This is a guest post by Mark Suster, a 2x entrepreneur who has gone to the Dark Side of VC. He started his first company in 1999 and was headquartered in London, leaving in 2005 and selling to a publicly traded French services company. He founded his second company in Palo Alto in 2005 and sold this company to Salesforce.com, becoming VP Product Management. He joined GRP Partners in 2007 as a General Partner focusing on early-stage technology companies.
TechCrunch Europe ran an article in November of last year that European startups need to work as hard as those in Silicon Valley and I echoed the sentiment in my post about the need for entrepreneurs to be maniacal about their businesses if one wants to work in the hyper competitive tech world.
Of course articles like these are going to inflame people because not everybody who is running their own business (or aspires to) wants to believe that you need to go all out to compete and win on a global scale. I agree that not all businesses require this level of dedication and the lifestyle choice isn’t for everybody. But … global tech does require an absolute, singular commitment level.
Having been through this all before myself I would like to tell a cautionary tale that can happen to the best of us: The Yo-Yo life of the tech entrepreneur. Mine started this way …
I started my first company in the “go-go years” of the Internet: 1999. We were based in London. We raised a seed round of capital in 1999 and our first venture capital round was the first week of March 2000. We were immediately thrust into a globally competitive market for B2B collaboration tools.
Our first big institutional round was $16.5 million, which by any normal standards was too much money. But this was early 2000 and our US competitors had already closed rounds North of $45 million. They announced their European expansion plans and put pressure on us to feel the need to keep up.
Within a year I hired 92 permanent staff and another 30 full time contractors. We built 4 products simultaneously to compete with the perceived need to offer end-to-end solutions like our US counterparts. I was on an airplane 2-3 times / week meeting potential customers, investors, employees, business partners and the press. I stayed up late every night after a day of meetings doing email until 3am so that I didn’t feel out of touch with our product and sales pipelines.
Dinners were consumed with customers or in hotels and often past 10pm. Alcohol wasn’t consumed in enormous quantities (OK, well, occasionally it was) but it was an ever present fixture in our socializing. It also served as the trophy for any big business win.
We had a $40 million round lined up to close in the Autumn of 2000. But the stock market continued to tank and one of our investors who had committed $12 million pulled out. Fawk!
I flew from San Diego (where I was visiting) to New York to persuade investors to stick with us. I then caught the red eye the same night to Paris to meet our investors there. I took the night train that night to London to try and hold investors firm. I didn’t sleep much for days on end.
We worked out a plan to merge our company with another European competitor, raise money from both sets of investors, cut the cost base and live to fight another day. The investors of our competitor agreed to a merger and we were going to raise $15 million between the two companies. And at the 11th hour they pulled out. We were weeks from bankruptcy. I tell that story in my post about the need for entrepreneurs to show resiliency.
We cut staff from 92 to 33 employees. We found a way to make our venture capital last when it shouldn’t have, at around the same time one of my all time favorite New Yorker cartoons was published on this topic.
We found a way to get a round of venture capital closed after all of this. Our existing investors supported us and a new lead came in.
I somehow never really felt stressed during all of this. At least not externally. Immediately following the closing of the round I flew out to a big real estate conference in France to meet with prospective customers. On the trip I nearly collapsed. I felt dizzy and had an aching in my chest. I started feeling panic attacks. I had never had any symptoms like this in my life.
I was now 33 years old. I had always been very athletic, but a combination of no sleep, late night food, too much alcohol and stress that I didn’t acknowledge started to take its toll. I had probably gained 15-20 pounds in the previous year.
I plodded through the conference and went straight to a doctor in London. I was convinced I was having heart problems. After an EKG and a treadmill test it turns out that my heart was fine. The doctor suspected I had ‘acid reflux’ because the symptoms are very similar. The doctor told me that while I didn’t ever show my anxiety to my friends and colleagues or even acknowledge it myself, my body still went through the stress internally.
If you’re still young I’m sure you think it would never happen to you – you’re fit, right? Age and life catches up with you. I was you, too.
I immediately cut out all most of the things the doctor ordered: coffee, orange juice and spicy foods. I cut down on the volume of food that I ate at any one sitting. I cut back dramatically on alcohol but wasn’t prepared to totally give up red wine.
