Fear is the Mind Killer of the Silicon Valley Entrepreneur (we must be Muad'Dib, not Clark Kent)

Okay folks... i am getting really fucking tired of all your

negative shit. 

yeah, i know it's gonna be tough.  and the credit crunch / downturn / whatchamacallit has already changed the balance of power from entrepreneur to investor in less than a month.  if you are lucky enough to *GET* financing, your term sheets are gonna suck ass (learn about liquidation preferences & protective provisions). if you are running an existing startup, you are probably going to have to cut spending, cut hiring, and you may even end up firing people / doing layoffs.  and then you pay taxes and then you die. 

sorry, life's a bitch.

but listen up:

• Silicon Valley isn't Wall Street.
• Internet Startups are not mortgage finance companies.
• and... Entrepreneurs are not supposed to be Clark Kent.

in other words... WAKE. the FUCK. UP.

if you came to Silicon Valley to do a startup (or to join one), it ain't always fun & games.  this isn't Disneyland, or a Harlequin romance novel (unless of course you're Tom Perkins).  you don't always win every hand of poker, you don't always get a free lunch, an Aeron chair, or free child care. 

the popular [mis]conception of startups being free rides to a pile of cash and/or stock options is just so much horse shit.

twenty years ago, i moved out to Silicon Valley after graduating from college.  i did not do so with the intent to get rich quick, but neither to live among sheep.  i came here for geeks & technology, ultimate frisbee, and a free-wheeling, entrepreneurial spirit that has electrified the valley since The Traitorous Eight walked out of Shockley Semiconductor over 50 years ago and started a Revolution.

while i don't profess to understand credit or capital markets, i do know that internet startups cost less money than ever to get started. and unless i missed something, there are more people online now than ever, spending more money online than ever.  and i doubt any of these trends will likely reverse in the long-term -- lower costs, more people online, more e-commerce.  doesn't that seem like a pretty good environment for building new online businesses?  if not, then what the fuck are you doing here?  go back home & get a safe job in insurance or mortgage appraisals (oh, wait a sec...)

the long-term macro trend of growing global internet e-commerce has been the foundation of my own personal startup bets, and why i plan to continue to invest going forward.  the companies and people i bet on HAVE to be both optimistic & opportunistic, if only because THE ODDS AGAINST STARTUPS SUCK ***ALL*** THE TIME, not just in downturns.  you damn well *better* have a positive attitude, or you're just never going to get out of bed in the morning.

you mean the current market environment scares you?

try making payroll on credit card advances when you're carrying over $100K in personal debt (been there).  try dealing with your servers being stolen on new year's day while you're in the middle of trying to close an acquisition (yeah, that sucked too). try looking yourself in the face every morning, knowing 10-20 people depend on you for their jobs & families & kids, and feeling like you're completely inadequate to the task and can't hide it (every day for 3 years).

being an entrepreneur is a friggin' FEAR FACTORY, and a living nightmare every day of the week. this is nothing new.  4 out of 5 small businesses fail within the first few years, and the odds aren't that much different for startups.  you are going to be embarrassed, ashamed, labeled as an idiot, shunned, ridiculed, and occasionally driven from the village with pitchforks.  on average, YOU ARE GOING TO FAIL. MULTIPLE TIMES, in NEW & INTERESTING ways.

GET USED TO IT.

in fact, the more you are used to failing -- and failing fast, with data on how you fail -- the better off you will be.  for a great presentation on how to use speed & fast failure as the ultimate startup weapon, check out mike cassidy's presentation on SPEED: The Ultimate Startup Weapon.

Best Strategy Is Speed (Startup2Startup May 2008)

View SlideShare presentation or Upload your own. (tags: stylus.innovation xfire)

and while we're at it, let me take on this issue of "conserving cash".  personally, i think it's the wrong message.  the point is not to spend less cash.  the point is to FIND YOUR FRIGGIN' BUSINESS MODEL.  if you know which direction you're going, it's ok to RUN... on the other hand, if you have no friggin clue where you going, it doesn't matter how slow you crawl you ain't gonna get there. you can slow down your spend until you figure out your business, but once you DO understand it, then by all means STEP ON THE GAS!  use your cash effectively to build product features, expand marketing, and hopefully use cash-flow positive arbitrage to MAKE MONEY.

to put it more succinctly: in a down market, it's even more important for you to understand the fundamental metrics of your startup, how activation & retention work, how customer acquisition & referral work, and how to make money.  these were always important, just more so now when people are looking harder at #'s.

