What if I told you that working on more than one startup idea is actually the fastest way to fail at all of them? Today, on the start of therapy, podcast will explore the dangers of division and the power of focus. Welcome to the start of therapy Podcast. This is Ryan return from startups dot com. I'm joined by my partner, Wil Schroder, who over the course of a 20 plus year career, has started nine or more start ups and at one point, and this is Germaine to our conversation today. You had five or so going in parallel, and we want to talk a little bit about why that might not have been the most optimal approach to things.

Yeah, to say the least. And preface by saying, Ryan, you know, I have talked to thousands of founders of this point about how many of them are interested in trying a few ideas all at once, and seeing which one takes off this idea that we can place multiple bets and just kind of hang out and see which one's gonna be successful and then just go all in on that.

If what works for spaghetti cooking Why didn't it work? Company.

Exactly. And I'm gonna share a little bit of my backstory having tried this experiment in Washed other folks try it in my case, having tried it for nearly a decade across five different companies and actually having some success. So this isn't a total horror story. This is even in, in spite of some of the success that I had running multiple companies at the same time, how I would still recommend people generally. Don't do it.

Let's set the stage a little bit. How did you arrive

at that point? Okay, so let's see, we're gonna go back into my deep in hallowed history. In the early nineties, I started one of the first interactive ad agencies, and from there we grew that to a fairly large company. That's only Germaine, because we're working with lots of big clients in parallel all at once. So I built the first near decade of my career, working massively in parallel with large clients to build lots of websites, lots of interactive solutions, et cetera. Got it?

And so that puts you in a frame of mind that not only is this possible, but maybe this is how it should go.

Absolutely. I thought that's maybe more efficient. So in the early two thousands, we had sold the agency and I thought to myself, instead of working across multiple clients, I've got a 1,000,000 ideas for start up companies that I want to get started in all kinds of different industries. Why don't I just build an agency where I'm the only client, so to speak? And we just start cranking out these amazing businesses with our own tools and are on their own knowledge? And in my mind, the idea was to build a portfolio of companies where I could work across all of them, which is really the same is be ableto pursue multiple ideas and see how that worked out. Now

we're building an incubator for your own ideas.

You bet. You bet. In important caveat here, unlike most founders, I had some resource is in order to pay staff to work across the different companies, which means even though my time was being shred sht in focus across the different companies, I still had other folks helping me push those individual agendas forward. And even then it was a terrible idea. A lot of founders think. Well, hey, just me right there like, Well, if I work on multiple things, I could understand why my time would get stretched and I couldn't get things done. But I'm telling you that even with the additional resource is it still started to come apart

at the seams. And I think that's an important point because one of the very common things that we hear from founders who planned exit hoped exit are about to exit a company is that this is going to free me up both time money, experience. All this stuff is gonna make it so that I can now go and do all these other different things that I want to dio. And typically the thought is in parallel, right? And so it's not just the case that it's a bad idea to do this. If you're a first time founder who can't decide what he wants to work on her, she wants to work on, but that even if you're an experienced founder with an exit under your bell and resource is in terms of time money team, it's still not an optimal approach,

correct, and we'll dig into why I'll give you a little bit more meat toe. How my personal journey went started off in roughly 2002 with a company called Swap police dot com. And some folks have may have used this service. It's the largest auto lease assumption Marketplace. We transfer billions of dollars worth of auto leases and, like letting people get into and out of cars. It was a great idea, a little bit ahead of its time, but it still worked out really well. And maybe the fallacy of it was that it worked really well, really fast. So in my mind, if I could build something this quickly, get it to market this quickly. Get it to profitability this quickly. Why not just keep doing it? And so from there about it, I

just keep doing it. You don't mean just keep doing swap police. You mean mission accomplished. Moving right along.

What's the next one? Absolutely. And so I thought. OK, let's build another one. So we built another company. It's actually part of our products, said it startups dot com Today, it's called biz plan dot com. I need someone will miss you, too, and same idea. Let's build this. Let's get it out there and start to build a use case around it. And that started to go pretty well. If they can rub two for two now, mind you.

