The biggest cost you pay of being a start-up Founder

It’s been 3 years since I stopped receiving the SMS from my bank at the beginning of the month (salary credited ??), I quickly realised the most difficult part of starting off on your own is that you need to create these SMS’s on your own, very difficult when you are used to it for more than 25 yrs of your life. I thought this was the most important cost of starting your own venture.

BUT I slowly realized that this is not the most important cost.

The most important cost of starting a company really is - our mental and emotional well-being.  

Every bit of start-up life chews away at our lives constantly. It's a journey few of us truly appreciate until we are too far into it. It's really time to start having a more open conversations about what it really costs to be a start-up founder.

When we talk about building start-ups, we talk about lots of costs: Staffing costs, the cost of capital, cost per acquisition, and opportunity cost.

But we never talk about the biggest cost – THE EMOTIONAL COST.

Imagine if we could put a value on how much “emotional capital” we have in the bank. The amount of stamina, the amount of positivity, the amount of mental wellness we have left. Start-up Founders don’t just run out of financial capital – we run out of emotional capital.

Running out of emotional capital isn’t something we talk about, and that’s a problem. That’s because the cost of capital in this case is our well-being, our relationships, and ultimately the start-ups we sacrificed it all to build.

This needs to be a more open conversation where start-up founders talk not only about what costs they are paying emotionally, but what they are doing to manage those costs.

Few realizations of mine during this journey: 

It is a lonely journey

Having worked at a company previously, you had two things that you probably took for granted – co-workers and peers. You showed up, met new people, lunches and happy hours, bitched about your boss, and generally enjoyed being able to express it with others.

Being a start-up founder is like a new job where you are the new in the room, yet no one ever really comes to you. It’s incredibly lonely.

You don’t really have peers – you have employees. You can’t complain about the boss because you are the boss, and that’s if you’re lucky enough to even have co-workers. Most of the time it’s just you, or at best a co-founder, and the long days and nights of never really being able to communicate and share can really add up.

When you go home it often doesn’t get any better. Your better half will not understand what you’re going through. Your friends and family still don’t know why you went down this road to begin with, nor do they understand what you’re going through because they aren’t start-up founders.

The emotional cost of being alone takes its toll on each of your relationships. It’s assumed that you’re alone, but that’s not 100% true. Some of the best medicine for being a “lonely founder” is to talk to someone who LISTENS. 

It tears into your savings

Start-up is a marathon and the thing is that even if you have the physical stamina to go the distance, you likely don’t have the financial stamina to back it up.

That’s when the initial josh wears off and you’re sitting there at 2 a.m. with two browser tabs open. One is showing your bank balance which loves going toward zero and the other is your expenses building up.

What makes this emotional cost so much worse is that it never seems like everyone else is having the same problem. Everyone else seems to be doing great – look at those Instagram posts! You told everyone you were going to be that super successful start-up founder and instead you’re trying to figure out how many meals you can make out of a single thali.

There’s simply no version of building a start-up and getting rich at the same time. Lot of times a side hustle is required or just living way below your means. Either way, it’s how every start-up is funded.

Relationships

If all those other massive costs don’t add up, the one that tends to clear out your emotional bank account is the cost of relationships.

If there’s an emotional bank account balance that you have, there’s also a relationship bank account balance, and that starts becoming nothing but debits the moment you start down this path. When you had more time and less anxiety you were able to create some credits that built that relationship but now you’re mentally and physically drained. It’s hard to make deposits.

There’s basically a two-prong approach that start-up founders tend to use to mitigate this a bit. The first is to be very up front about the fact that you are less available and that you realize you’re relying on credit “in the bank” to get by. Often this just goes unsaid, and that lack of understanding is what causes the most amount of friction.

The second part is to recognize that there’s no version where you can maintain the same types of relationships you did in the past. You basically must pick your battles, and sometimes that comes at the cost of consolidating friendships or at the very least recognizing how much investment you can afford to make going forward.

Accept the reality

All these costs add up to what a start-up founder really pays to keep their business moving forward.

When you sit across from your friend who’s into year 3 of their start-up, you’re not looking at a person who has burned through venture capital, you’re looking at a person who’s burned through emotional capital. We need to stop pretending that we’re all superhuman machines that can build these companies from nothing without a massive toll along the way.

We need to recognize, in the few and far between moments when you see someone succeed that it wasn’t free. It wasn’t easy. And whatever you think they may have risked in personal capital, they spent 10x more in emotional capital.

We need to consider that our start-ups and their teams aren’t just the people that work at the company, but all the people they go home to and the lives that are impacted. It’s not just about asking your team to work 40 more hours per week, it’s about asking your team to spend 40 less hours with their loved ones.

We need to set realistic expectations around how long it takes to build a start-up and how much personal runway is really required. It shouldn’t be about “do you have 3 months of savings?” as much as “how can you keep your bills paid for the next 3 years?”

The conversation and the questions aren’t limited to just those topics but if we could even begin to have a conversation about these things more openly it would do wonders to help drive down the emotional cost of starting a start-up.

If you want to reduce this emotional cost or manage it, let’s have a conversation. I can be reached on [email protected]