In this biweekly column, Andy Dunn—the founding CEO of Bonobos and Pie—offers advice on leading teams, building things, and surviving the startup life. Got a question for Andy? Ask it here.
I’m a startup founder diagnosed with Bipolar II. I have been on a major depressive season since 2021 and it hit fever pitch in 2023 as I grappled with suicidal ideation. I want to close my three-year old startup as I’m losing the passion for it, even though it is still promising. How do I prioritize my health without throwing the baby out with the bathwater?—Christy
Hi Christy. Your mental health must come first. I’m proud of you for navigating these last three years. I know how difficult that is and I am SO glad you’re still with us.
If the startup is still promising and you’ve lost passion, I’d recommend selling it—even if it’s for one penny. After all, that will give you a narrative that you sold your company. Perhaps your team members might get an offer, and while you and your investors will probably get wiped out, you’ll live to tell (literally) and you will start something new again. A merger with another startup where you don’t ask for much in return can also be a way to do this.
Meanwhile, for yourself, maybe take a break, and get a job for a while until your mental health is rock solid. You might need a year or two in a decompression chamber, to heal from the double-vice grip of stress you’ve been under.
If neither the sale to a larger company or the merger approach to an “acqui-hire” work, then shut it down. It’s okay. It happens all the time. Your investors are already rich. And you will rise again.
Just make sure you give everyone a heads up that you’re doing this, and do it soon—so that you have money for wind-down costs and no one on your team nor your investor group feels blindsided. Do your best to get your team severance and be 100% transparent with your investors about your intentions and your runway.
Don’t tell them that you’ve lost your passion for it: Tell them that it isn’t working and you can’t capitalize it. For those you feel close with, disclose your suffering: team and investor wise. Or just pull a Burn Rate and go for it, and tell everyone.
A candid conversation with your investors could actually reenergize the company. It will unlock their empathy and get them thinking creatively. There is more love out there for you than you know. If they lean in and want to put in more money, you can then work together to find a new CEO. That won’t be easy to do, but if some portion of your insiders want to keep going, they’d probably rather take 5%-20% dilution from a new CEO than see their investment marked down to zero.
Whatever path you choose, I am proud of you.
How do you think about your startup’s growth rate when it comes to building a business centered around trust? You can’t buy trust.—Shizu Okusa
Grow slower. Growth is overrated. Capitalism loves hyper growth. But company culture loves solid, compounding growth.
Think about it this way. When you get to $1 million in sales, which might take a minute, you’ve got not just a potential company but a potential business. If you compound growth at 75% a year, you’ll be at $50 million in eight years. That’s really good, and didn’t require you to double or triple the way some impatient investors might want.
After that, if the growth rate drops to 25% a year, you’ll still be at a quarter billion of sales in year 15. That’s pretty impressive, and you’ll be able to trade on a multiple of revenue, most likely, if you are growing that quickly. That means you’ve driven a $100 million to $250 million exit in years 8-10. Not bad.
If you keep going, even better. Sometimes great things take a long time. We need more Patagonias, and fewer FTXs.
If you are touched by hypergrowth, then God bless. Then you will learn an important lesson: You can buy employee retention, even if you can’t buy trust. And trust, if everyone is executing, can come over time.
A wise man once told me it takes a long time for culture to kill a company that’s growing quickly. Greed is a powerful thing. And growth is super-fun. People learn and grow a lot. Winning together is a great way to build trust. It’s hard not to trust each other if you’re on a winning team.
That said, there are very few overnight successes. Take your time, and check your own internal compass.
I love my friend Erik Allebest’s story. He bootstrapped for over a decade and built a remote-first company starting in 2006. From him I’ve learned that you can do things differently, and down the road you might be glad you did.
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