One of the most important things that I’ve learned in the three years that I’ve been working on our startup, AtmaGo, is that it really is a rollercoaster ride. I’ve heard this many times before from experienced entrepreneurs, but nothing can really prepare you for the reality. At the beginning, your startup’s trajectory will be chaotic. The key thing is understanding the ebbs and flows of your startup and making wise decisions in an ever-changing landscape rather than making bad, emotional decisions.
Euphoric Space Shot
I’ll start with the less deleterious mistake that most new entrepreneurs make. You just launched your app, and you’ve had pretty anemic adoption for a few months. You have a few dozen users, and you’re starting to think that this entrepreneurship thing was a huge mistake. “Why didn’t I stay at Google?” you ask yourself. Suddenly, you get a few hundred user registrations in a couple of days. All of the sudden you feel like Mark Zuckerberg! You are the new startup hero. You’re gonna be bigger than Facebook! You have some seed money in the bank, and you’re convinced that you’re going to close a huge series A by demonstrating this great traction. You, your co-founders and your two engineers throw yourself a congratulatory party. Hit up the club, drop a couple K. You’ve made it.
The next day you’re posting a job requisite for a “rockstart engineer for a super hot startup.” Then you get back to actually doing your job and look at your metrics. Shit!! Your user registrations are back to a trickle. You scramble to figure out what happened. Your magical growth just evaporated. You feel like the biggest idiot on this side of the Mississippi. Did I really just blow nearly $2K at a club last night? What happened? Why did we get this huge spike in registrations? And, more importantly, where did it go? Upon some basic investigation, you find that you app was mentioned in a pretty popular tech blog, but now that the post is buried, you are too.
This is an exaggeration (I’ve never come close to blowing $2K at a club), but this story will resonate with a lot of new entrepreneurs. You get some great news such as your metrics spiking, a mention in a super-popular blog, a promise of funding, and you make decisions based on this new high. The problem is that with an early-stage startup, this high will almost always evaporate pretty quickly. Rather than going on a spending or hiring spree right during this whirlwind of euphoria, give it a bit of time. Wait for things to settle back down. If they don’t, amazing! You’re one of the lucky few. But things will probably stabilize back down at a new equilibrium, which will likely be higher than the old one, but not by as much as you hoped.
Startup Tip: When amazing things happen, celebrate them, but then quickly chill out! Remind yourself that it’s a long and chaotic journey, and there will be many more ups as well as downs.
Pits of Despair
So two months ago you had that amazing spike in user registrations (or your favorite metric), and since then basically crickets. You are feeling a combination of panic and depression. You’re back to questioning if this startup thing was the biggest mistake that you’ve made in your life. You’re stressing about all the people you’re disappointing. You’re thinking about dropping this entire product direction and making a huge pivot to a market space that you’re not that familiar with. Or worse, you’re planning your exit strategy.
You start second-guessing yourself. We can’t possibly have product-market fit, but what was that spike in registrations two months ago? Maybe we really do have product-market fit? If we pivot, we’ll be starting at square one. We might be worse than we are now. Maybe we have no idea what we’re doing and should fold up shot? Going back to Google might not be such a bad idea. But I have this urge to build something on my own, with my co-founders. Maybe my team is the problem? Maybe I’m the problem, and I should quit?
You should quit. Quit freaking out. What goes up, must come down. The reason why I think this is the more dangerous state is that those decisions seem to have bigger ramifications than a spending spree. Unless your startup is one of those exceedingly rare unicorns, you will have those troughs of despair. Don’t make huge decisions when you are in those dark places because you will almost certainly make a bad decision based on a temporary state.
If you do need to make critical decisions, try your best to imaging what the average state is likely to be. Perhaps before the spike you were getting a dozen new registrations a day, then you got a few hundred in a couple days, now you’re back to a dozen. If you keep working on your product, outreach, and marketing, you’ll likely grow it it a few dozen per day. Assume that’s your average trend for the next few months, and make a decision on that information rather than on your negative emotions. On the other hand, if another couple months go by, and you haven’t made much progress, it really might be time to make a bold move.
Startup Tip: Weather the storm before making bold moves. If the storm does not abate, you should consider a bigger change.
For my part, I’ve been on this rollercoaster for almost three years with AtmaGo. I initially over-reacted when things were really good or really bad. But after a few blast-offs and after passing through some valleys of darkness, I know now that neither state is permanent and try to plan for the average case. It’s a very long journey, and you have to try to husband your resources as well as mental and emotional energy. Hope this post helps you keep things in perspective and make better decisions!
What are some euphoric experiences or moments of despair that you’ve endured and what did you learn from them?