Ryan Rutan: Welcome back to the episode of the Startup Therapy podcast. This is Ryan Routan joined as always by my friend, the founder and CEO of Startups.com, Will Schroeder. Will, let's just say I bootstrapped this thing. I built it from the ground up. I don't have a co-founder. I never took on cash. I control 100% of this business and I will forever.
Wil Schroter: Right? I think not getting an investor, not giving up control is the easiest part of not giving up control. The hard part is maintaining it and actually running your company because the way you're gonna lose control of your company is actually operating your company. I think that's the part that most people don't get is that you lose control of your company by operating it, you lose. Controls the people that you work with day to day, and no one believes that. No one believes that. I was like, oh no, that doesn't actually happen. I, I control the cap table, so I actually run it. No, you don't. You're gonna lose control of this thing in so many ways you don't realize. And, and as this thing goes on, if you talk to founders who've been doing this long enough, you know, and we do all day long, and, and, and they're not. Their heads going, yup, you're gonna lose control of your customers, you're gonna lose control of your employees, your, your vice presidents, you're gonna lose control of your co-founders. You're gonna lose control in so many ways that you don't realize. And the whole time you're thinking, yeah, but I didn't give it to investors. Let me tell you, doesn't make a lick of difference. The things you should be concerned about, you're not even looking for. That's what we're gonna talk about today.
Ryan Rutan: Yeah, that's fair. No, and I think that is, it is funny because we, we talked to so many founders get so caught up in that, even to the point where they're like trying to decide whether that's why they should take on investment capital or not, and that's really, OK, it's part of the decision, but that's not the main consideration there, right? Like, does your business need it to move forward or not, and instead they're conflating that decision with giving up control and you and I are sitting nodding your heads going, yep, yep, but like this is already happening in the background. You've already started to lose control of your company and you don't know it yet. So it's it's all the secret ways that this happens that that are also. certainties, right? I think it's a certainty that happens. I think that's the, that's the part that's most, most alarming for me is that like they're they're not concerned about it at all. It's like, well, an investor might take control just because also, let's let's put that out there. Just because an investor does invest in your business, you give them equity doesn't mean that they take control. They generally don't want to, right? They want you to make money with their money, not them to have to take control of the company, but all these other ways, all these other kind of phantom secret ghosty ways that you're giving up control are happening and will, will happen, right? There's a certainty behind them.
Wil Schroter: Let's start with what control actually means, because I think people hear control and and and they they think of this like this amorphous thing that means I get to make decisions. And generally that that is what it means, but they won't really define what those decisions mean, or more specifically what are the key decisions, OK? So let's lay out a few of them. So as we're talking about what control means, we can really, really like hone in on what you've lost, OK? So here are the big ones, OK, we'll just lay them out. The big ones are, can I sell when I wanna sell, meaning when it comes time to sell the company, can I say yes? That's always the big one, OK? Because when we talk about investors, and we talk about them coming in and being able to control the company, the biggest one that always is the ultimate C block of all time is I want to sell the company and investors won't let me. Now, to be honest, that's kind of a high class problem that very few people ever actually
Ryan Rutan: have problem, yeah, yeah,
Wil Schroter: like it's like, I want to sell for billions and investors wouldn't let me. OK, dude, right. Sorry about your problem, right? Uh, happens never, OK? But, but it's, it's still kind of the hypothetical big one, right? The other ones though, while kind of minor, are what people actually deal with. A big one is, can I get fired, right? Can I get pushed out? That's a safety one, right? Huge, huge, kind of top of the list, right? Now, what people don't understand about that one is there's two levels to that. There's, can I get taken out of my company at all, ergo, do I have an ownership stake, and can I get fired? Guess what? You could have a 100% ownership of your company and get fired as an employee, right? I mean, that is possible, right? Like people can get fired, right? Um, the other side of it is your ability to be able to maintain control of decisions has a lot to do with what's in the operating agreement of the company. And for those that aren't super familiar with how these things work, and a lot of people aren't so they have to look at that operating agreement, the operating agreement states how the company will work. On all of the most important things. What has to happen if uh if the company is to sell? What has to happen if the company makes a key hire or fire, things like that. Yeah, all of these things spelled out ahead of time, and it's it's again, it's the operating agreement for how the company works. All of these key decisions are spelled out, and we're talking about losing control, we're talking about what's hard coded into that agreement. Our ability to exercise control is kind of what comes back to that agreement, right, when you think about the big things that people lose with control, what do you think about?
