When it comes to the extremes of the startup spectrum, three-time founder, investor and New York tech ecosystem advisor Jeff Wald has seen it all.
“I’ve counted Fred Wilson as an investor, raised over $60 million in funding and sold my startup WorkMarket to ADP,” says Wald. “But before all that, earlier on in my career, I had a startup implode, leaving me bankrupt, depressed, and on the verge of moving back in with my parents. And while I’m really proud of WorkMarket’s success, it wasn’t smooth sailing. At one point, the board forced me to get a leadership coach. After four years, my co-founder left the company. And when we got acquired, people openly questioned why I didn’t hold out for a bigger outcome. So behind every exit and glowing write-up are the stories you haven’t heard. Scratch the surface and you’ll reveal what everyone’s leaving out, what’s lingering unsaid.”
Many founders and startup leaders find themselves facing a similar stack of hidden defeats, setbacks and feelings of inadequacy, a tower of self-doubt that looms large, despite valiant attempts to shore up the base. But in Wald’s view, too few take the next step of copping to that feeling. And that omission sacrifices much needed depth and dimension in the broader conversation about failure in tech.
That’s not to say that the topic doesn’t come up. After all, phrases such as “fail fast” and “celebrate failure” are frequently thrown around in the startup world, and we’ve seen many a successful leader get up on stage to talk about their biggest mistake. But all too often, the conversation stops there — few keep digging to uncover stories of failure that aren’t confined safely in the past tense, wrapped in platitudes or buttressed with follow-on successes. True vulnerability about how those personal struggles are currently rearing their heads in the here and now is a rare sighting.
In this exclusive interview, Wald reflects on the seldom discussed truths from his brushes with failure by walking us through three specific challenges founders face when it comes to opening up. He also shares effective tactics for traveling further down the road of vulnerability and tools for extracting key lessons from failure, as well as the advice he would have welcomed as he was going through it. For founders fresh off a failure (or for those who feel they’re precariously teetering on its very edge), Wald shares invaluable perspective and helpful wisdom for getting back in the game.
“Failure’s become trendy. We live in a culture of innovation and pushing envelopes, which requires failure,” Wald says. “But I’d draw a distinction between failure and vulnerability. We’ve confused the idea of putting failure out into the market as making yourself vulnerable, when it isn’t. Talking about how your startup didn’t work or how your product fell flat isn’t the same as digging into how that made you feel or how you failed specifically as a leader — there’s a degree of separation there. You actually need to put yourself out there.”
Here’s the difference between talking about failure and getting truly vulnerable: Vulnerability is necessarily personal while failure is not. Don’t conflate the two.
Wald is the first to admit that he’s avoided practicing this kind of true vulnerability most of his career. Take the failure of his first startup, Spinback, where co-founder issues gave way to contentious legal disputes that caused the company to collapse and forced Wald to reach into his own pocket to pay back investors. “The first thing I did was not talk about it at all — not in any way, shape or form did I acknowledge the failure, the depression, the isolation and everything else for many years,” he says.
Wald continued to bottle it up — until the narrative changed. The company was reformed with new leadership, and was acquired by Buddy Media (which was then in turn acquired by Salesforce). “All of a sudden, it went from this huge gap in my career that I always skated over to ‘Oh, I founded this company called Spinback and through various twists and turns, it got sold,’ which of course wasn’t completely candid. It was only later when I was further along in my journey and my new venture WorkMarket was proving successful that I felt confident in revealing more about what actually happened and the toll that it took,” he says.
Sharing tales of startup failures, market defeats and company losses is not necessarily an exercise in true vulnerability, especially when there’s a safety net of follow-on success to fall back on. “I only got comfortable mentioning Spinback after there was a successful end to that story, when there was no downside for me,” he says. “Given where I am now, everyone automatically views the failure as a stepping stone to that success. So even though I'm more forthcoming about it, talking about the company going under doesn't really make me vulnerable. It’s an abstract layer, a discussion in which I’m still shielded. Talking about the depression that went along with it and the inability to cope with the failure — that’s a little bit more down the road of vulnerability.”
And even further down the road? Talking about the potholes ahead, not just the ones in the rearview mirror. “Putting out stories about failures in a past context, while helpful, doesn't feel like some big act of courage to me. We need to take the conversation to the next level. The better approach is to talk about things as you're struggling with them, displaying weakness in the present tense. Vulnerability is opening up when it can actually hurt you,” says Wald.
