Startups are a terrible way to make money but a great way to learn what you can do
Mick Johnson, who worked at Facebook and Google, says a month of polite maybes showed him a resilience he did not know he had.
EO · My 2 Startups didn't work, But here's what I've become | Meta Mick Johnson (2/2) | EOMick Johnson knows what it looks like to succeed inside the biggest tech companies and to stall out on your own. He worked as a product manager on mobile at Facebook, later worked on maps for cars at Google, and later rejoined Meta for more work on Facebook. In between, he founded two startups that never scaled, including Gasbag, an app for finding cheap gasoline nearby that launched when Apple first opened its App Store for the iPhone.
Looking back, Johnson argues the math was terrible and the education was priceless.
“Startups are a bad financial investment, but they’re a great personal investment,” he says. “You will learn more about what you are truly capable of founding a startup than doing almost any other thing in the world.”
By bad investment, Johnson means what it felt like at the start. His team entered Y Combinator, the well-known startup program for young companies, and received roughly $6,000 for each founder. They paid themselves around $1,500 a month or so; they were, as Johnson puts it, “just trying to make ends meet” and “didn't really know how to raise money.” They knew they had something people wanted only when their computer systems failed and customers tried to call them because they wanted the service back.
By personal investment, Johnson means what happened when things did not work. High achievers from technology companies and good schools, he says, are not used to failing. In startups, you can pitch 40 venture capitalists, professional investors in young companies, and get polite maybes from all of them. Johnson describes reaching “the end of a month of knocking on every door you can,” when you have to decide “Am I going to make one more phone call? Am I going to send one more email?”
Johnson says facing that rejection, from investors who did not believe in him, from a product that had not yet found its audience, or from job candidates he could not yet convince to join, taught him about his own staying power.
“I certainly discovered a resilience I didn’t know I had,” he says.
Questions people ask
What is Y Combinator?
Y Combinator is a startup program in Silicon Valley that gives very young companies a small amount of money, advice, and introductions to investors in exchange for a share of the company. It is best known for backing Airbnb, Dropbox, and Reddit, and for its intense three-month session that ends with founders pitching to investors.
What does product-market fit actually mean?
Product-market fit means enough customers want what you built that demand feels pull-like rather than forced. Investors often describe it as the point when customers complain if the product stops working, hire more salespeople to handle orders, or tell friends without being asked.
Why are startups often such a bad financial bet for founders?
Most founders own a large share of a company that ends up worth little or nothing, while taking low pay for years and giving up higher salaries elsewhere. Even successful founders can do worse per hour than employees, once failure rates, dilution from fundraising, and the long time to a sale or public offering are counted.