You Can’t Eat Shares
My grandmother is turning 90 next month, and today we had our quarterly chat. It’s not scheduled; it just generally happens that way.
We discussed the idea of working for early stage companies and how, at my prior venture, I went for nearly 18 months and paid myself less than the cost of a new Ford Fiesta. We lived in a closet for 6 months (I kid you not - we actually built a bunk bed in a walk-in closet), and had a decently good time.
Why deprive yourself so much? Dreams. The vision of building a great company and not necessarily optimizing for future financial wealth (that’s more secondary), but rather thoughts of simply being able to continue operating in hopes achieving that next goal or milestone.
But, as my grandmother says, you can’t eat shares. Well, not until someone is willing to buy them anyway. And at that point, you can eat a whole lot of shares. I’ll save the statistics discussion for later, but suffice it to say that the likelihood of you being able to eat your shares pales in comparison to the likelihood of going home on a full stomach working at a regular job.
My partner would grab dinner at his fraternity and grab food from home in Amherst, whilst I got food checks from home and hilarious and fruitful Costco shipments from my girlfriend’s parents as well as home made food from the girlfriend. I mean - who doesn’t want 32 Cliff Bars?
Ok, so these are all fun stories, but what is my point?
I think, if there is a deeper lesson here, it’s that if you’re going to go out into the wilderness, make sure you’ve got supply stops along the way, and remember that it’s you flying the plane. If you starve, you will also crash. I both admire and respect those who can tell risk to take a hike, and I also wonder if there’s something about the human spirit that does indeed derive invention from necessity?
Early on, one of the biggest questions my partner had for me was if I would have pursued the venture had I not received life support from my parents (we were very honest about finances). And you know what, I’m really not sure. I’d love to pound my chest and brag about starvation resistance, but to be honest, I do have some medical needs that go back to a set of lungs that need a bit of help now and then. Mr. Obama certainly helped me there - thank God for free parental healthcare until age 26.
All barriers aside, I’d like to think that I would have found a way, and that asking my parents and being extremely honest with them about the risks was indeed my way. Perhaps my answer should have been, ‘Heck yes, I’d go to my Uncle.’ Or to the late CEO of Sysco Foods that went to my church. Or … Or … Or … The beautiful thing about money in this country is that, though our economy faces stark challenges, there always seem to be people with lots of it.
One of the more crazy stories that I heard was a friend getting financial aid from HBS based on an alumnus who had shorted the ‘08 crash. Though I don’t care to investigate the details, at least I can rest easier knowing someone made money. As a matter of principle, I don’t short stocks or people for that matter, but I do admire the ironic and steely-eyed bravado (or insanity) that seems to accompany those who do.
When it’s all said and done, I do admit that someone has to pay the bills, but at the same time, screw it. We can always find someone, something as entrepreneurs to make it work. And if we can’t, we live to die another day.
One of the best speeches I heard about entrepreneurship was given by the 2009-Chairman of EO *Entrepreneur’s Organization. He related entrepreneurs to cockroaches. The beautiful thing about our very creepy Metamorphosis-like friends is that they can, some think, survive a nuclear winter. And if, to step back and enlarge our problems for a second, entrepreneurs can survive such tough luck as having their companies fold out from them, getting fired by VCs, product failures, and general apathy and malaise, then perhaps we are like cockroaches.
And it’s a darn good thing too. Some cockroaches can go for over a month without eating, so those shares can simmer for a good while.