It’s one thing to bring up how you’ve failed in the past, especially when you’ve since attained success. Talking about issues I still struggle with and showing any kind of weakness — present tense — feels more daunting.
The broader narrative around success and failure in tech didn’t help Wald’s innate hesitation to open up and leave himself exposed.
“There's this notion that the only companies that are really successful are the ones that are growing in the triple digits. We don't really celebrate success, we celebrate ultra-success. It’s not even enough to be a unicorn anymore, you almost need to be a decacorn,” he says. “There's a culture of celebrating monetary outcomes to such an extreme degree, and deifying the people who get to that point. When you’re not there, if you’re not ‘making it,’ then you start to question what you’re even doing.”
Wald faced this firsthand when WorkMarket was acquired by ADP. Despite his excitement around the sale, he admits that the paradigm of ultra-success weighed on him. “What people should have said was ‘You had a nine figure exit. That's a one in a thousand or a one in ten thousand probability. That's unbelievable,’” Wald says. “Instead, many conversations I had were, ‘Eh. Sorry that didn’t quite work out,’ or ‘Why didn’t you hold out for a bigger outcome?’ I knew that this was an incredible opportunity, one that I was proud of, but it didn’t stop that line of questioning, and my own internal running monologue about how I could have built a company that was worth more.”
For Wald, this obsession with the number of figures in the acquisition check failed to capture the contours of a truly successful exit. “ADP is an amazing global company. They’re taking everything we built from security and compliance to UX and they’re kicking it up a notch, raising it to operate on an enterprise scale,” he says. “It’s made WorkMarket so much stronger — and it’s made me a better founder. How is that anything but success?”
And although a healthy fear of failure can be a competitive advantage that sharpens a founder’s drive, he’s found the discourse around failure to be equally distorted. “The failures that we hear about and read about are spectacular ones, typically involving fraud, malfeasance, or the unethical. Whether it’s Fyre Festival or Theranos, the only thing that gets our attention is sensationalism. We don't hear enough about other successes and failures on a smaller scale. These extreme endpoints color our perceptions of what it really means to succeed and fail — we slowly lose our grip on reality.”
Founders miss crucial relative context and level setting around their work. You might feel like your failures are more catastrophic than they really are, or that your achievements don’t clear the bar for success. Don’t listen to that voice.
To get that dose of context to keep your perspective fresh and head on straight, lean on these three tactics from Wald:
Prop open your door. Create the space to meet and talk with other founders. “Don’t base your understanding of what it means to succeed or fail in the industry on what you read in TechCrunch. Lean on your network and cut through the small talk. I’ve tried to keep an open door to anybody in the startup community that I've had interactions with,” says Wald. “Whether it’s going through their business plans, talking to them about what it's really like down in the trenches or listening to what they’re going through in their lives — it’s cathartic for them and helpful perspective for me. Be upfront and talk to them about failing. Let them know that you’re here to do anything you can to help them not fail, but failure is a possibility. And that’s okay.”
Seek opportunities for structured mentorship. Wald also recommends making time to give back in a more formalized way. “Spending time with founders that are just starting out is essential. It helps you remember the start of the journey and it helps them as they set out. I’ve mentored companies through organizations like the Entrepreneur's Roundtable Accelerator and The Founder Institute,” he says. “You’ll want to work with these founders at least once a quarter to get that shot of reality. Whether they’re getting things started post-seed round or still formulating ideas, it serves as a reminder of what we’re all striving toward as founders.”
Look beyond the story of a sale. Back when Spinback first failed, Wald felt an intense pressure to salvage some sort of outcome. “Over and over in my mind, I kept thinking ‘If I could sell it for a dollar, I could just tell people it sold.’ The money didn't matter. It was the story that I could tell to myself and others,” he says. And it’s a mindset he’s noticed ingrained in other founders as well. “I’ve invested in a lot of companies that failed and I see the same thinking, the same anguish from those founders. I’m not arguing that selling isn’t a better story, but don't get yourself wrapped around the axle on it. If it works, great. If not, you gave it a shot. You need another couple of at-bats to get it right,” says Wald.
Don’t just read about industry deities — take inspiration from the founders that surround you. You need to hear the stories from the trenches that will help keep you going.
Fighting and fallout between co-founders is a huge source of tension in many startups, but it’s one we don’t hear too many details about, especially as lawyers and comms teams start to get involved. But it’s a challenge Wald has encountered twice, both at Spinback and at WorkMarket.
