I Walked Away From My Startup This Week
I Walked Away From My Startup This Week
Hey y’all 👋
I left my startup this week. You can read more about my journey here.
Now I’m all-in on making this newsletter valuable for you all. Expect to see even better, more researched posts and new ways for us to connect soon.
Choosing to leave a startup you founded is a complex, hard decision no matter what stage you’re at. So I wrote about it!
This week’s post is about the reasons founders, and how to know you should, decide to leave your startup.
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Read time: 5 minutes
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Leaving a startup you founded is emotional and can exacerbate the extreme highs and lows of startup life both in the lead-up to making the decision and also afterwards.
But there are plenty of valid, legitimate reasons to move on and try something new.
In each of the scenarios below first make sure your team, investors, and customers will be ok. Have a plan to avoid putting the company at risk. A founder leaving can be a destabilizing event even into the later stages, as I wrote about a few weeks ago.
If you leaving will kill the company, consider exploring a sale before moving on.
You’re Burnt Out
Startups require consistent 80-100+ hour weeks, often for years.
Sometimes the reasons why stop mattering and a founder realizes they just don’t have it left in them to keep grinding on the same thing.
Paul Graham says you need to be relentlessly resourceful as a founder. If you lose the “relentless” part, and the “resourceful” part feels extremely tiring, you may be burnt out.
I recommend taking a short time away before making this decision. If, when you come back, you still feel the same way then you can treat it as confirmation it’s time to move on.
You Hate Your Cofounder(s)
Being cofounders is like being married. Sometimes you’ll spend more time with your cofounder than your spouse, often in much more stressful situations.
But maybe you can no longer tolerate, have lost respect for, or lost trust in each other over time. And now, your relationship hurts the business because you can’t agree, make decisions, or delegate.
One technique to try before calling it quits is a cofounder operating system. There are also executive coaches who specialize in mediating cofounder disputes.
But if things are truly no longer working, one of you can (and should) leave the company. The only exception to this is if a cofounder leaving would destabilize and kill the company. Then you should look to sell, instead.
Your Startup No Longer Needs You
A few weeks ago I wrote about how founder-market fit is arguably more important than product-market fit until at least the Series B stage (and maybe longer).
If you reach that point you’ll find that the founder’s job has changed substantially from the early days of being heads down building the product or doing in-the-weeds growth, sales, or operations work.
Instead you end up spending more time managing people, on finances, and with legal teams, among other things.
Maybe that just doesn’t appeal to you.
As long as your startup is stable, and won’t fold if you leave, you can look to go work on something new again to recapture some of that early stage energy.
Just remember that doing so could mean leaving millions on the table to keep working on what’s now a much less risky company.
Your Startup Can’t Compete
The market you’re in can shift abruptly, sometimes in ways you can’t predict.
Maybe there’s a new market entrant with a superior offering, better network effects, or an unfair advantage. Maybe a macro event changes what your users want, and you no longer have their attention. Maybe you uncover a critical flaw with your revenue model.
A good example of what this looks like in practice is Slack vs. Microsoft Teams. Slack eventually had to sell to Salesforce due to Microsoft just bundling Teams with their existing offerings that millions of teams were already paying for.
Despite an inferior chat product, they had nearly 2x as many users as Slack after just 3 years, and were growing at a much faster rate at that time:
The point being any number of things can leave your startup suddenly not well positioned to achieve your mission. Sometimes this is your fault, but other times it’s bad luck.
You Need Financial Security
Whether you left a cushy gig at Google or are fresh out of college, startups can be a drain on your personal finances.
Maybe you assumed you’d be able to pay yourself a salary by now but things haven’t gone according to plan. Maybe you had a large, unexpected personal expense.
No matter the reason, don’t put yourself in a precious financial position for your startup. Not only will it be extremely tough on you and those around you, but your stress may cause you to make bad business decisions as well.
Sometimes you can solve this by pursuing a secondary sale (either to existing investors or new ones) or, in some cases for startups that are later stage, using your founder shares as collateral for a personal loan.
Regardless, there’s a lot of advice out there to prevent this from happening in the first place by not quitting your job and go all in on your startup until it’s generating meaningful revenue.
That’s good advice, but ironically the people who are startup founders tend to be more comfortable with taking financial risk. When you have an idea you’re obsessed with, it can be hard to hold off on trying to make it a reality.
Your Priorities Change
Imagine: A parent or family member gets sick. Or you’re about to have a baby.
There are many situations in life that might cause you to re-evaluate your priorities. Sometimes changing the world starts seeming a bit less important than something else.
Each year I spend an hour doing an exercise called the Web of Life:
First, I go through each category and write down my level of contentment from 0 (none) to 10 (fully content). It’s important to not think about this and let it be a knee jerk reaction.
Then I reflect and write for a few minutes about each one:
Why did I give the rating I did?
Do I actually want to update any of the ratings I gave?
How does this compare with last year?
This can be a useful way to quickly take a step back and sanity check how you’re spending your life (and whether you still want to work on your startup).
Your Startup is Pivoting
Maybe your cofounders want to pivot the company and you’re not as excited about the new direction.
The problem you’re solving needs a different solution, or you uncovered a bigger (but maybe less exciting for you, personally) problem.
Whenever you’re pivoting, don’t just blindly assume you’ll enjoy the new direction. Step back and think deeply.
It’s better for your team if you can let them know before things get too far along with the new direction and responsibilities have been split up between you.
You’re Obsessed with Something New
You don’t need a “good” reason to leave your startup.
If you find that the problem or idea you can’t get out of your head is not what your startup is solving, you may just be finding a new obsession, and there’s nothing wrong with that.
Once you feel that it’s a real potential path you may want to go down, commit to a timeline to make a decision and make sure you have upfront, transparent conversations with your cofounder(s).
You don’t want to blindside them.
A good article on the other side of this topic — how to handle your cofounder leaving your startup
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