Startup Confidential: Surviving The Valley of Death
by Winslow Swart
Courage and Vision
I saw a great post quoting Admiral Nimitz’ observations as he toured the destruction of Pearl Harbor. During this initial tour, he was greeted by a corps of dejected, morally defeated men and women who behaved as though the Japanese had already won the war. He said the Japanese had made three critical mistakes in their attack. First, they attacked on a Sunday when 90% of naval personnel were on shore limiting casualties to 3,800 versus a potential 38,000. Second, they failed to strike the dry docks across the bay, allowing the fleet to undergo immediate repairs, and thirdly, they did not strike the on top of land fuel supplies which were stored only a few miles away.
Admiral Nimitz had the attitude required of any startup founder, committed to succeed in the face of adversity. Here in the West we talk about “leaning in.” In Israel, where failure is much less of an option, startup entrepreneurs “leap forward”.
You can easily look at a problem and say these are all the reasons why it won’t work, or you can look at the same challenges and say these are all the reasons why it will work. The first approach is good from a tactical standpoint, the second is an essential strategic outlook.
Another analogy, or experience I had recently was, while still under the pandemic, South Texas underwent an almost complete collapse of the power grid during February 2021’s “snowmaggedon” winter storm. We were without power for several days, so basic things like heat, internet, lights, Netflix, drivable roads, were not an option. Even firewood, food, and drinking water were in scarce supply.
For the first few days, I just grabbed my mountain bike, headed into the snowstorm and had some of the most amazing rides of my life. The next day, there was a TV news interview scheduled for my startup, so I plugged my phone into my car to get enough battery power, our local HEB Grocery store was open on backup generators, so I rolled down a few miles through the fresh powder to pirate their customer Wi-Fi and the interview went ahead as planned, albeit remotely. Most startup entrepreneurs will just shrug at this point in the story and say, “sounds pretty normal.”
The Valley of Death
Startups typically get a funding boost somewhere in the early stages, and then, long before going to market and generating revenue, find themselves in a trough, where funding can be scarce and the burn-rate is highest due to developer costs, etc. This phase, before the product is fully released and subsequent funding rounds, and or market traction are not yet reached, is known as the Valley of Death. It is where most startups fail, pivot, or try to get “aqui-hired” where some of the talent and possibly their IP is salvaged.
Surviving this requires Admiral Nimitz-like, or even, Israeli entrepreneurial mentality. Personal sacrifice, the ability to endure public humiliation, and an unwavering commitment to the noble cause that went from an idea, to getting initially funded, to a “minimally viable product”, and then to market is the war story that will not only be worth telling, but the payoff that makes it all worthwhile and which demands single-minded commitment to the ultimate goal.
Keeping the Dream Alive.
If I were to list all the personal costs and sacrifices made to bring One Million Dreams to market, it would scare the startup aspirations right out of you, and probably my former self’s as well. Fortunately, I run into people all the time who can’t wait to put our product in the hands of their employees or students, and since we are only a few tasks away from going live on both app stores, the excitement is beginning to eclipse the pain.
Values
Jon Stewart once said, “if you don’t stick to your values when they’re being tested, they’re not values, they’re hobbies.” As a startup founder, your values will be tested. One of the biggest challenges will be saying no to Angel investors that are not a good fit for your company. Even worse are the type of VC’s (venture capitalists) whom might better be described as vulture capitalists and are only interested in profit and do not share the vision and passion for the startup’s noble cause. Other challenges will include the need to put the team and product development before your own needs when it comes to uses of capital, which can be scarce at times. As General Arnold Schwarzkopf said, “leadership is a potent mix of strategy and character. If you must be without one, be without strategy.”