*PLUG*: for more about how to learn more about Startup Metrics, see our recently completed STARTonomics conference. 

Silicon Valley has never been without risk or fear.  in fact, quite the opposite -- Silicon Valley is rife with fear & paranoia.  and yet GOOD entrepreneurs somehow manage to overcome their fear, somehow make their hopes & dreams bigger than their fear, somehow manage to find imaginative solutions to problems whilst being backed into a corner by a guy with a .44 Magnum who outweighs you by 75 lbs, and nothing in your pockets but a butter knife and a paper clip.  it doesn't matter.

and so i leave you with this:

the true Silicon Valley entrepreneur will find a way around these obstacles.  the true Silicon Valley entrepreneur is not frightened by a "down market".  they are not daunted by VCs who now have massive leverage.  and they are not going to back down.  the true Silicon Valley entrepreneur is full of optimism,  and sees the world as his or her oyster.

you are MacGyver. 

you are Jeanne d'Arc.

you are Luke Skywalker. 

you are Paul FUCKING Atreides, and the SPICE must FLOW, motherfucker.

I must not fear.

Fear is the mind-killer.

Fear is the little-death that brings total obliteration.

I will face my fear.

I will permit it to pass over me and through me.

And when it has gone past I will turn the inner eye to see its path.

Where the fear has gone there will be nothing.

Only I will remain.

Comments

[Successful Entrepreneur]

Well said. I can certainly see why you're riled up about the whole thing... it seems that, no matter how much evidence there is to the contrary, there are still loads of folks who think that entrepreneurship is the fast track to an easy life. As you've stated (and I've found out myself), nothing could be farther from the truth.

Having left the corporate world to run my own show, I'm convinced some days that entrepreneurship requires at least a moderate mental imbalance. But that's our lot in life... so be it.

[wissam]

thanks,this is just what I needed to read this morning, you are spot on.

[social application development]

Very nice post... kudos to you....

[doug]

fear is a powerful emotion, and reveals the will of men at their weakest moments. it is this smell which excites the aggressive, and then the vultures and other carrion crows. resolve in the face of fear - that's what it takes.

[purchlive]

Fuckin' right on.......

[David Cain]

"Risk is our business!" Captain James T. Kirk, USS Enterprise

[Glenn Kelman]

I am the last to see this but my God this is good: heart-felt without being schlocky, idiosyncratic and totally real.

The writing style alone has had a seismic effect on me & Redfin's now effete-seeming blog. Have you ever read Junot Diaz? You both combine profanity, profundity and science-fiction in a way that grabs me by the adolescent gonads.

So, you now have a new subscriber... and you should check out Junot Diaz. Thanks! Glenn at Redfin.

[Edward Daciuk]

Great post. Very motivating. It's really helpful to hammer home the right reasons to be in a startup and erase misconceptions of what it takes to win. No such thing as problems, just things to do.

[MG Howard]

Dave,

Loved your Muad'Dib reference as Dune is one of those films like Blazing Saddles where the dialog is known verbatim.

I recall a seminar by Ram Dass that said the pendulum needs to complete swinging in one direction before it can swing back in the other.

Here's hoping we are at that point where momentum changes course.

Best to you,
MG Howard

Lightglove, CEO

[Song Huang]

As a founder of a start up the mist of all this FUD, I want offer this observation. When you are out pitching your deal, the investors always ask you, "Who is the competition?". If there are none, then maybe there's not a market. If there are too many, they freak out thinking they are late to the game.

Here's where the crap economic climate comes in. Several months from now, most of the competition in your market will fade into noise. This is survival of the fittest. If you have a business model and you are gaining traction in this climate, investors will fund you or your revenues will fund you. All those companies on "low burn" will be left behind as you strengthen your position.

The ripe marketplace with too many competitors will still be there, but the number of competitors will be greatly reduced. Not spending time addressing all the other people who say they are doing what you are doing is a cost savings. Somewhere in the overall scheme of things, you just got more money to build your business because of this phenomenon.