At that point, I didn't quite understand. I didn't see me yet, but the time and energy that I was putting into biz plan creating a product from nothing was taking away from time that I spent on all the little details of SWA police that I probably didn't appreciate at the time. Regardless, this plan started, do okay? And I thought what any other entrepreneur would think how about another? And then a few months are about a year and 1/2 after that. How about another year and 1/2 after that? How about another?

And you provide a beautiful analogy for this in the in the article that follows the same topic, which is tequila shots in the same sense that you know, one more would be a great idea. Another one. You know how it ends. Yeah, it never is awesome

time, because after the 1st 1 you feel great. You know, you don't realize what happens when you stack them all together. and what ended up happening was the next three companies that I did. It ended with a company called unsubscribe dot com, which, incidentally, I founded with a friend of mine, Jamie Semenov, who then went on to stir ring dot com, which he sold for a $1,000,000,000 this past year. How many

was he working on at the time? So it was ring and six

others, right? Actually, Jamie had quite a few under his belt as well. I mean, he and I were definitely cut from the same cloth in that we had always been working on numerous things, and we both had this idea that you could work on numerous things and make it work. I would probably suffice to say that Jamie, focusing on only one thing which is ring, probably had a lot to do with the outcome. It's the credit goes to Jamie for what he built, but the focus can't be overlooked. But here's what's really interesting about that. You know, the the fifth company there again was unsubscribe dot com allowed you to get off all of your junk mail. What's interesting is Jamie and I Bowl started the company together right. Both of us had had some success in the past.

Both of us would go on to kind of build her own. Cos me with startups dot com and he with ring they're after unsubscribed it. Okay, Not great. We sold and got her money back, but it was a venture funded company. It wasn't that big of a win. Ah, and Jamie and I would probably look at it as a bit of a loss in the grand scheme of things as far as our time in our career. However, both of us were clearly capable of making it happen. And the fact that we had our heads in so many different things did not help us. Sure. Right. So they're gonna focus. Well,

big problem. And you could even say if you're tryingto eliminate some of the variables here. Hey, you've got two founders that know what they're doing, but we weren't exactly focused by the time that we had founded unsubscribe dot com. I already had four their companies under my belt that I was running. I wasn't just stopping by to see how they were going. I was doing the financials. I was building the product. I was writing the copy for the sights. I mean, I was as involved in the business is as you could be. In most cases, I was also larger shareholder. So, you know, I was very tethered to what? The business us.

All right, well, so to some degree, it sounds like things have worked out O. K. At this point. So there's obviously more to the story here. Let's let's dig into that. Where did it start to go wrong?

Okay, well, as I'm watching each of these companies grow or sometimes stall a little bit or sometimes create some problems, I'm realizing that I can't invest any more energy into any one of them because I'm stretched across too many. I also don't know specifically where to put my time because they all have problems, right? Like the nature of a startup, if you were to do two or three at the same time, is nothing but problems. I think there's this concept that the good start up the good child, if you will, will just show nothing but promise. And it'll be so obvious that that's where to put all of your time. I've never seen that to be the case. I've also never seen it to be the case that it happens quickly whereby you've got this idea and it just takes off. And it's so clear that the idea has so much momentum by itself that it just raises its hand and says, Drop everything else. This is the idea

funny, and we know this right. You know that even when you're solely focusing on something, it could take a long time and some luck and the right circumstances to achieve any kind of growth that looks even a little bit like a hockey stick. Rightto have any indications that things are going the right direction, and that's when you're fully focused. So the idea that if you're dividing your time across multiple companies, multiple ideas that somehow one of them is going to magically take off by itself without your focus a little bit of a fallacy.

Let's let's give you this analogy. Let's say you're Tom Brady, right? And

I often think of my

number compared to him all the time. I'm sure. Let's hear Tom Brady, and your idea is that you can come into a football game, play for 1/4 and then leave in the rest of the team will just continue to win Superbowls, right? No matter how good you are, the moment you're not there, you're not valuable. And essentially, no matter how talented you are, and I'm fairly talented guy, I know Tom Brady. But wherever I was putting my time into one company, I was specifically not there for another company. Chur in. That's what leads to failure.

