Today I have an adaptation of a millennia-old Zen parable which I've found myself sharing with clients often as the market causes new stressors (and exacerbates chronic ones). It's a perspective that has taken 20 years to really sink in for me, and I think perfectly captures the startup journey. May some good come to you in the reading.

Once upon a time, not so long ago, there was an old, grizzled CEO. He’d piloted his firm successfully through the dot com bubble and the 2008 crisis, and with the strength of 30 years of operations and accumulated profits, he’d reached the stage of life at which he was focused on legacy. For several years, he’d been grooming a promising young VP who had the potential to lead the company into its next phase. He felt she could be the one to take over when he retired.

He was pondering what it would be like to finally step away from the company he’d built when, one Friday afternoon, his protégé came to his office and sat down across from him with a serious look on her face. “I’m leaving to launch my own startup,” she said. Though he was surprised and disappointed, he congratulated her and wished her well. 

Two days later, as he did every Sunday when the weather was nice, the old CEO sat with coffee and newspaper at a picnic table outside Philz Coffee. It was a beautiful fall day, and the CEO noticed a chill in the air and the leaves changing color all around him. An associate at a big VC firm happened to be sitting next to him, and the younger man recognized the older one and struck up a conversation about all the CEO had accomplished and the future of his company. When the CEO mentioned his protégé’s recent departure, the VC shook his head. “What bad luck,” he said. 

“Good luck, bad luck, we’ll see,” said the old CEO. 

A short time later, the protégé asked to meet with the old CEO. Over lunch, she told him that she was raising a seed round. She asked him to be the first money in, and because he believed in her, he invested $500k on the spot. With that $500k, the protégé built an MVP in the enterprise software space and began to sign on early customers. Her early traction was so good, she put together a team right away to keep up. Among her early leadership team was another VP with whom she’d worked closely at the old CEO’s firm, a fact which he noticed but said nothing. Seven months after his seed investment, her company numbered 20 people.  

The old CEO avidly followed her progress as he considered his own future. Soon spring came, and on a particularly pleasant Sunday morning, he found himself setting out for Philz and his favorite table outside. Once again the young VC was there, and once again, he struck up a conversation with the old CEO. He knew of the protégé’s company, he said. It was one of the hottest deals in the Valley. He congratulated the old CEO on his good luck to be the first money into such a fast growing company. 

“Good luck, bad luck, we’ll see,” said the old CEO. 

A year passed, and revenues from the protégé’s enterprise software company continued to exceed projections. Word was that they were planning a big Series A raise, which was targeted for May before the venture community went on summer holiday. And then, a week before they’d planned to launch the raise, a customer representing 50% of their revenue reneged on their contract. The churn of this well known company meant that the fundraise had to be put on hold. Further, because of their expectation of a straightforward raise, the company’s balance sheet was weak, and without that revenue, the company did not have a path to profitability. The protégé called the old CEO, and dejectedly told him the news. He told her that she could stay in the game, work as hard as she could, and she still might not succeed. But that the only way she was certain not to succeed was to give up. 

A couple weeks later, again the old CEO sat outside Philz. A hummingbird had caught his eye, and he was startled when again the VC struck up a conversation. The VC knew the enterprise company’s customer, and he’d heard that their pulling out was not simply random – they were going to take what they’d learned from working with the protégé’s company and try to build the same product in-house. “It’s bad form, and won’t look good for them,” the VC said. “What bad luck for her, though, and at the worst time.”

“Good luck, bad luck, we’ll see,” said the old CEO. 

Without the cashflow to make an enterprise software company work, the protégé pivoted her company to a consumer video app. She slashed expenses, and with a bare bones team put their collective heads down for a few months to build an MVP, before releasing it over the winter holiday. After the obligatory Techcrunch article, the initial response was tepid. Out of ideas and almost out of money, the protégé had nearly fallen into a depression when, seemingly out of left field, a global pandemic spiked demand for consumer video apps. Overnight her company became a hit. On the heels of her success and with the pandemic raging, her app was accepted into Y-Combinator. Elated, she called the old CEO on a Friday to tell him the news. While they both agreed the context was undoubtedly really, really bad, he matched her excitement at the news.

A few months later, the pandemic having abated slightly along with the warmer weather, the CEO was enjoying a stroll down the sidewalk. He saw the dark windows inside Philz, and noted not for the first time how much he missed seeing people. People at his office, at the coffee shop, just any people. He enjoyed spending time with his wife, but they had both become a little stir crazy. No sooner had he thought this than he spotted the VC, walking toward him from the other side of the train tracks. They stopped as they got near one another, maintaining a safe distance, and after a short amount of commentary on the wacky state of world affairs, the VC mentioned that he’d heard about the protégé’s new consumer app being a part of the latest batch of YC companies. Word on the street had it that Accel and Greylock were both interested in leading a seed round, if her growth rate continued apace. “It’s obviously terrible what’s going on,” the VC said. “But it’s great luck for her! Right place, right time, I guess.” 

“Good luck, bad luck, we’ll see,” said the old CEO, and the pair continued walking their separate ways. 

