Episode 13: From Rough Patches to Reality: When to Call It Quits on Your Startup

Zach (Lead): Hello everyone and welcome to Founder Problems. I’m Zach Oshinbanjo Army Vet, turned Construction project manager, and I’m joined by my co-host, Lee and Sarah.

Lee Zuvanich: I’m Lee Zuvanich I own a startup founded a nonprofit and I’m running an agency that helps other founders be more organized than I am. 

Sarah: I am Sarah Schumacher and I run a website agency working primarily with small clients that need me to do things such as find out where a domain name is registered that has been untouched for 12 years.

Lee Zuvanich: That’s so specific.

Sarah: True story. I may have resolved it, I’m not sure yet.

Lee Zuvanich: This is why we love you.

Zach (Lead): We’re rolling into season two.

A few months ago we talked about how. should maybe not quit their day job, especially if they’re going out on a limb testing a new idea. We also [00:01:00] talked about different strategies and ideas to manage multiple opportunities at the same time. Sometimes that just doesn’t work out. Sometimes you have to be able to let things go.

After four years, as of July 1st, 2025, I am to shut down.

My organization Vetelligence, which was originally structured and based on the idea of helping military service members transition out of the military into the civilian workforce.

I want to keep it top of mind that failure isn’t some dirty word. Sometimes things don’t go the way that you anticipate and it allows you a little bit more bandwidth to do other things. So I open the floor. Anything off of that?

Sarah: Everything you say. Means you have to say no to something else. As soon as you said that, that’s what popped in my head.

Zach (Lead): Yeah.

Sarah: It’s sad, but it’s also an opening for other things that you can get even more excited about.

Zach (Lead): Mm-hmm.[00:02:00] 

Lee Zuvanich: Yeah, that’s something that I struggle with, that I’m also learning. It’s funny ’cause I don’t consider any of my businesses I’ve shut down to be failures at all. That’s probably because I didn’t come up in the world. I was like throwing shit at the wall.

My family members have started businesses that were incredibly practical I don’t even know if anyone in my family knows what a VC is, because they don’t care to, my aunt started a daycare. My grandma had a typing business, and they just. Figured out a way to make money so they wouldn’t make some money, and they never really thought of themselves as like capital E entrepreneurs, I don’t think. So patterning myself after that, I would just toss together a business and then I’d shut it down when it didn’t serve me and my family anymore.

And in my mind, that’s what a business is for, and that’s what you’re doing. You are experimenting, you’re iterating, you’re taking care of your family, and when it doesn’t make sense anymore, you’re moving on. And that’s what a really smart business owner does. So it’s a good skill to [00:03:00] have.

Sarah: When you say that, it’s interesting ’cause I feel like that’s obvious . Yeah, that makes sense. Those of us living in founder land all the time, put these ideas on a pedestal somehow and make everything way more like the expectations are higher, everything is more difficult and more monumental than it needs to be, which is really unhealthy probably.

I hadn’t really thought of it that way till you said that, but yeah. I mean, what is a business for? It’s so that you have control over your time and your energy, and you benefit from the work you put in. You’re not making money for someone who’s making a bajillion dollars a year, for meetings, whatever CEOs do that are making these wild salaries, while all the people in the office are dealing with the actual work. You can see the return on the work that you do, and then you benefit from that directly. And then you also have the ability to do things like fire clients when necessary. So I think that that’s how we should be looking at it and why are we not looking at it that way? 

Zach (Lead): I think a lot of the thought in trying to structure and organize something that [00:04:00] can provide for yourself and allow you to allocate your own time, and a lot of, I think a portion of that gets lost sometimes when you, I don’t know, get so far into the business. When you’re just consumed by it. It’s every waking moment you’re taking calls, you’re stepping away from pool parties, whatever it may be, and you no longer have excitement about what you’re doing. You’re burdened by the idea of, oh, you know, every Monday you’re gonna have a potentially difficult conversation with new clients. You gotta go through onboarding. Somebody’s gonna call you a jerk, somebody’s gonna tell you to take a hike, and all these other things.

So it’s like. YI think it gets lost and I, one of the things I look back after whatever my time is, is I genuinely had difficulty to remember the last time I found it enjoyable and or I identified as someone who was attached to this organization like. 

Lee Zuvanich: Wow.

Zach (Lead): it’s such a [00:05:00] stretch. I think I was like, remember back in December 22, I was a bright-eyed founder trying to do all these things, but everything since then, it’s kind of sucked, you know?

It’s not been good for me. It’s not been productive.

Lee Zuvanich: say, I was looking through my books the other day for Adva for my agency, which has been the most profitable business I’ve ever run in my life. And I was looking through everything because I’m talking to some people who are interested in buying it again, I don’t know if it’ll go anywhere again. And getting it all together and in my mind I’m like, 20, 23 was really profitable, you know, 2024, not so much like economic downturn for everyone and. And like, that’s what I’m gonna see in my books. No that downturn started in 2022 and it’s been a blur since then. And I think it’s been a blur

Sarah: Hmm.

Lee Zuvanich: a lot of people.

