This past weekend I heard Kenny Rogers' "The Gambler" and realized this song teaches us a lot about how to run an effective Internet startup. So I dug up the full lyrics for the song and will share what I think it means for entrepreneurs.
On a warm summer's evenin' on a train bound for nowhere,
I met up with the gambler; we were both too tired to sleep.
So we took turns a starin' out the window at the darkness
'Til boredom overtook us, and he began to speak.
When you start your company, you can look forward to many sleepless nights, wondering what to do. Wherever you think you're headed with your company in those early days, I can almost certainly assure you will not be where you end up. Companies evolve just like people do. Ten years ago I couldn't have predicted to you that I'd be living in New Hampshire running a successful media intelligence company, but that's exactly what happened. Your startup will follow a similarly unpredictable trajectory, correcting its course over time if it is to be successful.
He said, "Son, I've made my life out of readin' people's faces,
And knowin' what their cards were by the way they held their eyes.
so if you don't mind my sayin', I can see you're out of aces.
For a taste of your whiskey I'll give you some advice."
Lots of people -- including me in this post -- will offer you advice for your business. Finding your own version of The Gambler who will help you out when you're least optimistic about the future of your endeavor will be important. Frankly, you also want that voice when you get too high on your prospects, too, as it is important to take a balanced perspective to make good decisions. Most businesses benefit from a business partner who complements your skills and outlook. You can go it alone, but the businesses that tend to excel usually have at least two partners to keep each other on an even keel.
So I handed him my bottle and he drank down my last swallow.
Then he bummed a cigarette and asked me for a light.
And the night got deathly quiet, and his face lost all expression.
Said, "If you're gonna play the game, boy, ya gotta learn to play it right.
Remember that you won't get this advice or partnership for free. Even advisors who don't want cash will want to get some value out of their relationship with you. Maybe it is relationships and networking, or perhaps it is entirely the psychic reward of helping an entrepreneur, but whatever it is you want to make sure you go into the relationship with your eyes open.
You also need to be prepared to give in order to get. Don't be greedy about equity. Be willing to share it generously with partners and key employees to promote the success of the business. It may feel at first like you're simply out of whisky, but what you receive in return may just be worth it.
You got to know when to hold 'em, know when to fold 'em,
Know when to walk away and know when to run.
You never count your money when you're sittin' at the table.
There'll be time enough for countin' when the dealin's done.
These are, of course, the signature lines of the song. When I mentioned the song at the top of this posts, no doubt your mind went right to them. Not surprisingly, they provide a tremendous amount of powerful advice for the startup entrepreneur.
Over the course of the life of your startup, you'll be looking at tons of deals and negotiations. Whether it is adding a partner, hiring an employee, doing a business development deal, signing a customer, working with a vendor, lining up an investor, or ultimately selling the company, you will need to decide what a good deal is. Some deals simply aren't worth doing, and you need to avoid the urge to do a deal at any cost. Especially in the early days of a company or when things are going tough, you'll be tempted to say I need this customer or investor to survive, or if I don't do some deal, I will lose momentum. Hogwash. If you're building something successful, there is no such thing as only one way to go. That type of thinking gets entrepreneurs -- and even established businesses -- in trouble.
now Ev'ry gambler knows that the secret to survivin'
Is knowin' what to throw away and knowing what to keep.
'Cause ev'ry hand's a winner and ev'ry hand's a loser,
And the best that you can hope for is to die in your sleep."
Just as important, you need to understand not just what deals to walk or run away from, but which projects and products to do the same with -- some will be winners and others losers. Picking those will be a key to success. Over the course of the nearly 10 years that I have been starting and running businesses, I have had numerous occasions where I have had a product or project nearly at completion -- or even completed -- that I have walked away from. You need to trust information and instinct to make these decisions. Just because you have invested heavily in creating something doesn't mean that you necessarily need to keep going forward with it.
If you watch poker on TV, the commentators will often say that a player is "pot-committed" and therefore must continue to play the hand even if commonsense tells them to walk away. While there may be something to this in tournament poker where it is a zero sum game, that's not how business is. Conditions change and as you learn more over the course of creating something, you need to be prepared to shift directions, just as Topix did recently when it completely revamped its business.
so when he'd finished speakin', he turned back towards the window,
Crushed out his cigarette and faded off to sleep.
And somewhere in the darkness the gambler, he broke even.
But in his final words I found an ace that I could keep.
People with advice will come and go, but you're still on that train to somewhere with your business. Do your best to pick out the valuable nuggets even when that person -- or blog post -- is long forgotten.
You got to know when to hold 'em, know when to fold 'em,
Know when to walk away and know when to run.
You never count your money when you're sittin' at the table.
There'll be time enough for countin' when the dealin's done.
When the time comes that you are contemplating selling your business, wait until the deal is done before you start picking out cars, boats, and houses. As our company attorney once said to me, when you start spending the deal money before you have the check in hand, you make bad decisions on the deal documents. He shared one case in particular where an entrepreneur already had picked out an expensive sports car, and therefore caved in on all the key deal terms simply to get the check.
Similarly, be careful that you don't begin to believe your own hype. There are plenty of entrepreneurs who ended up broke because they saw dollar signs and stuck around too long. Unfortunately, there are probably just as many who exited too soon and didn't get the big payday they might have. Figuring out when to exit will be one of the toughest things you ever have to do.
Hopefully, in the end, the company won't die in its sleep but will instead give you a nice, satisfying exit.
