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, Why is it that every time as a founder that we hit the startup lottery, that we think that it'll just happen again, right? This feels like a thing, but, but, but hang on, let me, let me set the stage here. Picture yourself in early 2021, I think, yeah, yep, so the world is slowly recovering from from a pandemic. Tech IPOs are everywhere and suddenly Peter Schulzeski, the co-founder of Wish, is a brand new billionaire. Company stock soars to memory serves like 31 bucks. He's now got a net worth in the billions, and so he naturally celebrates in a very billionaire way and buys a Bel-Air mansion, right? And it's only 15 million bucks, right, which when you're worth what, like $4 billion on paper, kind of doesn't matter, right? Like, who cares who's sweating 15 million. It's, it's literally a a an almost incalculable fraction. But then what happens,
Wil Schroter: Will? We all do the same thing. When times are good, when the riches are flowing, we assume they're gonna keep flowing. And what's different about this, not just wish, which I think is a fascinating story, but also just any kind of payout. Or big payday. It could be a good year, right? It could be a good quarter. It could be a good whatever. But when we get, when we receive a substantial payout, whenever that time might be, OK, now, Wish was a rocket, right? That thing like grew so fast. It was everywhere. It also worked particularly well during the pandemic because everyone was at home and they're on their mobile devices, which was serving up junk. Cheap, right? And they built this whole story behind it, like this, you know, bigger story for the, for the street, and they said, look, it's not just that we're selling cheap junk, it's that we're building this amazing like third party logistics infrastructure to be able to do that. That's gonna be worth more than Amazon and you know, you told the story. And so it goes out, has an amazing IPO to your point, you know, hit a market cap of 18 billion. Uh, Peter's worth, I think, 4 billion at the time. And I'm watching this whole thing and then I, I. And then I saw the headline, bought a mansion in Bel Air, and I'm like, oh, right, and, and look, I, I don't begrudge anybody for spending their money, right? Uh, the irony was I was thinking about it, right? Like, my wife and I were shopping for a house in Bel Air. It wasn't a mansion, it's just a house, but like we're shopping for a house in Bel Air, like a year before that, can't begrudge the guy, and I sure shit didn't have an $18 billion IPO. But my point is, all I could think to myself is this guy feels like he's worth $4 billion and numerically he is, he was, and 15 or $15 million I think it was the pricing $15 million is a rounding error.
Ryan Rutan: It is. It's literally it's a, it's a tiny incalculable fraction,
Wil Schroter: right? And if, if you went to even the most curmudgeon accountant and said, I want to make this purchase, that accountant would be hard pressed to say. That's ridiculous. OK. Again, this is the point though. This is, this is why we're gonna set up with Wish. Now, I'm intimately familiar with Wish because I made a wish too on Wish. I bought their stock. Uh, I don't remember exactly where I bought it, but I held it through the entire drop. Now it's bounced back a little bit since then, right? But when it peaked, OK, I do remember this, it peaked at $31 OK? So Ryan, if you're looking at your payouts, and this is what this is all about. If you're looking at your payouts and you're thinking, I'm at $31 worst, worst, worst case, we go to 1510 maybe 9 on the worst day we'd ever have. 24 months later, it's trading at 38 cents. 99%,
Ryan Rutan: 99% reduction. Ouch, right? For everybody to own the stock that was painful. For anybody who owns $4 billion. Worth of that stock. It was a lot more painful.
Wil Schroter: This is what we're teeing up with, right? At that point, when his stock kind of hits that milestone, he's down to somewhere around $38 million of value. Now, there's a whole bunch of caveats to that.
Ryan Rutan: I mean thank God he bought that house. That was a 50% hedge on his future net worth, right? Holy shit.
Wil Schroter: Yeah, yeah, and so, you know, uh, you could make the case. Well, 38 million is still a lot of money. It is. It's not that liquid. It theoretically sounds liquid, but you're the main principal in a, uh, in a public company. You can't just fire sale at all.
Ryan Rutan: You make it worse. So, yeah, especially at a time where it's gone from $31 to 38 cents, not a good look if you're like, I'm just gonna let go of what I got left here.
