I founded Pandora along with two friends at the end of 1999. Within a couple months we had raised some seed financing and began building the Music Genome Project. It was a fantastically exciting time. We were packed into a small studio apartment, white-boarding a business plan, hiring musicians and engineers, inventing a new product, and jumping into the startup fray.
Then things got rough. We began running out of money and wound up in a long, grueling fight for survival. It took almost 4 years, a few business model changes, and 348 investor pitches before we were able to raise another venture capital round. By the time we got to the closing in March of 2004, we had deferred close to $2 million of salary, racked up massive credit card debt, battled lawsuits and eviction notices, and experienced just about every other imaginable challenge for a young business. It was a wild process that by all measures we should not have survived. As I enjoy the progress of Pandora, those days are never far from my mind.
When people talk about the challenges of starting a business most of the discussion focuses around the external challenges: raising money, finding great people, overcoming competition, creating awareness, etc. These are all of course critical obstacles that confront every startup. But for me, the biggest obstacle was internal; I struggled with the personal impact of having to constantly borrow time and money from others, and for something that had very little chance of success. I felt like a leech, and that feeling got harder to suppress with each passing year.
Pitching investors in the beginning is easy. You have an unabashed enthusiasm that comes from the overwhelming sense of possibility and the rush of invention. No doubt, just potential. Then, unless you're very lucky, your velocity slows as your idea collides with market realities. The ascent steepens, and you lose sight of the summit. This is when you are really tested as a leader. In the absence of evidence that warrants their continued support, can you sustain the faith of your backers?
Four years was a long time for me to wrestle with this. I figured out pretty quickly that the solution was not in pretending things weren't that bad, or finding periodic escapes from the experience to rejuvenate. Instead, the solution came from a simple, timely piece of advice. Someone told me one day to "stop being so self-conscious." The input really struck a chord. I had indeed become very self-conscious, and self-consciousness is a crippling feeling for an entrepreneur. Your currency is your enthusiasm and self-belief; It's what attracts investors and people to your cause, and it's the wellspring that keeps your own spirits high as you climb a daily wall of worry. If you lose that resoluteness, your will follows closely behind and you get overwhelmed by all the external pressure and the doubt that comes with it. For me, the perpetual reliance on friends, family and unpaid employees to keep the company going was creating a growing sense that I was failing, and "falling behind" in some larger professional way. The well-timed advice helped me break that connection. It reminded me that startups don't follow the same path of milestones and rewards that standard careers do, and that as long as I measured my progress on that same yardstick, I was destined to feel like a misfit. The truth is, startups are experiments and adventures. And they're full of absurdity. Heck, there was a time when we seriously considered a trip to Reno to put our last $25K on black!
Once I had internalized that perspective, it became much easier for me to manage the doubt and do all the things I had to do with conviction and enthusiasm. Ultimately, I think it was that confidence and sense of purpose that investors bought. It's a form of eternal optimism, but one that gets the odds. Over the last five years, I have had the chance to meet many successful entrepreneurs, and almost to a person they have described their own version of what I went through - in some cases more than once. Starting something new is hard. It rarely succeeds, and (unless you live in a startup hotspot) it's very different from what others around you are up to. Fully understanding the low probability of success, but embracing it nonetheless, can actually give you self-confidence instead of self-consciousness.
I regularly meet people who are living the tough stretch - I can feel their anxiety - but with the right perspective you can calm your mind and actually enjoy it for what it is, in all its quixotic chaos. I'm a big believer in pursuing your passion - the more quixotic the better. You live life once, and if you wind up hitting the wall... Hit it going 100 miles an hour and you just might break through!
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