“With Spinback, two co-founders sued each other and I was a bystander to that. WorkMarket was very different,” he says. “My co-founder is one of the best pure startup people in the world. He and I worked on our company together for four years and eventually created a great outcome. But we were deep into a company with 60 employees and processing tens of millions of dollars in revenue. It was outside of both of our comfort zones. And we had very different styles, and after running for such a long time at such a high rate, we just hit a divergence in how we approached things. I don’t know if I’d peg that as a co-founder failure that deep into a company's life, but it certainly felt like a break-up when he left the company.”
Even though failing to choose the right co-founder in the first place or maintain a healthy working relationship later on is one of the biggest startup killers, honest discussion around the specifics of how it can go sideways is rare. Wald believes this is because many other startup causes of death are still, to some extent, beyond founders’ control and easier to depersonalize.
“The breakdown in a co-founder relationship isn’t a math problem. There's often no definitive right or wrong, and there’s usually a 'he said, she said' component to it,” says Wald. “But what’s more is that there are other ways to fail that might seem more honorable. You can work on the tech and do everything that you're supposed to do, and you still might get it wrong. Your competitors might outcompete you or the customers might not come. But if you gave it every ounce of energy, brought every resource and worked 18 hours a day, 7 days a week, there’s this feeling that you can hold your head high as you walk away.”
Much like flexing the skill of vulnerability, a bad co-founder relationship falls in the realm of the personal rather than the business, and is consequently, much more painful to confront. “Admitting that you couldn’t play nice and get along is tough. In theory, that kind of failure is the easiest to avoid, right? But it requires building trust. And one of the key components in building trust is being vulnerable with each other,” says Wald. “If you're willing to be vulnerable and build that trust, there's no reason those relationships can't work. But so many, myself included, fail to do that work, and then corrosive behaviors take hold.”
The co-founder relationship is 100% in control of those people. That failure is the easiest, in theory, to avoid. But it requires the building of trust, which in turn requires vulnerability. Neither are easy and both are overlooked.
Building trust and alignment from the start is critical — but it requires allowing conflict to enter the room. Nowadays when co-founders come to Wald looking for an angel investment, he relies on a key question to probe the strength of their relationship and willingness to get vulnerable. “I like to ask ‘Have you had a fight yet?’ And if they say, ‘No,’ I’m pretty hesitant to invest,” he says.
“We're all different people and we bring different perspectives. That makes for a stronger company. If you're having healthy conflict, you're going to get to a better answer, because everybody's pushing each other. If you’re sweeping everything under the rug or getting swayed by group think, that sends up some serious red flags,” says Wald. “The truth is that if you’ve known each other for a while or at least worked together intensely on this idea, then odds are you’ve gotten under each other’s skin. So there’s two dimensions to this question: Are you voicing those issues and working through them? And will you be vulnerable with your investors and share that instead of papering over problems or pretending everything’s perfect?”
If Wald were to decide to work with another co-founder on a new venture, he has a better sense of the qualities he’d try to suss out. “I’d look for somebody who I thought was in a growth mindset. A person who was willing to be vulnerable and have real conversation. If they’re able to share the times where they’ve really failed and the things they’re insecure about or ashamed of, then I don’t doubt we’d be able to build trust and healthy conflict,” Wald says.
"You'll look back and be grateful for this time in your life. It'll be a formative experience."
When working through those challenges as a founder, Wald heard countless variations on these well-meaning words of advice. And although he’d agree with the substance of this counsel today, it wasn’t what he wanted or needed to hear at the time.
Here’s what he what he tells founders now — and wishes someone had told him — about failure:
1. You’re not the only one who’s failed.
In theory, Wald knew he wasn’t the only founder coping with a defeat. But swimming in the despair of losing his first company, he felt isolated and alone.
“Looking back, here’s what I needed to hear: ‘Do you think you’re the only person who’s been down this road? You’re not. Sorry, you’re not special,’” he says. “And I’ll tell that to founders I advise and invest in now. You failed. You’re going to fail again. It sucks. I'm not pretending it doesn't. But once you’ve had your time to wallow, take your lumps, dust yourself off and get back out there. Your investors, advisors, mentors and friends will be there to help.”
These rallying words are grounded in a realization: At the time, Wald’s failure felt like something that had uniquely occurred because of him — that he alone shouldered the blame. “Every founder thinks there was something unique about them that made them fail. That nobody else would have failed in those circumstances,” Wald says. “But your failure doesn’t define who you are.”