Over the next 18 months, the protégé’s company expanded while the world battled the pandemic. She’d closed a series A round with Accel partners, with participation from a who’s who of early stage investors in the valley, and had scaled her company to become one of the largest players in a now incredibly lucrative consumer video sector. But as the first vaccines were released and the pandemic began its slow abatement, people close to the sector wondered how the video app would perform as the world began to reopen. So it was only a little surprising when the protégé called the old CEO out of the blue with news. She told the old CEO that while she hadn’t been looking to sell her company at this stage, she’d gotten an offer she couldn’t refuse, and wanted to ask his advice. She explained that he’d get a great return on his investment and described the terms of the deal. Sensing she was still holding something back, he asked her what the problem was. The deal sounded amazing. “Well,” she paused, “there is one little issue.” She then told him that the acquiring company was the CEO’s largest competitor (the old CEO could see immediately the strategic value of owning such an asset and kicked himself for not having thought to make his own move). The protégé had agreed to terms, she said, and was calling to ask for his blessing. The old CEO didn’t hesitate when he told her to do what was right for her. 

The old CEO took an extended winter break down South, partially because he needed a break and partially, if he was being honest, to try out living in a new place. He’d long had designs to move after his retirement, and he wanted to see what it felt like to live in perpetually warm weather. He decided he liked it, but not until after he’d come back home and spent three days in the dreary 50-degree winter. He was missing the warmth when he sat down to try out the new heat lamps outside Philz. No sooner had he opened up his Flipboard app and seen the acquisition announcement, did the VC, now a General Partner at a small firm of his own, approach him again. “Did you see the news?” he asked. The CEO showed him the article on his iPad, and the VC shook his head knowingly. “I know it’s good for her, but geez. That’s bad luck to have her end up with your competitor,” he said. “Are you worried?”

“Good luck, bad luck, we’ll see,” said the old CEO. And after a few minutes of catching up, the VC had to run off to a board meeting across town.

Two years passed. Now engaged in a fierce competition with his rival around consumer video after he’d acquired his own technology, the old CEO was feeling every day of his age. Despite many attempts to groom his successor, he still had not found anyone the caliber of his one time protégé.Most days, he found himself feeling out of place, working like a much younger man. He looked forward to the periodic postcards and emails he got from his protégé as she traveled the world, enjoying the proceeds of her exit, because he cared about her. But he also found himself wistful at each communication, thinking about what might have been. Nevertheless, he still smiled to see her name when his phone buzzed in his pocket. 

It was the first time they’d actually spoken since the acquisition, but they fell into their old rapport as if no time had passed. She wanted to know about the competitive battle he’d been in and admitted to feeling (only) a little guilty about it. But he wanted to hear about her exploits around the world. He’d once wanted to do that kind of traveling, so it made him glad to hear the joy in her voice. They caught up for an hour before, in a pause in the conversation, the protégé shared that she had called for a reason. Delicately, she informed the CEO that her non-compete had expired. “Are you still looking for someone to take over?” she asked.

Six months later, the protégé had rejoined the company as a COO, and the pair were hard at work on a succession plan. The old CEO was again at Philz as the sun began to set over the mountains. He was enjoying a spiced coffee and finalizing his plans to transition to a Chairman Emeritus role when the VC approached him. “I was just thinking about you,” the VC said. “I heard about your new COO, and I also heard that you may be moving down South.” The old CEO neither confirmed nor denied, only smiled. “What a wacky ending,” the VC said. “After all that, you have some of the best luck.”

“Good luck, bad luck,” the old CEO said as he stood up and closed the cover over his iPad. “We’ll see.” The old CEO smiled as he began his walk home.

Things I read this week

One: Feedback as a business process (Mochary)

Matt Mochary has some great ideas as it relates to how to structure a growing business. Think of his work as EOS for early stage tech startups. I particularly like his ideas around feedback as a business process, and have used them with many clients. The source is a book called "The Great CEO Within", but a quick highlight can be found at the link below.

LINK >>

Two: The Stages of Leadership Maturity (Youtube)

Susanne Cook-Greuter adapted her stages of adult development model to work with leadership development. I've been telling this exact story to clients for years, and only now did this video serendipitously find me through Twitter. Thanks Kyle for the find!

LINK >>

Want to dive deeper?

If you liked this, check out this list of my top posts, read and shared by thousands of entrepreneurs.

Here are a few of my favorites:

• Why most “culture work” actually does more harm than good

• Why we struggle to make the leap (from founder to CEO)

• The juggling act of a creative life (or the cost of pouring everything into your company)

Executive Coaching for Entrepreneurs

There’s a reason every elite athlete in the world works with a coach. You need more than one perspective to see your best work.

I’m an executive coach and the founder of Inside-Out Leadership, a boutique leadership development agency supporting founders to rapidly scale themselves as leaders, so they can thrive professionally and personally as their company changes the world. Leveraging 15-years as a founder/CEO, along with deep training in mindfulness, psychology, Neurolinguistic Programming, psychedelic integration and more, I have helped leaders from some of the fastest growing companies and VC funds in the world design a more conscious life and make key changes to improve their performance and satisfaction.

I coach leaders how I want to be coached:

• Focused on the person, not the role.

• Focused on results, without the fluff.

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