Wil Schroter: Yeah, and, and, and I'm not intimately familiar with, with anything Peter did with his money, so I, I, I don't want to pretend to be an expert. However, what I do know is that when you have that. of money in the market, you don't take it out. Uh, you don't take it out because you borrow against it. It's also a tax strategy, etc. For those that aren't familiar, the reason people get all pissed off at rich people for not paying taxes, truth be told, they pay tons of taxes. But what, what they, what they hear in the headlines are this guy Peter, his stock goes to $4 billion. He takes out a loan against $4 billion and that loan's not taxable. So he now gets cash in his bank account. He's got to pay it back, but He's got casher's bank account with no, uh, taxes. Oh, anyway, a long way to say, when times were good, Peter did what we all do. He says they'll continue to be good. This is just the beginning. Oh brother,
Ryan Rutan: we are master extrapolators of our best day ever, right? as startup founders really like best day ever. Probably gonna look like this for the rest of my life.
Wil Schroter: Like I said, the stock has bounced back a little bit, nowhere near where it was before, and that's fine. But that's not really the point. The point of the story isn't, isn't that it went up and went down, it's that when it was up. He spent and felt and thought like we all do. That's gonna continue to go up. And honestly, I, I've always felt, and I always tell founders when they have their moment, they've got like a cash out moment or a sale moment or whatever, tell the same thing every single time. Um, generally everybody ignores me, but that's OK. I say treat this payout, treat this distribution, treat this whatever you're about to get, as if it's the last payout you'll ever have because numerically, statistically statistically. It is. No one believes real, right? No one believes it, Ryan, because at the time someone's giving them a giant chunk of money. And they're like, well, if I can do it now, I can do it again. It's the guy who wins a ton of money at the blackjack table, right? And just has an amazing streak. Does he take 10% of it and keep gambling and put the other 90% away?
Ryan Rutan: Double down. Why would you at that point? Cause clearly it's replicable.
Wil Schroter: Clearly I'm winning, right? I mean, it's, it's, it's Vegas over and over. I told you this once before, so. When, when my wife and I go to play, um, blackjack at the casino, that's our game. We always do the same thing. We show up at the table, we put down a very relatively small amount of money. Uh, we, we both buy the equal amount of chips. Now, I don't know why, but she is really bad at gambling. Um, it's blackjack. There's not really a lot to be bad at, and this is why we play it. Anyway, so she tends to be pretty bad at it. And as the night continues, um, her money just like slowly dwindles, and I, I'll give her more chips and, you know, keep her going. Anyway, as my streak goes on, I tend to win. I have no idea why. But I, I tend to win it at the table, but what my wife does, as I'm getting more and more aggressive and excited and whatever about my winnings, my wife is siphoning my chips off the table and into her purse, OK? And so at some point in the night where it's like time to go, I'm like, man, you know, we didn't do very well. And of course she's like, we actually did really well. I just took all the chips off the table, right? And we actually have, we made a ton of money. I'm like, oh, well that's a nice, nice find. those taking the chips off the table when when you're up is exactly what we're talking about. And what I want to unpack is, you know, when we go through this today, I want to talk about why people don't do it.
Ryan Rutan: Because that's the important. I think everybody logically gets it when you say this now, everybody goes, yeah, OK, that makes sense. So as I start winning I should sock some away. Everybody understands that, and yet no one sees it as that moment where like, oh, these are the Winnings, this is the time to sock it away. And I think, look, you've said this before, but I'll say it again, man, it's good times make for bad decisions, really bad, really bad. Yeah, because you're everything's going well, right? We got a big payout and again, it could be quarterly windfall, could be a private sale, could be an IPO kind of doesn't matter, right? Whatever that is, it's easy to believe that it's, it's just the beginning. Right? It's a home run, but I'm gonna treat it like it's a base hit, like I can just continue to do that and bat more and more and more of those. And this is where it really starts to go wrong, but it's because we're on the high of that success, right?
Wil Schroter: Right, and it's funny, it's like, uh, professional athletes are so known for this, right? They, they get the signing bonus. They go into the NFL, the NBA, you know, wherever they go. They all have a money manager that more or less says the same thing to them, which is don't blow all this money on dumb stuff because you'll probably never get it again. And of course, most of them are like, are you kidding me? Right? If if it's a million,
Ryan Rutan: it's 10 hit my prime yet.
