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What I Learned From Losing $100,000 on Two Failed Startups
Don’t invest more money, energy, or time than you’re prepared to lose
Over the last five years, I founded and shuttered two startups, losing $100,000 of personal and seed money in the process.
I worked on the first startup — an app that helped diners discover new restaurants — for a year, and the second startup — a stock market investing publication — for two years. The company details are less important than the insights. Shutting down my dream idea (twice) was painful and humbling. But I survived, learned a ton, and progressed my career in the process. And thankfully, I’m lucky to have a good day job, a happy home, and an amazing family.
Recently, I’ve had a lot of time to reflect on what I learned along the way, which boiled down to these 20 lessons:
1) Startups need your money, energy, and time (MET) to survive.
New ventures draw on three precious resources: Money, energy, and time (“MET”).
- Money in this case means your savings, revenue, and any capital raised from friends, family, and investors.
- Energy is your physical and emotional bandwidth to create something from nothing.
- Time is both the time you devote during each day to work as well as the timeline required for startup goals to be met.
There’s a piece of longstanding wisdom in the startup world that goes something like this: “The job of a startup CEO is to find product/market fit before running out of money.” In my experience, that applies to time and energy as much as it does to money. If any of the three MET supply lines are disrupted, growth will stall. Most people assume startups fail because they run out of money, but exhausted energy and time have also claimed their fair share of new ventures. MET is the lifeblood of your company and success comes down to investing it wisely.
2) Don’t invest more MET than you can afford to lose.
When starting your own company, there’s a temptation to go all in. There are moments when you’d trade anything to bring your idea to life.
