How I think about balance as an entrepreneur

There are a lot of ways to break a startup.

An incomplete list of things that can (and often do) destroy them includes:

  • Inability to balance long term growth of a company / product / culture against day to day choices
  • Uncertainty around what’s worth measuring and what’s extra noise
  • Failing to minimize the biggest risk(s)
  • Accounting for the needs and anxieties of your investors and key partners vs. what’s important to your users and/or customers

In a recent episode of the Reboot Podcast, Fred Wilson reflected on the early days of founding a venture capital firm, and talked with his then co-founder Jerry Colonna about the heart wrenching process of being on the board of Star Media, which at one point had a $2 billion market cap before eventually going bankrupt. In particular, he talked about support he received as well as times when he wishes he’d provided more direct support to the companies he invested in. 

“…when you watch a company of 500 or 1000 people go bankrupt, it was like we did not live up to our duty and obligation as a board…we knew the founders were in over their heads, and we knew they weren't really running the company properly. And we should have stepped in and done something about it and we didn’t until it was too late.”

Things look a bit different for entrepreneurs now compared to when Fred and Jerry started Flatiron Partners in 1996. If you start a company in 2015 you can find almost any information you need via a combination of YouTube, blogs, and simply punching some phrases into a search engine. Paperwork to incorporate, advice on dividing equity, and other basic structures are all easily accessible on the web. 

If it’s easy to find information, why do so many startups fail? 

Entrepreneurs and investors often point to growth as the number one characteristic of the health of a startup. Paul Graham’s essay on startup growth is frequently cited in blog posts, and has been rehashed by a range of people across the startup ecosystem. 

But how many companies that went through rapid growth and led to an IPO or acquisition are still around 10–15 years on? Making significant revenue? Continuing to add value and/or meaning to their customers’ lives? 

I don’t know the answer to these questions. But I do know growth alone isn’t enough. It must have purpose, and that purpose must be long term. Andy Baio’s painfully honest description of the fall of is a too common story for startups, especially those where community is a critical building block. 

In the early stages of a startup there’s no clear path, and it takes guts, grit, and heart to build something quickly. You have to get used to pulling in as much information as possible, and still not knowing if you’re making the right decision. In that environment, balance becomes critical — both for the health of the company, and of the founders and first employees. 

Here are a few things I think about regularly when it comes to balance… 

Hiding the interface isn’t a virtue by itself.

One of the most powerful things I’ve read in the last year is Olia Lialina’s piece on user experience, and what she calls the Turing Complete User.

The entire piece is worth a close read, but one aspect that stuck out to me when reading it is how we often hide interfaces on the web.

The world is filled with unexamined interfaces. Sitting in your favorite coffee shop, crossing a street, chopping vegetables in your kitchen, these are all interfaces with embedded rules, qualities, and meaning.

On the web, hiding an interface has become the new norm. Companies like Google, Facebook, Apple, and Microsoft want us to believe that what they are creating connects us directly to each other. You can see it in platform and app design, and it reflects in how we talk about our relationships online.

This is false. There is no interaction on the web that isn’t mediated by technology, just as there is no experience in the physical world that isn’t mediated by some type of interface. 

I strongly believe that balance requires openness— we can’t build with purpose and for the long term if we try to hide the interfaces. We have to invite people knowing it’s that much more powerful if they accept the invitation, and let us know when the interfaces — literal and social — work or don’t work for them. 

Being honest about what I know, and don’t know.

Failing fast is a common mantra for startups, and worth taking to heart.

What investors and experienced entrepreneurs don’t talk about enough is that the single greatest risk to an early stage company is the same one each of us face as humans: the unknown.

It’s not what we know that drowns us, it’s what we don’t know or are afraid to draw out into the open that has the most potential to destroy us. That’s one of the reasons I believe philosophy isn’t a dead subject, and also why I’ve attended my fair share of counseling in the last few years. 

In order to know ourselves, and by extension anything we are building, we must be willing to examine the unexamined, and to be in that space of “what if” that actors, artists, designers, and other creatives live in. 

Developing a relationship of mutual respect with co-founders.

A dirty little secret of venture backed startups is that the people who invest in them often expect the management of the company over time to be…well, a shit show. 

You won’t get anyone to say this out loud, but it’s true. The average return on this type of investment takes 5–7 years, and adding a bunch of money and rapid growth adds an unimaginable amount of pressure whether you are experienced or a first time entrepreneur in your early 20s. 

Aaron Harris’ recent post on co-founder management does a nice job of laying out some of the dynamics that come up, including ego and lack of communication skills. The reality is that anything that requires balance also requires working with other people to achieve it. If you don’t put time and energy into developing a respectful and honest relationship with your co-founders then the code, the platform, the product, anything you create will reflect that.

Too often we glorify the story of the person who works 100 hours/week to develop / execute a brilliant idea in the face of opposition. While the story is attractive (especially to newer entrepreneurs), it’s rarely true. It’s also not very healthy, as evidenced by this post from Kyle Wild, and this thoughtful and at times heartbreaking conversation between Jerry Colonna and Moz founder Rand Fishkin. 

Understand what I own, and who I own it with.

In the Reboot podcast, Fred and Jerry talk about how creating a new venture feels like raising a child. It’s an interesting phrase, and it comes up often when I talk with other entrepreneurs. Any time you put thousands of hours of sweat and dedication into something, it begins to feel like an extension of yourself. 

But just like raising a child, it’s important to recognize that a company has a life and values that extend beyond you. When people talk about how hard it is to let go of controlling their company, I often find myself thinking “yes, but it was never yours to begin with.” 

As Jerry elegantly puts it, you are creating an “ecosystem of human beings.” 

This is a tremendous responsibility, and one I feel the immensity of everyday. Knowing who I am accountable to, and having a framework for understanding / evolving that balance requires a constant willingness to learn, and the humility to realize that I am owner, but not the owner of what I am building. Only by living within this truth can I create something with value over time. 

Scale and sustainable growth require ecosystem level thinking. 

Too often in startups we look at growth in a narrow field of vision. We go back to the same place: someone new on the block shows us a magic trick that Works Every Time, that gets X number of people to take Y action.

But “we got 4,700 new people to sign up this month” means nothing by itself. What did you have to do? Did you trick them? Did 18% of them sign up to see what kind of train wreck you are involved in? Did 23% of people sign up because their friends made it look cool? And if that’s the case, will they stick around or care about what you are building? 

Scale and growth matter — but so does the ecosystem you are building. Having balance means caring about that ecosystem, so that when the time comes to make tough decisions you can do it with your eyes open, and with humility and honesty. 


Thanks to Cali Harris, who provided tough and gracious feedback for this post.