Wil Schroter: Exactly. He said as he got his last check. And it blows my mind because in that moment there are no signals to tell you stop because you're winning because you're winning, right? When I was running my first company and we started to make some serious money, I was like, well, companies just grow every year. That's just the way it goes. We do
Ryan Rutan: 20% year over year
Wil Schroter: forever. What could go wrong.com
Ryan Rutan: bust. Yeah, insert, insert pretty predictable cyclical economics and here
Wil Schroter: it's, I mean, I look at it now, like when something good happens to me, I instantly just wait for the other shoe to drop, right? wherever there's a windfall, I'm like, no, and, and my wife and always have have this joke, we say the money is spent, we just don't know where yet.
Ryan Rutan: Exactly. That's exactly it. I take it. It's already been claimed. They just haven't called us yet.
Wil Schroter: Exactly. And so I think, well actually, Ron, let me ask you this, when you think about founders that are like, you know, in that prime moment, they've got the glow, whatever, why do you think they're so prone to making bad decisions or like like what does that look like to you?
Ryan Rutan: I think it's, it goes back to this like projection of hope thing that we've lived on from the very beginning, right? We had to believe against all odds. That this dream that we had can actually become something, and we kept going against all the odds, right? While things weren't working, we weren't making payroll, we didn't have revenue, we lost the contract with the co-founder left with half the IP, whatever it is, right? Like there's all of every, every one of these success stories, there were a shit ton of challenges and hurdles that led up to that point. And because they were able to succeed despite all of that stuff, I feel like what happens is in that golden moment when all of a sudden the glow is upon us. Now it's like, OK, if I was able to do it when shit was completely sideways, of course it will just be easier from this point forward, not realizing that this isn't a change in the The tides, that this was a a payback for what had been put into that point, right? All the efforts that have been put in. This is that moment. This isn't just a change in the environment that now it will just always be like this. We get like, oh, this is our new normal, right? This is the new low water mark. We'll just always be here, it'll be great. I think that's what ends up happening. I think you, you, when we're in those moments and I've certainly had them myself, where it's like, I worked so hard through such tough circumstances. Now everything feels better, ergo, everything feels easier. So clearly, if I could do it then, with all the advantages I have now, it'll be that much easier to do it again and again and again. Right,
Wil Schroter: right, right,
Ryan Rutan: absolutely untrue, but it sure feels like that.
Wil Schroter: And, and it's easy to make that story, right? It's so easy to make that story at that time. I, I'll give you an interesting counter story that one of the few times I've seen someone go the opposite direction, OK? So this is late. 90s. This is at the, the, the formation of Priceline.com. Now, a lot of people don't really understand like Priceline like now because it's not the company it used to be. But when Priceline came out as an IPO in the late 90s, it was one of the greatest IPOs. It was a massive, massive success. Jay Walker, who's a fascinating individual who's the, um, the, the, the founder of Priceline, was on the cover of Forbes and, and they said he was like the next Edison. Like it was a big deal. Well, it just so happened that one of my closest friends from high school actually went to go work for him and the when they were figuring out what Priceline would become. OK, so he was there like one of the first like 15 employees, right? Like long before it became Priceline. He's there through the whole journey. He's the whole journey as this thing, you know, turning into what it was gonna come and like, like a $27 billion IPO, which is, it's a lot now. It was a hell of a lot back then. Oh my God, yeah right. Anyway, as as they're they're leading up to the IPO, they haven't gone IPO yet. He goes in, uh, and talks to Jay Walker who was like a mentor to him, right? And Jay loved him, and, uh, he said, hey Jay, I'm resigning. Jay's like, wait, what? Uh, he's like, are you kidding? Like, like, what are you talking about? He's like, yeah, I'm going home. Yeah, it's so he said he's like, I wanna exercise my options at like, you know, I I'm. Making these numbers up because I don't want to share his, his numbers, but like I'm exercising my options at $100,000 when if I saw it through the IPO in 6 to 12 months, um, you know, past lockup, it would be like $2 million right? So like a massive difference. And Jay's mind blown. He's like, what are you like, look around, man, look what's happening here, right? And so finally, finally. He breaks down and he's like, this is the dumbest thing I've ever heard in my life, OK? And, but, you know, begrudgingly writes him a check. It was more than 100, a lot more than $100,000 but, um, writes him a check, and my buddy takes it, he quits, he puts himself through law school. He buys a house with it. He buys his first house with his family, bought some cars, or whatever, like, uh, invested it in his future, right? Basically bought all the things that, you know, money, yeah, exactly. Massive IPO, uh, Priceline has a massive IPO and then basically right into the dot-com bust. All those options go underwater and nobody's options are worth a penny.
