From IPO to Bankruptcy and Back — Scaling Across Full Lifecycles, with Mike Krupit

Yes, yes, I got no voice today. Couple weeks of traveling, I'm toast. Ah, so what does it look like to go from startup all the way to exit? Mike, our guest today, has done it a few times, um, across a variety of sectors. We're going to share all about that. We're going to see what the, the discerned lessons are from all of that today. How do you go startup to exit multiple times across different sectors? That is the topic of our show today. Hey everybody, I'm Bill Gallagher, scaling coach and host of the Scaling Up Business Podcast, to you, coming to you now. I don't know, we're closing on 700 episodes and we've been doing this for 10 years, and it is a real pleasure to talk to people every week and hear something new and share stories and things like that. Our clients, their experiences, authors, CEOs, etc., all that and much more. Plus, we've distilled some of the stuff into a book coming out now. Busy Is Broken is probably on sale now, preorder by the time you get this. Some special things for people who preorder, special events and some additional goodies for that. BusyIsBroken.com is where you find that. So find that and more, also our regular workshops, things like that, scalingcoach.com. Of course, you can like and subscribe wherever you're getting this right now. We like to bring it to you everywhere we can. So, all right, all right. My guest, Mike Kruppert. Did I say that right? You did. It's good to check that beforehand, but I did not in this case. Uh, now I should go on and mispronounce it for the rest of the show.

No, you know what, I, I remind, um, I, when people ask, I'm reminded of middle school where they said it rhymes with stupid.

Oh, that's painful. Like, not that anybody's self-esteem has got trouble in middle school.

Um, for everyone.

So Mike's got 30 years of building companies as, in different roles— CTO, COO, CEO. He's worked across a range of across the country, range of industries, that kind of thing. And through all different stages. CD Now, is that right? Help take that one public?

Yeah, that was, I was part of 3 IPOs. Yeah, that was one of them.

Yeah, that's a big deal. That's not everyone. Like many people part of 1 or 2 IPOs, 3 is a lot, right? So across a big range of a founder of this Trajectify company that also works with people now in that kind of situation and has been featured in the Philly Business Journal as Most Admired CEO. Welcome to the show, Mike.

Great. Excited for our conversation today, Bill.

Well, okay. So here's the deal. I think, I think a good place to start, right? You've been through all this range, like successes, but also some failures. M&A, growth, IPO, like all that kind of thing. As you think back about that, what do you think is the most surprising thing that earlier stage entrepreneurs, uh, would have about a lifetime of that?

That perhaps the most surprising is that it's not about the idea or the product or service. It's not even about the timing. Did I pick the right time to launch it or grow it? It's that the people matter most. Having the right people in the right seats is ultimately the biggest determinant of success.

Mm-hmm. Yeah. You know, it's funny, we talked to so many guests and leaders over time. The reliance on people— like, people drive us crazy. People are tough. And yet you can't do anything really big on your own.

You can't. And even in today's, you know, very fast-moving market of AI-enabled companies. You know, you can't surround yourself with hundreds of AI agents and expect the same kind of success as if you were to surround yourself with, you know, 10 good people.

It's for sure a multiplier, right? I have a team around me, and yet some of the things that I've been able to do faster this year and last year because of AI is unbelievable. The ease of producing our show today, uh, I've written a book. The process of writing the book, AI-enabled throughout. I had to write it, but the using AI throughout for research, for organization, for proofreading, for feedback, like all that kind of thing— remarkable.

Correct. So it's a, it's a great multiplier, as you said. Um, it is a tool for people to use. And so I have— I meet entrepreneurs today who say, well, I'll just spin up 100 agents and they'll be managed by other agents. And, and you know what, just surround yourself with 10 people and let each of them spin up 10 agents. But it's that the scale comes from the people who you surround yourself with.