You can't create success by being not present. Right start ups don't germinate by themselves on a fraction of your time. Tom Brady isn't winning Super Bowls by playing 1/4 right? Exactly. In fact, Tom Brady has a hard time winning Super Bowls by playing all quarters by being one of the best quarterbacks of all time. That's how hard this game is, right? The moment you take yourself out of the game the moment you stop playing the moment you spend less time with one of your startups, you might as well call the game right because it doesn't work now.

There's a huge amount of selection bias there, too, and that the one that you're spending any time on, right and the minute you start to shift your focus to that one because it's starting to look like it's doing a little better. Here's Here's the interesting flaw in that logic. If you're capable of seeing which one is going to do better with a very limited amount of time, then you shouldn't need to spend time on the other. There's anyways, you should already know which one is going to work right away, though you're only gonna know it works when you dedicate yourself to it and you work through

it. And along those lines, even if you put all of your time in one idea, the probability of success is still dramatically low. So doing anything to make your odds even worse by putting your time on something else is well, Onley makes your probability of success even lower in my mind. And I'll just give you My personal thinking was that my value was around ideation. It was round product development to some degree, was around fundraising, and it was a little bit around when I say marketing just kind of spinning up, getting our initial user acquisition done, and if I could invest that part of my value, The rest could be then carried by folks that would operate the company day to day, whether an engineering, marketing operating, et cetera. And that's actually kind of true,

except for the fact that back to the Tom Brady example the rest of the team is very capable of running on its own. But it runs especially well when Tom is there, right? And what I didn't appreciate is when I take myself off the team, it's not the same team anymore. They're all smart folks, but it's not the same team anymore. In the same goes, If I was just running that the ideas myself, when it's all I'm focused on, when I have just one singular, painful focus that's haunting my dreams, that's when I'm in the zone. The moment I say, Well, I'll just think about the idea when it's convenient or it looks like it's working. It just doesn't work anymore.

Yeah, I mean, the ship is sort of sailed on multi tasking. There's no no shortage of evidence that even multi tasking at a tactical level is less productive. When you start to do this at the highest level of function, where you're literally trying to lead the company companies through multi tasking. Sort of no surprise that it doesn't

end well. Yeah, And if I look at my personal history across all the companies that I've done over the past 25 years, whenever I was singularly focused on something like Blue Diesel, the first agency that I mentioned, you know, that grew into a huge company when I split my focus across a bunch of companies, which all did Okay, you know, not stellar. I pretty much capped my success. And that's even when I knew what I was doing when I finished then with those companies and then focused all my time six years ago on startups dot com, lo and behold, you know, becomes worth $100 million right? I mean, I don't think that there that there is any variable there other than where I spent my time. Those other ideas weren't necessarily better or worse ideas. And maybe there was those who become $100 million businesses. But I wasn't focused

on sure you didn't put $100 million worth of effort into it. Exactly. So wth e. Let's dig into the motivation behind this a little bit. Let's Let's talk from it about why founders feel the need to do this kind all the way down to the deep emotional feels like. Why is it that they end up thinking like I need? I need to hedge my bets? Why is that right? Knowing because I think we do know that you know the less. If I'm not focused on this, we understand the danger, and it's certainly not an uncommon story, and it's one that you'll be warned again straight. Don't split your focus. Don't split your focus, and people do it anyway. So what is this super deep seated? Need to hedge our bets? A startup founders. Where's that come from?

I think at the end of the day, it's very simple. Fear is much more painful than greed is pleasurable. We don't wake up in the middle of the night to greed, but we definitely wake up in the middle of the night to fear. And I think hedging has everything to do with preventing fear. Right? I I want to try your failure. Yeah, I want to try multiple things because I'm terrified of failure, right? Not I want to put my money all in one basket because I'm greedy as hell that I want this thing to succeed.

