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Jelle Smeets
Jelle Smeets

Posted on • Originally published at blog.jellesmeets.nl

Why I stepped out of my first startup

This is not a story about a startup that raised millions and grew exponentially. This is a story about a student finding his ideals, and learning some life lessons along the way. I will take you along in how my first startup was founded and which 3 lessons lead to why I stepped out of my first startup.

How it all got started

In 2015 I was working part-time in a student development team while I was getting my Bachelors in Computer Science. A good combination of getting related experience as a developer and getting paid. At that time quite the upgrade from my previous job; delivering pizzas.

In the summer, we had to pick which minors we wanted to follow for the next period. I was always interested in entrepreneurship and decided with 3 other students that were in my team to sign up. We quickly realize we wanted to start a company to provide student teams to companies who had issues with finding qualified developers.

The 6 months of the minor flew by. I loved writing business plans, exploring options, marketing our idea, and calculating how much money we should ask.

At the end of the minor, we entered a Startup competition. I was able to attend several inspiring sessions by entrepreneurs. In conclusion, we had to give an elevator pitch and our business plan would be graded.

Me posing for one of the marketing shoots we did
Me posing for one of the marketing shoots we did

While we were crazy about our idea, the judges did not share that excitement. It was a bit boring, they did not see it happen, and our grade was mediocre at best. The competition was not a complete waste of time. A couple of weeks later we got contacted by one of the jury members that was in a similar field. He liked our idea and would like to help us get started. he made sure we could start on the attic of his current office building, and we managed to find our first customer that hired a complete team for a few months.

The startup was getting up to speed. But at that time I had to make a strategic decision. I still needed to graduate. And at that time I decided to take a half step back, and focus on graduating. At that time a good decision. As we needed someone qualified if we ever wanted to start taking interns. Which we planned to do in the near future.

I worked 40+ hours on graduating, and then on Saturdays joined the startup to coach the team. At that time the cracks started to show, even though it took me quite a while to see it myself.

3 reasons why

The three reasons why I stepped out of my first startup are all related. I am still convinced the idea is good. But there are so much more aspects to running a business than the idea. Let's take a look!

Focus on partners

The entrepreneurship minor, as well as the startup week, were all focused on one thing. Make sure you have a great idea. Forgetting one very important aspect. Your partners.

We had not discussed how we wanted to run our company. I personally like the agile concept of servant leadership. But noticed my partners were more fond of the authoritative style. People need to know who's the boss. The difference in the style started giving friction. Me treating the staff as I wanted to be treated irritated my partners. Me wearing a t-shirt instead of a suit irritated my partners. Every day my morning started with "Am I going to wear a t-shirt and have a conflict-type of day, or do I go for a suit?".

Am I going to wear a t-shirt and have a conflict-type of day, or do I go for a suit?
Am I going to wear a t-shirt and have a conflict-type of day, or do I go for a suit?

And that is the first lesson I learned the hard way. The way you want to run the company is just as important as your idea.

Partnering with friends

This paragraph can be 6 words long: Don't start a business with friends. I have learned that even if you think you know someone if money is related people are different.

I founded the startup with two people who were my friends. I even made sure another friend of mine was one of the first full-time hires. When I quit this completely backfired. I no longer speak to any of them, and some birthdays or events by mutual friends were painfully awkward.

I can say without a doubt this is my biggest regret on this startup journey. Destroying relationships with friends that were close to me.

The second lesson is: Don't start companies with friends, even if you think you know them well.

Legals

I'm not sure how this relates to business outside of the Netherlands. But we started in a legal form where our personal assets were liable in case our business or one of the other founders created debt. A form exists where that is not the case, but that several requirements we did not meet (yet).

This could create the situation where if one person had a personal debt that someone wanted to collect, the business or your own personal assets could get seized.

I'm personally frugal. Or at least like to think about how & when I am spending my money. Some of my partners had the opposite attitude regarding money. And while I was in charge of large purchases, partners made large purchases without following the rules we made.

I found it to be suffocating that I was personally liable in case of someone else's money habits. The thought that if the company failed maybe my personal savings had to go to someone else's created debt, made me really uncomfortable.

This leads me to the third lesson I learned. Make sure you find the right legal form for your company. Before you start, consider if you are okay with personal liabilities.

Make sure you find the right legal form and you are okay with any risks related.
Make sure you find the right legal form and you are okay with any risks related.