You know, my son had— was like a founder, raised money and did a few companies, and they, they— 3 of them in a row didn't go anywhere. And he dabbled with the 4th, and, and then he folded his work in with another guy, and they built a company called Midjourney. And Midjourney became a very big deal. And there, I know roughly, this is not exact, but roughly there, as he left the company, there probably were 55 employees, right? A lot of community leaders. And then about 1 million paid users or maybe more at that point, right? But that's in a couple of years. So that is, it's still somebody. 55 is not nobody. It's remarkable. And then, you know, multibillion-dollar valuation on the company at the time. That's a remarkable growth journey. And that is the kind of the multiple of AI. It's still not by yourself, right? Even that.

And I'm going to guess that the reason why Midjourney became what it was, wasn't only because of the technology, and I hear great things about the technology, but it's, it's the, those 55 people who, who were there for the early period of the company.

Well, in the technology, if you don't adapt and evolve, right, it becomes common. Like, you know, other people soon develop your capabilities and that kind of thing. And what you're known for is hard to hang on to that edge over time unless your team pulls together and continues to pivot through.

Yeah, right. But the barriers of entry that we see low for— lower now for ourselves to get into business are lower for everyone else as well. So every, you know, it's a— it levels the playing field and it makes a lot more competition. So you've got to figure out what's What's my secret sauce?

Yeah. You know, it's funny with expected IPOs coming, depending on how things go in the market conditions, and there's a lot of ifs there, but it is reasonable that we might have $3 trillion companies, new trillion-dollar companies in a, in a short period of time. Right. And that is like mind-boggling when those companies didn't exist 5 years ago.

Yeah. And therefore, what does that mean for 5 years from now? And, you know, we're 5 years from those IPOs. There's just there's so much uncertainty there.

And that—

and while there's an excitement to that uncertainty and, and a lot of, you know, dreams of, of innovative opportunities, the other side of that is we're struggling to make decisions in this period of uncertainty. Of uncertainty.

Yeah. And it doesn't necessarily, uh, solve that, like making decisions. Look, I, I— so my son's now, uh, an AI scientist at Anthropic, and so he's working on the latest versions of the Claude tools. And so I get an unusual inside sort of help in using AI well for our business, right? But if I just go to AI with a decision for a client or for ourselves, I get pages of stuff like making sense of it and deciding what to do. It's not sort of deterministic. It's, it's like an aid to something. You cannot just like lean into it. Anyway, I don't know if I've got it off.

And that's, that's why we surround, we need to surround ourselves with the right people because human reasoning has not The need for human reasoning has not gone away.

I think that's a— so let's loop back then to your story. Not just one, but many, many industries, different outcomes, difficult ones, joyful ones. And I'm sure even some of the joyful things had many challenges along the way. If you think about across your whole career arc, what are the— like you mentioned people— what are the big patterns you see? And maybe you can connect to some specifics of the companies and what it looked like.

Yeah, let's see. So as part of the whole theme of having the right people in the right seats, the biggest mistake that I made early in my career that I subsequently took a different approach at other companies is the— what I guess, for lack of a better word, I'll call diverse perspectives. We are very comfortable to bring on people like ourselves because we get it. And we lose the appreciation for the fact that different experiences, different backgrounds, different perspectives, different ways of processing information are critical to the success of an organization. And, you know, when you're surrounded by 10 like-minded people in a room, I think— how did I hear it once? If there are 10 people in the room and they all agree, then 9 of them are unnecessary. And so we, you know, it took me a while to be okay with not only the concept of 10 different opinions in the room, but the ability to identify those people who are not like me, who would bring those complementary strengths into the room with me, to the point where I once, once had a boss at one of my companies um, who said to me, Mike, you're not micromanaging your team enough. Um, I said, I beg your pardon? I said, I hired people who can do their jobs better than I could. And he says— how did he frame it? Um, you didn't get to where you are today because other people are better than you. He says, you're the best and you're better than all of them. And so you need to determine how they get their work done. I didn't last at that company much longer after that. There were several, you know, several bad leadership moments like that that convinced me to sort of move on. But, but the stories that he gave me are great because I now use those as teachable and coachable moments for the rest of my career. Yeah, right. But the ability to fill the room with people who do what they do better than I do. I had a client who was running a CEO peer advisory board and had one of the members, a client, say that he wanted to hire a salespeople, a salesperson, but his first salesperson, and said that I don't expect them to be better than me because I founded the company. I know the products and services really well. And one of his peers said, wait, You don't come from a sales background. You're not focused on it full time. How can you tell me that bringing on an experienced salesperson who's 100% focused on sales shouldn't run circles around you? And, and it really changed the tone of then of that CEO who he was going to go out and hire because he, he had his expect— he had to reset his expectations and figure out how do I hire a really good salesperson even though that's not my background.

