Don't Forget to Do That Thing You Know You Need to Do

Entrepreneur Office Hours - Issue #241

A few weeks ago I wrote about my car breaking down and leaving me stranded on the side of the road. In my post, I praised all the people who stopped to offer help, and I offered some thoughts on why I believe that, despite what the broader media landscape seems to think, the world is generally full of good people.

What I didn’t mention was that the entire time I was on the side of the road with dozens of people stopping to offer me help, I kept thinking about how I wanted to do the same thing. As soon as I finished dealing with my current vehicular drama, I was going to buy an emergency kit to keep in my trunk — with jumper cables and flares and whatever else a stranded motorist might need — and anytime I’d see someone in trouble, I was going to be sure to stop and offer help.

It was a noble and kind thought. And I swear it lasted the better part of a day. But I never acted on it. Instead… life happened, kids had to be dropped off and picked up, there were classes to teach, newsletters to write, etcetera.

Fast forward to this week. I was picking up my daughter from summer camp, and I heard the unmistakeable click, click, click of someone trying to start a car with a dead battery. But guess who didn’t have a great way to help.

This guy!

Yup… despite my vows to help a fellow motorist in need, the first time it happened, rather than being the proactive good samaritan I’d envisioned, I wasn’t equipped to do anything.

What… a… failure…

I realize, of course, sharing this failure doesn’t seem relevant in a newsletter about entrepreneurship. But hear me out…

Failed entrepreneurs often fail because of the exact same reason I failed. Like me, they often know exactly what they were supposed to have done, and they thought about doing it, but they didn’t follow through. Instead, they let life get in the way just like I let life get in the way of being better prepared for a car emergency.

Consider this your reminder to not be like me. Chances are you’re sitting around right now imagining yourself doing great and meaningful things, but you’re not actually going to do them. Instead, you’re just going to think about doing them because it makes you feel good.

Stop it! Go do whatever things you know you need to be doing right now but are procrastinating on. You’ll thank me for it when you need it later.

-Aaron

P.S. For what it’s worth, I was actually able to help the stranded driver thanks to a pair of jumper cables in the office at my daughter’s camp. Also, before I’d even left the parking lot, I went on Amazon and bought an emergency kit for my trunk.

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This week’s new articles…

Proof Your Startup’s Product Doesn’t Matter Nearly as Much as You Think

Entrepreneurs spend too much time obsessing over their products and not enough time worrying about what actually generates revenue.

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What if Entrepreneurs are Actually Artists?

Most entrepreneurs don’t come from arts backgrounds, but they’ve got more in common with Shakespeare than they probably realize.

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Office Hours Q&A

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QUESTION:

Dear Aaron,

I’ve spent the past few years running a startup that’s raised a significant amount of funding. However, in the past few months, as a result of market conditions beyond our control, my co-founders and I have accepted the reality that we’re not going to be able to deliver on our initial vision for the company.

We still have a large portion of the invested capital in our bank accounts. My co-founders and I believe if we scale back our team and expenses significantly, it’s enough to last us another 12-18 months, meaning we could basically fund a complete pivot and attempt a different business.

I’m curious to get your thoughts on this strategy and the best way to execute it.

One of my co-founders is arguing that we should quietly pivot by not telling our investors. He thinks we can be successful, and it’s better to “ask forgiveness than ask permission.” My other co-founder thinks we need to return the money since the pivoted business isn’t what our investors originally invested in. And I’m honestly not sure what I think.

Do you have an opinion on this situation? Have you ever dealt with it before?

- [Anonymous]

P.S. You are welcome to share this question in your newsletter, but please do not print my name.

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There’s so much going on with this question, I’m having trouble figuring out where to begin! I think I’m going to attack it piece-by-piece.

First things first… congrats on what sounds like a decent run. Sure, you didn’t quite reach the promised land, but creating a team, raising significant capital, and making a meaningful go at building a successful startup is more than a lot of other entrepreneurs accomplish.

Second… congrats on being honest with yourselves and knowing when to quit. Most entrepreneurs in your situation would keep fighting a losing battle while wasting lots of time and money in the process.

As for what to do, this is definitely tricky.

In most cases like this, the company isn’t technically under any obligation to return money to its investors, and if you and your co-founders retain majority control, you can do whatever you want. (But please don’t take my word for this… be sure to consult a lawyer.)

Still, there’s a big difference between what you can do and what you should do.

For starters, I suggest you tell your co-founder who’s arguing to hide things from your investors to take a hike. After all, if he’s willing to lie to other people, what makes you think he won’t lie to you? Personally, that’s not the type of person I’m ever interested in working with.

Your other co-founder is right to point out that your investors didn’t invest in whatever idea you’re thinking of pivoting to. However’ there’s some nuance here worth considering. It largely depends on what stage company you are. If you were a Series B company doing $15 million in revenue, yes, your investors were investing in a specific idea.

However, based on the limited details you’ve shared, that doesn’t sound like you. If you’re still a small startup at an early stage, then it’s quite possible your investors invested knowing full well you might have to make some big changes. In that case, they were investing in you and your team, and they’re probably willing to keep betting on that team even if you go in a completely different direction.

Whatever the case, the important thing here is to talk with your investors. They’re probably a lot more familiar with the situation you’re in than you are, they can likely tell you more about your current market than you realize (maybe your company isn’t as dead as you think), and they also likely have valuable knowledge about whatever other markets you’re thinking of moving into.

Beyond that, your investors deserve the truth. It’s really that simple.

Remember, your investors aren’t your enemies. They’re your partners. And the worst thing you can do to your investors isn’t lose their money. After all, they invest recognizing that losing money is a significant possibility.

Instead, the worst thing you can do to your investors is lie to them. Be open and honest about the situation and what you’re dealing with so that you can all determine the best next step for the venture together.

Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!

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