I. Things have been hard for a lot of people, like people who should have gotten funding and landed clients and moved forward with great ideas, able [00:06:00] to, and a lot of shit died in late 2022 or and mid 2023. So I just wanna say that that like, if that’s exactly the timeline for you, I think it’s Very realistically tied to the economy and not some personal failing. The fact that you were able to recognize it and figure out how to move on is something that I still don’t know how to do quite yet when it comes to like investment money. That’s that’s different ball game for me. I’m willing to torture myself a lot more than I ever was. If there’s investors on a cap table looking at me, waiting for me to make a move. Which is crazy because they don’t want you to torture yourself. They want you to make moves. Spend the money, iterate, right? Figure it out, shut it down, on. Go get your next idea. Like that’s what a founder does. so yeah, I think to me, you did everything right.

Sarah: There’s almost the same dynamic with I think, founders and VCs potentially as there is as like an [00:07:00] intern working for someone for the first time or a junior dev or something. Because the way that you just described that there’s this pressure hanging over their head as far as, oh no, like am I, am I gonna do this right?

I have some questions, I’m afraid to ask questions, and they just make it into a big deal and the person running the business is like, dude, just ask me the question. It’s fine. Just ask. You’re making like you think that this is like this huge Yeah, exactly. Then just do something and then you ask questions, because that’s the attitude I have with less confident people.

That I’ve had working for me in the past. One of the things I love about one of my main devs right now is I love that you ask questions, keep asking questions, ask all the questions, and it requires a level of courage to do that. To trust your own ability to even know it’s the right question to ask perhaps.

I’m not sure what the dynamics are for that, but I think that really matters. And there’s maybe a lot of that that happens with founders that are. In this place of feeling beholden to an investor and then aren’t as free to do what they think they need to do. And [00:08:00] it sounds like, based on what Zach just said, we need to have more of a Marie Kondo approach to businesses.

This startup no longer sparks joy.

Lee Zuvanich: Yeah.

Sarah: I’m gonna toss it out like these old socks.

Zach (Lead): Being able to identify that early is such a challenge and maybe from a societal perspective, maybe I’ll just speak for me, It’s a very strong driving force or factor to not look dumb. There’s probably a more tactful way to say that, but I feel like asking questions almost implies ignorance no one wants to be caught in this position where they seem like they don’t know what’s going on or they don’t know what to do. ’cause we have so much external pressure knowing what’s going on and the right decisions. ’cause everyone wants to be independent, everyone wants to be autonomous. But if I’ve never done X, Y, Z, how should I go about that? Relating to someone and saying, I didn’t know how to do it.

Can you show me? I think that in its own kind of creates a. I like a power imbalance. You’re like, shoot, this person knows more than me. So I think that could lead to why some people find it [00:09:00] so difficult to ask questions or speak up or like in my case, I think I was just driving and driving and driving and trying all these things to see what would work and I kept getting to a point where I was just like, well, I can’t and or shouldn’t ask. about this? ’cause it’s just, then it’s gonna mean I don’t know what I’m doing, so,

Lee Zuvanich: Oh.

Sarah: That makes perfect sense actually,

Zach (Lead): so.

Sarah: that’s, I think you hit the nail on the head.

Lee Zuvanich: I feel like I have some very

Sarah: I.

Lee Zuvanich: I have an abundance of confidence most of the time. I over-engineer things mostly because I know in my gut I. If something will work, like I feel very strongly. This is like an example of me being overly confident. I’m like, I don’t know if I’ve ever been wrong.

I’ve definitely been wrong, but I can’t think of a single time off the top of my head. ’cause when I think back to my childhood, I love to sell. I’m good at selling [00:10:00] and the key to me to being great at sales and to really landing things is. You can’t just be ready for the next step, in my opinion, have to be ready for the next five or 10 steps.

You gotta be way ahead of the buyer, right? So if they lean in one direction, you can be like, oh, I’m prepared for that. I’ve got the solution for that too. That hurts you. I have the pain reliever for that, and you better not be full of shit. don’t really like the approach of let’s build a vaporware castle and promise a bunch of stuff we haven’t built yet, build a landing page and then if people sign up, then you go build it. I know that’s the lean way to do it. And in today’s economy and society, that’s probably the smartest way to test an idea. But I hate that ’cause I’m used to the old school entrepreneur, small business owner mindset If they say they’re ready to buy, I’m ready to take that dollar right now and I’m ready to perform that service by tomorrow. And that’s been a big strength of mine, is I’m ready to go and I haven’t been ready [00:11:00] to go with my startup this entire time. There’s always been a problem. There’s always been, well, it’s not done being built it’s part of, it’s done being built, but they wanna buy the other part that’s not done. Or what if there’s bugs and they don’t wanna give me enough money to fix those bugs. They just wanna give me enough money to put their toe in the water. So I need to go back to investors. It’s a whole different ball game that I’m not used to, I have an overabundance of confidence that I can sell when it’s ready, if that makes sense. so I’m sitting on, it’s not ready yet. I know a lot of founders get stuck there. And I don’t know if I’m delusional or not. It’s hard to know.

Zach (Lead): Some of that distinction might be knowing, or maybe you can characterize this since I said you’re bursting at the seams with courage, bravery and optimism. I. What would you say is the difference between maybe a rough patch and a dead end? We’re talking economy, some different periods.