Failure is not an indictment of who you are. It’s a learning process. You went through it. And from a probability standpoint, you’re more likely to be successful next time.
2. The only thing you owe your investors is your best effort.
With Spinback’s co-founders embroiled in legal conflict, Wald thought his backers deserved to see their money returned.
“I felt that our investors, some of whom were my friends, didn’t make an investment accepting the risk that we couldn’t play well in the sandbox together,” he says. “Because of that, I reached into my own pocket and paid them back. I was so ashamed of it that I didn’t want to just call them up and say, ‘Hey, I’m really sorry that this is how it all played out.’ Instead, I just said to them, ‘Oh no, we just decided to give everyone their money back, so don’t worry about it.’ I was too proud, and because of that, I was broke,” he says. “I would probably do the same today. But there’s a motivation around this impulse that’s interesting to explore — I’m not sure it’s healthy for founders to take on every ounce of that extra weight and pressure.”
As a result of that experience, he’s now upfront about his philosophy when investing in other founders. “I’ll say to them: Here’s the money, good luck. If you ever need me for anything, call me, I’m always here to help. But I’m going to assume you’re going to fail. I hope that you don’t, and I’ll do anything I can to help you, but you don’t owe me anything, save for your best effort. I made a decision, and it was based on the fact that you will most likely fail. But if you succeed, I stand to make a very healthy return, and I’m willing to make that trade,” he says. “And if they do end up failing but gave it every effort, I make sure that they understand that I’d invest in them again.”
If your company fails, you don't have to make it up to your investors. You don't owe them a thing — unless you really didn’t try.
Failure has been an invaluable teacher for Wald, but only because he put in the time to excavate its lessons. “Failure can be something that happens to you, or it can be something you learn from. But that doesn’t happen through osmosis, it takes a lot of concentrated effort and dedication to unearth the takeaways,” he says.
For Wald, moving past the notion that his failure defined him ultimately required professional help. And something he'd once scoffed at — working with a coach. When first approached with the idea, he wasn’t too receptive. “One of the WorkMarket board members took me on a walk and said, ‘We think you need to get a coach’ and I said, ‘I think you need a coach,’” Wald says. The board member, however, made it clear that the suggestion wasn’t optional.
“At the time I was more focused on proving that I was right as opposed to being effective. I was very emotional and volatile. There were board meetings where I would sit in the corner with my arms crossed, hoodie up, and not say anything,” he says. “There were other times where I threw things — sometimes tables and chairs. I was an asshole. I wasn’t giving off the impression that I could provide the leadership that a growing and transforming company needs.”
Wald reluctantly went through the process of finding a coach, determined to do the bare minimum to satisfy his board and nothing more. “I certainly planned to blow it off,” he says. But just as Wald needed to connect with fellow founders to get a better context for his work, it took a coach who had a similar career path, and thus more relevant context, to realize how helpful an outside perspective could be. “I met with people that had clinical backgrounds in coaching, but I knew from my own makeup that I needed somebody that had sat in my chair before. I was introduced to someone who had been incredibly successful in the startup world first and then went back to become a coach.”
Here are practices and learnings from his coach that helped Wald soak up insights from his setbacks and move his personal development forward:
Adopt a growth mindset.
Wald’s coach exposed him to Brené Brown’s work on vulnerability and the growth mindset, pioneered by Stanford University’s Carol Dweck. “In the fixed mindset, we're trying to prove ourselves and in the growth mindset we're trying to improve ourselves. I realized that at WorkMarket I had so many insecurities and I was trying to prove that I was the smartest guy in the room,” he says.
This mentality applied to revisiting prior experiences as well. “With a fixed mindset, you’re going to see failure as an indictment on your entire life. But with a growth mindset, you’re going to see it as an amazing opportunity to learn. The problem is that if you're stuck in the fixed mindset and you just had the biggest failure of your life, you're not really hearing anything else,” says Wald. “My coach pierced through my hangups about Spinback and helped me see that for myself.”
Just buy the sandwich.
In their first session, Wald’s coach asked about his personal and professional goals. It was a simple question, but Wald found himself without an answer. “I looked at him and said, ‘I don't know. I don't have any,’’ Wald says. “He packed up his stuff and said, ‘I’ll be back next week. You have homework. My job is to help you be effective at achieving your goals. And if you don’t come up with them, I can’t do my job. You need to think about what your goals are.’”
