was a fully realized human being. Your old friends start to move on, your own self image is in tatters, you become the fool ready to accept your own buffoonery and incompetence as innate and unchangeable.
Marijuana is tempting because it is easy. Our field is so mentally demanding, we come home from the office, often after hours, completely wired up in problem solving mode.
We return home from the office a bundle of distracted energy, ready to unplug, but unable to power down our mental faculties. Drink and drug are the most readily available solutions, they require no skill to use and are guaranteed to provide some level of chemically assisted detachment. Better options might be meditation, a nap, exercise, or sex.
Pretty soon a habit becomes a crutch, and pretty soon a crutch becomes a necessity.
After 8 months sober, I said I would ease myself back into it. I could see myself smoking just once or twice a week, what would be the harm in that? Surely, after 8 months completely stone cold sober I could moderate my habit...
One last point, abstinence is much easier than moderation. Abstinence means making a clear choice and sticking to it. Abstinence means there are no drugs in the house, everything is black and white, so I have a sanctuary from a world obsessed with the easy way out.
Moderation means making lots of gray choices, often while already intoxicated.
The point of this rant is basically to say Cannabis State Dependence sucks. It has been 5 months since I decided to smoke only occasionally. Can you guess how many days I have been sober since that first toke? 1, I have been sober 1 day in 5 months, and that heroic effort was immediately followed by a relapse.
This is not a joke, marijuana can ruin people's lives(just like mmos, gambling, and heroin).
Just like those other things, MJ can be just fine for some people. Please be careful, "Know Thyself" and seek a real lasting peace, because there has "got to be more to life than chasing down every temporary high."
It goes through the various stages of withdrawal in detail. I found it was pretty accurate the first time I quit. I'm on a second quitting streak right now. I have no desire to continue again after experiencing the depths of depression and anxiety that comes from habitual usage of weed in response to stress.
There's also a support group at http://www.reddit.com/r/leaves that takes this kind of thing seriously.
When I quit I had almost identical withdrawal symptoms to yours. I'm not looking forward to this next bout. It should be much easier this time now that we are profitable...
Thanks for letting me know I'm not alone in this community.
-twenty and change startup exec
Where was the board before the last round of funding?
There is no mention of the CFO or company accountant. Did the company have either?
What did he tell investors who asked about who was overseeing the accounts?
If you cannot talk to anyone that is close to you, or if you are more comfortable with it, then please find your local phone line such as www.samaritans.org in the UK or www.suicidepreventionlifeline.org in the US
I also laugh like a jackass at George Carlin and get the munchies, but the other stuff happens too.
The Guatemala story is hearsay. This makes me so angry.
Why does this 'piss you off'? Seemed entirely reasonable to me.
EDIT: Perhaps you don't see any 'new' information here, but a lot of this was news to me. A great many more of us live outside the bubble that is the few square miles on the planet where so much tech activity takes place. We all didn't know Jody personally, and there seemed precious little in the days after his death that was anything more than "we didn't see this coming" and "he was always so full of life". Perhaps this will serve as a call to investors to have a closer eye o the books, regardless of how charismatic the head of the company may be. And I don't just mean for financial reasons - other people having a closer view of the books might have caused some serious discussions to happen - a forced face to face, as it were - which might have allowed them to see what was going on and offer help. Or it might have pushed him to suicide faster (assuming it was suicide) - who knows?
It's inarguably tragic. What rang the truest to me were the mentions by McClure towards the bottom about keeping problems & ambitions, magnified by our own bubbles and echo chambers, in perspective.
I can see how seeing his name again would be very unwelcome, and I absolutely sympathise. But I think it is an unfortunate fact of life. If you knew him well, nothing you will ever see written on the web about him will match the person you knew.
If you're seriously going to kill yourself, please do NOT use a gun or pills or jumping or cutting wrists or arteries. It's bad enough you've chosen to and finalized your decision to end your life you don't need to traumatize your family and friends with a gruesome death. Use an "Exit bag". It's instant, painless, blood-less, non-gruesome, and peaceful.
http://www.youtube.com/watch?v=UWfWl-xJnnY
Created by a right-to-die group Exit International it's a bag that goes over your head with a tube connected to a helium tank you can purchase at a local party store. Fill the bag up completely with helium, pull it over your head and take a deep breath. You'll pass out instantly and leave the earth in just a few minutes. No blood, no suffering, no bullets. It's bad enough you're committing suicide, you don't want family finding you with your brains splattered all over the place, or your body in a bathtub full of blood. Just because you're hurting yourself by ending your life doesn't mean you need to hurt those that love you anymore than you already are. They'll find you tucked away in your bed, peacefully, and for the last time. They'll appreciate that a lot more than finding you in a pool of blood. The one thing they'll have is the knowledge that you just left the earth peacefully and calmly.
Just keeping it real.
The appropriate use case of an exit bag is where it is not in fact suicide, where you're dying anyway of something like cancer or Alzheimer's, so you don't have a choice whether you live or die, only whether you die cleanly or are tortured to death. Avoiding torture is healthy and sane behavior, and full credit to anything that assists such avoidance, and if this thread were about terminal illness, your comment would be appropriate and on topic.
But it's not. It's about a healthy man who had much to live for and was driven to suicide by depression and stress. And here's my view on what to do if you find yourself becoming suicidal in such a situation:
1. For heaven's sake, talk to someone. Family, friends, Internet contacts, or if you can't bear admitting your troubles to anyone who knows you, get on the phone to the Samaritans or somesuch.
2. Failing all else, if you really are at the point of committing suicide, no, DON'T use an exit bag or a gun or jump off a cliff. Take an overdose of sleeping pills instead. Why? Because maybe, just maybe once the deed is done you might change your mind, and if so, you'll be very glad indeed to have chosen a method that lets you call an ambulance and maybe get a second chance.
Nobody asked to be born and plenty of people would rather die than admit to failure.
Nitrous Oxide > He, really, though. (I'm against state executions, but if I were going to support them, the method should be N2O asphyxiation). I did wonder in reading that article what happened to his car afterward; I hate washing blood/brain matter out of cars (have done it a few times...). I assume his wife wouldn't want to keep it.
I think talking about the messy physical and social/emotional aftermath of suicide IS a good thing, because it might deter people from doing it.
I'm sure it has good intentions, but as they say: the road to hell is full of good intentions.
I thought your comment was enlightening, though not in a good way so I upvoted it, btw.
The insulation you required ("don't downvote me!") and the contortions of logic you had to apply to make this comment seem like a public service should tell you something about the comment you are currently typing. Sort of like "I don't mean to be racist, but..."
Because this isn't the last time someone's going to post a suicide notice and goodbye.
And I never said "don't downvote me!" my exact words were "before you downvote...".
Death by suicide, no matter the method, is always deeply distressing.
> about 1 million people commit suicide each year. You and I are not going to change that.
At least I'm trying to change it.
Just keeping it realistically mysterious. Cause we don't know. For sure. It could be one, it could be another. Metaphysically, we can't deny the possibility of anything out there.