It's a really funny thing. And we so often fall into that trap of thinking— I don't know if we think well of ourselves or we just think so badly of everyone else, right? And then that leads us to start a company, and then we're surprised when we get in or surrounded by mediocrity that we can't count on. I think it's because people then show up mediocre and don't have a chance to show up great around us.

In part, that's what— that's a requirement of our being good leaders, is to give people the opportunity to show us what they can do, to allow people room to fail, to create that environment, that safe environment that encourages people to, to, to do big things. And yet, you know, one of the things you said there kind of reminded me that majority of people who start businesses do so because they're not good at working with others. And so we're already starting from a deficit of, well, you know, I didn't work. I didn't, I wasn't successful working for others. I wasn't successful working in a big organization or for a corporate structure with all the processes and politics. So I founded my own little business. And now that it needs to grow, guess what? I've got to figure out how to get all this people stuff right.

Yeah. All right. Look, I want to be in charge. The problem is, even if you are and you find people who will just do your bidding, Your customer wants to be in charge ultimately.

Well, yeah, the source of revenue is your number one priority.

Right. What is this shift? So founder to CEO, you've done a range of company types and sizes and that kind of thing. Well, if I'm an early-stage entrepreneur, I started the business, what do you see as the arc that I go through as the leader?

I think, I think the first aha moment is that moment of delegation, right? And that delegation is talked about a lot. And it's, it's a difficult thing because we start by delegating tasks. And eventually, we realize we have to delegate accountability, that we can't be expected to manage a whole bunch of complex work, we've got to have the right people to manage their own work. So, so, so getting good at delegating accountability, The second, the second big milestone to achieve is the processes, right? So now we have multiple people working with us. It's the systems and processes that help us, that help keep us aligned. And so maybe it's an operating system for our business or a system upon which we run our business, or maybe it's just some structure we came up with, but it involves, you know, meetings. And I never forget, I got my first management job early in my career, and I went home to my then-wife, and she says, "How's your day?" And I said, "It was awful. I spent all day in meetings." She says, "Isn't that your job now?" And it was like, yeah, I guess I'm enabling teams to get things done. And so we have this aversion to meetings, yet when our job is to sort of keep— to have the systems and the processes to keep people aligned, A lot of that time is spent meeting with people one-on-ones and groups. Um, obviously enough time carved out for our own deep work, our own thinking. The, the, the, the next part after that is the, um, for lack of a better word, I'll call it the letting go. The realization that I have several things that I need to do. Fiduciary accountabilities, you know, investor relations, press relations, or, or vision, right? Being the visionary. There are things that I need to do that no one else in the organization can do. And I've got to let go of all the other things, right? I've got to trust that the systems and the processes and the people that I put in place get it done.

So why don't you— I'm sure there was a point in your life where you were a poor delegator, and then there was a point where you became a better delegator. And I don't want you to tell us about that time and what, what happened for you.

