Joe Grover: 0:00

Fail A word and experience that we spend our whole lives running away from A word I did not intimately understand. Until recently, my life was filled with progress, milestones and growth, and it's not to say I didn't have some disappointments and some of the usual ebbs and flows, but I was not acquainted with the actual despair and darkness that comes with letting so many people down. I replayed the last few months a thousand times. I've dissected every thought, every theory, each assumption and decision that I made to try to save this business. Maybe it was arrogance that I could solve an impossible puzzle, but the realization that the outcome was a result of some of my decisions has brought me to my knees and tears to my eyes more times than I can count. My heart has ached to the point that my body trembled. My mind has spun just uncontrollably as I search for answers, for peace, for direction. I have felt anger and bitterness. I have felt remorse and hopelessness. I have felt abandoned and lonely. I have felt defeated that really is the word defeated.

Joe Grover: 1:19

Dead. My care for people makes business failure almost unbearable. Dead, my care for people makes business failure almost unbearable, whether it's that look on the face of an investor who's lost all their money, or the worry on the face of a friend who doesn't have a job. The weight of the decisions that impact people's lives sits on shoulders not broad enough to bear them, and intellectually I understand these outcomes happen, even most of the time, but emotionally I just can't make sense of it. Peace eludes me as I search for learning and for meaning in what I've experienced the last several months. Hope seems as scarce as peace. As things have crashed down around me. The collapse of something that I have worked so hard for is more than I can bear. I tossed and turned most nights before the crack of dawn on a mental marathon without a finish line, thinking and solving and praying, while I wondered when the sun would rise to steal away the darkness in my heart and mind. The only consolation is experience, but I wonder if the price is worth the reward, or if this experience will ever pay back my family for the time and sacrifice, my investors for the capital they've invested, or for my employees for the difficulty I've caused them as well.

Joe Grover: 2:48

Why this happened? It's a fair question, but one without a meaningful answer. How did this happen? I've been asked that so many times, but the confluence of factors that led to this outcome could not be replicated in a way where the answer would provide any relief. So what is to be done? There's really not much other than growing, learning and moving on. I am a failed entrepreneur. Welcome to the Real F Word. To the real F word. That was my journal entry from 2017. And I have since reflected on this experience over and over and over again, and it's taken me these years to even get myself to a place where I could share that publicly with you.

Joe Grover: 3:39

Welcome to the real F word, a podcast that dives into the often overlooked side of entrepreneurship failure. Each episode features vulnerable, real conversations with entrepreneurs who have felt the sting of defeat, and we're going to talk about false starts, failed launches and the collapse of once-promising startups. I'll invite our guests to share their raw, unfiltered, unvarnished stories of the setbacks and disappointments and the hard-earned lessons that come with entrepreneurship. The Real F Word aims to really de-stigmatize the challenges of entrepreneurship and will highlight the resilience and adaptability it requires to move forward, but not by ignoring the real personal and financial costs of these failures. Most importantly, we'll explore invaluable insights from facing failure with perfect honesty and extract all of those lessons and wisdom and insight to help de-risk the journey for other entrepreneurs. These are the real stories rarely discussed by entrepreneurs and often hidden by investors.

Joe Grover: 4:44

My name is Joe Grover and I'll be your host. I spent the first part of my career in venture capital. Afterwards I had stints as a venture-backed CMO president and CEO, and I'm excited to share some of my personal experience and mostly learn from other entrepreneurs that I've worked with, and to set the stage for future conversations. I'd like to share for the first time publicly how I felt when I was dealing with my own painful episode of failure. So I left venture capital and I joined one of our portfolio companies in Denver, colorado, and the company was in the ad tech space and it was booming.

Joe Grover: 5:22

Like we were growing, we were winning all the awards for five years. Like we were hiring, we were traveling internationally, closing deals. We were profitable. In fact, we had two opportunities to sell the business and we should have like we really should have, and you know I probably advocated for that, but I think the team and investors especially they saw this kind of meteoric rise and they thought, listen, the best is yet to come. And so they asked us to keep building and we did, and we kept building and building and then the market started to falter and ultimately, things started to shift and we did not adapt.

Joe Grover: 6:06

We did not make the right decisions in this market shift that would allow us to continue to succeed, and so our business started to contract a little bit. We had raised some equity and some debt. And listen, when you have some debt on your business and you start tripping covenants, things can get perilous quickly, and it did. It got perilous, in fact. The board came in and they restructured the leadership team and they had asked me to step in as the interim CEO and I really had no interest in trying to solve this. It was an impossible puzzle to solve. I felt like someone had dealt me a two and a five, if you play blackjack, and they expected me to beat the house and get 21. And it's just tough.