Ryan Rutan: Yeah, well, I think it's, it's the ability to, to either make decisions or to act on them, right? It's funny because like the thing that we always hear people come back to is like, I, you know, I, I'll never give up my control. I will never let anybody tell me what to do, right? That really happens, right? It's really somebody telling you what to do. It more often comes down to, I want to go do this, and then you're like, well, you can't right to your point. It's the, it's the moment in the in the boardroom with the with the investors where it's like, I wanna sell this thing. No, you can't do that, right? I want to bring on another, I want to bring on a co-founder and give up a chunk of equity. No, you can't do that, right? So it's it's when it's when you start to see your decisions become limited. Yep, but I think there's a lot of places that that starts to happen that are are very non-obvious. You've got a great story and I think we're gonna get to it a little bit later when we talk about one of the customers taking control, right? Or, or even our our staff taking control, right, right, but at some point where it's like, OK, I'm the founder, I decided we are going to be a sales led organization. And I go to our CEO and say, hey, we're gonna be a sales organization. He's like, no, we're not gonna do that. Like it doesn't fit within their right and all of a sudden like, and even if it isn't a hard stop, but all of a sudden there's a ton of resistance and you don't just have control over being able to make a decision and have something go into play, right, that's a loss of control, right? At at the moment where you no longer just have the ability to dictate and something happens, this is where we start to lose control.
Wil Schroter: When we think about those control mechanisms, I, I think the first thing we need to do when we go into any of this, is be very, very upfront with ourselves about what specifically we want to retain control of. Now, what's really hard about that, really hard, is if you haven't been doing this for a long time, it's hard to know what to defend if you've never had to defend this before. So you go into saying, well, I just know I want to control stuff, but I don't know what that stuff is cause I've never done this before. I've never lost anything, so I don't know what to defend. I know that's difficult. And you think about things like, well, I wanna be able to control the product, or I wanna be able to control our strategy, and again, those are broad morphous things. You don't know what you need to do to control that. But what we're gonna talk about is we're gonna talk about the types of things that start getting taken away from you, that lead to the loss of control. Yeah. So let's talk about the first thing that we jump over ourselves to add that destroys control, and we high five the hell out of ourselves in the process. In fact, it trumps what would otherwise be bringing on an investor as far as a loss of control, and that is a co-founder. We cannot wait to find a co-founder. The startup business celebrates the concept of a co-founder. Yeah. And when we bring on a co-founder, and we're not saying co-founders are bad, but when we talk about a division of control, there's no way to faster divide our ability to have singular control than handing it to a co-founder. I definition. Right?
Ryan Rutan: I get
Wil Schroter: it
Ryan Rutan: to your point. You want to talk about like why that's so much more magnified than investors? Think about the number of decisions that an investor might get involved in. They're few and far between. They're few and far between. Think about the number of decisions a co-founder might get all of them, literally everything from like, where are we gonna go to lunch today, right? Right, right, literally everything. And so at that point, I think that's part of what and then of course, like, oh no, you know, we've we've created our lanes and we've got that, yeah, and everybody always drives in their lane, right? Everybody always stays and only follows the operating procedures and the protocols, uh, because they're human and that's what humans do. So yeah, it's the co-founder is such a big one and it is so funny because People are so, so excited to take it on, and look, there are a lot of reasons to do it, and there, there and there are a lot of good can come out of it. But again, like you have to recognize the the the consequences of your decisions and then one of the consequences of this particular decision is that you absolutely do forego some control when you do that.
