There Is an Entrepreneurial Afterlife
A Talk with Jason Shuman
When he stopped thinking about his business in the shower, he knew it might be time to pull the plug. “I feel like I had thrown everything against the wall but nothing was sticking,” recounted Jason Shuman, founder of Category 5, a custom shoe company. “That’s when I started thinking, if this isn’t the team to do this, and if I’m having doubts, even after building up a pretty good business, like, if this isn’t what I’m thinking about in the shower, I’m not sure this is what I want to be doing. I was starting to feel really burnt out.”
Shuman wasn’t the kind to call it quits easily. Hell, he had grown up suffering from Primary Immunodeficiency, which means for one thing a shortage of white blood cells so he had to get infusions every three weeks. He also came from a family of entrepreneurs, so he knew what he was in for. His dad owned a business, as did his grandpa, and aunt and uncle. “I really grew up at a pretty young age,” Shuman recalled, “and I started working in start-ups in high school, including at my aunt and uncle’s identity theft protection company. There I worked under a former VC who really looked at me and said you’re not going to get the nepotism treatment.” As Shuman put it, he worked his ass off. And he concluded, “I started thinking more maturely about businesses. … I was the kid who was writing business plans in middle school, got my real estate license at 18, and then that all lead up to Category 5.”
Shuman came up with the idea the summer after sophomore year at the University of Miami, where he was double majoring in entrepreneurship and marketing. His vision was to take the classic preppy boat shoe, make it both more comfortable and durable, and allow for custom logos to be put on each pair – something that was not being done at the time. The logos might be for fraternities, yacht clubs, sports teams, etc. The company officially launched his senior year (2012-2013). Shuman roped in his brother and three best friends to help out – so the team was homogenous, comfortable, which would ultimately lead to a couple of problems. In fact, it was a bit of a rollercoaster ride for Shuman right out of the gate.
It took a while to nail down a manufacturer in China who was willing to handle the custom logo aspect. Prototypes were shipped back and forth, all seemed good, then 12 months into the relationship the Chinese manufacturer went belly up. “So I was like, Oh shit! Do I give up or what do I do?” Shuman said. He searched around LinkedIN (really, this is not a plug for LinkedIN) and finally met a guy who happened to know his dad from years ago and was connected. This guy subsequently introduced him to a manufacturer. But Shuman still had to find someone willing to do the leather stamping for the logos.
When Your Buddy Abandons Ship
The ups and downs continued. They included building a fantastic campus rep program, but then having to let one of his buddies go, and another buddy quitting unexpectedly at a crucial time that first year. When his buddy then asked whether he wanted to talk about it, Shuman looked him in the eye and said flatly, “No.” As he explained, “There’s times of self-awareness in entrepreneurship, and that was a time when I was not going to sit and sulk. It was time to put the pedal to the metal.” Their relationship became strained, but the exodus of two good buddies speaks to the pitfalls of creating a homogenous team of friends and/or family in which team members may not share the same commitment or may not have the skill levels required for certain functions. He and his buddy would eventually patch things up, not always the case.
During these tough times, Shuman learned, “You need to know when to put on the blinders. And then when to also have an adult conversation later on and reflect on those things.” Shuman also observed, “During the healthy, the fun parts, when I was on an entrepreneurial high, whenever the shit hit the fan, it just lit a fire under my ass even more. It made me want to work that much harder, that much smarter to figure things out.” Speaking of which, he called dozens of people in the leather business before finding an 82-year old guy in Alabama who helped create a metal “contraption” for custom stamping the shoes.
Cash flow was an issue too. (Ain’t it usually the case?) Shuman had raised only $40,000, with 10K being his. Coming out of that senior year in college he knew they wouldn’t be able to pay salaries and living at home was a likely reality. “Things just weren’t going our way from a sales perspective, or mainly a fundraising perspective,” he said. “And I think part of it had to do with some self-doubt that I had in my own mind. I wasn’t convinced this was I wanted to do this for the next 10 to15 years. And wasn’t sure the people I was working with wanted to do it for next 10 to 15 years.”
Throwing It All Against the Wall
Still, Shuman went to New York to talk to VCs. While they liked the concept, no money was forthcoming. Shuman also spent a month and a half sleeping on a New York couch, trying to find and recruit key team members. It was a tough sell with no real compensation package to offer. That was the period when he was throwing everything against the wall and nothing was sticking. An extended down period raises the questions of how do you cope? “Unlike the other situations where I was hard charging forward, I took a step back to try to get out of the rut,” Shuman explained. “I took a couple days off, and I figured it would recharge my battery but it didn’t. I think that’s when I started to reevaluate things for my next steps for moving forward.”
Shuman also relied on his mentors and peers as sounding boards. “I built up a really strong network of mentors,” he said. It included executives in the footwear industry, his dad and uncle. Joining a founders circle was also key because he could call one of his peers up and talk about things. “The reality is that entrepreneurship is really, really hard,” he said. “Really hard. And it’s really lonely. And you are going to have to have difficult conversations. People are going to look at you like you have all the answers. Sometimes you do have answers but sometimes it’s just the fact that you have more confidence or you can give your answer with more conviction.”