Sure, right, it's It's not about driving multiple outcomes. It's about trying to get to any outcome and not for the sake of the outcome itself, but to avoid the outcome that everybody wants to avoid, which is his failure. And so it kind of comes back to a very a very personal thing that drives

this well. Let's dig into those talk about all the things that more or less fall apart. When you start spreading your bets right, I would say the biggest one. That's harder for folks to realize. But when you zoom matter, when you play back, the history of where you tried to do it, it becomes painfully obvious. Is that moment I mentioned before whereby you're just in the shower and it's all you can think of. You wake up at four in the morning, and it's all you can think of everything that you encounter. Every you talk to goes through this filter of this one singular problem or idea. It's where we are now with startups dot com, and I haven't had an idea for another. You know wholesale business since the day we started this business. And the reason is because it's the only problem I care about.

Helping founders build companies is all I care about. And so everything that we do, you know, we did a whole bunch of acquisitions. All of those were with the lens of How do we help entrepreneurs? I'm not thinking about the 1,000,000 other things that were splitting my time and focus like we were doing before. Back in the day with five Cos I was thinking about how to assume auto leases. Had a cast people for television howto create an algorithm that could automatically determine whether email was spam or not. That is not a very healthy focus.

You've got a couple different contextual frames there. It's the kaleidoscope model of focus. It's horrible. Yeah, and I have to say, like throughout the threat, the bill to start ups dot com it's it's you know, we have done a lot of different things. And yet to your point there, all through that same contextual frame of helping entrepreneurs to build grow businesses, and we did some explorations early on, we talked about other things that could be involved. And often they were just from a purely opportunistic standpoint. And we're really, like augmentations to the business model. Things like credit card processing, right?

Well, we could become people's first merchant processor count. Sure, that's an important thing for them to have, and it would augment our bottom line. But was that core to helping them to succeed? And the answer was no. They could get that somewhere else, and somebody else could do just as good a job of it is. We could. And so let's not spend our time on our focus there. Let's think about what's the what's the biggest hurdle that we can help them clear. Let's not think about anything that would be helpful. What are the biggest likely barriers to their success? And let's tackle those, at

least first what's billed on the barrier concept for a bit, too, because I think this is justice important as the focus. I think he goes part and parcel. Every startup idea, whether it's a good idea or a bad idea, has the same number of hurdles, right. People tend to think that if it's a good idea, that must mean that there aren't a lot of hurdles, and I just kind of run through the obstacle course quickly. Total bullshit. Right now, that's exactly the best. Ideas tend to have the most hurdles, which is how they become the best ideas because the opportunities air bigger, they're harder to make war. People were thinking,

Well, that's what makes them a valuable opportunity.

Correct, right. Businesses that aren't working right there, just nothing but problems in a bad product. Market fit tend to be pretty obvious, right, because you're putting the product out there on the shelf and nobody's buying it. Nobody's buying and businesses are working and a couple people are buying. It's really hard to figure out. How do you get more people to buy It? Sounds counterintuitive, but anybody that's built a business that capped out at $20,000 a month in sales will tell you there's no way to know whether that's working well or not. You have to work 10 times harder to kind of move it to the next level.

Yep, it's getting getting that positive feedback. You don't have any sense for the scope or scale of that positivity, right? It could be that well, this thing does just max out at 20 K, but there's a lot of exploration has to go into it. It's not as binary as this just doesn't work

well along those lines. It also takes time. There's no way to fast forward the outcome of these processes said differently. Within the first year, it's unlikely that you'll get any major indicators to definitively tell you that this is gonna work or it's not. Now. There's usually negative indicators, plenty of them right. That's kind of the nature of what this business is. But within the first year, if folks were expecting hay in your one, I'm expecting to get some really positive indicators to let me know that you're too should be there. I would challenge you other than really trying to hypnotize yourself into positivity, to find absolute indicators that tell me this business is gonna be successful. Good business, bad business. They take a lot of time to figure out, which requires an insane amount of focus. During that period,

