When you start a business you’re in for a long journey. There’s the initial euphoria, the success at the end of the road, and along the way there are hundreds of milestones. Some feel great, but some feel like your world is ending. It’s these milestones that form your founder’s journey. Each entrepreneur walks a different path, of course, but there are striking similarities.
Where Are You in Your Founder’s Journey?
Most entrepreneurs only think about the two parts of the founder’s journey that we’re most familiar with: the optimistic beginning and eventual massive success.
We feel great when we first start our companies precisely because we’re focused on that big win at the end. How can we fail?
We read stories of founders like Steve Jobs, Mark Zuckerberg, and Jeff Bezos. We’re familiar with their success because it’s put front-and-center for all to see on the covers of magazines.
If they can do it why can’t we?
What we miss, though, are the years of turmoil and struggle that occupy the space between the early start and the final success. It’s full of ups-and-downs, some amazing wins, and plenty of frustration. It has a name: the trough of sorrow.
It’s where all too many of us get stuck and give up. We may get a customer or two, but that’s where things start to fall apart. We don’t have a clear picture of how to get to the next level. We don’t realize how hard this is going to be.
What Is the Trough of Sorrow?
The trough of sorrow is a term that’s been become widely popularized by venture capitalists. Andrew Chen first saw it drawn at a YCombinator dinner, and it looks like this:
The trough of sorrow refers to the period after some initial success, during which all of your dreams about how quickly you’ll grow your business are crushed. You’ve gotten some great press coverage, or someone decided to invest in your business, or you’ve signed a few big deals… but then the momentum stalls.
You start second-guessing yourself.
Is this working? Is this actually a terrible idea? Should you just give up? When will you be able to pay your bills again?
It turns out this is just part of the process.
The trough of sorrow is something that nearly all companies face. In fact, it’s almost a prerequisite to success.
You may be there now—doubting if you’ll succeed and wondering if you should just throw in the towel. Only you can make that decision—but I hope you’ll stick with it 😉
To help you out, here’s a look at a few companies that managed to navigate the trough of sorrow successfully.
Tesla & SpaceX
When Elon Musk took over Tesla there was no guarantee that electric cars would become widely popular. In fact, history was littered with failed efforts by major car manufacturers. Musk also already had a company that was burning cash: SpaceX.
His decision to also run Tesla led to him almost having to choose between the two companies. Here’s how Musk remembers 2008:
“You have these huge doubts that your life is not working, your car is not working, you’re going through a divorce and all of those things. I felt like a pile of s—. I didn’t think we would overcome it. I thought things were probably f—ing doomed.”
“I could either pick SpaceX or Tesla or split the money I had left between them. That was a tough decision. If I split the money, maybe both of them would die. If I gave the money to just one company, the probability of it surviving was greater, but then it would mean certain death for the other company. I debated that over and over.”
Talk about a trough of sorrow!
Musk was able to save both companies by the end of the year. SpaceX won a $1.6 billion contract from NASA and Tesla secured $40 million in funding just hours before it ran out of money.
The location-sharing service Foursquare went through many iterations under the leadership of co-founder Dennis Crowley. Did you know that Crowley sold his original location-based company—called Dodgeball—to Google in 2005?
Originally, Foursquare’s unique check-in feature was plastered all over Twitter and Facebook, with fierce competitions taking place as people tried to prove they were the most loyal customer of their favorite locations.
However, this initial success faded and Foursquare was faced with dwindling prospects.
Instead of giving up or selling off its assets to a larger company, Crowley made the hard decision to pivot Foursquare. Instead of the massive social network originally envisioned, Foursquare focused on local search and recommendations. It was a difficult choice, and for a time it seemed like the company would either fail or have to sell at a discount.
In retrospect, it was a wise move that managed to shift Foursquare out of the trough of sorrow.
Airbnb may seem like a successful company that never ran into trouble, but the truth is completely different. The company started out by renting out an air mattress in a tiny apartment in San Francisco. They found a few customers, but not the widespread popularity needed to pay the bills.
One of the founders, Joe Gebbia, tells us on the “How I Built This” podcast how they were so strapped for cash that they were just maxing out credit cards. “You know those binders where you keep baseball cards? I had one of those except there weren’t baseball cards in it, they were credit cards. We would go through Visa after Visa, to Mastercard, then finally to AmEx, just maxing out credit cards.” (Transcript courtesy of Inc.com).
No one would fund them (you can read the rejection letters here). To get themselves out of this tough situation —the stereotypical trough of sorrow—they created politically themed breakfast cereal. They managed to sell 800 boxes at $40 each!
Not only did this keep the company financially solvent, their hustle impressed Paul Graham enough that he invited them to join Y Combinator. Eventually, this chain of events led to Airbnb getting funded, finding product market fit, and enjoying exponential growth. While it wasn’t perfectly smooth sailing from there, it was the beginning of the end of the trough of sorrow.
Dealing with the Trough of Sorrow
These are great stories, but how do you navigate your specific situation? Here are two things to keep in mind to help you on your journey:
Connecting with Other People
First, connect with other people who can empathize and understand what you’re going through. Yes you have friends and family who can commiserate, but most of the time they don’t really know what you’re feeling as you try to scrape together the money you need to make payroll.
Instead, get to know other founders. You aren’t trying to recruit them—you’re just trying to find people in similar situations that you can be honest and direct with. There are almost no qualifications for who these people are, but we recommend entrepreneurs who you respect and who have been through it before. They’ll likely be able to give you some perspective on what you’re facing.
They may also be able to give you helpful suggestions on how they successfully handled the same situation.
We offer both mentoring sessions and group masterminds at 10xU to help with exactly this.
Even Bad Things Aren’t Failures If You Learn Something
Second, remember that the Trough of Sorrow is part of the process. You aren’t failing just because things feel like they aren’t going your way.
This is essential to understand, since you can find yourself permanently stuck in the trough of sorrow if you buy into the belief that you’re a failure.
The truth is that you’re only a failure if you fail to learn from your mistakes.
Making educated bets and losing is fine—so long as you’re able to learn from it and make better decisions in the future.
Once you have this mindset in place, you’ll be much better prepared to handle the trough of sorrow when it comes. We promise you’ll figure it out, and that the sun will rise again.