Got Me in My Small Business Feelings

An anecdote about riding the emotions of small business life.

On a Friday afternoon during winter 07-08, Darren and I drove down to Calgary hoping to close an angel investor. We’d met him that week at an entrepreneur development program organized by a local tech accelerator. There were around ten other early stage startups there. None of us had much experience in launching or running companies. We were hoping for insights.

The program, a four day boot camp, put participants through a series of presentations and workshops designed to get us thinking like entrepreneurs. We strategized, positioned, and forecasted; we focused on customers; we ran scenarios, we refined, we planned. Our guides and mentors for this process were seasoned entrepreneurs: men who had built and successfully exited businesses. The phrase “proven track record” kept popping up. I assumed they were living a life of leisure and had the time and inclination to give back. They did tend to be a little light on the specifics of exactly how they climbed the mountain, but, oh, the stories they told. Crazed ex-partners, meddlesome bureaucrats, adventures on the seas! I remember some 20th century rock star’s name getting dropped. Sting? Or was it Peter Gabriel? It was larger than life stuff — but it took up a surprising amount of the overall time.

It all culminated with a debutante ball on Thursday afternoon. The founders were given a chance to pitch their sharpened business plans to a room full of what we understood to be high society angel investors. It was set up as a competition with one of the teams chosen the winner by a panel of experts. I don’t remember the prize. But it definitely wasn’t money. I would’ve remembered money.

Darren and I pitched a startup that we’d been working on for a few months. It was our first business together, and it wasn’t going well. “It” was a real world and online social network that we launched in Vancouver in fall 2007. There was another social network getting attention at the time. You’ve probably heard of it. I think it was closing in on a hundred million users that year, or maybe it was the year after. Our alternative social network — the one you’ve never heard of despite our best efforts and what we thought was a brilliant twist — launched oh so quietly and peaked at a hundred users; if, like me, you rounded up.

Our twist was that, on signing up, each of our members was interviewed by a professional writer, photographed by a professional photographer, and featured in a magazine-like profile in a members-only area of our site. As members, they could attend regular meetups and exclusive events that we hosted at local businesses, with registration, ticketing, and payments all happening on the site.

What was the point? Dating? It wasn’t really dating. Networking? It wasn’t really networking. A private club? Too elitist. Groupon before Groupon? To my regret, we didn’t connect the dots. Adult education? Definitely not. We weren’t targeting an age group or singles or the elite. We weren’t targeting professionals or learners. We weren’t using group buying power or deep discounts to bring new customers to local businesses. So what were we doing? Was it a paid service? We hadn’t figured that out yet. How did it make money then? Tickets? Hadn’t figured that out either. OK, I’m so confused. Why join? Good question. The nearest we ever came to an answer was another question… because it was fun?

Well, the project wasn’t fun for us. It was difficult to explain, operate, or scale. The horrid name we’d chosen for it was impossible to pronounce or promote. It was an idea we sketched on the back of a napkin that, in retrospect, was worth less than the napkin. But, because we went ahead and turned that napkin idea into a business, it ended up costing us considerably more. After a few desultory months, we shut it down, paid our pound of flesh, and retrenched in Edmonton.

So why were we pitching and developing this soundly discredited idea at the entrepreneur program instead of shifting to something, anything else? Again, good question. Maybe shock. Maybe reality hadn’t sunk in yet. Maybe we felt better wandering in unreality. “Sure, it didn’t work this way, but that doesn’t mean it can’t work another way. If we just find the other way, the whole thing could go big, fast!”

I’ve found that mostly untrue things only have to be a little bit true to work their power over us — us in general — especially when we’re at our extremes. It’s the law of small but salient numbers. A few people get rewarded for persisting with an idea that isn’t gaining traction. They tend to get noticed. Most in the same situation either shift focus or eventually feel foolish and frustrated enough to let it go before the tank runs dry. These “quitters” usually don’t want to talk about it; they want to leave unnoticed. Failure is an abandoned orphan. So it’s usually the first group we hear from: “We were right there, right on the brink of giving up, and then, and then something happened that never would have happened had we given up. That was the key. If you’re going through anything like what we had to go through, keep going, keep trying. Who’s to say that something couldn’t happen to you too?” Compelling stuff when it lands at the right time in the right ears. And when so much has been poured into a venture already, and the reward is so high if something breaks the right way, then who’s to say for sure when it’s time to let go?