My life changed dramatically. I took up running again. I woke up extra early (often before 6am) to get runs in. I still traveled for work all the time but I planned runs everywhere I went. I scheduled runs with teammates and even with customers. It became a social activity. 8-miler in Munich with the CEO of a company we were trying to buy. 7-miler in Dusseldorf with Stuart Lander, my close friend and associate. 10k in Cologne with the CEO of my largest customer.
I ran a half marathon, which I crushed in a personal best 1:42. I decided to run the London Marathon, which I completed this in 3:57 and was on top of the world.
But the story doesn’t end there. April 29th, 2003 my first son was born. Sleep deprivation kicked in but my work responsibilities did not wane. My exercise routine was torpedoed by waking up 3 times / night, but my travel schedule persisted. We set up a development center in India and I had to be there for three weeks to tour all of the prospective cities. We opened a US office which increased my air mileage.
Then we merged with a US competitor and I moved from London to Silicon Valley. I started my second company while retaining a board seat at my first company. I had my second child and commuted every month for 18 months between San Francisco and London. We sold the first company to a French services company and were racing around getting our second company off of the ground. About 18 months after building the product for the second company we received an offer to be acquired by Salesforce.com
I was now 38 and in worse shape than my previous experience. The time zones, the travel, 2 kids, pressure, managing the sales process, speaking at conferences Somehow I had yo-yo’d back to where I was previously.
In early 2007 I focused exclusively on the sale to Salesforce.com. I stopped doing conferences, traveling or pitching to VCs.
As a result I freed up the time to get back into shape. I swam every morning and ran every afternoon. I started “pulling doubles” often doing the swim then run one after the other. I began bike riding and dreamed of become a triathlete again. I lost 22 pounds between January 1st and March 27th through a combination of serious exercise and watching my calorie intake. I was on top of the world again.
Except that after the acquisition, my job at Salesforce.com required that I commute more than an hour each way from Palo Alto to San Francisco. So 2 hours of potential exercise vanished. The work pressure mounted, the food piled in, the sleep disappeared and the exercise was non existent.
I would like to finish this post on a happy note but I can’t. After I left Salesforce.com I moved to LA and became a venture capitalist (no, that’s not the sad part ;-) and had a new challenge to prove myself in a new field. My hours picked up, I worked hard to establish myself in a new city and a new industry. My wife said to me, “I thought you weren’t supposed to work entrepreneur hours when you’re a VC?” I still felt like an entrepreneur. I had something to prove.
I lost perspective and my life hasn’t been in balance since then. Exercise hasn’t been enough of a priority in 2008-09. But now I’m nearly 42. This time it’s for real. After a recent international trip with limited sleep I went to the doctor with chest pains again. It’s still acid reflux. But this time it’s combined with high blood pressure. I’m still in the manageable zone of hypertension but the doctor said I’ve got to change my ways. He also ordered me to take medicine to control my blood pressure.
So the yo-yo continues. But with 2 beautiful kids and a lovely wife I have much more to be serious about. It’s easy in your 20’s to imagine you’d never be in my shoes. I thought that, too. But I’ve spoken with many entrepreneurs in their 30’s who are going through some of the yo-yo health issues that I have brought on by work, travel, food choices and stress. And one doesn’t have to look beyond the most prominent technology bloggers, early-stage Silicon Valley angels or even some of the biggest names in tech to find people suffering like I have been.
It’s far more productive to make sure that exercise and healthy eating creeps into your routine. Find something else to cut out – not this. You know what I’m talking about – it’s far easier to stay in shape than it is to get into shape.
So no prizes for guessing my New Year’s resolution for 2010. I plan to be 25 pounds lighter by December 31st, 2010. Based on experience I know I can do this much more rapidly but I care more about that longer term goal of maintenance.
I’m normally too cool to write posts like this. I prefer to write the December 2010 post about what a great year I had. Somehow this is more honest. And the first 2 steps of achieving any goal are to set metrics (“you manage what you measure”) and to make your goals public (it’s easier to shame yourself into compliance than to be the only person holding yourself accountable). I’ve written about the technology to lose weight in this post.