After we came to the difficult realization we were going bust and no amount of execution or “Don’t take No for an answer” was going to resuscitate our business, we still had to figure out to handle ourselves. Here are a few tips should you ever find yourself in this situation.
- When it’s the darkest of dark, confide in your trusted advisors. Shut your mouth with everyone else. Nobody wants to hear how miserable you are, and I was a miserable person to speak with for a few weeks. I should have kept my mouth shut because I was a whiny turd.
- Shutting your mouth allows your more time to craft the story you want to tell. Once you’ve got a working version of that story, tell it. Don’t allow key partners, advisors, friends, potential investors to draw their own conclusions or hear it second-hand. Tell that story yourself. Most startup communities, including Tobacco Alley, are pretty small. Own the story to keep your name in good standing in your community.
- Settle your debts. Pay them if you can. If you can’t, try to work out new terms, or see if you can cut contracts short. Our partners were gracious with us here, because
we’re just awesome dudeswe asked nicely and begged.
- Honor commitments to your customers, if possible. For us, this meant leaving our site active for our customers and taking a small loss each month to do so. They bought a 12 month mobile coupon book, so we’re going to give them 12 months.
We had help figuring this out. Zack Mansfield at Square 1 Bank sat us down and guided us directly to these conclusions. He called it “failing gracefully”. This approach isn’t for everyone and for every startup, but it’s worked for us.
Stay tuned for the final installment where I’ll share a few things we actually did right.