Our idea was great. It just wasn’t working. Maybe that was our thinking back then. We wanted to believe we’d turn it around, stage that late game comeback. Maybe we did believe it. Remember it was our first business together. It’s one of those intense, not entirely rational experiences that some people go through in love and business: that there’s a chance. It’s a very particular kind of foolishness that only becomes apparent, if at all, well further down the road. Hard to explain, but treated with some sympathy, I think, in the opening lines of one of the loveliest of Canadian songs: “Anyone who's ever had a heart, Wouldn't turn around and break it, And anyone who's ever played a part, Wouldn't turn around and hate it.”¹

Of course we won the pitch competition. By we, I mean Darren. He just decided he was going to win it, and of course he did. He went up in front of the panel of experts, the investors, the seasoned entrepreneurs, and he laid out the same business that I just laid out, the same confused, inert mess — except his version made perfect sense. He supplied the energy and the transfer of enthusiasm, and the scattered pieces came together to form a picture that seemed not just appealing, it seemed inevitable.

(I realize I’ve been using “we” freely to describe “our” feelings and thought processes, when, really, I’ve been describing my own. Darren may have felt or thought something along the same lines, or not. It was so long ago. If we talk about it now, we don’t get into the details of feelings. God no. Consider the use of “we” in this post to be mere shorthand for the fact the two of us went through this experience together rather than we experienced it the same way.)

It was a win, but it wasn’t a victory. The investors congratulated us but demurred when we asked if they were interested in, you know, investing. Interested in what? Investing? No. The catering? Definitely. Their money, they explained, was tied down and trapped in another dimension. It was unavailable. To us anyway. It made me question how high in society retired doctors and dentists could be.

In the evening, the whole group, attendees and mentors, went for dinner. Our peers congratulated us. I think it was genuine; they’d been thrilled by Darren’s performance. It was an aspect of business they weren’t comfortable with, and to see someone their age and in their position do it so well left an impression.

The men of leisure were still giddy from Darren’s pitch as well. They talked about the business as if it was their own and what they would do with it. They settled on a business social club. As they all traveled a lot, they loved the idea of a chapter of this club in every city across North America. The local club would always have something going on, a concierge they could check in with. They could get out of their hotel room (or bar) and meet new “high bandwidth” people for networking and a fun evening of salsa dancing, wine tasting or what have you.

The steady supply of drinks kept the ideas pinging from one side of the table to the other. There was a consensus that “you guys are really on to something here.” One of the mentors, X, took us confidentially aside and said, “You guys should come down to Calgary. We should really do something.” Or something like that. X was an interesting combination of regular, unpretentious guy and likely high net worth tycoon, given his exits and the respect his peers showed him. When we told one of the other mentors about X’s offer — we weren’t entirely sure the interest was genuine; the alcohol was flowing pretty fast — he told us, “Wow. I’ve know X for years. And when he says something like that, he’s serious. He doesn’t kid around. You guys should definitely go see him in Calgary.” That sealed it. After a short work day on Friday, the two of us set out to chase the dragon.

We met X late that evening at a packed downtown bar. Those were heady days in Calgary. The province’s unofficial capital and economic powerhouse was enjoying a long boom period in the oil price boom and bust cycle. The price of a barrel of oil had been rising for years after 9/11. It was on its way to an all-time high in the summer of 2008. The inevitable crash, resulting in much wailing and rending of garments, would come almost immediately after the peak with the onset of the financial crisis. But that was still months away. For the time being, money was flowing a foot deep through our southern neighbor’s gilded streets. And, as we searched for X through the wall of bodies and noise, I could sense the people there, perhaps with a premonition of the good times coming to an end, were determined to spend enormous amounts of it. Maybe all of it, that very night if possible.

X was at a table with his stockbroker, a tanned, thick-necked barrel of a man. Like everyone else in the bar that night, they were in a celebrating mood. X had made some type of trade on the markets that had netted an unreasonable amount of money. X was pleased with his gains, the broker with his commission. Our arrival killed the definite “I love you man!” vibe happening between the two of them, and the broker, sizing us up, seemed not pleased.