Wil Schroter: You're, you're talking about at so many different levels. You're you're saying I want control, well I'm gonna bring in a co-founder cause we're on the same side of the table. Until you're not, yeah, so you're not, right? Wait,
Ryan Rutan: so you mean it's easy to agree when you're agreeing? Uh-huh,
Wil Schroter: right. Isn't it the same way with an investor?
Ryan Rutan: Right. Exactly yeah.
Wil Schroter: Cool. I want, I want to give up control because I just wanna, I only wanna bring on people that agree with me. Cool, only bring on investors that agree with me, right? Like, and you're never giving up control cause you're only bringing on people that agree with you. It's never a control issue. How sweet is that, right? And but the reality is, when we, when we bring on anybody else, right, our best friends are, you know, our, our spouses, whoever we're gonna bring on that would otherwise, you know, be totally theoretically on our side. It changes the moment we're not in the same spot, and look, it's, it's no one's fault per se. Dude, life happens, life happens, right? I get in a situation where you got two co-founders that are that that are joined at the hip and all the decisions are the same, and then life happens. One co-founder has a kid and then has a totally different set of responsibilities, right? And then so there's an opportunity to sell the company and they're like, I need this liquidity, I've got a whole different set of responsibilities. I have to do this. And then you're like, no, I have no responsibilities like that. I want to push this thing as long as I can, right? All of a sudden,
Ryan Rutan: never, they never see it coming. They never see it coming and it comes down to something very simple for me, which is that they came together in a moment of parody. They came together and they agreed, they agreed, these are this is how we have put in balance and that's great. Yep, that balance existed for exactly 1 2nd, right, in that moment in time, and then your point, life happens and now all of a sudden. We're making decisions, we're doing things out of parity, right? The the balance will only exist on the day that you agree what the balance looks like and then everything gets out of kilter in different ways after that. There's some up for you, down for them, down for them, up for you, whatever. Over time it all changes and and you don't recognize that at the time, right? At the time, of course, it's all hunky dory, you know, like we said before, when you, when you're agreeing with someone. It's easy. The moment there's a disagreement, this is what we're talking about, right? That's where that lack of control shows itself. It happened the minute you signed the the equity agreements and brought that person on, but it starts to manifest itself when things aren't going perfect anymore, when things aren't in balance, and so you bet, again, just being prepared for it, understand that that's what you're signing up for is a good first step.
Wil Schroter: I see 10x more co-founder disagreements than investor disagreements, not because, not because co-founders are bad, just because there's way more co-founders, right? Just the number of instances is just way higher, right? Because almost everybody has a co-founder versus everybody having an investor. And the nature of it is there, there are often tend to be more co-founders. And the nature of it is, there's just so many touch points between the co-founders, and because of that, when we jump into these relationships, and again we're like, hey, I, I wanna maintain control, it's like then then why did you why did you add a co-founder of control was so important. Secondly, before you added a co-founder, did you stop and say, hey, What do I want to control and will this, you know, prevent me from from maintaining that control. Now, to be fair, for most of us, that ship is sail, right? So, who cares how I got there, but I got there. But I like opening with that one when we have this discussion about how we secretly lose control because for most folks the ship has sailed, and it makes them start to open their eyes that hmm. Wow, I really did give away control without realizing it. Part of this kind of catharsis is, if you will, in this journey, is starting to realize that control isn't something that you're able to hold on with this like iron grip and never let go of. It's something that is a natural thing that you do let go of over time, right? Whether you try to hold on to it or not, in fact, it is almost like a natural order of something that you naturally let go of over time. As much as you try to hold on to it, and, and part of it is just kind of the natural evolution of a business, but it happens in ways you kind of don't expect, which brings us to point number 2. Customers.
Ryan Rutan: Wait, Customs, those things that I've been pining for since the day I got my co-founder.
