METASTARTUP Episode 2: Why you SHOULDN'T startup

so in the last episode I told my story but in this one I'm gonna give you reasons why you shouldn't start a started you know there's a lot of glamour and of the obvious upset of success but stops can also be extremely high in my opinion startups are one of the hardest things to pull off successfully scaling a successful startup takes a long time I'd say anywhere between four to ten years in this episode I'm going to go through two reasons and there are about to do the reasons but I'm gonna focus specifically on two reasons why you shouldn't start a star the first reason is emotional risk startups are very hard to deal with and we'll come to that in a bit and the second reason is financial risk it is so easy to go bankrupt with a couple of lad moves especially in the early days of your startup before I start off more emotional risk I want to tell you a little bit about my friends I tried roughly the same set of friends for the last ten years it's been a decade where I just enjoyed and had fun the same set of people in this decade of being friends with these people I've never failed them and I never expected anything in return from them apart from maybe just you know being there when times are rough a lot of people think you can just take your friends tell them hey I want to start off with you and everything's going to be fine the very next day in reality things are much harder if you start working with your friends and this is I start my career there and I've seen these shoes right there will come a point in time where you might need to fire right and that is the worst conversation to have with somebody you've known for a decade and I've had this conversation so I'm playing you for a decade so I have to let go you know my previous companies and it's not a fun place to be a lot of people think startups are you know I have a great idea I'm just gonna build something along the lines of that idea and you know I start selling it and then I'll be successful overnight but that's the easy part the hard part is actually managing a lot of this risk that comes in the way as CEO or a co-founder your job is to absorb all the risk of a startup with the product that is for the customers the list of your employees the disc just the finances in the bank it's your job to handle all of that and it can get extremely overwhelming in times even after doing this for almost a decade it can get really overwhelming in my first startup I had an employee who was a longtime friend of mine who I've had some great memories with who I had to let go off and the reason was this that puzzle simply wasn't pulling his weight right which means that a person wasn't doing the job that he was the same I know this person for a very long time and I just couldn't gather the resilience to let go of him the only problem was I also had other employees at the same time and they were watching this behavior and they were getting to demoralize in the process they were saying hey this person is not doing anything for the company you're still letting him on you're still paying him in salary why should I work why should I put in all this hard work so over the next few months I realized it was unfair for all the other employees that I had to keep this person on and in my last coming jobs file we had this one girl who was on the sales side who is also studying for her master's and I knew that she was saving up money the money she made a jobs file to go and pay for her master's she was saving that money outright and she loves to study for the course side by side at one point her DVR comes to me and says well in this person's not performing well I think we have to let go of her and it's probably not if I fire this girl she would not have enough money to do her master's right after if I didn't fire her for team leader as well as everybody else in the company would see it as a sign of weakness hey I can do whatever I want in this company and I'm still going to get paid so I had a dilemma I just didn't want the emotional setback of having to fire somebody who was saving up money to go to of future course and just hello I'm gonna go in this dream of yours I didn't want to do that a couple of months passed and the problem was getting worse the girl is performing very poorly on your sales targets and there wasn't much I could do two months later I ended up firing her she took it extremely badly she was she's almost in tears by the end of it and I told her the look I had an option either let her continue doing this and miss your numbers again and again despite warnings or I let you go right and I chose to be the person that cares about the company more than I care about your personal needs and I've never actually said something like this but for the first time of my life I realized the value of placing the company before any particular person in the company even if that person is needed I picked up the call and I won my lead investors and you know he's also on my mentor so I was telling him that you know this happened and you know I spent two months on it I was thinking about it the entire two months he said oh you should have fired her two months ago and I said why would you say that I mean we should we deserve everybody deserves a second chance why not you know I thought she'll do better over the next two months he said look at the end of the day you still

