Entrepreneurship Is Tough. But Leading a Successful Business Ultimately Comes Down to These 3 Surprisingly Simple Truths

I’ve been an entrepreneur for 15 years. I’ve co-founded and led a laundry and dry cleaning startup called Rinse, which is now a leader in the space. I’ve invested in and advised early-stage startups. I mentor aspiring entrepreneurs. I co-teach the “Startup Garage” course at Stanford Business School. And before all of this, when I was just beginning to understand my passion for entrepreneurship, I interned at a little New York startup called Bonobos, where I had the chance to work directly with and learn from Andy Dunn and his team.

Suffice to say, I’ve seen a lot, from rapid growth and funding successes to jarring setbacks and global crises. These experiences have shaped my understanding of entrepreneurship—and of what it means to succeed.

Entrepreneurship is a volatile journey—you only need to glance at the headlines to see stories about dramatic fluctuations in tech valuations and economic pressures on startups. In light of these constant highs and lows, you must find a way to manage your mental health.

At Rinse, we’ve weathered numerous storms, from lawsuits and layoffs to a global pandemic that halved our revenue overnight. The stress and pressure of leading the team through all of that was compounded by my personal journey of building a family at the same time. I would not have made it through all of that if I did not manage my psyche and maintain a mindset of growth and resilience.

While navigating challenges, I’ve often found myself coming back to a quote from my mom: “It’s not about the what if, it’s about the what now.” That simple reminder has helped me focus on the things I could control and maintain stability and composure through a number of challenging situations.

Regardless of how you approach it, you have to figure out how to manage your psyche. Whether through exercise, meditation, or support networks, maintaining mental well-being is essential. This self-care allows you to effectively lead and make sound decisions, particularly in turbulent times.

Every day we read about another startup collapsing. Given that, I am always a bit surprised when I meet founders who are hesitant to ask for help. Some of this is rooted in pride, some of it in embarrassment, and some of it is because we do not want to appear vulnerable when everyone else seems to be “crushing it.” But I urge all entrepreneurs to cast those potential blockers aside.

At Rinse, we’ve leveraged our network and asked for help at every step of the journey. Friends and mentors have played pivotal roles in our success. My network has led to introductions to people we’ve have hired as employees, customers we have acquired, and capital we have raised. I’ve also connected with other founders and received timely advice that has helped me navigate challenging situations.

Startups today are facing funding crunches and financial difficulties, and many have had to resort to layoffs or other drastic actions to get through it. Some of this is due to their own mistakes, and some of it is due to changing market conditions. Regardless, the CEO’s job is to create the conditions to weather any storm.

One of the most common mistakes venture-backed companies make after raising capital is spending their money too fast on growth, hiring, and “shiny objects.” They think having money translates to assured success, so they don’t bother fixing fundamental “leaks” in the business that would help improve profitability, reduce cash burn, and put the company in a much better position for long-term success.

I made that very mistake. After a successful Series B funding round, we focused on hiring a senior leadership team, expanding to new markets, and investing aggressively in marketing. It was fun and exciting, but we did all of this without addressing underlying issues with the unit economics of our business—the proverbial elephant in the room.

We should have proactivelymade tough decisions that would improve our profitability when we had capital and leverage. Instead, we were forcedto make tough decisions, including layoffs, to prevent the company from running out of cash. 

Successful entrepreneurs know to make tough decisions from a position of strength. By fixing fundamental issues early on and building a strong foundation for your business, you can weather any storm that comes your way.