Wil Schroter: Yeah, so in the same way, investors exert control because they're connected to cash, which is our lifeblood, which is how we keep our lights on and keep ourselves fed. Customers are the same proxy, only investors are a temporary bridge to this money, and customers ideally are the permanent bridge to that money. And customers ultimately. Control the cash, and and and as the saying goes, the golden rule, she with the gold rules, and sometimes that's investors, sometimes that's customers. And I'll never forget how I learned this rule as it relates to customers. In the early early days of my first startup, uh running an agency, I had this one client, uh, tiny client, uh, in
Ryan Rutan: in by the way, will, I, I will say there is no better place to learn this particular lesson. Than in an agency, right? Because it's because of that direct relationship, because of the amount of power, because of the amount of collaboration it takes, and the amount of sharing control, right? Like it's what it comes amazing.
Wil Schroter: Also because your money is looking at you directly in the eye, right? Yep, your money, your money is talking to you, the scowl on their face, their, their dissatisfaction with you. Everything is so emotionally communicated to you, right?
Ryan Rutan: We see the same scene. It's from planes, trains and automobiles. And it's where it's where Steve Martin is trying to to leave on time to make like to get his taxi to get to his train to get to his his airplane or whatever, and you've got that the somebody's reviewing the creative up behind that big desk and he just keeps looking down, he looks up and he starts to open his mouth. And then he doesn't say he looks back on the crib, like I've lived through that so many times and it's just like it's just, it's so painful, but to your point of like seeing those emotions, just literally seeing your money staring you in the face, it is painful. You
Wil Schroter: know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you. Which means the answer already exists, you may just not know it, but that's OK. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups.startups.com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it. So I, I, I had two clients and two ends of the spectrum in And for anybody that's listening that's in the client business, you, you will appreciate this at so many levels. The first client early on in in my career was my first like big client, big to me, but I was, I was an agency of one at the time and whatever money they were paying me was literally the money I was gonna eat with that week. I mean, and I'm not exaggerating. I, I mean it was, I was gonna take that money. I was gonna go to the grocery store, buy food and eat that money. Right, it was that specific.
Ryan Rutan: Well, you and I also both have a story where, where we independently of each other at the time worked for food.
Wil Schroter: I, I, I also built websites, websites for food, with food. Yes, and it was so excited about it.
Ryan Rutan: Oh man, it was great, honestly, it was it that that cash went further than most of the cash I got right because there was only one place to spend it, and it was very necessary. It was
Wil Schroter: higher margin business it
Ryan Rutan: was.
Wil Schroter: I was happy about it. And so, um, uh, but like that level of control that a client exerted that was like, hey, if the work isn't done, you are not going to eat. I don't, I, I don't know what gets more, right, like dominant than that level of control, right? That that project, right? Yes, exactly right, literally my my existence, right? And, and I remember thinking like how beholden I was to this client and how much. Their whim controlled my company, my destiny, etc. I'm not overstating this either. I mean, it really was that specific, OK? And immediately someone's gonna say, yeah, that's because you're small and you know that your climb. OK, now, fast forward, OK. Not that long, 3 years later, OK? Things have changed a bit, OK? We've had some, you know, some significant wins. We now have a different client. They're now paying us $10 million a month. Yeah, I can eat a lot more ramen now. Things have changed a bit, right? And now I have 100s and 100s and hundreds of people on staff, right? Client calls, different client, right? Client calls has an issue. If I don't do whatever that client says, hundreds of people won't eat, their kids won't go to college, mortgages won't get paid, right?
Ryan Rutan: I am
Wil Schroter: royally screwed. I like, I don't have a rich uncle that I can call and say, hey, can't make payroll this month. Can you wire me 10 mil? Right? Like, I have no way out of this, right? I am screwed like it's nobody's business. Lots more zeros behind that problem, same goddamn problem, right? Client owns me. In both cases, The customers control the cash, the customers control me. In both cases, I put myself in that situation. I, I put myself in the situation in the first instance because I created a business model where I didn't make enough cash that that I had any leverage over any one client. Yeah. In the second case, I, you know, was part of a situation where I signed a client that was so big that they owned us, you know, they owned us. Uh, they were paying us a $250 billion a year, and that was it.
Ryan Rutan: That's the paycheck, that's where where the money comes from. That's that's right, yeah, you bow to that to some degree.