Ryan Rutan: Cause they were and they were still in lockdown, so like this is
Wil Schroter: they're all locked up.
Ryan Rutan: You cannot, you can't, right, so right after the IP you can't sell. So everybody watched their, their paper value go through the roof.
Wil Schroter: I mean, just popping bottles everywhere, right?
Ryan Rutan: Straight back down,
Wil Schroter: yep. You 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. We've got a great photo of me and a couple of my friends from Priceline and then a couple of other buddies at the same time, and, and we're all like 25, right? And we're all standing on a beach, right? And just like, like, just in this great pose, not like like anything crazy, just like just 5 or 6 dudes on a beach, you high school friends catching up, like blown away by our good fortune. And then when I look at that photo now, it's like that one bust, that one bust, that one. Yeah. I mean, like, the beach photo was great cause like again it was just 5 or 6 dudes standing on the beach. It wasn't like anything crazy, but I remember the sentiment, Ryan, at that time, where everyone was like, we're gonna make so much money, we don't even know what to do. We don't know
Ryan Rutan: what to do. We want to do it. Look at the grains of sand around here, each one of them is $1 and imagine they're all yours, right?
Wil Schroter: Dude, and, and, and again, this is, this is where I started to learn firsthand how quickly cause I didn't believe any of that could go away, right? I just, I was like, if if it's worth 10 now, it's worth 1000, and I, not because I was being so arrogant. I just didn't know any better.
Ryan Rutan: I don't know any better, and, and it just, it just feels like that, right? Like you're watching it grow, you've started to put something into it. You understand how you made it grow. You don't understand how could I possibly turn this around and, and like, yeah, like, ask, ask Peter, right? If you had asked him, could this thing possibly could, should we hedge a bit here? Could this thing possibly go to 38 cents? What do you think his answer would have been? Well,
Wil Schroter: I mean, no possible way. It's it's at 31, it's gonna go to 300, right? Like you're thinking the opposite direction. like none of that makes sense. Now, I have no idea what the dude did with his money, right? For all I know, he cashed it all out and, and, you know, put it in T-bills first hell if I know, right? All I'm all I'm relating to is his purchase and his stock price as, as just like a general idea that like, let's put it this way, if he had known that it was gonna be 38 cents, he sure as hell wouldn't have been buying $15 million Beller mansion, right? Like what I advocate for is picture the worst case scenario. And spend toward that, right? Like, like what is, what is the worst thing that could happen relatively, right? Because the other side of it, like, things, when things go bad, they usually don't happen overnight per se, they happen fast, right? But you do have time to, you know, to react. So he might have sold at $5 right, and have been $150 million or what, you know, whatever that maps back to. But regardless, it does happen, you know, the, the floor falls out all the time. It does. So much so like I said, my my my wife and I, like we bet on it. Yeah, we're just like, yeah, matter of time.
Ryan Rutan: Yeah, yeah, that's the thing I think to your point, when we manage towards that that worst case scenario, right, regardless of what happens, then like if it doesn't end up happening, then we're better off, doesn't end up happening, we're better off. In either case, we're better off. But the minute we turn a lucky payout, lucky, lucky, you know how I'm using that word here, fortunate payout, right? We work hard, we get something, but that one time. Event. We turn that into our baseline, forgetting that it is blip not trend. Once that baseline disappears and the floor is gone, that free fall is a lot harder and the crash is way more significant, right? If you're not managing towards that downside, um, it will jump up and bite you.