[Ralf Lippold]

Hi Dave,

Great post - even though a bit disturbing in the beginning (What the s... should the cursing mean?).

Entrepreneurs are not the safety-like people who like it warm and cozy. If they stumble and fall they always stand up again (like everybody of us did as a child - or did you ever stay on the bottom after you had fallen on it?).

Looking forward to team entrepreneurship as the second step to entrepreneurship;-)

Best regards from Leipzig (being redirected to the post via a good friend of mine from Australia, Marigo:-))

Ralf

[Tim Ferriss]

Dave,

You are the f*ing man. I love the Dune reference, not to mention the uncommon common sense that people seem to lose while running around like Chicken Little.

Rock on,

Tim F.

[Ted Murphy]

Those guys up top (http://www.slideshare.net/eldon/sequoia-capital-on-startups-and-the-economic-downturn-presentation?type=powerpoint) are encountering a kind of perfect storm. But its calm and still down here under the waves. Glug.

Seriously, I think this market malfunction will hurt the VC types a lot more than practitioners in online social media.

[Thomas]

Phenom post. Sequoia pursuing FAIL strategy. Change = opportunity. BIG Change = BIG Opportunity.

[Kevin Dwinnell]

My solution for getting up in the morning - I care for my daughter in the mornings. The start up work begins at 1PM and then goes until I sleep. The reason I get up is clear.

[Murphy]

Frankly, I'm starting a web app. I thought it would be easy (I'm determined, intelligent, and have a business model that follows my passions). Knowing that it's actually a bit of a challenge kicks my ass in gear harder. Thanks. I need an enemy.

[Lisa]

Beautiful post.

(I too could have done without the swearing but even with the vulgar words, it is a beautiful post)

[Tom]

I see the truth of it... great blog, I just found it and I think I'll keep reading

[Marc Barros]

one of the best posts i've ever read!

[some nigga]

Holy fuck shit. Right on, you fucking cocksucker. What an inspirational fucking rant. I'm abso-fucking-lutely certain that those fearful pieces of fucking shit tightened their fucking belts after reading this fucking masterpiece, motherfucker. Fucking A. And you can bet your sweet ass that the hardcore, badass optimists such as myself, who were already manning up and getting their fucking heads out of your mom's ass, appreciate your too-cool-for-school brutally honest fucking commentary.

Fucksicles.

Cliff notes: I agree wholeheartedly with your message, but is the delivery compensating for something? ;)

[Patrick]

Great post Dave,
Even the NY Times is telling people to just cill out. The following is an interesting read about the real scope of the financial "crisis".
http://www.nytimes.com/2008/10/10/opinion/10mulligan.html?_r=2&ref=opinion&oref=slogin&oref=slogin

Cheers

[onetake]

Bi-la kaifa!

[Ali]

Well said! - Trade fear for courage, passion for profit, and forge ahead at full speed.

All the best,

Ali R. Rodriguez
Business Coach
www.VisionForSuccess.biz

[Patrick Hopf]

Living this now. Walked into a great start-up a couple of months back. A buddy is one of the founders, and I jumped at the shot of working with him and the rest of his team. Great people, great track records all.

Timing is everything: I hope I don't see the demise of what I think is a great product, and a great business model - and I would know the difference having been in the space since 1999.

[Josiah]

Amen, brother - reading this was a great way to start off a new week. Thanks for the perspective.

[Ron]

kick ass man
every word in stone
rock on

[rodel]

just the read food for thought i need.. keep it comm'n dave!..

[Paul OFlaherty]

Great post Dave. Glad I'm not in the valley at the moment although the herd mentality that is driving this is pretty much everywhere now.

[dominic]

Excellent,

"That which doesn't kill us makes us stronger"

[Art Reisman]

Dave,

If you doing the right thing and being honest with the people that work for you then fear should never occur.

You sound like a sheep. You don't need to take VC money if you have a good idea their should be plenty of market window to grow organic, but perhaps that does not get your adrenaline running I understand that. Here in Boulder the VC's ignore us or back stupid ideas looking for the next google behind every corner. Find something off the radar , the next thing that works is not where the sheep are.