Wil Schroter: And so my, my, my point is, in both cases, you give up control in this mechanism. You don't see coming, you know, in the, in the co-founder case, you're high fiving everybody that you landed this co-founder, you, you, you know, you're, you're going out for drinks, celebrating the fact that that you've, you've done something together, and you don't realize you just gave up more control than you've ever given up in your life. Same thing as the customer, you have this huge customer win and you don't realize that you just created this level of indentured servitude that you've never had before.
Ryan Rutan: Yeah, right, and the costs don't just end there like with with customers, let's talk about a couple others. So there's there's two others that I have seen play out multiple times, and it, it's painful. One is things like we start taking customer feedback and we start building and we start, we start essentially answering to the customers. Sometimes this is great, sometimes this leads to things like scope creep, we start building every single feature we believe. That because the customer brings that cash, and so it all does map back to cash, but because of that, we start to allow them to influence us, control our product direction, control the type of team that we build, which brings me to the other one, and, and this one is, I think one of the most painful, and I'm I'm sure you've suffered through this as well, well, where a client will start to change company culture for the worst, right? You get, you get a. Bad client and or or a challenging client, all of a sudden this starts to create dissension amongst the ranks and and you know, this can happen, big company, small company. I'd say in a small company, it tends to be more cataclysmic, more obvious, like you feel the pain, you see it, but in a big company it be even more dangerous because it just starts to erode things and you start to get, you know, kind of uh rot if you will, from within. And and the organization can start to fall apart as a result of that, and that can be driven by, you know, the clients, particular types of client work, or even just a single singular client can do that. It was again, it's just all these really crazy little hidden costs where where we're giving up control of something we otherwise would have done very differently. Now by virtue of the client, it's happening the way they're dictating or the way we're allowing them to dictate.
Wil Schroter: Yeah, it it it it starts to take us in other directions as well. In some cases, we hate the work, but we have to do the work. That's control. That's control, right? And at some point, like, like uh as our agency grew, this was, you know, we're an interactive agency, but we also did um uh traditional work as well. we call it traditional work now or then, but like that's like um I think like billboards, journal ads, stuff like that. I hated that work. Like I was all about building websites and interactive stuff, right? I hated doing that work but it paid so much money, right? But that's my point, right? Like it we we're doing stuff I hated doing, but You kind of needed the money, right? And so we need the money, right?
Ryan Rutan: But it's also how you win the other business that you do like, right? In that case, it's like sometimes you're taking on essentially a portfolio of work, you're you're you're you're you're eating from the buffet, um, but you have to eat it all, right? You don't get to say like, well, we'll just do this for you, and they go, no, we'll get another vendor that does all of it.
Wil Schroter: But take that a step further cause now you look at a lot of companies that have these products, right, where they get paid. To do this legacy stuff. Think like the equivalent of back in the day, CompuServe, Blockbuster, all these companies, AOL, that rode to the bottom of the ocean on customers that they couldn't unpack from, that just sat and watched their competition run circles around them, right? It's essentially what's happening at Google right now with AI. Right? They're well aware, right, that AI is eating their lunch and what is gonna become the next version of Search, and they're trying to dig out of it. They're trying to, you know, build their own version, right? They're trying to do what OpenAI or Chat GBT is doing right as a product, right? And they can't, right? They're watching it happen because they can't kill the search business, right? Exactly. But that's my point. Like their product, their customer, their ad words business, right? is that level of control. It is controlling their ability to be able to go do something else and and that's what I'm talking about. It's like the secret control that prevents us. From doing the things we wanna do, it's real, and even at that level, for a company that innovative, that smart, that goddamn rich.
