I got an e-mail the other day from a friend explaining that he was shutting his start-up down and would be joining a big company as some kind of VP of something. The role he is taking sounds very close to the job he left in the spring of 2010 to #beafounder. I tried to talk him out of it, but it was too late.
Having to give up on your company sucks for a month or two and it hurts forever, but it is not failure – if these teams are absorbed back into the world of cubicles and are allowed to return to the jobs they walked away from in the first place, that will be failure, and failure at the community level. When you meet the founder of a failed business, reach out your hand, pick them up and do everything you can to keep them involved in our community…because our community depends on it.
My friend’s story is not unique. He had an idea, raised 12 months of runway from angels in the middle of 2010 and was unable to get significant traction or raise more capital. I am sure most of you know a few people who are facing something similar right now. I have been there, it is the worst. But how the community values the experience of a shut-down and the doors that it opens or closes for the founders is what really matters.
I think we will hear a lot more of these stories in the coming months and my prayer for NYC is that we all remember that the business may be a failure but the entrepreneur is not. Don’t forget, founders of failed companies had an idea and they pursued it. They quit their jobs (at big companies), convinced investors to provide the required capital and persuaded talented team to embrace their vision. The teams shipped product and learned from customers. They iterated on market feedback, they tested methods of customer acquisition and everyone that worked on the business learned more from their mistakes in the last 15 months than they could have from success in their 9-5 job.
The success of an emerging start-up scene depends on keeping homegrown talent in the game. We should treat the experience of a blow-up as a badge of honor. The scars of a failed company deserve deep respect and affirmative action from investors and start-ups starved for talent.
If you are one of the lucky founders who has hit escape velocity and can’t hire fast enough, make it a point to seek these people out. If they don’t want to join you, do your best to help them try again. It will come back to you in a stronger, deeper community supporting your efforts.