[Jeff]

what you say is so true. sometimes, i just lay awake at night, not being able to fall asleep. fear is something every entrepreneur HAS TO learn how to deal with.

[becca]

I like you just for the fact that you referenced Dune. :D

[Jeff McNeill]

The Spice Must Flow, Motherfucker!

Thanks Dave :D

[Max]

Thanks. I needed that.

[Jeff Widman]

I love the extra work you put into your posts--rarely do I see text/links used so effectively!

[Scott]

err hear hear! :)

[Scott]

here here! doom and gloom is the exact wrong message. the time for worrying about that was 6 months ago. now is about opportunity!

[matt]

very well said! thanks for posting this piece.

[Josh]

Dave,

Couldn't agree more. The pansies that pack up and run away now shouldn't have been starting companies in the first place. Sure it's hard, but in a way, this is going to be easier to be an entrepreneur because you don't see everyone right and left getting money, competing for talent on truly crap ideas and I'll get rich of my simple Facebook app in 3 easy steps.

[Chris Yeh]

I've always been more of a Harkonnen man myself, at least when it comes to the Dune video game.

[Eric Nakagawa]

Hell yes... This is the kind of shit I like seeing.

Things will get tougher. What happens if/when people war it up in the streets... when shit stops being civil... where you gonna be? Cash flow positive? If not now, when? What's the hold up? Consumer's in a ditch. Innovate suckas!

Everyone GET YOUR SHIT SORTED!

Dave, always love the posts. It's as if you conjure them up using notepad and old school html codes. The style is unique and focused on the message.

[Eliezer Yudkowsky]

Be Yoda, not Luke Skywalker. Guy's a friggin' wimp.

[dick costolo]

ok, tell the truth, how long did it take you to put that Montage2 jpg together? Come on, be honest.

[Anon]

Dave what's with all the cussing? I prefer this place when it was family friendly...

What, reading the site aloud to the little tyke on your knee, are you? Scared to expose your little angel to the big bad world of adults?

Grow the fuck up, you little pussy.

[Sophia]

awesome posting. If it were easy, everyone would be an entrepreneur.

[David Sandusky]

this post must be geared to wannabes

[Michael Sitarzewski]

First time reading your blog... I've added it to my RSS feeds and will read from now on. Very inspiring and direct.

My two favorite comment quotes: "nothing is more powerful in killing the entrepreneurial spirit than constant bad news!" and "Time to suck it up and double-down, because there's work to be done..."

And this was awesome: "on average, YOU ARE GOING TO FAIL. MULTIPLE TIMES, in NEW & INTERESTING ways."

Thanks to Brad Feld for sending us over on Twitter: http://snurl.com/49acr

[Jeff Clavier]

Gloom, which gloom?

[Mike]

Request - can Eye of the Tiger please play in the background on this page? Thanks. And great post.

[Scott Schnaars]

Dave, one of your best posts ever. Awesome job! Deep breaths, keep your head, modify your plan, move on and kick ass.

[Dave Donohue]

Nothing like a few Dune references to totally turn my day around. Thanks, Dave!

[scott broomfield]

All of us should remember the scene in 'It's a Wonderful life' where Jimmy Stewart was explaining to everyone how the Baily Building and Loan worked and that Potter wasn't selling, Potter was buying.

Faith in each other. Don't let fear paralyze.

The doers, the innovators and the entrepreneur's will pull us out of this mess that the money changers got us into.

[Paulo Traça]

Dave,

I just have to say that this is a kickass post.You are spot on.
So many things resonated with me, I've been bootstrapping my startup for the last 2 years and feels great to know that there other people that think that, leaving a safe job, getting deep in personal debt and the pain and hardship that you go through when you're trying to build your dream isn't a fools quest. Some validation does wonders for the soul. You are my new hero. Adding your feed to my reader for sure.

Cheers

[George Lee]

Great post Dave, BUT negative points for using a picture from the new Dune series, not the David Lynch version.

BTW, I'm going to start lighting my hand on fire in pitch meetings. I just want to prove to people that I'm the kwisatz haderach...I mean, who wouldn't fund the kwisatz haderach???