Ryan Rutan: Yeah, that's it too, right? Like you talked about like with all those resources, this can still happen to them. Right, so when we, when we boil this back down to to the vast majority of folks who are listening to this particular podcast at it typically a significantly earlier stage of of of their their their startup, imagine what that looks like there, right? Imagine how, how heavy that burden is and and and when you don't have those resources. If you have those resources like you just said, you still can't escape it, right? So it's a massive issue. It really does. It comes down to all of a sudden, whereas, you know, before you've given up any of this control at the very early stages, you know, when it's an idea still, imagine just take it all the way from the imagination state when it's an idea. You have all the control. You can literally imagine it to be whatever you want. The minute it starts to become real, all of a sudden now things like, I don't know, physics, right, our limitations right now it's like, well, well, yeah, I was gonna build the uh the the flying laptop, but it turns out, uh, you can't do that cause of physics. And so all of a sudden you start to have these constraints and and the further and further you go with that, what was a pure freeform thing. Gets put more and more on rails or or has constraints and lanes around it that have to be adhered to, right, and, and they come in so many damn forms.
Wil Schroter: OK, so here's where it gets interesting. Um, you know, we're talking about at which point we, we've got the kind of these legacy institutions where, where, you know, where we're kind of baked into things. Part of that is our own damn staff, right, which brings us to number 3, giving up control. To our own staff. Now, now let me explain what that looks like and and this is one of those things, once again, we're celebrating every time. I just hired the EVP, the C level, the whatever. OK. You just gave up some control? No, I didn't. I empowered, right? I, I just delegated to someone else. No, you didn't, you just gave up control,
Ryan Rutan: but it's the same, it's the same ironic logic that's applied at the at the co-founder level, which is like, look, I don't want to do all these things by myself. I don't want to be. Responsible for these decisions. I'll take on a co-founder. You're giving up control. Well, no, I'm not. Well, if you didn't give up any control, then you're still the one making the decisions. You're still the one who's beholden then what did you do? Same thing when we start to bring people on they're like, well, I want somebody else to manage this, you know, I, I don't want to have to handle the the day to day of that. So you're giving up the control of the day to day. Well, uh, it's not how I would put it, but, well, that's what it is, right? That is literally what you're doing. You are giving up
Wil Schroter: control. It's necessary, right? 100%. It, it's necessary, but it's also giving up control, so you can't have it both ways, right? And look,
Ryan Rutan: we're we're not saying don't do it. We're not saying don't do it, absolutely, and I haven't introduced into this conversation at all is why we feel the need to have control over everything, right? And, and what aspects of control are absolutely valuable to give up, at least partially, right, where maybe we still have some say in something, but like, again, we're not doing the day to day. So yes, it is, this is all positive stuff. Yeah, well, can be, uh, but let's be very careful about the recognition of the fact that there is control being ceded.
Wil Schroter: Right, and so, so let's back this up before we we get into the the the third leg of this. We're not saying don't have co-founders, customers or employees. That would be,
Ryan Rutan: yeah, right. Well, I can guarantee your outcome. What we're
Wil Schroter: saying is, at which point you're saying I don't want to give up control. You're literally saying I don't want co-founders, right? What we're saying is you're going to give up control. Here's where it's all gonna go. Right? And if you, if what we're saying is, yeah, but I technically control all of those things, no, no, no, you don't, right? And as much as you want to pretend you do, pretending you do is actually the big mistake. Recognizing and being highly cognizant of what those deliberate decisions are and saying, hey, I'm taking on co-founder. Black and white, here, here's what I'm giving up. I am very, very cogently. Giving up these control points, OK? And I'm deciding that I'm gonna give up these control points. It's kind of like when you get married, and you say, I am giving up 50% of my wealth, so to speak, right? You know, I'm giving up these decisions that were mine and now they are joint decisions. You can't say I'm getting married and I'm not giving up any of those things. That's literally not how it works. And then say that, you could say, yeah, yeah. Kind of not how it works, right? And so with that, with that, what we're saying is just the very nature of this process of building a startup, of going into business and and adding these components is a division of control, and that's fine. Well,
Ryan Rutan: it's, it's a division of well look let me, let me, let me put this in a really simple way. Like I, I see this in a very basic term, control is the currency that we spend for growth.