Summary

That is my story of how I co-founded and stepped out of my first startup in 4 months. I hope you learned something from my personal mistakes. So that you won't have to make them yourself. To summarize my learnings:

  • The way you run your company is just as important as the idea
  • Don't start companies with friends, even if you know them well
  • Make sure to find the right legal form for your company & make sure you are okay with the level of liabilities

The three reasons combined were enough for me to dread every day I had to work. I decided to sell my stake in the company. Just after 4 months of officially starting the company.

This blog post is a personal story I do not share often. Receive more of my content through the newsletter.

Discussion (23)

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cndavu profile image
Charles Ndavu

Starting your own thing will never be an easy road at first, especially if you involve family or friends. They get comfortable because you're "blood"

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smeetsmeister profile image
Jelle Smeets Author

I agree Charles!

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ekimcem profile image
Ekim Cem Ülger

I am happy to see that we are not alone

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maddy profile image
Maddy

This is such an interesting article Jelle!

Even though it didn't go well, it's great that you had this experience.

It's admiring that you thought about launching a startup when at university. 👏🏾

I agree with not involving friends and family when it comes to business.

They get comfortable. Plus, there is always that chance that it can ruin the relationship.

Lovely story, keep it up! 😁

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smeetsmeister profile image
Jelle Smeets Author

Thanks Maddy! I appreciate the kind words.

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enygmator profile image
Tarun Aditya Thurlapati

I have 4-6 true friends. (I'm an introvert and keep a very "closed" circle)

I would be comfortable starting a company with them because I know them so well.

The catch is - I know (near perfectly) their behavior, attitude towards life, the way they make their choices, so I am very much aware of almost all of their "faults" (reasons which might be a cause of friction), and I'm not afraid to point that out because, when it comes to work, I can't compromise in the name of friendship.

What I'm saying is - you tend to know your [close] friends, so it's a good idea to start a business, but make a rule at the beginning - "When it comes to business, we are NOT friends, and I will voice my mind perfectly, because my life is at stake here", and maybe accept the fact that if the other person can't separate business and friendship, then your friendship may end up on the burner.

My personal story

It was a "mini" project in my second semester. I was more interested than my friends in making it the best project (among the rest), but they didn't share my enthusiasm (due to various reasons, incl. interest in the area of systems/OS programming).

I initially resented them, but then realised that we were good at being friends and working on certain things together (like hanging out and solving textbook problems), but a project (in systems) wasn't one of them, and that's fine.

I still love them and we're great friends; I just don't partner with them on projects as their goals/habits are different from mine.

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smeetsmeister profile image
Jelle Smeets Author

I cannot agree more Tarun! thanks for sharing your story.

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dada1008 profile image
Dadasaheb Patil

The very similar incident happened with me as well. The only difference is now I am running the company with my another partner. 3rd partner left us, even though he was managing everything, only just because of his egotistical attitude and always taking doubts on us.

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Jelle Smeets Author

That sounds tough! Having to deal with such a partner. Good to see you took another approach Dadasaheb! And that you are still in the company.

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linccodes profile image
Linc Codes

this is very informative ✍️... thank you for the insight

I also have a startup and this has helped me a lot, thank you 😊

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smeetsmeister profile image
Jelle Smeets Author

Glad I could help!

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harmin preet

Noma restaurant features three categories of food on its menu. The most popular categories are forest and games season, and ocean season. foodmenuprices.info/noma-menu-with...

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sahesh profile image
Sahesh

Nice write up ! I also started a startup when I was 19 years old and I also stepped out :) This article inspires me to write my story as well.

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smeetsmeister profile image
Jelle Smeets Author

You should! I’d love to read your story as well.

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Sagar Barapatre

All the very best Jelle for your future endeavors.

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Jelle Smeets Author

Thanks Sagar!

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Jelle Smeets Author

Cannot agree more Leonid!

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Gonçalo Dias

When you create a company from zero and without much money you probably need to take the risk and work with people that you consider friends because you need to trust them. Otherwise you will be working in everything alone meaning that you don't really focus on your skills and the company core.

Starting a company is for sure not easy and I do understand your pain of being responsible for other people's debts and money habits.

Good luck

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Jelle Smeets Author

Thanks Goncalo! You make some good points.

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umeya kassim

One should consider be be the center of everything that you do and make sure that you are in control of your business.

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Liviu Lupei

I think most of us can avoid such a situation simply by doing some research.

I wrote this article some time ago:
12 Extremely Useful Tips for Building a Startup

Some of those tips are based on my personal experience while building Endtest.

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Andrew Baisden

You did what you had to do all the best with future roles.