Wil Schroter: Agreed, agreed. And so, again, I think we've got this fantasy that that there's another payout coming. But, but here's. Like, Ryan, if, if you had just gotten the big payout and I was trying to, um, pitch you on the idea that there will not be another payout, and by the way, think of how negative I sound in that moment,
Ryan Rutan: man, especially, especially when it's coming from somebody like actually kind of doesn't matter who it's coming from unless it's coming from a copy of you who went through exactly all the same shit you just went through to get there. You're like, you don't know me. You have no idea what my. struggles were like, you don't know what it took to achieve this and what I am capable of and clearly I'm capable of doing this again.
Wil Schroter: If we look at the stats, when I make the argument that this has nothing to do with you, this has nothing to do with you, right? This is just saying that statistically this will be your last payout. And, and, and when I say statistically, let me explain the statistics I'm using because some of them apply and some of them don't. Statistically looks like something like this. At any given time, there's 10,000 venture backed startups in play, right? Um, a few 1000 new get added to the thing and a few 1000 die off. So there's 10,000, uh, active at any given time. About 1% of that give or taker is gonna have like the big, big exit like the IPO, etc. and Peter, you know, to his credit, got to that exit, right? Very hard to do. Easier to do in 2021, a lot harder to do before and after. Definitely timed it right. Anyway, beyond that, a total of 15%, including that 1%, are going to have some sort of positive exit at all,
Ryan Rutan: right? Say that again so that people hear this, right? Say that again. 15% have any level of positive outcome.
Wil Schroter: Correct. Like it's like an M&A kind of sale, like, you know, you sell to somebody, etc. and the sale prices more than you invested. OK. So again, some people in the audience, um, aren't familiar with this. If Ryan and I raised. $100 million and we sell for $100 million. The 1st $100 million in almost every case goes back to the investors first and we get nothing. OK, so yeah, we heard we sold for $100 million. Yeah, but how much did you raise? Because, uh, and by the way, the investors get nothing either. Getting their $100 million back is right where they started,
Ryan Rutan: right? Um,
Wil Schroter: also not a win for them. But so,
Ryan Rutan: so keep that in mind again, like, so just to, to stick with the math there, 15% see any level of positive outcome, but that's at the VC level, right? So that doesn't mean that 15% of venture backed founders end up with. Any kind of benefit or payout.
Wil Schroter: And what you, you kind of missing those numbers of the 10,000 that didn't die, right? I mean like, think of how many levels this is going past, Ryan. This is saying there are countless companies that never get a penny of funding, OK? And some of those go on to do great. OK. We're not counting those right now. What we're looking for is a cohort that is more statistically likely to exit because of funding and focus and and momentum. So we're basically saying these are the people that make it to the NFL, OK? Of the thousands or millions of companies that get started, only 10,000 of them will ever get a venture check. Now, some people don't understand what that means. What that means is venture capitalists are further down the pipeline than angel investors and other investors before you get to them. So what that means is those 10,000 are still the cream of the crop of hundreds of thousands that got invested before them. So this was already like getting vetted out. So these are already like the high draft candidates to begin with, OK? Even of the highest draft candidates, the people with the most. Most capital, the fastest moving ideas, etc. you know, the freshest teams, you name it. Only 15% of those would have any kind of exit that's meaningful. Now, now, here, here's where the numbers get way better. The number of people that got to that exit, either IPO and or sale, and did it again, less than 1%,
Ryan Rutan: less than 1%. Yeah, it's, it's like saying what what's your, what's your roadmap and plan for the future now that you've had success once, so like, well, I'm gonna go get struck by lightning, then attacked by a shark, then survive a plane crash. And then I'll walk away and win the lottery, right? So these are quite literally the odds you're talking about trying to do like multiple like it does happen, right? Like, we got the we got the Elons, we got the Jack Dorseys, right? They've done it multiple times. This
Wil Schroter: is a bit different. I, I think people mis misrepresent these stats. What we're saying is the probability of doing that ever again. The probability that Peter from Wish is going to have another wish is almost zero. And when people say, well, well, Elon Musk, and, well, yeah, the fact that you can name who these people are. Demonstrate how few of them are, right? Or like, you know, you could say, oh well, you, you said you've had 5 exits. Yeah, but they're not public companies, right? Um, yes, there's lots of people that, that can build smaller things and sell for smaller amounts. And if you want to make the argument that, hey, I could have another, I'm just making up a number, $10,000 payout or $100,000 payout, yeah, statistically you probably can. But as that number grows, the probability that you'll do it again. Shrinks geometrically. Yeah,
Ryan Rutan: when we're talking about exits that are larger than a good annual bonus from a Fortune 500 company, right, the odds drop off really quick.
