FACE TO FACE WITH FAILURE

ECONOMIC TURMOIL POSES A DAUNTING CHALLENGE TO FOUNDERS: BALANCING THEIR STARTUPS' FUTURE WITH THEIR OWN MENTAL HEALTH.

- ANDY DUNN

Somewhere I heard that a startup doesn't fail when it fails. It fails when the founders give up. In this "money is no longer free" market, that begs two questions: When should founders give up? And how should those founders manage their psychology while seeking the answers to such a momentous question?

I AM FACING THIS EXACT dilemma right now. My new consumer software startup has not gone particularly well by one sort of important measure: growth. It's been a four-year grind to find some signal of productmarket fit and we haven't found it yet. At one point, we had 12 people. Soon, it might just be my cofounder Jen Greenwood and me, at least until we rebuild in a more methodical way.

It's been like panning for gold in a turbulent river: Sometimes the prize feels closer, other times farther away.

Still other times it feels like we are drowning in aimlessness and exasperation. An identity crisis looms for any high achiever flirting with failure, and a calculation begins on the conflicting forces of sunk costs and lost time on the one hand, and reputational harm on the other. As entrepreneurs, we struggle to separate our egos from the prospects of our startups. We conflate the fate of the enterprise with our value as human beings.

Our startup has burned through $10 million of cash, much of it our own. Were it not for the privilege of access to capital that comes from my being an "exited" founder, we'd have been dead in the water years ago. As Marc Andreessen warned me during a Zoom meeting in 2020 (which did not lead to an investment): "Make sure you don't raise too much money or you'll be stuck working on this for a long time. Raise just enough to get to the milestones that justify the next raise."

Oops.