It’s unfair to take a particular moment in time, slice it, and pass judgement on that particular slice. Yet that’s our precise function, as chroniclers of news, and our role in the startup community.
Like many others, I read the news this week that Vegas-based ecommerce site Ecomom will be shutting down. As I read the story, I remembered interviewing the hopeful CEO Jody Sherman for his original funding post on TechCrunch. “I hope to one day be as big as Zappos,” he said at the time.
Confirmation that he died of a self-inflicted gunshot wound came on the same day as his birthday, and on the same day I received the saddest Skype notification ever (above) – that Jody was “offline” on that day.
If this week’s reports are correct, and we’ve heard they are, Ecomom will be shutting down soon due to mismanagement of funds and some sort of purchasing decision the site somehow couldn’t recover from. More than anything, this shutdown makes me realize that the cult of startup success, exacerbated by the spin from this and other publications, may not entirely be the positive driving force we posit it to be.
As popular culture continues to glamorize startups, the harsh reality that 90 percent of them fail is consistently ignored. “We the investors, the ones who write off the losers quickly and amp the winners, we share a lot of the blame for creating the fiction around startups,” Ecomom investor Paige Craig told me in an email.
Hell, I’m terrified to start a startup and I’m relatively well-positioned toward success. While nothing will make you appreciate businesses of all kinds more than having actually operated one, I’m pretty sure I’d at least get a TechCrunch post for whatever it was I was launching.
Ecomom investor Dave McClure agreed that our community, with its apotheosis of successes and the blind eye toward failure, was partially at fault. “Jody was obviously going through a lot of stress and probably needed a better support network to help him out. Unfortunately we are all likely somewhat to blame — I saw Jody less than 10 days before the accident down in LA and I had no idea he was considering anything so drastic. Mental health isn’t part of something we as investors are typically qualified to assess, but maybe it needs to become part of our process.”
So did Craig. “I never asked Jody for an honest answer, not really – we did the startup lineup and we all knew what pattern to run. I’d ask ‘How’s it going dick bag?’ and he’d say ‘Killing it.’ We’d rush straight in with some talk about good things, jink with a little not so great stuff and circle back to the center with ‘It’s all good!’ And then ‘Awesome man, lets get more drinks.’ Of course we’d get a little deeper than that, but truthfully we’d never get to the painfully ‘truthful’ part. When you’re not a board member, you don’t want to hurt founders and dig too hard and they don’t want to bare their vulnerabilities.”
Sure, there are few startups with the self-awareness to see through this cycle, but most get caught up in the hype.
One of the more self-aware founders, LaunchBit’s Elizabeth Yin, recently gave some much-needed perspective on startup spin versus reality:
When entrepreneurs say they are “crushing it”, statistically speaking, they must be lying or complacent, neither of which are great traits. You have to be absolutely clueless to truly believe that someone is crushing it when they say they are. If I told my employees we were crushing it, they would see right through me. I do want them to be hopeful. And the way to do that is to praise them when they do an excellent job. And to show them numbers and traction, not fake semblances of hoopla.
“The most likely animals to be left alive after a nuclear war are cockroaches, because they’re so hard to kill,” Paul Graham wrote in 2007. “Instead of a beautiful but fragile flower that needs to have its stem in a plastic tube to support itself, [startups better] be small, ugly, and indestructible.”
While there’s plenty of speculation, there’s still no conclusive proof that Jody’s death and Ecomom’s failure are correlated. After all, we live in a time where acquihires and talent fire sales result in Twitter high fives, a couple of years at Google or Yahoo or eBay and then the world moves on.
The industry has a tendency to make pariahs out of startups that aren’t doing so well, so “never show weakness” becomes a koan, to the point of self-delusion. TechCrunch gets pitched hundreds of “Top Ten Ways To Be A Successful Entrepreneur” guest posts from entrepreneurs who quite honestly aren’t that successful themselves.
This super-human stoicism is at best superficial and myopic to the human component of so much of our business. The emotional travails of deciding what to build, how to build it, who to build it with, when, where, why, with whose money, etc. are harrowing. And it’s even worse when the investors are your friends and family versus nameless pension funds. Losing the savings of people you admire cuts deep.
Yet aspiring to someone else’s idea of success should never be the ultimate goal or something you use to beat yourself down when your startup or career isn’t hockey-sticking or crushing it.
“No matter how dark it gets, you should never, ever take your own life. Professional investors understand failure,” Ecomom investor Cyan Banister keenly observed. “Your friends and family may not but they should. Your employees will move on and find better things to do with their lives. It is all temporary. You may never heal [entirely] from it, but everyone around you will.” And everyone else might just be wrong.
Graham himself also wrote in the same post: “What investors still don’t get is how clueless and tentative great founders can seem at the very beginning. And anyone who has been denied funding because of lack of social proof knows the impact of this.” This too shall pass.
On a more macro level, I don’t know what the solution is, except the immediate one of outlets like TechCrunch covering more failures in addition to all the successes. Let’s start with this post.