In, well, in terms of being a poor delegator, yes. When we take that first management job, I was, that management job that, that I was, I complained about the meetings for, I was the worst manager possible. I made every mistake in the book. I didn't have training. I didn't have a role model, didn't have a mentor, didn't have a coach. I hired the wrong people. I dealt with conflict in a very ineffective way. I maybe was a poor communicator. I overcommunicated the wrong stuff and undercommunicated the right stuff. And I probably micromanaged the business, right? And that's, that's the biggest challenge when we're delegating is, is the sort of trusting, giving them the accountability. And I probably didn't. So the aha moment is when I got my— for me, at least, when I got my first performance review as a manager, I was a 5-star manager. I was a 5-star engineer. I was a 3-star manager. And that was very upsetting to me, having been wired to be a perfectionist. And you do a lot of soul-searching at that moment. First is like, Am I in the right career or should I have just stayed an engineer? But the biggest one was, well, what did I do? Right? And so one of the things that has stuck with me to this day that I use a lot with clients who are sometimes offended by it is that ancient Chinese proverb, the fish rots from the head, the fish stinks from the head. It's like, if my department is not performing, if my department is not effective, if we're not meeting our goals, What am I doing wrong? And it's that, it's that self-realization that this is on me. This is not them. This is me. And, and it takes a while for, I think, especially entrepreneurs who are, who are growing into the CEO role and scaling an organization, it takes a lot for you to be able to say it's me. I've been working with some entrepreneurs now for 6 years and they still don't think it's them. But yet we've been engaged for 6 years. Um, the—

so they're hoping you'll figure out who it is.

Yeah, because it's always someone else. Um, and, and they're willing to, you know, the— what is that Einstein quote, right? And the definition of insanity is, you know, we're taking the same steps and expecting different results. Um, so we, you know, it's It's that aha moment that says, it's me, what can I do differently? And I've learned that now. I've honed that throughout my career and realizing that in any case, not just in my, in my leadership work, in any case, the only person you have control over in the room is yourself. In any relationship, the only control over you have is yourself. So how can I think How can I communicate? How can I process something? What behavior should I exhibit? And so to me, a lot of the success in becoming a strong leader is not the ability to master others. It's the ability to master yourself because you're the only one you have control over.

Now, have you gone sort of founder to CEO more than once?

Yes, I've started as co-founder to CEO, and then, and then I started the last two companies I started, I was, I was CEO and founder at the same time, but CEO of a, of a two-person company is really not a CEO.

Founder versus CEO. Yeah. What, explain the difference in your mind.

Well, the founder is, is the person who gets the company off the ground, right? Who says, hey, I've got an idea, I've got a product, I've got a service, I want to go into business for myself.

Clear.

Um, we reach this moment that we have to say, did I just create a job for myself, or am I creating— or am I building a business? Because let's say you get it to the point where it's meeting your, your initial goals. And if you, if you say— if the answer is I've just created a job for myself, I've got a little boutique business, and it makes me happy, and it, it, and it, it gives me the, the compensation that I need, and the flexibility that I want, then you're done, right? You know, you're never the CEO of anything. You've just created a job for yourself and you're the founder of that, of that business. It's when you say, I want to build a business and I want to get this business to a certain size, right? I want to, I want to go from $1 million to $2 or $2 to $5 or $5 to $10, what have you, where you realize that it's not about my direct contributions to get there. It's about the people, the processes, the systems that we put in place, my ability to be a strategic thinker and a visionary, my ability to communicate, my ability to identify the right people. And so, so that's the biggest part of that evolution is to say, I'm the founder. As a founder, it's about me. As a CEO, it's about the organization.

Yeah, I think, and You start a company, you list yourself as CEO right away, right? Sometimes if you want to telegraph the stage, you might say I'm founder, but founder and CEO is the most common thing. And then you find out there's 3 people in the business and 2 of them aren't getting paid.

Exactly.

And the only person who's getting paid is your assistant, right? So there's— there could be that in some cases. Where you've got something like that. Well, I think when we think about CEO, it's like, I'm an executive driving the future and the vision of the company. And I have a leadership team and a wider team. And then now, OK, that's CEO, right?