Wil Schroter: Yes, it's a great way
Ryan Rutan: to
Wil Schroter: put it. Well, right,
Ryan Rutan: that's, that is to me, that's that's the essence of this entire discussion, which is like if you want to grow necessitously, whether it's it's headcount growth, whether that's doubling the number of leadership with the co-founder, whether that's taking on an investor to have cash, you are spending control. Like I think a lot of times we equate equity as like this one of these currencies for growth and it is, but with Equity, it is sort of a proxy for control. It isn't necessarily, uh, control is control like you can have it with or without the equity. Uh, but to me, I think that's what it comes down to. What we're doing here is we're saying, I am willing, or I, I, whether I'm willing or not, I am doing this. I am going to spend some of my control in order to gain some growth.
Wil Schroter: You bet, you bet. And, and look, when we bring on staff. Right, at every level, you know, whether it's in the C-suite or whether it's on the front lines, right? We are ceding control of those day to day decisions to that person. And, and as we subdivide that control to more and more of those people, that becomes spread across all of those people where where it was just us. And everything from a frontline customer support decision to finance to everything was 100% in our domain. It was our decision, not filtered in any way by anyone. It's now essentially their decision that somehow gets overridden if it ever somehow gets back to us. In our fantasy looks like this. No, but it's really my decision, because it's gonna come back to me perfectly filtered in exactly real time, and I will be presented with the correct information so that I can make that decision. Bullshit. Yeah,
Ryan Rutan: exactly.
Wil Schroter: Try doing that at any level of scale, and look, never gonna happen.
Ryan Rutan: The responsibility does maybe end there and rest there, right? Like the buck. Stops here. Yes, but the buck that arrived before it stopped there was not necessarily of your doing, right? It's someone else's buck. You just have to catch it now, right?
Wil Schroter: Yeah, yeah, yeah. Earlier, Ryan, I told you the story of me sitting down with a guy named Brian Marcusson. Brian was the CEO of Bristol Myers Squibb pharmaceutical company in the 90s, and I remember sitting across from Brian. Uh, and I was pitching on the idea of having BMS do uh detail aids, which this is like in the 1990s, where the sales reps would go out and they would use a portable laptop, which is hilarious cause like a portable laptop, like a, uh, this is before tablets existed back then, I think on it. It's like it's like a backpack. Anyway, anyway, and, and he loved the idea, this is like the late 90s and
Ryan Rutan: he wanted to do as the alternative at that point, like it was a it was a flip chart, right? Like it was yeah
Wil Schroter: it was yeah yeah yeah and this this was way ahead of his time and um anyway, he loved the idea and I was like, let's do it. And he said, I, I can't, and I was like, what do you mean you're the CEO of the company. It was so funny. I remember like pushing back on him. And like who the fuck was I right? I was like I was like a 27 year old kid, right? Like, like, you know, in retrospect, I just didn't know any better like the audacity of what I was saying at the time and I look back now thinking like he should have just got up and smacked me if I'm being.
Ryan Rutan: You were still carrying your first driver's license at that point. That's how old you were.
Wil Schroter: I was still servicing pimples from high school. It's. And so anyway, but he was, I mean, he was fairly cool about it anyway, um, but here's what he said. I remember that I'll never forget this, he was like, I don't think you understand of an organization this size, how hard it is to get something done, and I didn't. I mean, I had no idea. Why, why would I? And in but essentially what he said was like, yes, I can say yes to this, but to all the people in the chain that would have to make this happen, you know, from, from IT to marketing to, you know, salesforce initiatives, etc. it would never happen. It would just it would never make it through all the political changes,
Ryan Rutan: the number of ways that that decision can die before it actually comes to fruition is insane in an organization that size.
Wil Schroter: The difference between strategy and implementation is massive, right? And then all and all the consultants in between, right? And I remember how dumbfounded I was. I just assumed that CEO says yes and it just magically happens.