[00:12:00] Like if you’re in real estate in the end of 2007, early 2008, that’s

Lee Zuvanich: a metaphor. I love that.

Zach (Lead): That’s the worst time to be in it. But if you waited until, I don’t know, 2021 when some bond rates and different things happened, 2021 was an amazing. Year to buy a car, now it’s terrible. Awful.

Or do you move towards the dead end part of that?

You’re like, well, it’s not working because it’s not meant to work. How do you envision or characterize that?

Lee Zuvanich: For me, the difference is how much, capacity, resource wise, you have to wait out the market. That’s it, period. That’s it. And within yourself, do you have the money? Do you have the time, do you have the energy? Do you have the life left to live? I turn 40 in a few months, so I’m about to start feeling like I don’t have a lot of time left, to just wait around for shit to come together or whatever. But I did decide to wait out the market with my startup when investors were bringing really bad term sheets to not just me, but everybody. Two years ago I [00:13:00] stepped back from all of it and I was like, you know what I’m gonna do? I’m gonna go manage some Airbnbs. If I have to, I will put my house on the market. which I don’t recommend for founders to do ever if it’s just to run their business, but I was already, for personal reasons, thinking about doing that. So it was kinda like in the back of my mind, if I have to, I’ll put my house on the market before I take a bad term sheet. I’ll keep working on the business.

In fact, you know what? I’m gonna go back and do a bootcamp to brush up on my enterprise level coding go from hobbyists to, I can actually get in the code with my developers. So I did that. I would rather do that than go with bad terms that are gonna sit on my term sheet for the rest of the life of the business.

So in that way, I rode out a bad situation and now I’ve got investors actually coming to me unprompted saying that they’ve got checks to write. Supposedly. We’ll see. don’t trust anything anymore, but like. It could have. [00:14:00] Yeah. But it could have been a dead end if I had decided it was a dead end because I was looking at, you know what?

My kids really need me to be able to pay for private school to be able to pay for whatever we’re doing without having to worry so much about money and work so many hours. My time with them is limited and precious and. it’s time to shut this down. I’m not gonna spend two years grinding and hustling and cleaning Airbnbs and back to coding bootcamp and telling them we can’t afford things because I’m not even working.

I’m in a bootcamp. It was my choice to do those things instead. And in my mind, I’m le I’m teaching my kids the value of hard work, and they’re watching me work my ass off. And they’re teenagers, so they’re like. You work harder than anyone I’ve ever seen. And I’m like, learn how to do it.

And also, no one should ever work this hard. It’s unhealthy go to therapy. We’ll find a balance eventually, but for me it wasn’t a dead end, only because I found a way to tread water. I [00:15:00] think one more bad day, one more dentist visit, one more trip to the vet or something could have been a turning point where I just gave it all up and had to go get A job, go back to tech, go back for working for someone else. Thankfully I just have not had to do that. Things came together over the last few months and kinda like back in the game again. And I think that investors, they play at this higher level than we may ever or no, that is more like a 20 year. Hold out, right? Like with real estate and that kind of thing. Stocks and bonds and stuff. What do you guys think is, is it about your internal switch or is it actually like No, any sane person would’ve called it two years ago.

Sarah: I think the takeaway here that people need to hear is every single business goes through this. And the ones that are still here are the ones that went through the rough patches and didn’t call it quits. So you’re not gonna escape unscathed. You’re not, and I think we need to highlight that.

This is just part of the game. It’s [00:16:00] gonna suck sometimes. That’s why the biggest predictor of success for a lot of things is grit. Can you keep with it? Can you be persistent? Can you be tenacious? So everybody’s gonna go through it. And then I think the way that you determine if it’s a dead end it’s so personal.

It’s so individual. I think trusting your gut is a big thing that’s not talked about enough. Having people that you can also talk to outside of, outside of you, but within the same industry, I think that’s also important to be like, Hey, here’s, here’s where I’m at right now.

‘Cause you can get some, some empathy from people that understand what you’re dealing with, but they can also give you tips or pointers or be like, man, that’s unsustainable, or You should try this, or whatever. So I think having support. Having a deep seated knowledge of back to the values thing we always talk about what your values are and what you’re willing to put up with for certain seasons.

And knowing that maybe this is a season, what is it gonna take me to get through this? There’s just no one size fits all answer for that, unfortunately,

Lee Zuvanich: Yeah,

Sarah: than the fact that everybody’s gonna go through it. So

Lee Zuvanich: true.

Sarah: I think the community [00:17:00] piece is a big one that needs to be highlighted here too.

I’m in a group the other day where someone was talking about, they said, I know you’re not supposed to talk, badly about employees, but it’s hard. And a bunch of us we’re like, no, no, no. The rule is you don’t, you don’t talk about that within your org.

But you need to have support.

 The sentiment there was, this is hard. I am frustrated. I’m having to deal with these things.

I feel like I’m not supposed to talk about it, but I feel like I need to. And it’s like, no, you need to talk about it, but you need to be selective about who you talk to, those things about.

Don’t be that

So find people.

Lee Zuvanich: in the meetings. I hated that. That was so bad.