I agree. I have this position description for the CEO that has 4 accountabilities: Vision, the face and voice of the future. Yeah. Fiduciary accountability, making sure that legally and financially it's a sustainable enterprise. People, ensuring that the right people are in the right seats, mostly at that point at the senior level. And outside face of the company, right? And you're the one, whether it's press or investors, um, or key partners or key clients, you're the outside face company. Everything else is someone else's job. Now, clearly, when we start a business, when we're in that one-person, three-person company, we have to wear a lot more hats than that. But, but we need to understand that eventually, as the organization grows, those are our only four things we should be focused on. One of the tools that one of my clients came up with that I keep stealing over and over again, or I've perpetually borrowed, is keeping a not-to-do list or a do-not-do list.

Yeah.

And I ask my clients to not— to keep it in a physical place, either on a pad or a whiteboard, so that they can see it all the time, that it's not buried in some file. And every time that they— every time that they do something that they know they shouldn't be doing or that they don't want to do, they got to go write it down on that, on that, um, on that list. And I have, I have a couple clients who I know that I, I work with them remotely, and so I know their office layout because sometimes I ask them to show me their office. And they have a whiteboard on the side. And in the middle of a conversation, I'll see them get up and go write something on the whiteboard, which I guess is a, is a proud moment for me.

You know, I've been working this quarter with people in our workshops as we focus on execution often this quarter, and in all sort of stages of our clients. And, and we've been talking about this, about like, okay, there's execution in your business, and then there's your personal execution, which is largely about your time management How do you spend your time? And having them let go of what they're not doing is a really useful thing. And we also like to advocate a not-doing list. And sometimes, not that many people, but a few people will create like a never-doing list that they're like just being really clear with. I like to talk about things that I've told my wife, hey, I'm never tackling that. Maybe someday I could take some, but for now, that's like a never. And then the not doing is like, yeah, like, look, look, that is something that maybe should happen someday, but it's not in anywhere in time for me. Like, it doesn't exist.

Exactly.

That's a useful thing to let go of and be clear about what you're doing and not doing.

Yeah, it's— and so one of the things I ask for is boundaries. And that's that not to-do list or not doing list is one example of a boundary, right? To, you know, to set up those boundaries. Boundaries are healthy and people think that I start a business and now I'm free of all boundaries because my experiences with boundaries in the past have been, have been negative. But when you think about it, every relationship we have, every, every piece of work that we do, every hobby that we have, there's always boundaries. And I just want people to be explicit about them.

Yeah, I think being clear about who you are and what you're doing and not doing is super, super useful. And then thinking about that role, like if you've had to evolve your role over time, thinking about what's on that list and not on that list. In, in the, in the book that I, um, that's published this year, Busy Is Broken, um, uh, I have— and I talk about, um, this guy Fernando Flores who talked about getting like really like direct assessments from people and soliciting that like honest, not polite, um, real feedback from people and figuring out who you are for people and then either dealing with it or, or, or evolving it is really, really powerful. I had a couple of leaders in a company that I took over and they told me that I was a bad CEO, that I was doing things wrong or whatever. And I heard them out and I'm like, oh, you're totally right. I don't do those things. And I'm never, ever I'm never, ever going to do those things. They were so, they were like, grrr, they were offended. I'm like, look, I get that you like that from the former CEO and it's reasonable. And there are CEOs who do that and I'm never, ever going to do that. And I mean, maybe by accident I'll do that sometime, but it's not at all anything I'm committing to. And I just want to be clear. That's not the kind of, here's who I am and here's what you can count on. Right? And, and they both left. And while that was like traumatic in some respects, they didn't really want to go and I didn't really need them to go. But, but if they weren't okay with that, like they did need to go and things got easier after they went, not because they were incompetent. They were very competent, highly competent. But there was just a mismatch between what they were looking for from a CEO and who I was willing to be as a CEO.