Wil Schroter: You bet. Like, I've got a good friend of mine that I'm thinking about who's been part of 4 exits, like where companies went public, etc. and he's made millions and millions and millions of dollars doing it. OK. Now, that said, he gets placed in these companies when they're about to go public, right? So that's the. That's like basically saying like, hey, I'm gonna bet on this hand when I already see the dealer busted, right? He's pretty much like chasing the finish line. And if you're, if you're one of the infinitesimally small number of people that can do that, go do that for everyone else, for everyone else, right? It doesn't work out that way. And so I think when we say hoard this money, right, because it's the last payout you'll see, all we're speaking to is the statistics that We see every day of how rarely people get paid out again, and it's always hard to believe. Yeah,
Ryan Rutan: I think again, it goes back to that all the reasons we talked for why it's hard to believe for the founders, right? But hopefully, hopefully this is perk in Sairs today, uh, because it's, it's unfortunately like we've seen this over and over and over again, right? And it's always a massive exit. It doesn't just happen to the to the IPOs. It does also happen to the little exits, right? And while those are more repeatable, doesn't mean you need. want to lose it, does
Wil Schroter: it? That's OK. So let's talk about, let's talk about hoarding the goals, OK? When you get it. So, you know, our advice to these founders, you, you've definitely heard the part where we're like, you know, don't lose it. But more importantly, do what my buddy did at Priceline, OK? If you're gonna spend it, spend it on things that are the foundational things that you were gonna buy in life anyway, right? Like in his case, his, his law degree, his home, like those were, those make sense now, maybe not 15 million. Dollar mansion in, in, in Bel Air. He bought a very reasonable home. And what he did, which was fascinating because he was only like 26 at the time, he basically paid in cash for all the things he was going to spend the next 20 years trying to draw a salary to chip away at, right, which put him exponentially far in life. Genius way to spend your money, right? I mean, I would just call that an investment. But what happens is for a lot of us, because we're founders is we push the chips back in. Yeah. We're like, well, you know, again, it's worth 50, it's worth 100.
Ryan Rutan: Yeah, I'll bet on myself. I'll bet on 5 other startups or 10 or 100,
Wil Schroter: 100%. I had this moment early on. Uh, when we were growing the agency, I don't even know if they're around anymore. There was a company called Compuare back, like back in like the mid 90s, doesn't matter. And they were looking to make an acquisition of a digital agency, and we had just won a big account, but we were still bare like fairly digestible at the time. And, and I remember kicking around numbers around like 50 million for a, for a sale. Me and my business partner Blaine, we're like, if it's worth 50, it's worth $500. Let's, let's pass, right? And we did, but. My point and we ended up selling for more later, but, but, but the, the point is, or not, like that could have just that could have been the best offer we ever saw, and, and I would look at it and say, you know what, had we, had we sold then versus now, I would still argue it was the right decision because it it was a meaningful amount of money on the table, etc. and you know, and we sold for substantially more, but, uh, so what? why risk it? In retrospect, I would have told myself to sell it.