[Jason Kemp]

Hi Dave,

Thanks for the passion and energy behind this post.

All markets are not the same- all businesses are not subject to the same linked risk.

Many of us face constant pressure on all fronts and the current crisis just needs to get in the queue.

particularly like your summary of the online market as positive and growing

>internet startups cost less lower costs, more people online, more e-commerce. >doesn’t that seem like a pretty good environment for building new online >businesses?”

Thanks again

[Sean Fahey]

LOVE IT! And if you need help staying positive pick up a book called Learned Optimism it has helped us get through some slumps in our start up!

[Dan Martell]

Awesome post! I'm glad someone finally spoke up ... I'm just really freakin' excited to know that during these times, is when the next Google will be born.

Everyone just needs to reflect on the good, and just push forward with more passion / intent then ever before!

[Josh Viney]

Hell yeah. Running a business is hard work, being responsible for your employees is hard work, and, interestingly enough, the best businesses actually try to make money.

This downturn could mean real opportunity for the right folks. I'm going down to Wall St. later to see if I can get some nice used office furniture for my team.

[Allan]

Bravo!

[michael]

Great post, lol, love the Dune ref's.

The last stanza is one of my favorites. I've used it when big things are straight in front of me.

mxt

THINK
think different
Think Open Source

[Vijay Goel, M.D.]

Amen on the sentiment.

But enough of the Silicon Valley elitist crap. People take risks all over the world. SV funding infrastructure has built an ecosystem resembling internal company politics over a meritocracy.

Focus on building real businesses with real revenues and you don't have to worry about survival if you don't get your D round. You need to spend time outside of the valley and see real customers with real problems in multiple situations to really understand this.

[John Roberts]

I haven't had someone cite The Litany Against Fear in a long time. Thank you... it was the core of my 8th grade graduation speech, which raised some eyebrows then. Fear IS the mind-killer.

[Ted Rheingold]

100% Agreed. We are not the VC's and their problems are not ours.

Now is literally the right time to make the next big thing

http://blog.dogster.com/2008/10/10/frozen-vcs-will-be-a-boon-for-internet-entrepeneurs/>I just wrote a blog post on why.

[Alex]

Yes.

I can't tell you how much I wanted somebody to come out and say this.

[Ryan Junee]

Nice one Dave! Way to rally the troops

[Gary Gil]

Dave, I wish you wouldn't hold back. Just tell us how you really feel ;)

[jyamasaki]

For me, in spite of the snide complaints from my colleagues, swearing is another form of showing your passion. It's clear, Dave, that passion (and sharing YOUR passion, as an example) is needed not only to survive, but to make it to the finish line. Thanks for opening up, and getting us to man up and walk the walk...

[jyamasaki]

For me, in spite of the snide complaints from my colleagues, swearing is another form of showing your passion. It's clear, Dave, that passion (and sharing YOUR passion, as an example) is needed not only to survive, but to make it to the finish line. Thanks for opening up, and getting us to man up and walk the walk...

[John Vars]

Love this post. Right on!

[Michael Wolff]

did you see this coming? do you know where it's going? do you know what the world will look like after the storm has passed? if you can't answer yes to all three questions, you might want to consider your options. if you want to see someone that predicted this back in 2002, see Prechter: Conquer the Crash http://is.gd/3QbK

[Dave Hodson]

Great post - I started my last company in 2002, against the advice of many. We were super cheap expense-wise (HQ = my house), stayed focused on the product and lived on crumbs until things turned around. Tough times can be a great time to find strong talent that wouldn't be available otherwise.

[Simon]

at least obvious benefits of awful times are great, inpired & hilarious blog posts ;)

[Rob]

Thank you Dave. This is getting ridiculous. One person (or fund) screams panic and everyone freaks out. Let's pull ourselves together and continue doing what we believe in. Let the panicky wimps get back scream themselves to irrelevance.

[robert]

Awesome post...

With a few tweaks it could be reposted and targeted at the VCs with their heads stuck in the sand.

[Boris M. Silver]

One of the benefits of not being in the Valley is that I don't get hit with this herd mentality when it creeps in both times of boom and bust.

One of the benefits of being a 20 year old CEO is I'm an eternal optimist.