That reminds me of a story. When I took over at CDNOW as Chief Operating Officer and a bunch of new departments got moved under me, and the head of one of them, of the biz dev department, came to me and said, look, when I used to report to the CEO, there was always a lot of friction in the organization. So I tugged their elbow and they would just sort of smooth the path for me. So can I expect that support for you? And I said, you know, that's not the way I work. You build strong relationships with your peers and you negotiate it with them and you get them to cooperate with you. I believe in leading with influence, not leading with power. So there is no tugging on my elbow. And he resigned the next day.

Yeah. Because reconciliation, there's a There's a difference. I had Marshall Goldsmith on a previous show, and he talked about working with Ford CEO who was implementing changes in meeting hygiene and behaviors and things like that. He had somebody famously come to him and he encountered him. The guy had been missing the meetings and he's like, hey, what's up? Like, I haven't seen you. And he's like, oh yeah, sorry, I've had a lot going on. And he gave him a lot of sympathy. He's like, oh, I totally get it. I understand. It's okay. It's fine. And the guy's like, oh, thanks for understanding. He's like, oh, no, no, it's fine that you have that stuff going on. You, you just can't work here anymore.

That's great. By the way, you just reflected on, on your book. I love the title of it. So I'm looking forward to it, right? Busy Is Broken, because I—

broken.

Anyone ever tells me they're busy, it's like, what's wrong? Like, that's not good. If the badge of honor that you want to wear is busyness, then something's broken.

It's funny, I had a, I had a friend years ago who was a, he was an executive of the now defunct company, and he in the tech industry, and he described, he's like, okay, I've, I've risen up in my role and that kind of thing. And I don't have anything to do anymore. And I feel like I'm actually successful now. We've got the team running, everything's going good. So I just need to kind of, you know, keep it sprinkling along, like make sure people are empowered and like that kind of thing. I feel like I've got my job, so I have more bandwidth, you know.

Yeah, there's a lot of, um, I've been writing about that a lot lately because there's a lot of perceptions out there that as long as I'm indispensable, I'm safe. Yes, quite the opposite is true. Right? So even in your business when you're doing succession planning, but, but even in my own career, right, I couldn't have gone from CTO to COO unless someone else could do my CTO job, right? I couldn't take on all of that additional accountability if all my other accountabilities weren't being handled by someone else. Yeah. And the fact that I let myself become dispensable opened me up to a lot more flexibility and new opportunities, as opposed to the opposite, which is, you know, be more valuable so nobody was ever going to fire me.

I had a client, uh, that worked with me for 8 years, and, and I know another coach who was like, that's really great, and he's— and his, uh, thing was to become indispensable to the companies. And I, I'm like, well, you know, I mean, it's nice, I know them well, and I, and I've been paid for a long time for the coaching work, but what I really like is to create a success story. I really like to work with you for like 2, 3 years and sell the company. And create a big exit. I mean, that's a much more enjoyable thing. That's a victory that I can brag about forever. We can both brag about, right? Like, so graduating companies through an exit or a succession or something like that, not needing me anymore, feels like— and it still takes a couple of years of work to get the work done.

But no, I've had that a lot in the course of my business. And right now I'm struggling with it too, where if a client becomes too dependent upon me, I feel like I'm not doing a good job.

Yeah.

And my goal is to wean myself out of the engagement with success, with, you know, promotable successes the way you've just described.

We're not always successful. We're not always slaying. We're not always killing it. We're not always, right, smashing. We're not like sometimes it goes badly. So you reference having some bankruptcies. Sounds like more than one, plural there. Tell us about one or more of those. Like what was the company? What happened? What did you learn from it? Like take us through those stories.