Reflecting further on the emotional ups and downs, Shuman said, “When it was the down times I would only allow myself to get into that state of mind for only a few minutes, maybe thirty minutes, at any given point, and then I would turn it off and say, ‘Hey, I don’t have any other options.’ It’s like, you ever hear the story of when they go to war and they burn the boats behind them? I felt like we had burned the boats.” In other words, there’s no turning back.
There’s usually a silver lining too: “What I will say though, is starting a company has made me a hundred times more self-aware as a human being. And I definitely recognized when I wasn’t happy, and definitely recognized when I was frustrated, and more so I recognized other people’s emotions. And I had to manipulate my own emotions, and really how I help myself in order to get the most out of my people.
Knowing When to Pull the Plug
Let’s head back to those whole two days Shuman took off to recharge his batteries. He got back to fundraising and working 14-hour days, but he also went back to “hemming and hawing” about the future. “I was in a real funk,” he recalled. “I was going through all of these different stages. Maybe we shouldn’t be doing this. What should I tell the team? Maybe it is just a funk and I’ll get out of it. I started analyzing all these things. I got sad, I got angry. It was just unbelievable the wave of emotions that overcame me. I remember it being me at the office, me alone, it was really late. I just put my hands on my head and said, ‘This is it.’”
It had been two years. He was living at home. He had made no money. He talked it through with his dad and decided on a controlled wind down to last six months, through the Christmas holidays. The hope was to sell enough inventory to pay back investors. The first step, however, was to cut loose the employees so they could get on with their lives. Of course, the questions Shuman asked himself were, “What do I do? OK, what’s next?” He noted that it was especially poignant because of others’ expectations: “Growing up and going to college everyone was like, Oh, you’re going to be an entrepreneur, you know exactly what you want to do. Everybody has these ridiculously high expectations for you. And I’m like sitting there, Well fuck, all my friends have all these good jobs now, and I’m not even sure what’s next.”
Shuman certainly recognizes the elevated status of entrepreneurs: “Relatively speaking they are put on a pedestal and completely glorified, and I think what people don’t realize what’s going on behind closed doors because not everyone is crushing it. And even if they are crushing it, shit still hits the fan quite frequently.”
Part of the battle is knowing when there’s too much shit hitting the fan and it’s time to pull the plug. We can put it a bunch of different ways such as knowing when not to keep hanging around like that creepy jilted lover, or when to stop throwing good money after bad, etc. etc. The thing is, even when you make the right decision to pull the plug, it’s still a failure on some level. And failure hurts. And can have a lasting impact. “I think that once you fail, there’s this limiting belief in your head sometimes that you can never build a big company on your own,” Shuman reflected. “That’s still something that I struggle with all the time when people go ‘When are you launching your next thing? When are you launching your next thing?’”
Raw Thoughts on Failing
We had to ask him about failing forward, failing fast, and how it can be treated like a passage to manhood. Shuman said he didn’t want to go on a preachy rant, but he has his opinions. “The idea of failing fast has been taken completely out of context,” he said. “Like completely taken out of context. On one hand, failing fast just means testing things, testing, testing, testing things out. What I don’t like, is the entrepreneurs using it like a Red Badge of Courage. There are more wantaprenuers out there than entrepreneurs. What I mean by that is young people who want to start companies, are in the process of starting a company, and all they’re focused on is PR. Getting into Entrepreneur or Inc. magazine, writing blog posts and tweeting, more than they’re focused on building an actual company.”
“Failing sucks, it really, really sucks, and it hurts a lot,” he continued. “So no, don’t fail, be successful. Being successful is a much better path. But if you’re going to fail, making sure that you’re being hyper, almost overly obsessive about reflecting is really, really important after all of that.” Shuman has done his share of reflection and concluded, “If I were to start this business again, it would be a hundred times easier.” Statistics suggest that entrepreneurs fail at almost the same rate with their second business as their first. We didn’t discuss this, but Shuman did say, “I think the second time entrepreneurs are so hungry because they don’t want to fail again because, they don’t want to feel that pain, that their resiliency and resourcefulness reaches an unhuman level, like a superhero level.”
There Is a Life After Entrepreneurship!
After shuttering the business, Shuman landed on his feet in a space that still allows him to satisfy his entrepreneurial leanings. He connected with a tech guy who’s loaded, and helps him invest his money in companies. Delving into the venture capital world has been a natural fit – namely because of the people factor and networking. “I actually love people. I love the idea of giving people the confidence and the tools to go out and succeed.”
Rather than going into business again, it also gave him the opportunity to help “a bunch of different people. It gave me the ability to meet a bunch of different people who are very, very talented that eventually I could work with if I wanted to start another company.” It has exposed him to different industries, one of which might inspire him to start a business in that particular industry. And it’s exposed him to “a bunch of different investors” who could come in handy if he ever launches another business.
In the final analysis, regarding his life after Category 5, Shuman concluded, “It filled the core of why, of why I feel like I’m here on earth.” Oh, let’s not forget the steady salary and job security: “Without a doubt the job security was important.”