we rely on very, very loose indicators, things like while having my first cup of coffee This morning, a rainbow appeared outside my window. I'll use that there are a finite, hard facts that we can use. T indicate that we're on the right path. It's sort of like I have enough energy to keep tackling this and therefore I will write I

and also I don't think people understand. We even referenced this the cost of creating something from nothing, right? It's hard enough to take an idea, a product, something that no one has ever seen before or understands the reason that they even want it. And bring that to life. If you're lucky in your lives, all of us, not just you, listener or anybody else. If you're lucky to do this once in your entire career to create something from nothing, you're one of the minuscule percentage of people who are successful. Now take that minuscule percentage in divided by saying, I'm gonna focus on two things and try to make that happen. You start to realize the magnitude of dithering. Your focus.

Well, you know it's interesting, but it's it's It's analogous to buying more than one lottery ticket, right? And not not in the same sense of division of focus, but in the sense that it doesn't improve your odds much right the odds air so long against you that having one ticket that's one out of 300 million or having two tickets that are one out of 200 million doesn't double your odds of success. I think that people think that butt math doesn't work that way, right? And it doesn't work in the start of space, either. When you divide that focus, when you have multiple chances, your chance they're still so small that you're not improving your odds and it's at the cost of the likelihood of the outcome is so great and so a pill that it just absolutely isn't worth doing.

Yeah, and I think most start ups. And if founders are listening to this now, they're thinking myself, Well, that's cool. But I really do have to ideas, and I don't know which one to go with. It's not that anybody can tell you which one to work on. It's that we can kind of tell you pretty definitively that you only get to pick one now, do I think everybody's just gonna pick one because we have some sage like wisdom here? No, I think people are still gonna pursue to, however,

that was my home. I had just sort of hope that people would just listen to go okay and sign off, flip a coin and then get to work building something awesome. Billy and I don't

think so. Founders need to make their own decisions for themselves. All we can do is try to provide some more data points to consider. The data point here to consider would simply be I know going into it that if I split my focus, I'm going to reduce my chances of success on either prospect. So with that, is there one of these that I'm willing to try for a longer period of time before I bother with the 2nd 1? Right? So it's to say, Yep. In the end, I may pursue two of these, but is there one of them that I'm willing to spend more time on initially in order to try to increase my chances of success?

Sure. Yeah. So think about the opportunities that are before you and then picture yourself in the role of Rocky, played by Sylvester Stallone, right before he actually wins the fight. When his face looks like it's been drugged up and down the street for a couple of hours and put yourself in that frame of mind and say now, now that this is your condition, which one of these things would you be willing to work on under those circumstances? Because that's what it's gonna be like, right? You're gonna take a beating. So being able to determine which of the ideas and this is an entirely different topic, right? This is about, you know, making sure you got enough passion to see something through. But I think it can be an important determinant in how to narrow your focus,

which I think is something else that would be really useful for us to talk about when we are faced with multiple ideas. How do we decide how can we help founders to understand how to narrow the field? All right, because we know it's important for them to narrow the field. So what tools have you used moving forward from the point where, you know, you created your own incubator and realize that wasn't optimal? Yeah, Well, what did you do personally to get to that

point? I looked at a few different things. One is I looked at what aspects of the business of the idea. Am I particularly good at pushing for right? So, for example, if I was particularly skilled in marketing, I would look at the two opportunities and say, which of those opportunities will my skill set? Most likely drive the business forward, right? I mean, even like one of the business. A more than business be. But if my inherent skill set is likely going to push business be towards success, I might start with that one first, right,

Because again, starting something from nothing, You've got a tremendous amount of momentum that you have to create. And if you're already starting with your foot in the hole trying to get this momentum going, not really gonna help your cause. So again, one of my first filters, if you will, would be where my best suited to actually make this idea successful. Another one in Ryan. You know, I've talked about this and other podcasts is which one do I like better? Like like where do I want to spend my time and my energy where I would actually be enjoying what I'm doing because those ideas tend to be ideas that work a hell of a lot better because I'm willing to go that extra mile is actually give a shit about the business.

