I once read a seasoned entrepreneur explain that exiting a startup is like landing a fighter jet on an aircraft carrier in the middle of the night with rolling seas and barely any fuel in the tanks. In other words, it’s really, really, really hard. In fact, more than 90% of entrepreneurs will not make that landing, oftentimes never getting off the ground in the first place. And the ones that end up landing the plane? They will tell you that the path to success looks more like a foggy paperclip than a straight arrow.
So, why do so many startups fail?
They run out of fuel. But it’s not the lack of operating cash of the company that is often the death nail; it’s the personal finances of the founders. In an effort to keep the aviation theme going, making sure you are financially healthy as a founder is equivalent to putting on your own oxygen mask before helping others.
And while this may seem obvious, it’s often intrinsic for founders to treat their companies like they would their own children, prioritizing absolutely everything above themselves.
As the heart and soul of a company, the founder’s own personal ethics and philosophies play an integral role in the culture of a company, making losing sight of #1 a dangerous game. It’s a slippery slope that can creep up on you with a sinking feeling of despair; albeit financially, spiritually, or physically.
Worrying about the finances of a company is a herculean task. Adding your own personal finances to that can be emotionally crippling, scary, and can lead to a number of other physical and emotional issues. Having a strong personal financial foundation means freeing up headspace to focus, empower, and engage the people and things that really matter.
And for the sake of clarity, ensuring your personal financial security is by no means about becoming rich (I promise).
It's simply about maintaining your chances at success as an entrepreneur. It may seem counterintuitive to put yourself first but think about this for a second. As an operator of a company, personal failure guarantees business failure, but the failure of your business doesn’t have to mean the failure of your personal finances.
In fact, if you can personally weather the storm, a perceived failure can morph into a new opportunity. Sure, you may have to make some tough decisions along the way, but you are also presented with a second chance to try something bigger, better, and armed with an entirely new perspective.
No matter the size, industry, or stage of your business, the same philosophy applies. Here are a few examples of founders who nearly didn’t make it and some of their crafty solutions to staying alive.
Airbnb: Think outside the (cereal) box
Brian Chesky and his co-founder, Joe Gebbia, had a few air mattresses rented out on their newly built platform called Air Bed and Breakfast and were building the future of hospitality. So much so that they racked up $20,000 in credit card debt and filled up a binder with maxed out cards.
Never one to let credit card debt keep him from changing the world, Brian and his team capitalized on cheerios and the 2008 presidential election. He and his small team designed and sold limited-edition cereal boxes and called them Obama O’s and Captain McCain, which were sold for $40 apiece. This netted him and his team $30k to continue their mission.
Airbnb is now valued at $35B. That’s a lot of Obama O’s.
Spanx: Be lean and mean
Sarah Blakey had been selling fax machines door to for seven years when she came up with the idea for Spanx.
She continued her sales role for two years while she worked to get Spanx into stores and finally found success when Oprah gave her a nod in 2000. Sarah spent $5,000 of her own money and used the proceeds of early sales to slowly, and then quickly, build Spanx into a multi-billion dollar empire.
And because of her relentless determination and pursuit of her own vision, Sarah remains the sole owner of Spanx, controlling 100% of its shares, making her a billionaire.
Chanel: Keep an open mind
One way to think about success is to figure out the sum of the opportunities presented to you and how you choose to engage them - even when seemingly coming from nowhere.
There is almost no better example of this than the legendary Coco Chanel.
Gabrielle Bonheur "Coco" Chanel sold her clothes at her small boutique in Paris when her life changed virtually overnight. Born into an impoverished family, Coco took inspiration from her upbringing to bring an entirely new kind of fashion to the streets of Paris.
But it was a simple, jersey T-shirt that she designed and was wearing on a chilly day in Paris that launched her into the history books as one of the world's most recognized designers.
And while I have done a nice job of oversimplifying the success of Coco, Sarah, and Brian, but the lesson holds true. The common thread is their respective ability to do whatever it took to cross their respective finish line. Getting there meant ensuring they, themselves, were in a healthy and stable(ish) position financially.
Whether you are just getting started or looking to land your plane, taking care of yourself first will inevitably give you space and time you need to pursue even the most challenging of opportunities.
Jimmy Lyons is the CEO and co-founder of the technology company AdvisorConnect. Jimmy is a serial connector, avid wanderer, relationship guru and devout entrepreneur who is constantly looking for creative and disruptive solutions to complicated problems. He has been featured in Forrester Research, TechCrunch, InvestmentNews, VentureBeat, and AlleyWatch and has shared his experiences as an entrepreneur at Columbia University and his alma mater, the University of Wisconsin - Madison.