Sarah: Is hearing every you

peer group. Outside of whatever, not even involved in your business. Ideally I have a monthly agency meetup thing that I do every month that’s just a bunch of people running business similar to mine and we just hop on and we chat about whatever, and it’s great, you know?

’cause we’d be like, Hey, I’d be dealing this problem. What do you guys think? So that is super, super important. Highlight you’re gonna run into rough patches. You’re gonna have these to make these [00:18:00] decisions, and you need to have people around you that are in your space. Again, not random people, not your grandma it has to be someone in the space.

It has to be someone that knows your industry . and at the same level of what you’re doing too, that kind of stuff. So find those people and then just play it by ear. That’s all all of us are doing is playing it by ear anyway.

Lee Zuvanich: I wanted to make sure before we move on to say opportunity cost is a factor that I forgot to touch on. It’s not just, can you hang in there? I think

Sarah: Mm.

Lee Zuvanich: an analysis, this is what I’ve been doing for the last two years as I’m trying to ride out a bad economy that has affected every agency owner I know. but I decided to hang in there because of what Sarah said. is the biggest indicator of success. recessions make millionaires or billionaires, right? When a recession hits, everyone who was unprepared or just didn’t have the grit to stick it out goes away and all of a sudden the market starts to open up. And that’s what’s happening for me. I mean, people are coming to me. My competitors, maybe scooped them up. They’re gone now I watched several [00:19:00] agencies that I have worked at, even shut down over the last couple years. But I would also do this analysis what am I giving up? Like Sarah said at the beginning, everything you say yes to means you’re saying no to something else, and I’m saying no every day to another good idea that maybe could be already funded. I’m saying no every day to starting all over with some scrappy new thing that I’m extremely energized about and that energy really makes a difference and whether or not I get up and go sell it or lay in bed obsessing about whether or not i’m doing the right thing, right. it’s just a waste. So that opportunity cost is the other factor. Let’s say you’ve got a hundred thousand dollars to spend maybe literally or figuratively in terms of your energy and time, you spend it on the business that’s struggling and you just hope it’ll pull through?

And when it does pull through, now you’re back to making maybe half a million a year, a million a year, or do you. Take that and you just invest it in a totally different concept that’s more primed for today’s market, and you go hit that [00:20:00] million, million a year kind of level that you’ve been wanting to hit. Yeah, I wouldn’t say go try to be a long-term investor with smaller amount of assets. If you only have a little bit, you have to be really scrappy and intuitive and know when to pivot.

Zach (Lead): One of the biggest points for me, is quitting harder than starting. I talked about when the excitement piece waned off for me, but another factor.

And as I was thinking just as an episode title, something like Living on Hope and a Prayer is that I realized that opportunity within what I was trying to do had ceased, and I was literally just sitting on a cliff, just kind of waiting for the next thing to happen. I was like, oh, okay, if this grant lands, I can get back in the game.

Or if this person takes my call or if I meet this guy who’s a scientist here, they’ll validate my idea. And I kept waiting on these other things that were very external. So it’s like I had no internal [00:21:00] control over what I was doing. The last grant I submitted April 21st . I moved land and water or whatever to get everything in for that particular grant . It’s usually a four month cycle before they let you know if you’re getting the funding or not. It was for $250,000. So after two months, I’m like, okay, just two more months and I’ll see if I get this. reopened the cycle, the applications for two weeks. that just gave me a big light bulb in my head. The only reason they would reopen it after two months is they were unsatisfied with what they had. I was just like, okay, Zach, what are you gonna do? Are you gonna sit around waiting for them to get everything together?

’cause I went back to them, I was like, okay, you reopened it. How far out am I gonna have to wait now? They were like, oh, we’ll let everybody know. Probably early October. And I was like. I’m not gonna sit around for three months waiting on one grant when this is the only contingency on the business. So that was probably the final straw.

I was like, all right, go ahead and draw this paperwork up. Get Delaware on [00:22:00] the phone, get Missouri, get them on the phone. Do the foreign corporation withdrawal, whatever it’s called. And do all the paperwork. So. I think that’s my little piece is if any that ever came up is like, when did you decide?

When I realized I was waiting on one thing and that one thing was unsustainable for the life of the business.

Sarah: I think the answer we should have given too between the rough patch and the dead end is if, if your clients dry up, if the opportunity is gone, I went straight to the hard answer

but if you’re in oh, I don’t know, writing right now, don’t become a writer right now. People Okay. Copywriters are not having a good time. All right. You do not wanna become a copywriter in the,

Lee Zuvanich: maybe not for

Sarah: well, I mean, I think it’s, the cream’s gonna rise to the top kind of thing.

You’re gonna have to become a strategist. There are ways to make it in that. But I’m just saying if you were brand new, junior whatever

Lee Zuvanich: you sound like

Sarah: Now is not a good time. Yeah. [00:23:00] Yeah. So there’s certain things where I would say that if it’s a rough patch and the rough patch is your entire industry just dried up overnight. Like, I don’t know, you made floppy disks back in the, or a

Lee Zuvanich: optimist in

Sarah: you know, you were a film company. Like look.

Lee Zuvanich: I’m like, that’s the best time if your whole

Sarah: Not for Kodak.

Lee Zuvanich: dries up. Kodak’s still around though, right? What’d they do differently? I.

