STORIES FROM THE CRYPT: When does one shut a venture?

In these unprecedented times of (using the word unprecedented) uncertainty, many of us are contemplating taking the leap of faith and becoming a fulltime entrepreneur. The 100-plus EMiR sessions over the past few months have presented me with remarkable opportunities to view the repercussions of the pandemic through the eyes of a 21-year-old management graduate/alumnus AND through the eyes of a 50-year-old Sloan/EMBA graduate/alumnus. I have been asked questions about venture setup, transitioning, scale up and often about co-founders. It was only on one rare occasion that I was asked: “How do I know it’s time to shut down?”

I must admit that this question caught me by surprise and transported me back to the angst of every failure I endured and survived as an 24x founder; and brought back a cauldron of several emotions; primarily — of grief and gratitude.

  • The utter grief of losing years of blood, toil, tears and sweat in building ventures and ultimately burying  them in a crypt (and the ensuing grief caused to people in my inner circle). Pain is the greatest teacher and the real resumé in life is just a catalogue of all your suffering.
  • The gratitude for the mental resilience built, the lessons learnt, the war-scars developed, the new-found wisdom and more importantly, the improvement in the judgment and ability to spot risks and chances of failures from a distance. This allowed me to chance upon Stoicism and the concept of practising misfortune – “premeditatio malorum” to prepare for the worst-case scenarios without being pessimistic, irrational or cynical.

Entrepreneurship is a brutal marathon… of several marathons

Entrepreneurship, by design is meant to push the founders to the brink – mentally, physically, emotionally, financially and spiritually, over and over again; until you are battle-hardened and are able to take on uncertainty, chaos, volatility, ambiguity with confidence (regardless of the odds) — OR until you break (sometimes beyond repair).

Entrepreneurial fatigue is real.

In an instant of hearing the question, a number of thoughts raced through my thinking mind – “Why is this person looking to shut down? And, what did I learn from my experiences?”:

  • Sales isn’t good if the unit economics is bad
  • Traction isn’t profits
  • Scale isn’t guarantee of survival
  • Funding isn’t validation
  • Three co-founders doesn’t mean it’s a team
  • PR articles and being published in Forbes isn’t a signal that you have arrived
  • A zillion app downloads isn’t a zillion staying customers
  • Getting an angel investor isn’t divine intervention
  • Having a mentor doesn’t mean you’re getting good advice
  • You won’t know, until you actually do
  • Valuation isn’t actual wealth

But my observing mind tried to rein in my thinking mind in by quickly summarising:

  • Success isn’t an absolute
  • Failure isn’t permanent

My response to the question was: “You simply know… when you have run out of passion, resources and the will to fight; and you have made peace with the repercussions; until then, find the PMF.”

“The swear word?”

 “No! not the swear word”

“Pardon My French?”

“Product-Market-Fit – find the bloody Product-Market Fit”

It’s a different story that the person in question had the passion, the resources and the will; and eventually chose to continue with the venture by pivoting into an adjacent area which helped with creating a market for the product. And succeeded. (I’ll take up PMF in my next blog.)

The market is unforgiving, unemotional, unconcerned, unempathetic, and brutal.

  • When a great team meets a lousy market, the market wins
  • When a lousy team meets a great market, the market wins
  • When a lousy team meets a lousy market, the market wins
  • When a great team meets a great market, great things happen

Whose fault is it anyway? The lesson repeats till you learn.

Acceptance of failure goes a long way in making or breaking a startup. Success has many fathers, but failure is often an orphan. As a founder, it is also very easy to fall into the traps that people sort of establish in their own mind by giving themselves excuses or giving themselves insurmountable obstacles, and insurmountable paths.

Some founders never learn to accept their mistakes gracefully and learn from them. For them, it is always somebody else’s fault. It is the co-founder’s fault. It is the salesperson’s fault. It is the client’s fault. It is my skin-color’s fault. It is the system’s fault. It is the government’s fault. It is my family’s fault. It is the university’s fault (funnily enough, one of my classmates sued his university for not getting him good-enough grades and hence a job)

You have to alter the perspective.

Enter the Devil’s Advocate (No, not Charlotte Richards)

Many new ventures and acquisitions fail because they haven’t been properly stress-tested or validated for the product-market fit before being launched. It’s so much less expensive, less embarrassing and more successful to get our proposals and decisions thoroughly scrutinised at the start rather than trying to correct mistakes later.

Whether you are an investor deciding about whether to put your money into a particular business or a founder starting up or pitching for funds to launch your new venture, it’s in your interest to have a Devil’s Advocate by your side. The mediaeval church knew this. They realised that all sorts of people were being selected as Saints and then found themselves embarrassed after they had been canonised, realising they had not done their due diligence properly. Consequently, the Pope created the role of the Devil’s Advocate: someone to thoroughly test the assumptions, look for alternative explanations, independently and critically evaluate the reasoning, evidence and judgements so as to improve the quality of the decisions.

As a founder (or investor), it is good to have a Devil’s Advocate’s view of your situation before taking the decision of pulling the plug and entering the crypt.

Beware: The dark side of Entrepreneurship

Am stumped by how so many founders think that entrepreneurship is “Freedom”, but don’t realise:

  • All responsibilities are on you
  • It is working on your terms for long hours, 7 days a week, 12 months a year without a break
  • Mostly, for little or no salary or benefits
  • You can land a big deal, but live with chronic uncertainty to get the next one sealed
  • You can work from anywhere, but you work every minute
  • You can be profitable one day, but it takes time to lift off
  • You fail and grieve like the loss of a loved one

It’s all about how hard you can get hit and keep moving forward… to the next venture

A study by HBR on the relationship between entrepreneurship, burnout, and passion. Relying on any single facet of your life for the entirety of your personal fulfilment is unhealthy and unrealistic. Just remember that despite any stories from the crypt that you may face:

“Your venture is NOT the only thing YOU are”

You will obviously fail and grieve like the loss of a loved one

But remember that:

Your family still love you

Your friends still love you

Parting thoughts till the next blog:

“Startups are designed to fail, Entrepreneurs are not.

#TheZymurgistDiaries #GrowthMindset #Leadership #EntrepreneurialMindset #EntrepreneurialChallenges #covid19times

See more from this series here.


About the author: 24x Founder, 3x Success, 2x VCExit, 19x Failure, 100x Resilient, 14x Sectors, 6x Continents, $2+bn deals originated and advised.

Chennakeshav Adya (Keshav) is an eclectic value creator for mid-sized firms and PE/VC funds on Fund-raising, M&A, growth, corporate strategy and deal-making (currently, as co-founder of Adan Corporate). He is a resourceful entrepreneur with 20+ years of global experience in building businesses from a concept and growing global teams from 2 to 200+.

A deca-lingual, multi-talented zymurgist, Keshav is skilled at using the founder’s mentality and thrives in uncertainty and chaos, directing teams through the “Unknown” in the initial 1-2 years of setting up any type of new venture.

As an Entrepreneur Mentor in Residence (EMiR), Keshav is associated with London Business School’s experiential entrepreneurship activities supporting students and alumni who are interested in pursuing a career in entrepreneurship, whether launching or growing their own ventures.

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