The definition of a “startup” is a small company chasing high growth. A startup is harder to run than a small business because it is extremely hard to chase high growth. There is a simple way to explain this. Risk and reward are inevitably interconnected. The number of people competing for a large reward is always proportional to the size of the reward, so a large reward is usually claimed very quickly. The people who are fighting for the reward are not only young and hungry startups, but also increasingly agile large companies who have a battery of weapons in their arsenal. So if you are chasing high growth, you can be rest assured that it is very rare. As a small company, the only way you can win it is by taking incredible risks. If it was easy, someone would have already claimed it.
Being a “startup” founder for 10+ years, I failed to recognise this, and I am 100% sure that most founders miss this simple fact. Most people expect to win when they commit to starting up, but don’t realise that most “startups” fail. Correction. They are designed to fail. While most “small businesses” may not fail, because they are looking to survive rather than go crazy, startups by definition should be going crazy. Startups engage in a theatre of gladiatorial fights-unto-death until a very few players remain in the arena.
Startup founders are basically lambs waiting to be slaughtered. Welcome to the arena.
The movie Hunger Games offers an apt analogy. If you have not read the books or seen the movie (the books are awesome!), the Hunger Games pits a set of teenagers in a large forest-like arena to a fight unto death. The winner gets all the glory. In this, there are various kinds of players. Players who have primed all their lives for this fight, and those who get caught unaware. There is a stash of weapons (called the cornucopia) that can be captured and those who capture the weapons have an advantage. If you are founder, you are player in this arena. Those who capture the weapons early on, can be compared to the lucky few startups who manage to get funded.
The rest have to scamper in the woods and fight for their survival. The players in the woods have to find water and survive all kinds of obstacles and also keep themselves safe from their well equipped competitors. This is the life of a bootstrapped founder. Your first goal is just to survive and then if you survive long enough, the battleground may open up for you to make your play. Life is not easy for the funded startups either. They have to move first and fast and deploy their weapons in the hunt for wins. This exposes them to be attacked by other players.
This is fun if this is a video game, where if you die, you get respawned, but people forget that this is real life. Failure and rejection are physically painful. Also this is the biggest game of them all — “capitalism”. The winner of a fortune gets incredible fame, power and influence. Your reputation is permanent to your friends and family. There is no respawning. You cannot hide in another identity.
This makes starting up really risky. You cannot let yourself lose in the moment. If you are in the business of high growth, you are in the business to be killed (as a business). If this is too hot for you to handle, there is one path. Don’t play this game. Aim to become a “small business” — find happiness in smaller rewards. There is no shame in being sane.
After understanding this, if you really believe you want to play this game, then come with the mindset of a player. It is going to be intense and there will be several dramatic moments. Victories will be snatched and sacrifices will have to be made. There will be moments of incredible joy and sadness. The highs will be high and the lows will be shattering. And remember, there is no shame in losing. Those who survive, learn to fight another day.
The only reason I am writing this is, if you are a “startup” founder, prepare yourself to fail mentally and make peace with it. Like most founders, I was deluded for years that I am going to win. But I did not win the “big prize”, and I don’t see any shame in that. I tried many things that didn’t work out. Maybe I wasn’t good enough, or the dice did not roll in my favour, or I landed on the wrong address at the wrong time. Lots of things could have happened. It does not matter if there was justice or not in the end.
In my case, I hunkered down and I persisted. I quit playing the big game and looked out for small wins. This helps me improve my own skills and also get a firmer grip on the landscape. Once I am in control of my game, I can think of going out for the big prize, smarter and wiser. Thankfully there is no time limit to this game.
Whether you are a no-name maverick underdog, or a highly funded pedigree player, you are in this war with a slim chance of success. It is just the nature of the game. Don’t expect kindness, don’t expect generosity (though you will get those along the way). Be prepared. If you are not ready, then there is no shame in starting small and living to fight another day.
Whatever you choose,