Joe Grover: 6:51

So here's the reality is like I did all that I could and I remember we stood up in front of the company and we told all the employees the day that the leadership teams switched, that we had X number of dollars on our balance sheet and we had five months of runway and that we were going to be forced to make some really difficult decisions and to cut expenses and probably kind of shift the business a little bit more to adapt to the, you know, to the market. And then I met with every single employee, one by one, and I was just really honest. And some of those employees were kind of spooked and they said, hey, I think I'm going to leave. And I said, totally respect and understand that, and you know, and a bunch of employees good people left the company and that was hard but it also helped us to reduce our burn rate. So we cut our burn rate in half.

Joe Grover: 7:38

We kind of made some really tough choices on who we were willing to work with on the customer side. That, you know, value-based decisions that didn't always translate into revenue, which was which was really tough. I had an incredibly supportive board, but in the end I had to raise more capital. So the spring came and we were running out of money again, and so the clearest path was to merge our company with a company in New York City in the same space. And we did that and we were able to capitalize the business and we worked really hard. But it just didn't work. The combined company wasn't as strong as the independent businesses were, and so I had to walk in to that amazing team that had rallied behind me and rallied behind the business and lay off my management team and the rest of the employees, at least in that division of the company.

Joe Grover: 8:29

I remember sitting down with my head of HR and she said Joe, why are you on this list? And I said because today is also my last day. And I just remember putting myself on the termination list and thinking about this move I had made from Salt Lake to Denver and bought a house in Colorado, and I knew that there wasn't going to be a golden parachute there's. There wasn't going to be severance right, and that impacted me, but it also impacted all those people in that room and so it was painful but it had to be done. And then I proceeded to continue to work in the business for some period of time. I wanted to make sure we got it to a good spot and I met with all the investors. As the debt investors came in and essentially foreclosed on the asset, I met with all the equity investors. I called them. In some cases I met with them in person.

Joe Grover: 9:19

I remember driving from St George, utah, to Ogden, utah, meeting with the local investors to let them know that we hadn't figured it out and we had taken some capital and it was unlikely they would ever see a dime from that investment and that was really painful for me. Um, and coming from the venture side, I felt great stewardship over those dollars. I felt like people had entrusted me with these dollars and really entrusted me with the company to help turn this thing around, and I wasn't able to. And I remember just sitting with one investor in a coffee shop in Ogden, utah, and I was pretty emotional and I was really discouraged, utah, and I was pretty emotional and I was. I was really discouraged and I remember he just listened and then he paused and he looked at me and said Joe, how are you, how's your family? So I just remember like in that moment, like I was, I felt like a complete failure and I felt like I could maybe never even show my face again in an investor meeting and this kind empathetic gentleman was worried about me when I had lost all of his investment. It taught me a great lesson and I remember he said to me and whether he meant it or not, I really appreciated the sentiment he said listen, joe, if you asked me to invest again, I would do it. It was a risk I was willing to take and I know you did all that you could, and so I really really appreciated that and I realized that I could move on, that I could be accountable, I could really learn from this experience so that I don't repeat the same mistakes. But I could move on, I could build again. So that's what I'm working on, that's what I've been doing for the last seven years. So that's a little bit more about that story and I hope that that experience and some of the learning there will be beneficial to you as you build your companies.

Joe Grover: 11:23

So, at the end of this whole experience right, laying off employees, losing all the equity investors' money, having to meet and talk and explain this to all those investors, talking to vendors whose checks would never be in the mail after that I just I had to reflect. I had to think like what do I do with all this? What do I do with all this experience? And I've shared bits and pieces with a few close friends over the years, but I just decided that I have to share it. I have to be raw, I have to be vulnerable, I have to like, open up and and listen. I mean, this is what entrepreneurship is all about.

Joe Grover: 12:01

In fact, most of the outcomes look more like this than they look like the you know the IPO where someone makes a billion dollars but we never talk about the failures. We never talk about the reality of, and the cost of those failures the cost emotionally, to our mental health, the cost to our families, the cost to investors we don't talk about it. It literally is a footnote in an investor. Investors we don't talk about it. It literally is a footnote in an investor report. Because they don't talk about it in their annual meetings and entrepreneurs don't want to admit it. In fact, they want to move on from that so quickly and there's some that's healthy too, to move on quickly, but that they don't even take enough time to really just like live in this space where we can learn and grow and feel some pain.

Joe Grover: 12:46

And so the Real F Word podcast is all about us living in that space and listening and learning and being real and authentic and vulnerable, and I think if we can do that, we're going to learn as a community that it's absolutely okay to fail. And it really is the cost of innovation. That failure is the cost of building something worth building, of creating value, of doing something different. And I know we talk about that intellectually, we read about it in textbooks, but we don't really talk about what those failures are like for the entrepreneurs that have to live those experiences every single day. That's what this podcast is all about. Thanks for tuning in to the Real F Word. The Real F Word is failure, and remember that failure is a stepping stone, it's not just a stumbling block. Join us next time as we continue to explore the journey of resilience and growth, without ignoring the true cost personally, professionally and financially that comes with failure. Keep learning, keep growing and keep embracing the real stories of entrepreneurship. See you next time.