When Your Startup Fails

June 28, 2013

9:00 am

This post is part of Tech Cocktail’s “Psychological Guide to Starting Up,” bringing you insights on the psychological and emotional challenges of startups throughout June.

When your startup fails, you have to gather your team together and tell them the news. You try to avoid the word “failure”; instead, you say, “Thanks for everything” or “We tried our best” or “It just wasn’t the right time.” This is how you fire your friends.

When your startup fails, you have to shut down your website, and write an email to your customers. It hurts to read some of the replies, but you read them anyway. You’re grateful for the few notes of thanks amidst the anger and disappointment.

When your startup fails, you can’t just box up your memories and hide all your company t-shirts and forget. Because you’ve got that $5,000 on your credit card bill that you haven’t paid. As the months pass, you watch your credit score drop.

When your startup fails, you’ll wonder why you spent so much time on it. You’ll wonder if the friends you haven’t been a friend to are still your friends, or if you’ve failed at friendship, too. You’ll think about calling your ex to talk, but you know she’s heard quite enough about your startup – enough to make her an ex.

When your startup fails, you’ll feel angry.

“When CrowdRules folded, I was mad. I blamed my partner. I blamed customers and the market. I eventually got smart enough to blame myself. It was classic grieving – Anger, Denial, Bargaining, Depression, and finally Acceptance and Self-forgiveness. Self-forgiveness was REALLY hard,” says Tom Cox, cofounder of GrowthMaps.

When your startup fails, you’ll feel regret and uncertainty, unsure if you could have done better.

“Success and failure. What did those words even mean? Which was Altsie? Had I failed because I hadn’t spread across the country like wildfire? Was I giving up too early? . . . At the same time, was it possible I could say Altsie was a success? I’d launched a business. I grew it. I learned a lot,” says Lucas Rayala, who spent three years bootstrapping Altsie.

When your startup fails, you’ll feel miserable. Not just emotionally, but physically: you’ll feel the months or years of sleep deprivation and stress in your bones, in your joints, in your heart.

When your startup fails, your family is still there for you. They say things like “Now you’ll have more time to go to the gym” or “You deserve to relax” – and you know that they don’t understand, can’t understand.

When your startup fails, you’ll wonder what the world thinks of you. Since everything knows you had a startup – you made sure to tell them about it – you’ll have to tell them it’s gone, over and over and over for weeks. Soon, you’ll have a memorized script so that you almost don’t feel like a failure every time you recite it. You’ll ask yourself if your friends are feeling pity, or sympathy, or surprise that you’re now unemployed. You’ll wonder what to put on your resume.

When your startup fails, you’ll wonder what you think of you. You’ll feel stupid and naive and arrogant.

“I dealt with some concerns that maybe I wasn’t up to this kind of challenge, typical fears of inadequacy or incompetence,” says Troy Davis, CTO of CoupSmart.

“I have personally had two startups fail, it hurts like nothing else. Without sounding disrespectful, I feel you can compare it with losing a loved one, and I feel comfortable making that comparison since I have experienced both myself. It’s terrible, it makes you feel like a complete failure, and it can take months to process it,” says Robert Hoddenbagh, cofounder of MesaSix.

When your startup fails, you’ll have chores to do. You’ll have to cancel your corporate bank account and your hosting subscription. You’ll feel the need and the fear of doing a post-mortem to see what went wrong and how to prevent it in the future. If you don’t, you’ll continue on in a fog of questions. Neal Cabage went so far as to write a book called The Smarter Startup to work through his thoughts.

After my second startup failed to get the traction I expected, I promised myself that I would not try another startup until I understood what went wrong and knew how to address it the next time. I spent the next five years obsessively studying other startups and learning from thought leaders in the space,” he recalls.

When your startup fails, you’ll be left with a lingering cynicism whenever you hear words like “hustle” or stories of the latest up-and-coming thing.

“Every day the tech blogs screamed about fundings and acquisitions. The entire valley was a dream machine where nobody worked, because everybody was too busy crushing it. Nobody ever talked about the emptiness of failure. Nobody ever told him the hockey stick of user growth might look more like a baseball bat laying in an empty field,” wrote Francisco Dao for PandoDaily.

“I felt numb. I was in a state of numb for 6 months. I tuned out everything. I didn’t want to hear about struggle or success or anything that was going on in the startup world or tech community. I unsubscribed from everything. Every group, every list, every newsletter. I stopped talking to people who mattered in my life during my startup/tech days,” wrote Tara Hunt of Buyosphere.

When your startup fails, that means you know failure – and anything you do in the future is tainted by that knowledge.

When your startup fails, you’ll have a burning question, the one crucial decision to make: do I do it again?

But when your startup fails – eventually, ultimately, in the end that may take a while to come – your startup fails. You do not fail. Not even if you decide that you won’t try again. Because you tried, and you made something, imperfect as it was. You tried, and you learned. You tried, and it’s over, and there’s nothing to do but be grateful for the opportunity and for all those who helped you. There’s nothing to do but continue making yourself and your world better, because even if you don’t have a startup anymore, you are an entrepreneur.

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Kira M. Newman is a Tech Cocktail writer interested in the harsh reality of entrepreneurship, work-life balance, and psychology. She is the founder of The Year of Happy and has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America since 2011. Follow her @kiramnewman or contact kira@tech.co.

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