Yeah, right. So when when things do get tough, you'll stick through it. Yeah, and it's a hell of an exploration, right? It's It's nothing easy to determine, particularly if you you don't have prior experience. Um, I think this is a much more challenging thing for first time founders to figure out, because they may not have been to that point in startup life where the only thing that you have left is is the passion for the idea right? And that's it's a It's a common milestone. You hit it multiple times throughout the progression of the company as it grows and having enough desire to see the solution through simply because you want to see it get built. You want to see the solution exists in the world. I think that could be really hard for them to determine. I like your idea.

You know you can focus on your skill sets and and determine you know which one is more likely to push the idea for it. I do also think that's incredibly difficult to determine I may be a talented marketer, but how do I know which one my skills will be better met two And all this is to say that it's not an easy decision. We don't have the answers. We just have some frameworks for helping people get closer to

that answer. We do. And I think people may look at their ideas and say that I have this one idea and I think this is going to be successful. And the truth is the idea has very little to do with whether it's going to be successful right. People will tell you this all the time. They will say It's the it's the execution that make makes it successful and that's also true. But I think what they're implying within that execution is also the fortitude to see it through. Most ideas we've talked about this before at inception are actually the wrong version of a successful idea, right? It's just it's it's a concept of what something might be. But then you actually get out there and you apply the execution in the fortitude and you shape it and transform it old school blacksmith style into the idea that that will actually become successful. You know, he's just a catalyst. So, sure, where I think people get stuck when they have multiple ideas is there. They're trying to say which one on its face without any execution, without transforming without proving anything is the right idea.

The reality is they're both valueless. At

that point, it was literally like saying I just had three kids. They just got born nine seconds ago. Which one of these will be a track star? Which one of these will be, You know, we'll go to Harvard. It's like How the hell would you know that, right? There's no possible way, no matter how much testing you did right now, T test the DNA of each of these kids to say, How will they turn out? You have to see this thing through in order to actually find out. And I think that's the fallacy of working on multiple things. Is people think you can get these definitive signals with very little input or

effort or focus, totally agree, and to bring it full circle? One of the things that we talked about was this concept of what is the motivation for this right and then the motivation for for holding on to multiple ideas was the idea that we're somehow hedging our bets and we're less likely to fail. We're more likely to have a success if we choose multiple ideas, and and it's sort of defray some of the risk of failure, and we know that to be untrue. And so I think one of the things that could make this a bit easier is for people to acknowledge that this is just going to be a really hard choice, right, but that making that choice is going to make you more likely to have the success that you're hoping for and avoid the failure that you're hoping to avoid and said differently. Holding onto both of them doesn't really change things for you in any way that could be construed as positive. Having this two lottery tickets doesn't meaningful change your odds of success numerically and in fact, fundamentally, we know that it reduces thumb. And so to some degree, what we can provide founders today is his permission to choose one. Knowing that that is not what's going to dictate your choice today is not what's going to dictate whether you're successful or not.

That to me is the biggest fallacy here. That somehow if I pick the wrong number today, I'm doomed forever. To your point, these things are at such an early stage, the idea phase that there is no way to determine which one is better. They're both just ideas. The one that is better is the one that you're going to dedicate yourself to. Your gonna dedicate time too, and you're gonna blacksmith into a shape that is recognizable is a business.

And not just an idea, absolutely, and really in paraphrasing and agreeing with what you're saying. Yours. The only way to make your sort of less successful or picked the wrong one is by picking too

well. That's a wrap for this episode of the start of therapy podcast. In the meantime, if you love what we're doing, head over to iTunes and subscribing Comment. If you'd like to connect with us directly, were not hard to reach at all. Email us at therapy at startups dot com. Will and I respond to every e mail that comes in, so don't be shy. What we shared today is a tiny fraction of the help that you can get from startups dot com. Whether you need to learn how a startup gets built, find a mentor, raise capital or get new customers Really, anything that start up needs. You can get access to thousands of Resource is on startups dot com. With that, let's get back to building our own startups. This is Ryan Return for my partner, Wil Schroder and the entire startups dot com community saying goodbye for now friends.