Ryan Rutan: Yeah, and you know there there's so many ways that happens because I mean some of it is, some of it's like direct control, like some of it is like, I say yes, CEO says yes, and then it goes down the hill, and then at some point somebody says no for some reason, right? And sometimes that's where it breaks down. Sometimes it's just a matter of like capability or competency where like you said yes, and then it gets pushed down and deployed and deployed and deployed, and then then we're working to get it out in the market or whatever whatever is gonna happen. And they just don't do it right. That is also a loss of control, like the, the, the difference between, I think it's so hard for founders because at the early stages of like, I'm, I'm gonna, I, I decided I'm gonna change the problem statement on the pitch deck, so I, I changed the problem statement on the pitch deck. The the the the gap in the delta between deciding to do something and it happening is often so short that like it's inconceivable to us that and and even as it slowly creeps to the point where it's like, I am gonna change the problem statement on our pitch stack. Right, which then goes over to the copywriter, which then goes over to uh the the compliance team, which then goes to design, which then gets shipped to the junior designer, which then gets, right, and then all of a sudden like just lost in translation, lost in compensy, whatever. That's a loss of control as well, because at the minute where like maybe it's not as much of a loss of control in that case is a loss of fidelity, but at the end of the day, the outcome is exactly the same where you didn't have the control of being able to say I want this to change, and then it just does.
Wil Schroter: And and I I think collectively every bit of, of, of how that control starts to go away, you look at founders that once used to have full command of their company when it was small, and, and as they get removed, right, even as Steve Jobs over time in, in early Apple as he kind of got pushed out, learned that lesson the first time, didn't make that mistake the second time when he came back, right? Started to understand that you can't make that mistake of division, that every time you hire somebody else like a Scully, right, like all of a sudden those people start to divide you out. You lose that control. Those hires aren't incidental and people that have been around long enough start to understand that. Folks that are listening right now, some of them have that issue right now. They're like, I, I didn't get it. But I got a couple of people in the organization I hired that you kind of aren't friendly, so to speak, right, that have actually created a division for me. They didn't add to my my power base, so to speak. They actually divided my power base.
Ryan Rutan: So it's interesting cause you just, you said something that that brought in entirely new dynamic into this for me, which is that in the beginning with the startup, control is almost a burden, right? It, it's like control just means you have to do everything, you have to decide everything, you have to think everything, you have to be everything. Yeah, at some point. Control becomes a different kind of currency where there there are different incentives where all of a sudden like you end up with people, the big you want it, you're there's power grabbing, right? We see it with things like equity, right? That that's an easy one, like, oh my co-founder wants an extra 10%, uh, the investor wants a, you know, a a a different preference, whatever, but there's a lot of that like just even in the internal politicking where all of a sudden it's, it's not even just about the amount of control that we give up, it's all of a sudden there are people willfully trying to take it away. Yeah, and that's, that's an entirely different, uh, kind of vector in the dynamic that I hadn't even been thinking about up until now.
Wil Schroter: And it becomes exponential, it
Ryan Rutan: sure
Wil Schroter: does. Yeah, a lot more people firing at you. So, here's what I would say, if you're thinking about what it's going to mean to give up control, the first thing you have to think about is what do you care about? Think about yourself, what am I not to give up control over, right? Like, what are the the things that I will not under any circumstance give up?
Ryan Rutan: When you're in a position where you start to think about the types of control that you are willing to give up or you're not willing to give up, this becomes an important piece of the calculus. This, this is the the very genesis point where we begin to say, here are some things that for me, control of this type is non-negotiable. Here are some places. Where I am willing to give up control, that becomes a very easy bifurcation of like the the the easy yeses, the easy nos. Well, maybe they're not easy, nothing easy can start a plan, but we have some rubric, some control over where we're going to give up control. The second one that I would say, and and this one to me is probably just as important, is go back to what I said before about thinking this is a bit of a transaction, as a cost for growth. And just ask yourself, am I willing to pay the price of the control that I will give up for what I will get back in return in terms of growth? Overthinking your startup because you're going it alone, you don't have to, and honestly, you shouldn't because instead, you can learn directly from peers who've been in your shoes. Connect with bootstrapped founders and the advisors helping them win in the Startups.com community. Check out the Startups.com community at www.startups.com to see if it's for you. Could be just the thing you need. I hope to see you inside.