Sarah: Maybe see other one. There was a company that really botched, I, it was a Kodak, one of them invented the digital camera and they refused to be first to market because they would eat their own business.

Is it Kodak? I thought it was Kodak. That’s an example, right? It’s like you’re gonna, you’re just

Lee Zuvanich: They had to pivot. Yeah.

Sarah: Yes. Just don’t, don’t get into that now. Right. Or even the way that Google was slow to get to ai, even though they had most of the research just ’cause they were afraid they were gonna eat their own ad business.

You know what I mean? So anyway, that’s, that’s kind of an aside, but I’m just saying that we should also clarify if your entire industry is going away or dry up or something, ’cause things are changing, that should also be a sign that maybe it’s time to move on. And I think we also need to [00:24:00] address the fact that it may not be a dead end.

It may be a pivot because pivots are also a very normal part of business. So I have pivoted two times, I guess. Yeah, I started out as a brand agency and then I, well, I guess I pivoted more into like a very niche way of doing that, and then I pivoted into websites and then I nixed everything else.

There’s some different ways I could divide that, but either way it took me time to get to where I am now because of making pivots. So

Zach (Lead): I, I think I did six,

Sarah: also a factor.

Zach (Lead): six pivots, if

Sarah: Dang. Yeah.

Zach (Lead): every single one. So military transition clearance management, personnel analytics, human resources, analytics management. Gosh, yeah, there’s probably two, three more even in there. Yeah, so probably six and all. And I think I’ve alluded to this or even pulled myself this, if you pivot enough, you just turn a 360 and it’s just let it go.

Sarah: That’s [00:25:00] a good point. If you pivot so many times, you make a complete circle, maybe it’s time to shut it. Down. That’s a, that’s good advice.

Lee Zuvanich: pretty good. Yeah.

Sarah: Also, it’s an experiment. That’s the other thing. We’ve talked about the overnight success before too, and how there is no overnight success.

You go through these different phases and testing and experimenting and trying things, and eventually, if you. Keep with it. And you go through the rough patches and you don’t treat them as dead ends. Eventually you’ll hit on something that works. It’s a numbers game. Investors invest in a million different things and then they’re like, oh man, how did you know to invest in, you know, Facebook ahead of time or whatever.

Right. It’s like, ’cause they invested in a million different things and that’s just the one that did well.

Lee Zuvanich: Yeah. Yeah.

Zach (Lead): Yeah, the getting back to is quitting than starting? think I’m almost of the

Sarah: Yes.

Lee Zuvanich: Totally. Yeah.

Zach (Lead): most

Sarah: Yes.

Zach (Lead): starting something is, there’s almost, there’s not no risk, but it just seems to be a lighter burden. If you want to test out, I don’t know, ice cream, and you’re Betty Ray’s ice cream, and you just make some funky, cool different ice cream, [00:26:00] that’s relatively easy to do.

But say you got a prime spot and you’re selling ice cream and the area is developing around you, and things just aren’t working, people aren’t interested in

Lee Zuvanich: If you’re Betty Rays, sorry, that was a low blow. They’re fine.

Zach (Lead): great place.

Sarah: They’re expanding

Lee Zuvanich: they, they

Sarah: constantly.

Lee Zuvanich: in a very tumultuous way a couple years ago.

Zach (Lead): yeah.

Sarah: Well, that was needed though. That was good. They’re all good now. Chateau owns them now.

Lee Zuvanich: Wait.

Sarah: They have the distribution channels.

Lee Zuvanich: know that the employees bought the company out at first.

Sarah: Yeah, a really young employee bought the company and then he sold it a couple years later to Chateau, which I think is a brilliant move because they already know how to do all of this.

That’s why they keep opening new locations now ’cause they know how to scale this ’cause they’ve done that.

Total aside. But if you’re in Kansas City, go check out Betty Rays. They are fantastic.

Lee Zuvanich: Sorry, Zach. Please

Sarah: So hi.

Zach (Lead): the chateau, their, their plant, you can go to it and go through it and they’ll give you

It’s

a gallon of their [00:27:00] 30 flavors. They have like 30 flavors of milk up there.

Sarah: right, but you can get like cotton candy milk, like for a company that makes something like cotton candy milk to buy an ice cream company that makes like Joe’s Kansas City barbecue flavored ice cream. I mean, that’s a match made in heaven. Come on,

Zach (Lead): a great 

Sarah: that was a good move.

Zach (Lead): So quitting and starting so yeah, if you’re deep in the trenches and you have this idea, you almost can be, naive to the idea that it’s just not working. ’cause you’re so far into it that you keep hoping and praying for the next thing. I don’t even think that’s worth a question at this point now is like, it’s

Lee Zuvanich: Yeah.

Zach (Lead): than starting, than the answer is

Sarah: Yeah.

Zach (Lead): Yes.

Lee Zuvanich: even socially, even in this group, you think about it, Zach, you’ve talked to Sarah and I about shutting down the company before you did, and the instinctive response, anybody that is your friend that’s watched you go through this is gonna have is no, don’t shut it down. But if you’re like, but I got this idea, you guys gotta hear this idea.

We’re gonna be like, yeah, that’s a great idea of like, that’s just how people are.