But once he realized that we weren’t random drunks, that we’d come to see X and that X knew us, that this was a business call, he relaxed somewhat. He told us of his client’s many exploits and many talents, moneymaking being foremost. Because of the bar noise, he leaned in close when he spoke. He spoke slowly, methodically to get his points across, adding generous pauses to let the words sink in. When he finished whatever he wanted to say, he would hold his gaze and position for an uncomfortable few seconds, searching my face to make sure I understood the importance of what he’d just said. I’d narrow my eyes and nod pensively, sometimes guessing at the reply he was looking for. He’d sometimes scowl and felt forced to repeat his point. Other times, he’d give a satisfied nod as though he’d found a fellow traveler. But he gradually lost interest in this, though, and, when he saw Darren engaging X, he turned his full attention to the bored blonde sitting beside him; I hesitate to call her his wife.

We were anxious to talk to X. We’d thought of the shape of a deal on the drive down and got right into it, starting with the plan for building out the business club concept quickly through the main Canadian cities and then carrying that momentum to the States. We talked about franchising or licensing local chapters to help with the financing. The two of us took turns, dealing sometimes at the high level, sometimes in the specifics. We knew he was sold on the idea; we just needed to give him confidence that we could handle the execution.

X wasn’t saying much. He seemed to be mostly agreeing though. I thought it was going well. We could soon move to close. Then, as though waking up, he looked at us baffled and asked, “What do you guys do again?” That was a little unexpected. But we ignored the implications; maybe he didn’t hear the first time; it was loud after all. So we took it once more from the top, hit all our points, and had him again nodding “Oh yeah, right! That’s so great!” We were again ready for the close. And then he said, “So you’re saying there’s a network…” and trailed off.

We looked at each other. We stopped talking. X asked some incoherent, repetitive questions about our “network.” We gave some halfhearted answers. By the fourth time he asked “So what exactly do you guys do again?” we were ready to go. I looked around the bar. It looked like the last days of Babylon. Or the cantina scene in Star Wars. The music’s playing. Everyone’s having fun. Someone gets their arm cut off. Someone gets shot. The music keeps playing. Everyone keeps having fun.

The broker stayed behind with his lady friend. We drove X to his office. He was rapidly sobering up, but he was still having a hard time wrapping his head around what he’d heard. We’d long stopped pitching him. But something had worked its way into his brain, something that kept disturbing him. He kept saying things like “It’s a network, but not your friends…” as a way to shake it loose.

I dropped Darren at his then girlfriend’s house. We said a few things about next week. He sat for a second, laughed, and stepped out. I remember him walking to the front door. It was late. The lights may have been out. I waited for the door to open, and, when it did, I waved to them both and drove off. I was soon past Airdrie on the highway back to Edmonton. There wasn’t much traffic. Ahead was the winter night and the familiar road that led home. The kids would be asleep. N. would be too by the time I got back. I tried to think through the events of the day, but I couldn’t. My mind was filled with a mocking white noise.

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I thought of this story while reading “Going it Alone: The mental health and well-being of Canada’s entrepreneurs.” It’s a 2019 study by the Canadian Mental Health Association (and I think the BDC) that “aims to enhance our understanding of the mental health experiences of entrepreneurs in Canada.” There were a few findings in this study that stood out for me:

• “Nearly seven in ten (67%) of entrepreneurs surveyed were stressed about their business’s cash flow.”

• “Entrepreneurs whose businesses are in the earlier or “growth” stage

  were more likely to report experiences of stress and were more likely to

  report mental health concerns than their counterparts whose businesses

  were “mature.””

• “Entrepreneurs with fewer than 10 employees, and those earning less

  revenue, were more likely to report stress and more likely to report mental

  health concerns than those whose businesses had more employees or

  generated more revenue.”

Darren and I made it through the 07-08 experience and many others like it. Most of them were related to cash flow, and they occurred while we were trying to establish a viable business. The stresses didn’t go away when our businesses achieved viability and got bigger, but there were fewer of them and they didn’t seem as threatening. A good way to improve the mental health experiences of small business entrepreneurs, then, is to improve the financial results of their businesses. I’ve heard someone call this getting a better reality.

1. Cowboy Junkies, Sweet Jane