DeepSummary
The hosts, Wil Schroter and Ryan Rutan, discuss the common misconception that startup founders are wealthy based on their companies' valuations, when in reality, many struggle to pay themselves and cover personal expenses. They emphasize the importance of consistently getting paid, even if it's a small amount, as opposed to deferring compensation in hopes of a big future payout.
They share personal experiences and examples of founders prioritizing potential future earnings over current income, leading to financial struggles, stress, and sometimes poor decisions that undermine the startup's success. The hosts argue that a steady income stream, even from non-scalable side projects, is crucial for maintaining financial stability and avoiding burnout.
Wil and Ryan advocate for a balanced approach, combining efforts to build a scalable business with revenue-generating activities that provide consistent income. They highlight the long-term benefits of this strategy, including better decision-making, personal well-being, and increased chances of success, as opposed to relying solely on the prospect of a future exit.
Key Episodes Takeaways
- Startup founders often struggle with personal financial stability, despite their companies' high valuations.
- Consistently paying oneself, even small amounts, is crucial for long-term success and personal well-being.
- Deferring compensation in hopes of a big future payout can lead to financial struggles, stress, and poor decision-making.
- A balanced approach, combining efforts to build a scalable business with revenue-generating side projects, is recommended.
- A steady income stream enables better decision-making, personal well-being, and increased chances of success.
- The sacrifices made by deferring compensation cannot be undone, even with a successful exit.
- The goal should be to maintain a sustainable approach that allows founders to persevere and reach their desired outcomes.
- Founders should prioritize their personal and financial well-being, as it contributes to the overall success of their ventures.
Top Episodes Quotes
- “I think early in our careers, we keep trying to think about this step function, this jump the line. This im going to do something extraordinary, and theres some value to that, right. But I think if you zoom out, which I cannot do now, that im not young and look at just the different paths to get to where you want, which is financial independence or whatever it is that youre trying to get to, a great way to get there is to keep defer or not get there is to keep deferred.“ by Wil Schroter
- “But there's a really interesting story within that story, which is, yes, he got there at the end, but getting there at the end doesn't change the fact that guy probably didn't have the wedding that he wanted to have had to struggle through that.“ by Ryan Rutan
- “The things that I've forgone as a founder don't come back to me right now. Maybe the cash, but time with the kids, time with the wife, traveling, vacations, sleep, I don't know, all those things, they don't come back.“ by Ryan Rutan
- “The goal here isn't just to have the big exit, it's to be around long enough to be there for it to begin with.“ by Wil Schroter
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Episode Information
Startup Therapy
Startups.com
5/20/24
In this episode of the Startup Therapy Podcast, Ryan Rutan and Wil Schroter, discuss the misconception that startup founders are incredibly wealthy on paper, while in reality, many struggle with personal financial stability. See the importance of paying yourself regularly, even when building a high-potential startup. Consistently getting paid, no matter how small, is crucial to long-term success and personal well-being.
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Wil Schroter
https://www.linkedin.com/in/wilschroter/
Ryan Rutan
https://www.linkedin.com/in/ryan-rutan/