Well, even I'll share, since CDNow is sort of a well-known story, I'll even share CDNow, the bankruptcy. That, that we were working towards. Um, we had gotten to the point where we were supposed to merge with, uh, Columbia House, and I was COO at the time. I hadn't been appointed CEO yet. And so, um, we, we were gearing up towards this, this, this private merger. Um, it was a merger with this major private company. Um, we were public at the time, and we put all of our eggs in that basket, and the, the owners of Columbia House pulled out at the last minute and left us in debt with, you know, big operating losses and no plan forward. At the same time, what was happening in the marketplace was there was a, um, there was the, uh, the, the beginning of the dot-com bust where now there wasn't a lot of capital available out there. And Wall Street, who was saying we, we care a lot about growth now said we care a lot about profits, and we had no resources to turn it around. So we put the company up for sale, engaged investment bankers, and, and for the most part, myself and the general counsel and the CFO were working on that. But in parallel, I had to be preparing for Chapter 11. I, you know, the fact was that the business wasn't sustainable And I remember at the, um, at the end of the, the, the banking process, we were supposed to get bids from 6 players, and none of the 6 players decided to make an offer, right? And so now it was, all right, well, I've gotta, I've gotta start executing this, this Chapter 11 plan. Um, and, and instead, you know, look, we, we found a, a latecomer to the, to the, the buying process was Bertelsmann, who, who had just come into $7 billion from their divestiture of AOL Europe. And, um, they had $7 billion to spend, so they bought us at, you know, $3 a share, which was way down from our, from our, um, peak of like $39 perhaps.

Right, right.

But, but it was a way to keep the business going. But there was, you know, that, that process. We had 575 employees at the time, right? That process of, of trying to figure out a Chapter 11. And even later in my career, so, you know, having done a startup, raised some money. This is the last startup that I did. You know, we got it to 9 people and we really, we thought we had demonstrated a little bit of product market fit, but when we tried to scale it, we realized that we didn't have it. There's some anomalies, and no matter what we tried, we, we couldn't, we couldn't get traction. And I went back to the investor. He said, I'm willing to put more money in because it sounds like you're making progress. And I, and I said, you know what, I, you know, we built some, we built a great technology, great product, we have a great team, um, but this next dollar you give me is, is it this at just as much risk as the first dollar you gave us? So, you know what, I don't think we should keep going. Um, we had a lot of false signals along the way, and, and maybe it was, you know, maybe it was our own bias, confirmation bias. Um, and, um, you know, so just, just taking those 9 people, right, the myself and 8, and just saying, hey, go find something else. Um, you know, you know, and we didn't, we didn't formalize it as a bankruptcy yet we subsequently did. We, we ended up trying to tuck it into something else so that we had— we could hold our heads up high and say, hey, we had an app, we were acquired. But the fact was, no, I mean, for all intents and purposes, the technology and the business went out— the technology and the team went under. Um, and it's— and that was all in the course of 18 months, right? It was maybe 24 months max. Um, the fact is that when you hire people and you create jobs and you create a product or a service, and all of this you feel has value, the whole process of saying it's not going to sustain and we have to bankrupt it is difficult because of all of the joy and pride that you got from it as you were starting it and and building it.

Yeah, I think the personal attachment, the emotional attachment to the thing is very, very high. And, and I think there's value in hanging with it, but the bankruptcy and the failure can be something. So I've skirted bankruptcy on two occasions with the same company, and I shut down two other companies. Now we sold off some others, but I, but I, but I just closed them. And I thought when we did, like, that we were putting them on pause, but I never went back to them. Like, I just got busy with other things. And like, and we could have. And in fact, one of them was online food ordering. Long before, you know, Uber Eats and Grubhub and DoorDash and any of that kind of thing, we had a working food ordering with actual live orders in restaurants. Right. And And you shut them down.

Yeah. And often, even though I said earlier that timing isn't really a critical factor for success, but, but in many ways for failure, timing is often a major contributing factor. Um, you know, too early.

Yeah, too early, wrong time. Yeah. Uh, yeah, our food ordering was pre-mobile. And, and lacked the, the same kind of integration that you have today in stores with the POS systems.

Yeah.

Talk about the lesson. So if you were going to look at the lesson for the bankruptcies to younger founders and CEOs, what would you say? They have yet to face that. What is it that they need to look at when they hit a bleak patch?

