October 17, 2023

Second-Time Founder Anxiety

A few days ago I received this text from a founder we backed:

If you've been investing for a minute, you know what that means.

We jumped on a call. My suspicion was right: He was shutting down the company.

Even when it doesn't work out, I have a lot of admiration for founders that bring something new into the world and put in the work, because I know the sacrifice required.

It's hard to truly empathize with this struggle unless you've been there. The really bad stuff founders face is rarely shared in public.

This study shows that entrepreneurs self-report dramatically higher rates of depression, ADHD, substance abuse, and bipolar disorder. Of course, this doesn’t imply causation and we don’t know which came first: mental health challenges or the company. But it highlights the reality of many founders.

I've faced many challenges building Product Hunt, most of which I haven't been able to share. A large company threatened to sue us before we raised a dime. An internet mob attacked the company and my character. We almost ran out of money after a sea of investors told us “no”.

The hardest part: Maintaining a smile and instilling confidence with my team, investors, and the community while my internal monologue is filled with doubt and dread. The dissonance between the internal emotions and external mask is agonizing.

And other founders have had it much much harder than me.

The experience can be traumatic and lead to debilitating anxieties. The body doesn't want to go through it again, and as a result many founders become hesitant to swing again.

Ironically, starting a company the second time can be harder than the first.

"UGH! That really hurt."

First-time founders are often gifted with naiveté. They may have heard about how hard it is to build a company, but they don't really know. They haven't felt it yet. Like a child who's unafraid to pursue daring stunts on the playground, the first-time founder lacks painful memories that introduce hesitation. And it's the lack of fear of failure that empowers them to try bold new ideas.

Second-time[1] founders have scars that can introduce hesitation. They know how hard it is, so they make excuses not to pursue ideas or simply bow out of entrepreneurship.

My advice: How would you feel 10 years from now knowing that you didn't try to bring your idea to life?

"Everyone's watching"

First-time founders often have less to lose reputationally. Expectations of them are lower and as a result, fewer people in their community are watching and judging (or at least that's the perception).

Second-time founders have a reputation to uphold. The more successful they were in the past, the more pressure they place on themselves to achieve even more in their next venture.

My advice: The truth is, most people don't care about you and the people that truly do, care about you for you, not for your startup success or lack thereof.

"My next thing has to be huge"

First-time founders are OK solving "small" problems. Many simply want to build something that people want without overthinking the grand vision.

Second-time founders can over-intellectualize into paralysis. They focus too much on systems design and potential TAM vs. solving a specific problem for a specific set of people (i.e. the basics).

My advice: There's no right way to start up and it's entirely fine to dream big, but don't do so at the cost of starting. It's OK to start small because even the smallest nudges can lead to an avalanche.

Isn’t it ironic?

Despite these anxieties and self-doubts, second-time founders are often far more equipped to succeed than their inexperienced earlier selves.

Ali Maseb, author of Superfounders, backs this up with data: Nearly 60% of CEOs and CxOs that founded a startup valued $1B+ have past founder experience.

Regardless of what the data supports, you don’t have to be a founder to internalize the advantages for those that have done it before.

Second-time founders have more experience building, recruiting, raising, selling, and scaling a startup. They’ve encountered challenges that were previously invisible; unknowable to those without the experience. Their network is larger, opening doors to potential customers and future hires. And they have more credibility in the market, even if their previous venture failed. There’s a reason VCs pay a premium to back second-time founders.

I encourage second-time founders to recognize their edge… with humility. :)

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Transparently – if it wasn't already obvious – I've experienced all of the anxieties above. I’ve hesitated to get back to building, often over-thinking or using prior commitments as an excuse not to take action.

A few months ago I started working on a couple projects that solve my own problems[2]. I’m having so much fun.

Now feels like an opportune time to discuss this topic as we see a growing (yet silent) wave of company shut downs amid macro difficulties. If you’re a second (or third, fourth, etc.) time founder working on something new, give me a shout at ryan@weekend.fund or DM me. :)

[1] I use the term second-time founders loosely to include founders that have one or more startups under their belt.

[2] Despite the benefits, I’m not building in public this time (which is an entirely different topic that might deserve its own essay). What I can share: It’s related to Weekend Fund and investing.

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