Sarah: That’s true.

Lee Zuvanich: think of a single person that in my life, especially the people who care about [00:28:00] me, that would hear me say, I’m just gonna throw in the towel. I’m done. And for them to be like, yeah, you should. So for people, yeah, just we already knew you were done.

How did you just figure out you were done? Like, don’t be friends with that person if people talk to you like that. so if that’s the experience we’re all having always as founders, and we are people who test the market and we say, well what do you think about this before we go do a new thing?

’cause good founders do that. No one is ever gonna support you shutting on your business. You have to have a really good story. And Zach, you’ve got a great story. You are not telling your whole story here, but you’ve got a lot of reasons why it’s time to shut it down. And I think it, it’s brilliant.

It’s perfect, but.

Zach (Lead): Yeah.

Lee Zuvanich: You know, people won’t always know the whole story and they won’t back you up. They wanna hear your next big idea. They wanna see you succeed. It’s hard to stop.

Zach (Lead): I think external from your friend group and your peer and your support group, I would say some of those conversations can be, and they’re probably [00:29:00] not for everyone, but just incredibly awkward. Especially if there’s ever money involved.

Lee Zuvanich: Yeah. Yeah.

Zach (Lead): it’s just such a tough conversation.

If somebody gave you money, whether it be grant or equity investment, you kind

Lee Zuvanich: Yeah.

Zach (Lead): have that conversation with them. That’s a tough thing to do, especially if you’re pre-seed or whatever, family and friends type round of investment. Somebody is like, oh, I have an idea. I need $5,000 or whatever.

So you have to be able to go back. That person put faith in you. And I think if you’re a person of relative ethical standing and morality. That sucks. There’s like top three crappy feelings

Lee Zuvanich: Mm.

Zach (Lead): letting people down, in a I tried to do it. They believed in me. They were along for the journey and it didn’t work.

Lee Zuvanich: Mm-hmm.

Zach (Lead): like, shoot, I already feel bad about myself. But Then you feel this feeling of, shoot, I let everybody down.

Lee Zuvanich: I let my dad down. I mean, my investor [00:30:00] shit.

Yeah, it sucks.

Zach (Lead): come to the Christmas party anymore. That sort of thing happens. So,

Sarah: Thanksgiving is ruined.

Zach (Lead): so yeah, I

Lee Zuvanich: Yeah.

Zach (Lead): conversations it’s surreal.

Lee Zuvanich: I’ll let, yeah.

Zach (Lead): have to detach yourself from it almost.

Lee Zuvanich: I’ve watched people in pipeline, the entrepreneurial group that Zach and I met in go through a lot of this over the last couple years. ’cause it has been a hard couple of years. That’s not bullshit, you know, it’s, I’ve seen it with every industry and a lot of people have lost their startups and had to go get jobs. And there’s a lot of awkwardness because whenever anyone is like, well, I think I’m gonna shut down, even all the seasoned entrepreneurs are often like, but why? Keep going. You can do it. I’m thinking of one in particular who just exited. She called me when she was about to lay everyone off.

She was specifically asking me if I could take some people on and hire them for my company ’cause she didn’t know where to send them. [00:31:00] She was out of funding. She probably had another month or two of runway left just for herself to keep trying to sell before she shut it all down. And we were just strategizing together and. we didn’t really stay in touch. Next time I heard from her, she had a different business idea. She was exploring, but I guess she kept the business alive. She somehow got it back up off the ground and she recently sold it. So there are those stories too, and we never know. it’s gonna go, right? So no one ever wants to say, oh, you should shut it down. we’ve watched bigger players in the ecosystem consciously decide to shut things down with confidence and give money back to investors and go on to their next big thing and make a lot of money very quickly. And I think that’s the example that we should be looking to, those of us who are just a little bit more. New to the ecosystem of taking money, taking investment and knowing how to go back and say, you know what, I was wrong. there’s a grace to that, that we need to learn how to have that. These more sophisticated founders in [00:32:00] the city that we know they’ve done this over and over again, they have it. like, yeah, failure’s part of life. Knowing when to quit is a huge skill and they’re modeling that for

Sarah: Yeah. ’cause if you hang on to the wrong thing for too long you’re handicapping yourself for the future. If you need to shut the thing down and you keep it alive for the next year, that’s, you’re now a year behind on the idea that you should have been working on after that.

So you’re just prolonging the death. There’s a really good quote or advice around, I think it’s around firing employees, actually. This may be from the book Traction where he calls it 24 hours of pain. I really hope I’m remembering the right guy.

It’s from a book I read at some point, but the idea of needing to fire someone and if you’re agonizing over this decision, you’re just prolonging the inevitable. If you know that this person is not a good fit for your org or it’s the last mistake, whatever, right? You just need to deal with 24 hours of pain to be like, we need to part ways.

Do what you need to do, wrap things up and move on. And it’s over quickly, right? [00:33:00] Versus dealing with that employee, screwing up accounts or making clients unhappy or whatever for two weeks. So I think that’s the same idea, should be applied to business as well.

Lee Zuvanich: the quote, you can suffer for 24 hours making a decision or suffer for 24 months avoiding it. That’s intense.

Sarah: Yep.

