Fantasies and Fantasies with Money
April 6, 2010
A few years back, I was chatting with one of my investors at a social event and he was describing one way of looking at startups and VC. He said that until startups are funded, they are basically just fantasies. I responded that startups with VC funding are also fantasies – they’re just fantasies with money.
When I started Brontes I was very confident in our market opportunity and product concept. That confidence helped us convince people to join our team and investors to put money into our company. However, I confess that I had many sleepless nights over whether I was simply wrong about the premise of the business. My recurring nightmare was that I was leading everyone off a cliff based on a narrative that had come from my imagination. Perhaps this is the courage it takes to be a startup founder. On the other hand, it was impossible to deny that everyone was betting on my business plan which might never amount to more than a fantasy. Raising money didn’t change this. It only made the nightmare worse. It was still my fantasy, just now with money. Had I misled everyone? Was there really a business here? No doubt my investors frequently wondered the same thing.
The challenge is that it typically takes years to transform a startup from a fantasy into a real business. Sure there are small milestones along the way that help make the startup more real, but the road to reality is long. At the start there are questions about building the team; then about the product’s market fit. Once a product is launched and adoption begins, there are questions about achieving early sales. Once early sales are achieved there are questions about whether the company will become profitable. Once profitable, there are questions about whether the startup scales and how fast. These fears pretty much prevail until the company is large and profitable or achieves liquidity. In my case, I had some reassurance that the company was not a fantasy when we received the first acquisition offer four years after we started the company. However, once we sold Brontes, the nightmares came back, as I was operating the company for 3M and realized that we were still a pre-revenue fantasy.
The only thing that made me feel better the morning after each of these nightmares was to get into the office and ask myself – What can I do today to make my company a little less of a fantasy? What can I do to make the company a little more real? These are the key questions for any founder at any stage of a startup. It is often unclear what milestones will make a company more real. A successful founder must discover the right milestones and spend every day chiseling away at the fantasy and finding reality.
Anything's Possible 
April 6, 2010 at 3:28 pm
Great post and completely agree. Fear is an amazing motivator and I’ve never been more afraid than when I took VC money or recruited new team members to join. For me, that fear of letting folks down is much more powerful than greed.
That said, I was a little disappointed to find out this wasn’t a post about Tiger Wood’s 😉
April 6, 2010 at 8:33 pm
Thanks for the post, Eric. Beautifully put, and staring down the barrel of this awesome, fearsome situation right now.
April 6, 2010 at 10:13 pm
It is certainly not courageous to lead people that trust you off a cliff. I think the point is that you are entitled to your doubts like everyone else, but it is your responsibility as a leader to work ceaselessly to eliminate the cause for fear. That is brave. Cowardice is realizing that your train is headed for the precipice, but not doing anything about it because you have a golden parachute. See Ken Lay, Madoff, and any other list of selfish but spineless a$$holes.
April 6, 2010 at 10:33 pm
great post.
it’s interesting to hear this level of candor. you hear lots of “we killed it from the start” stories about start-ups. are they entirely true?
my last start-up ended with a good outcome, but it involved lots of the fear you discuss here. and i’m on to my next one and the doubts and challenges are here again.
great to hear your perspective. reminds my a lot of what paul graham shares from the experiences of YCombinator teams.
April 6, 2010 at 10:38 pm
I’m on my 4th. Exactly as you have described above. Funding is a milestone NOT a goal. Focus on the customer problem and not giving it away for free and you’re half way there.
April 6, 2010 at 10:40 pm
Eric – I am so there 🙂 Great post. And you’re right – when you have a brilliant team and many other people believing in you, you just have to go, I am going to will this venture into being, and I am going to turn fantasy into reality, whatever it takes.
April 7, 2010 at 12:32 am
Nearly every startup goes through near death experiences. Anyone who tells you otherwise is likely trying to sell you something.
April 7, 2010 at 12:37 am
Funding is more a necessary distraction than a key goal. It’s a milestone that makes a startup a bit less of a fantasy, but only a bit less. The startup becomes a fantasy that other smart people believe can be real and with some resources to make itself more real. It’s a far cry from customer validation.
April 15, 2010 at 6:59 am
This is the most interesting post I’ve read on the subject for a long time! Thanks for this great insight ….
July 9, 2012 at 1:45 pm
This story is really inspiring. This is a good message for everyone. It is really true that when you venture a business, you really have to start from the scratch.