One of the benefits of reading this blog is I get to read awesome posts full of passion and flare.

Awesome post Dave!

[rashmi]

Needed this after seeing the doom and gloom all around. You are right. being an entrepreneur is tough. Sometims its tougher. Suck up and deal with it.

[Faisal H]

...you had me at "Ultimate Frisbee"...

[Kingsley Joseph]

please keep the swearing, the Dune references and the crack color schemes coming.

[David Kendall]

> try dealing with your servers being stolen
> on new year's day while you're in the
> middle of trying to close an acquisition

The memories come flooding back.

The phone rang at - maybe - 7:30am on the holiday weekend. It was a cop calling saying that there had been a break-in. I was a little bleary-eyed having been out to - ahem - a "social engagement" the night before. Apparently the cop had found a phone list on your office wall, he started dialing numbers from the top of the list. I was the first person to answer the phone.

The thieves had been super efficient. The cables to the computers looked like they had been cut with heavy duty shears. I bet they had been in and out in minutes.

I think one machine had contained the source code repository and the other was the development server with the working code on it. All the code for the project written since the last backup had been lost. Lesson learned: frequent off-site backups are important.

The true lesson, though, was how fast we can recover from crisis. When I arrived at the office to find the cop and the pile of broken glass I had visions of canceled contacts, lawsuits, and the prime resume fodder project we had been working on all going down the tubes. The reality was that we were able to rewrite the lost code in a day or two. The hard part of coding is the figuring things out. Typing the code is the easy part. In the end the delays at the client end slipped the launch much much more than the couple of days that were hit by that theft.

Crises come and go. We muddle our way through the difficult times and surf the waves of the good times. In the long run the good luck and the bad luck cancel each other out and what we are left with is fruit of our labor.

Those were the days....

[bernard lunn]

Yeeha, great post Dave. Still think FB suck as a business :-)

[sprfrkr]

Someone get me a worm!

[daveschappell]

Amen, Mr. McClure -- I was just telling some folks last night that "at least other people are starting to feel the same pressure that I've been feeling for the last year!". Time to suck it up and double-down, because there's work to be done, and opportunities to be taken advantage of!

[antje wilsch]

LOVE this post, although hard to believe you still love FB so much :)

thanks for kicking some arse; I am tired of the moaning too, esp coming from certain investors

[Kris Colvin]

Love "the spice must flow, mofo!" Love this whole post. A newbie startup, I've left the safety of only working for others and am building products myself. Perfect "wake up" advice for people who might fret, and never START, in or out of the valley. Thanks for the awesomeness.

[Davide Di Cillo]

very true.
the positive aspect of online businesses is that they can profit anywhere in the world and when things go bad here there is always another market with a positive cash flow to target.

[Daniel James]

Thanks Dave, this is just what I needed to read this morning, you are spot on. Rock n roll, mates!

p.s. I don't mind the swearing, so much.

[Christine Lu]

this totally rocks. i think i'll skip my coffee this morning. i'm wired after this post. :D

[Ben Tremblay]

As one VC CEO pointed out: growth sectors always recover faster than other (more "mature"?) sectors.

[surya]

this is the greatest post you have ever written.

[Leila Boujnane]

Hell Yes! Thanks for your blog post. Awesome start to the day in this gloom and doom world. As you said: enough already! Back to work folks.

[Ryan Graves]

Gotta say Dave, I'm never bored reading your shit.

Love the positive but realistic message your preaching. One last point... Entrepreneurs are committing suicide if they are constantly reading the news...nothing is more powerful in killing the entrepreneurial spirit than constant bad news! Turn of CNN and focus on making that $krill!

[Wondering]

You are my hero....great words and great inspiration for those who want to do something and not just 'finance' something.

[WalKnDude]

Well, 'dave'I am coming to the valley, and this sheeple is looking for NASA BLOOD.
feel me PSYOP?

WalKnDude
*nofear*

[Pug Nagual]

Common man sees destruction. Exceptional man sees new opportunity.

[Mike Montano]

great post dave.

"with data on how you fail" << I really like this point. Most people leave that out when they talk about failing fast and failing often.

[Allen]

amen.

[maneck]

Dave what's with all the cussing? I prefer this place when it was family friendly...