Zach (Lead): That’s, that’s a good one.

Lee Zuvanich: And that,

Sarah: I did that with my startup too for, I don’t know, several months. , It was a slow realization that things were not working, and so it’s hard to know at what point, if I had had this attitude of just shutting it down, would I have figured it out more quickly? I don’t know it. I’m not sure that I could’ve made it any quicker, to be honest, but I would’ve, it would’ve been nice in retrospect.

In retrospect. I would’ve never done that business in the first place, though. So.

Lee Zuvanich: Well, everything’s clear in retrospect.

Zach (Lead): The ashes and the rubble. Everything makes sense.

Sarah: Yep.

Zach (Lead): As I think about my own journey or even just somebody who’s going through this sort of thing, I imagine a really good way to go about shutting [00:34:00] everything down, having those conversations. Hey, it’s not working out. This is why, because in the smallest sense, you don’t have to necessarily pay everything forward. But you, get the opportunity you can speak at a 1 million cups or talk to someone else, you can help them avoid a lot of the pitfalls that you drug around, like, that movie, Troy, where they drug the guy around in the chariot for like four days. Some Greek myth or something.

Lee Zuvanich: Jeez.

Zach (Lead): it might be, might be Hector or Achilles.

Sarah: Just thought of a really morbid example. I read a book the other day about this cult leader woman who was basically like, they thought she wasn’t gonna die and her followers like, just mummified her basically

Lee Zuvanich: God.

Sarah: because she died, obviously. Don’t mummify the corpse of your startup

Zach (Lead): Yeah,

Lee Zuvanich: Holy.

Sarah: leave in your house.

Lee Zuvanich: Good.

Sarah: It was a wild story.

Lee Zuvanich: pretty

Sarah: Yeah. The.

Lee Zuvanich: thought [00:35:00] to Yeah.

Sarah: She was on life support and should have been taken to a hospital and instead died. And they just kept her body there. Yeah, there’s definitely some people doing that with their businesses, I think.

Zach (Lead): who just refuse to let everything go.

Lee Zuvanich: feel personally attacked by

Sarah: Yeah.

Lee Zuvanich: got all my, like mummified shrines, because I was saying before we started this, I’ve never really shut down any business. I don’t go through the formal process of doing that. And there’s been times where I’ve spun a business back up, like my little lifestyle businesses. On my little corpses, they’re my pet.

Zach (Lead): Hector.

Sarah: In there somewhere.

Zach (Lead): so the myth is in Homer Iliad, Achilles kills Hector and he drags him around for three days. 

Lee Zuvanich: Oh yeah. Yeah. The ID course.

Zach (Lead): I need to reread that. So

Sarah: Much more cultured version of my,

Zach (Lead): yeah.

Lee Zuvanich: story.

Sarah: I do love the Odyssey though. It’s a great [00:36:00] one. Yeah. Yeah.

Zach (Lead): making sure that you close everything out in the right way because you can get caught up. Just make sure you go through the proper channels. You have to shut down at the federal level, the state level, the city level, and make sure you do final close out.

If you’re a C corp, there’s something called an 1120. to do a final 1120 or the IRS is gonna expect you to keep doing it over and over.

Sarah: Hmm.

Zach (Lead): Have to have all this in writing.

’cause if you’re just like, ah, and I’m just not gonna identify as the founder of this business anymore, I’ll see what happens. You’re gonna get people asking about you or I asking for things and coming to you it could get really messy. So I would say definitely have those conversations.

Investors, or if there’s anybody you need to talk to, make sure you have closeout the same gusto you had to start your business. Have the same thing when you’re filing, getting your EIN, making sure you are set up in the right incorporation. Have that same intensity and energy shutting it down.

Otherwise it could haunt you the rest of your life. I.[00:37:00] 

Lee Zuvanich: Hey hang on, I’m gonna

Sarah: And then burn some sage or something.

Lee Zuvanich: because you’re about to scare a lot of people, including me. So yeah, I have not shut down some old, old LLCs from back in the day. And LLCs if it’s a single member default, sole proprietorship, you didn’t go turn it into an S corp, which you wouldn’t have done, unless you were making at least 80 to a hundred thousand a year. If you didn’t turn into a C corp, which would’ve been insane if you had a little mom and pop, like you’re doing baked goods or something. so for those of you listening who are having a heart attack right now, you don’t have to file an 1120 if that’s all you had. If you’re at the level where you’ve gone a lot further than that, you got a lot of shit to do.

Like if you’ve made. Around a hundred thousand a year. Yeah, you got a lot to un untangle. But for those of you who are listening to this, wondering if you should start a business and now you’re like, oh, fuck that. Because if it dies, the IRS is gonna come after me. Nah. But if you’re [00:38:00] successful, yeah.

You’ve got some homework to do and Zach is very knowledgeable about that. I, not so much, I’m very, the accountant can figure it out. It’ll be fine. But yeah, just it’ll be fine. It’ll be fine either way. Just move on, learn to move on and you won’t be haunted hopefully.

Sarah: Time for the next thing. ’cause there will always be a next thing for most of us that are doing this and have this mental disorder.

Lee Zuvanich: Yeah. It’s just one more

Sarah: That is always a new idea.