ended up firing all your data goes waste two months of your time and you spent too much worrying about this particular problem so the next time just make that decision faster and I sort of started realizing that anybody who didn't deliver consistent value to the company I would eventually end up firing them right and not just my company every other company in the world if you stopped providing enough value over time then you will be removed from that company and the only problem was because I was working with people with real emotions with real feelings I mean till now is just a job until I want to start a startup it was just was all in the air right it was like oh you know I want to manage people but management people comes with handling things like a person breaking down a furniture a person saying hey I'm not gonna be able to afford my school fees my kids rights alright been in those situations I've seen how difficult it is but you still have to make the decision that favors the company the most it's not just a job as CEO it's also your fiduciary and legal duty to all your stakeholders so I had a terrible time trying to separate the emotional component of a business and the kind of people involved their needs their satisfaction their value drivers do the same thing you know the cost of that person into technical value that person was driving in I had a very hard time separating these two when I start a company I start with a belief that you know you start team and your team is like a family but I realize that is the worst way to look at a start-up right in a real family nobody gets paid nobody gets fired and nobody definitely gets demoted right it's just it's a very different environment I think the best way to look at it would be as really stings from Netflix says as a sports team you say I've got a limited number of slots in this company and you're only as good as your last season or your last game and that's exactly when we approach things that have a lot everybody's going to be on the toes all the time because they know that if they don't provide enough value then we might not be able to justify paying them that much and you know you might think that creates a very scary culture where people are always whatever being fired but that's not true at all what I've seen is that it encourages an even better culture because it keeps all the slackers out so everybody is extremely motivated to perform at their best not just because hey there's this fear of being fired but also because everybody else around them is performing at their best and eventually people just forget for the fact that they can get fired right I used to think that when you start a company you know you have these employees and they stay with you for like years and years put in reality people don't stay with you for that long right everybody has their own needs everybody wants to start a company of their own or retire to an island or travel or whatever right and you're nobody to shackle them back right today in 2018 and employee will maximum stay with you and you will between a day to like four or five years at maximum right the average about a year and you got to make the best of that person in that year reading somebody like a family member knowing fully well that this person's not going to be in the family a year later not because of your fault but because that person's needs and that person's you know own career path for themselves you would start approaching things a little differently you say I have a limited amount of control over this person's time and energy over this one year or two years or three years that this person is going to be here for how do I make best use of it to make my company which is as good as your baby a success right so I write some extremely grueling emotional situations and I realized that the minute I walk in the four walls of Avalon I leave my emotions behind I still use it you know obviously everybody deserves a fair trial but even when we hire people when we shake hands of them and say you're hired we also tell them they look the Davis stop providing value to our company like Avalon we will not be afraid to show you the door right and that creates an amazing culture is it creates a competitive culture but at the same time it creates a culture where nobody is slacking a CEO or a co-founder you have to absorb all of this basic right because tomorrow the product fails if you run out of money if your investors aren't happy with you if your employees it is your fault you absorb that risk first nobody else is gonna sit and say oh yeah that's my problem because I rarely happens and that brings me to my second big problem with startups or the second hardest part of running a start-up which is the financial risk I know personally of people who start a start-up with everything on the line even raise capital and then you know after a few years run out of money especially on the wire just when they were about to be successful have to lay so many people off and then go back to being almost homeless right I've seen that happen in front of my eyes and I still despite all that do this on a daily basis knowing fully well that is a particular end result an end outcome of running a start-up you can't become homeless it's not a pipe clean you can actually lose all go back to living with your babies more mourning than that you'll find that you're one of the only people in your company that actually gives a about the Capitol right that actually cares

about how that money is being spent I bring you back to one of my experiences where you know we were running a project we were running an advertising campaign for one of our clients and I had this employer mind this person who's had like the marketing campaign spent over 12 lakhs trying to do something new right and I wasn't aware of this decision I just okayed it without going through things because I had 100 other things to manage and as luck would have it or the 12 lakhs that we spent we got less than 500 signups which is you know in all regards an absolute failure and when I went I confronted this employee and I said you know I give you a response when you do this project you screwed up the dude put his hands up say I'm sorry I'm leaving Avalon I tried my best could do anything any walked out of the door and I said what about my vile acts and you just walked out of the door I mean everybody wants to take responsibility right I've seen a lot of my employees come up and say you know ma take responsibility this responsibility of that and by responsibility they just mean they don't wanna be ordered around right they just want to make their own decisions but those decisions come with real downsides which is you can lose a lot on and unless you run a company of your own and you're responsible for the bank of that company you will not know what it's like in this case that relax that damage was on me right because at the end of the day as CEO I okayed that decision at the final level and it was my bad because I was working so many different things that one particular problem I was I had to overlook so in the one instance that I actually delegated a financially risky task to somebody else I was let down right and I've been let down multiple times in my life especially when it comes to financial decisions so we have a threshold right in Avalon we say that you know if you're burning if one of your projects is gonna cost you more than a lakh then needing approval from either me or my hm so as much as everyone wants to take control every employee says you know I'm empowered I feel like I'm making decisions unless the financial risk is on you know you're only taking a partial decision previously I wasn't one the guys worked in a multinational company who had a budget of 45 lakhs manage a team of four or five people and he was talking about how he feels like a CEO and I said no that capital at forty five lakhs is not yours if it was yours then you have every right to call yourself CEO of that project right because at the end of the day if it's from your pocket or if something that you work extremely hard to make then you will not realize the value of it and as a start-up CEO in this is you are fully responsible for it and especially in my early days I did not know what to do with capital I didn't know if something was expensive or not should I spend a lakh and a half on office chips should I spend a lakh on ceiling lights should I you know not spend on ceiling lights and spend on employees instead there are so many variables in modern startup and unfortunately a lot of those variables cost money right and you were at the end of the day responsible that money without a guiding post there's no book or template they'll tell you oh yeah you know you should spend on furniture this person even though it's a little more expensive so those decisions are decisions that you will encounter on a day-to-day basis every day is crisis day the star so a multitude of other reasons I'm not going to cover them these are simple ones like you know what are your sales what if your idea is not good enough what if there are competitors I mean we cover all of those are solvable right you can always change your start but think like having a co-founder and having a fight with that co-founder or having employees and realizing that these people are not good enough and having to fire people point-blank and I've done that so much right every single person that I've fired point-blank has taken it personally despite the fact that when I hire people I tell them don't take this personally if you do not have enough value the company will have let you go and we've had people work with us for years who continuously delivered value we cherish me you know it's we even have celebrations in their name every few years and we have employees like that we also have a voice to be fired point-blank after 24 hours right it just depends in the amount of value and the kind of culture you bring to the team right obviously you can't create an extremely toxic culture you can have a culture where everybody scared all the time but you also want to make sure it's a culture where everybody knows that they have to deliver value otherwise it's the door for that if you feel like you've got the balls to actually go out there and take the startup list play one of the riskiest games in the world go out there and probably make a fool of yourself then startups are for you if you've got do this much of the video without you know leaving then it means that you're determined to continue building a startup and this course now that we've gone through the devil's advocate part of this course is all about how do you use your finances effectively how do you manage your emotions and how you can actually survive in this startup game