For Wald, that goal-focused framework was an incredibly simple, but clarifying and impactful tool. “I now apply that mindset to everything that I do. Take even a silly example, such as when you’re trying to order lunch and the person behind the counter isn’t paying attention. You get frustrated and think, ‘What the heck?’ But then you remember that your goal is not to fix this company’s operations or make this person a better sales representative. Your goal is just to buy the sandwich,” he says.
Whether it’s ordering a sandwich at a deli or leading a project at work, staying focused on your goals — on what’s important — is key to getting out of your own way.
And beyond bringing focus and direction to his personal growth and leadership, Wald found there were spillover effects for his team as well. “Before I worked with my coach, I don't believe that our team at WorkMarket understood what our company goals were. If you asked each member of the team to describe the company, what our mission was or what our north star was, you would have gotten hundreds of different answers," he says. "We did what many startups do, which is chase short-term chances and lose focus on long-term goals. There were customers that presented tremendous opportunities, so we shifted our focus, changed our roadmap and bent over backwards for them — and then the deal fell through and we’d wasted a whole year.”
After working with his coach, Wald was able to distill WorkMarket’s goals and clearly articulate them for the team. This helped shape WorkMarket into a company that grabbed, and held, the attention of ADP. “If we didn’t have that goal orientation, I don’t doubt that ADP would’ve said, ‘What exactly do you guys do here? You're saying one thing, but the sales team is doing one thing and the engineering team is doing another.’ It enabled us to build a company that was an asset that ADP wanted to buy.”
If every employee at your startup can't clearly articulate what you do or where you're going, you’re not increasing your company’s probability of success.
Never stop learning.
And for Wald, his learning and growth is still a work in progress. “After an acquisition, people always ask you, ‘Why are you sticking around?’” Wald says. “First, ADP invested in me and my team, and I want to make sure they see a return on that. I am aware that, while WorkMarket was a great outcome, it was not the billion dollar outcome we all shoot for, and I’m aware that my shortcomings as the leader of the company were a very large variable in that,” he says.
“ADP is helping me through leadership training, and it’s giving me the opportunity to make myself a better manager and a better person. I know I’m going to be a founder again. Everything I learn here will help make me a better one,” says Wald.
Many feel a rush to jump ship after a company gets acquired, as employees are eager to continue on in their entrepreneurial journey. "Don’t deprive yourself of the opportunity to learn from the scale of a global organization," says Wald. "Those that think big companies can’t innovate or be entrepreneurial need to shift their mindset — there’s a tremendous amount to learn from places like ADP.”
Mind your followers.
Wald noticed a considerable difference in his employees’ engagement after working with his coach. This made him realize just how important it is for founders to note whether employees are staying at a company for the opportunity or for a founder’s leadership.
“It's very easy to follow somebody if you think everything is going great and a positive outcome is quite likely. But when it's unclear if you're going to arrive at that destination, when things are going poorly, will people still follow you?” says Wald. “A competitor raising money, a big customer loss, technology and market shifts can all cause them to lose faith. If they're staying because of you, because they trust you, because they know you will do the best you can for the team and for the company, they'll weather through these things.”
The common denominator for all leaders is that they have followers. You can have whatever style you want, but the question is: Are people following you? And will they follow you when things aren’t great?
TAKING THE LEAP
The startup journey is a rollercoaster that requires resilience and reflection to get through the many twists and turns. And while opening up about failure and personal struggles can help lift the load, there’s considerable baggage around and hesitation towards stepping into those conversations. Don’t get discouraged by exaggerated narratives around success and loss. Instead, connect with other startup leaders who understand your context and look for ways to give back in the tech community. Bake trust and a willingness to get vulnerable into co-founder relationships right from the start — and don’t be afraid to get into a fight. Remember that failure isn’t an indictment, but rather a learning opportunity. Consider working with a coach to perfect your growth mindset and stay focused on your goals.
Above all, try to deal with failure while it’s happening — the mark of true personal vulnerability. Wald’s ready to go first:
“I still struggle with imposter syndrome and worry about not taking chances due to fear. I worry that I have been too afraid to take the risks necessary to really go big,” he says. “I don’t know that I’ve gotten myself fully out of my comfort zone. I’m insecure about what I can accomplish and that stops me from really trying sometimes. And from avoiding marriage to not starting a company by myself without a co-founder, there’s still all this fear and uncertainty attached to taking a leap into the unknown. So that's what I'm working on now, present tense.”
Photography by Michael George.