Lee Zuvanich: I mean, think about if I had never shut down the yoga studio. That’s crazy. There was

Sarah: Yeah.

Lee Zuvanich: and better things waiting for me. So you just

Sarah: I.

Lee Zuvanich: have that mentality.

Zach (Lead): Yeah, there’s some people who are very driven and motivated to achieve and do things, and sometimes that. Mentality can make anything you shut down seem like failure. And for the longest time, that’s been the only way that I could characterize what I was going through.

As I would look at what I’m doing, how would I describe it? A smoldering failure, you know, that just won’t go out. [00:39:00] I need somebody to put some water, extinguish this thing.

Lee Zuvanich: Oh man.

Zach (Lead): For the longest time, I think that’s how I looked at it. But now, I really looked at everything pin to pad in writing the actual agreements of what’s happening, what’s transpired. The ledger, think, helped me get to another thing.

Eh, it just didn’t freaking work.

Lee Zuvanich: Yeah.

Zach (Lead): thought something four years ago was wrong.

Lee Zuvanich: Stay money.

Zach (Lead): the first time I’m wrong today and just keep on moving.

Lee Zuvanich: Yeah. You know, I keep thinking,

about the fact that you decided to start something that needed government participation and grant funding to be successful. In, in the climate that we are in today that you couldn’t have foreseen, four years ago, right? Like there

Sarah: Yeah.

Lee Zuvanich: way for some reason I keep thinking about that next to, in my mind, bottle learning, which is a originally KC company that blew up, about

Sarah: Mm-hmm.

Lee Zuvanich: four or five years ago. [00:40:00] So they blew up because they were an ed tech company in 20 19 I think is when they got started. Really small, just as small as any of us. They just wanted to build something to help kids learn, and then 2020 happened and all of a sudden, ed Tech was it. And if you were positioned already. That was game changing.

You were on a rocket ship and, and so of course they got funding and now, I follow them on social media. They moved to Oklahoma to take a grant and have stayed there. But they seem to be wildly successful, not just financially, but socially, personally. Like they achieve their goals. They’ve got teachers posting on Twitter all the time about, oh my God, my kids love this platform so much.

They’re learning during the summer on their own with it. We love bottle learning. They’re always. Tagging them. It’s really cool to see how that’s turned out. And it wasn’t because of so much what they could control, but the fact that they were just positioned at point where something was about to have an inflection that no one could have foreseen.

And similarly, Zach, like [00:41:00] positioned yourself, and it could have gone either way and it went. A way that maybe wasn’t what you wanted, but now you’re open to go position yourself for something else that maybe would take off more

Sarah: That’s the role of luck in a lot of this. A lot of people are just in the right place at the right time and there’s stuff you can pay attention to to some extent, but at the end of the day, you don’t have control over that. You really don’t.

Zach (Lead): Yeah. Having the mental clarity to remember that quitting isn’t necessarily giving up. As Sarah said it at the top is it’s making space or making room for some other things. It’s been a journey. I need to write out and finish the postmortem and I’m gonna do a press junket.

Jacket, junket. It’s a junket. I don’t know what it is.

Sarah: Press release.

Zach (Lead): It junket. That’s such a weird word.

Sarah: That’s an odd word.

Zach (Lead): shouldn’t have went for it. A press tour. There we go. A press tour. Maybe I’ll talk about maybe some UMKC entrepreneurship classes, about some things that I would watch out for. [00:42:00] So,

Sarah: Mm-hmm.

Spin it into something positive.

Zach (Lead): the kids. It’s all about the kids. 

Sarah: Mm-hmm.

Zach (Lead): if this episode resonates because you’re holding onto an idea that you’ve been baking in your kitchen and you just keep saying one more loaf, we’ll do it one more loaf and then Wonder Bread’s gonna license out my baked goods. Maybe do some reflection. That might be a good idea.

Sarah: Always.

Lee Zuvanich: Bury your corpus.

Sarah: I was gonna say, you could have a funeral.

Lee Zuvanich: Oh

Sarah: You can have a funeral for the business, burn the paperwork, and then just be like, I feel like you need to start playing taps right now.

Zach (Lead): like it would be illegal.

Sarah: Okay.

Lee Zuvanich: I really am curious now though, to know like what, what exists for us as an initiation or like a rite that a business owner could go through to really grieve and let go of an idea that they incubated for years. We don’t have that. We make it really hard on ourselves. So yeah. [00:43:00] Zach, I’ll show up to your business funeral if you have one. We really should though like celebrate your bravery and willingness to move on.

Sarah: People are doing that with divorce parties now, instead of it being this somber thing, they will literally throw a party. I read about one woman who burned her wedding dress. I read of a couple that had a final meeting at the coffee shop they met.

 It’s important to mark things and marking a turning point like that, even if it’s sad in a positive way so that you feel free to move forward is important. So yeah, maybe we should have that for business.

Zach (Lead): I’ll see if I can get a nice venue for the funeral. But on another note, if everyone’s enjoyed the episode, like, subscribe, comment, reach out to us directly. Tackle the stuff that nobody wants to admit that they’re going through.

Remember everyone, we all have problems and sometimes they have to end.

Lee Zuvanich: Amen.