When they hit a bleak patch. Um, get outside-in perspectives, right? So we are, we are too close, and as you say, too emotional to what is going on. And that is a critical moment where the outside-in perspectives perhaps matter more than the inside-out perspective. So when things look bleak, go get other perspectives, go get other opinions. Maybe it's a coach or an advisor, maybe it's a mentor, maybe it's a comp— I, I, when I was struggling with my last startup, I went to the competitors. You get another CEO of a startup on the phone, they're happy to chat with you, and often they'll share with you more than you, more than you expect, especially if you're willing to be vulnerable, authentic as well. So, so get, get outside perspectives. Um, try to make your analysis as objective as possible, right? Really look at numbers, um, whether it's, you know, what you've learned about the market, whether it's what you've learned about pricing, whether it's what you've learned about conversion rates, whatever, whatever you've learned that is not turning out that is creating this, this bleakness, right? To not— to really make it as objective as possible. And there's nothing more objective than numbers.

The—

I think the final thing is to be willing to take more risks, right? So things get bleak and we get a little bit nervous and we might get too conservative. And so if we've built a business that perhaps is iterative, And many businesses today, many business founders and founders and business people do think iteratively. Um, be willing to iterate on riskier assumptions in tighter iterations. And so, um, when I saw at my last startup that we were running out of cash, I said, let's just you know, in a sense, throw spaghetti at the wall, but do it in very tight, tight iterations. So let's take this one feature and fake it till you make it. Tell everyone we have it, throw up a landing page, send traffic to it, see what we can learn, right? Within a few weeks, we learned that— so, so we were, we were a mobile app, and we thought maybe if we had a web presence, it would be all different. But you know what, web presence, you know, building that system would have taken a little bit of time and money. So Let's go validate that. And, and so we made believe we had a website. We put up the shell of a website and we, we drove people to the website and drove people to the mobile app and, and try to convert them and found out the conversion rates were equal, meaning it wasn't the website that was holding us back. So be willing to take risks and iterate more quickly when things are feeling bleak. And finally, Um, I hate to call this something formal like scenario analysis, but map out the next few steps because when you get to that next step, emotions are still going to be high. And so before you get there, make the emotional decisions. So if I spend another $10,000 in 6 months and want to get X number of customers and I don't, I am willing to shut it down. I will shut it down. Do that in advance because in 6 months from now, you're going to try to talk yourself out of it. So convince yourself before you start.

You know, it's great. What are your— what do you consider success? What are your boundaries? What are you willing to iterate on? We spent some time iterating on a new workshop recently. And as of last week, we'd registered over 800 people across 2 sessions, and it's still climbing. And then this morning we were over 500, nearly 600 people registered for the workshop for the first session. I'm like, holy crap, we've hit on something. Now, did we do a good job with it? Is it like, is this— but clearly what we laid out is of interest. Like, we hit on something that there's interest in. So now we have to see, can we make it like really successful and repeatable over multiple sessions? Right, right.

Well, and the question becomes like, what are the assumptions that went into it that you want to validate coming out of it? Pricing, conversion rates, things like that. Like, what are we, what are we expecting from these 600 people in the room?

Mike Kripit. Um, if you want to know more about Mike, his website is Trajectify. If you like what he's selling, you like his message, go check it out. Trajectify.com, um, is a place to find out more about Mike. Mike, thank you so much for joining us on the show today.

Bill Gallagher, I very much enjoyed it.

A lot of great things in here and more. If you want to find out more, go to truejectify.com. If you want to find out about our stuff, go to scalingcoach.com. That's our workshops and that kind of thing, including ones like we did, we're doing this week. And then I got the new book coming out, busiessbroken.com. Advance orders are available for that as you get this now. We're pretty excited about it. So, businessbroken.com, scalingcoach.com, Mike Kruppitt, Trajectify.com. Thanks to my friend and mentor Vern Harnish for creating this whole Scaling Up mess that is responsible for our work and impact in the world. And to Wanda and the team for getting our show prepared and out the door each week. Thanks again for watching, for listening. We'll talk to you again next time. Keep scaling.