Ryan Rutan: You can lock in that save point, right? So. It's just right,
Wil Schroter: it does
Ryan Rutan: so much when you start to look at what the actual differences are, the benefits of holding and and increasing that. We both know people that have sold for 150 million and people that have sold for a billion. The happiness quotient between those two folks doesn't change much, right? Right, yeah, sure, you got a lot more money, but it doesn't change life that much. Now, if you go from even selling for a million, we've done this. I mean, like one of our earliest episodes. Well, $250,000 is a life changing amount of money, right? People go like, no, it's not till you hand it to them, they go, Oh, well, that actually changed my life. So I think this is where it becomes really difficult for founders to then start to do the calculus. Like, so when, when should I do this? When should I sell? I think the other thing is like, it's not like there's a whole bunch of options for this either. It's not like, it's not like just any day of the week you can be like, well, let me drive it down to the dealer and I'll just see what they give it, give me for it, right? It's, it's not a 57 Chevy. Yeah, it is a very dynamic and complicated to to liquefy asset. So like if you go
Wil Schroter: back often only have one chance to sell, that's the
Ryan Rutan: thing. And I think that's the thing. So when, when, when you guys said no to the Compuare offer, by the way, they sold in 2020 for, for $2 billion to a larger software conglomerate.
Wil Schroter: Really? Yeah. That's interesting cause we had a $6 billion IPO, so like, um, I'm wondering like which one of us may be made better or worse than that. Anyway,
Ryan Rutan: they've been around since 1973, so maybe they've just been stacking up little exits for,
Wil Schroter: it was good company as best I knew.
Ryan Rutan: So I think that it's, it's difficult for founders. If you go back in time, like, how would you really, so you can say in hindsight, I'd go back and I tell myself, take that offer. What advice can we give as as that offer comes in, like, how do you decide? Is this the best it's ever going to be? Should I just hold this thing like that calculus gets really complicated.
Wil Schroter: I've got a whole formula for it, like, you know, when the Evaluating these things. I look at it and I say, basically, where, where will this move me up the chain in my life? Like safety is usually what it's come down to, you know, lifestyle, things like that. And I always say, at this point in my life, I'm not worried about how much more I'll make. I'm not worried about losing what I have. And I think for a lot of people, they just haven't maybe been around long enough to understand how hard it is to get it back. Right, I, I know a lot of founders who have gone out and lost it. I don't know many that that got it back and there's no way to forget that. And so again, I look at it, you know, personally and and I say, OK, um, yeah, of course, like everybody else, I'd love to make more money. part is just the achievement, but the other part of it is like, hey, my life's OK, right? Like the. Increases won't buy me much more happiness, but the decreases will make me pissed off. I just remembered, I just remembered a great Alex Trebek line. It's so odd because it's coming from Alex Trebek. I love Alex Trebek. And somebody's asking about gambling. It's funny we're talking about this. He says, I hate gambling. They said, Well, why? He's like, winning doesn't bring me that much pleasure, but losing fucking pisses me off.
Ryan Rutan: That's exactly it. That's, that's it though. I mean, like, and that's it's kind of what we're getting out a minute ago, which is that, you know, those increases have a very diminishing return, right? Like if you go from 1 million to 10 million, 10 million to 100 million, 100 million to a billion, yeah, it is, there will be some life changes that come along with that, certainly, how impactful they'll be, don't know, but it's also the likelihood of that happening versus the likelihood of the opposite happening without making the save points. So. I think you're right. I think once you've you've had the ability to buy yourself some safety and kind of minimize that downside and say like, OK, like I'm I'm at least going to be reasonable with the portion of this, um, because you're also not saying like, don't celebrate, right? Right, right. Oh yeah,
Wil Schroter: like, pop the don't enjoy your money. Just don't assume it's coming again. Yeah,
Ryan Rutan: exactly. Yeah, exactly. I think that's that's the important part.
Wil Schroter: So I mean, here's the thing, right, I, I wish, I genuinely wish more founders would heed this advice. I'm 100% sure almost none of them will. I think all of them that are, that are listening today are gonna have, they're gonna be in two camps. Where was Will and Ryan when I needed that? It's because I made that mistake and the other camp is not gonna happen to me, right? That, that, that sounds like, you know, real negative kind of oldie timey advice. I'm, I'm sure that might work back in your day, old men, right? But it doesn't apply to me and I can just already tell you, you're going to be wrong. I don't want you to be, but you are. But here's the thing, the whole point of This journey is to get to a point where at some point, we can cash in our chips, we can fill our bank account, even if it's a small amount. What we don't want to do is ever risk going backward from that. So every time we get a win, keep the win, Keep the win cause it's probably our last win, and if we do it right, it's the only win we need.
Ryan Rutan: 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.