Success is 90% luck. So how do you build a successful startup? (w/ Mike Grossman)

Founders are told that if they work hard, build the right product and hire well, the outcome will follow. It's motivating. It's clean. And according to today's guest, it's mostly wrong.

Mike Grossman has been CEO of six venture-backed Silicon Valley companies. Across them, he tried 18 different business models. Twelve failed. Five required layoffs. Three lived in persistent existential crisis. And yet all six were eventually acquired. Mike's story is one that far more founders actually live, but almost nobody tells.

In this episode, Yaniv Bernstein sits down with Mike to dig into his new book, Failure Is An Option: a candid 44-essay collection drawn from three decades in the trenches. They explore the uncomfortable truth that luck dominates outcomes more than skill, why your business model is not your business, and how radical honesty is the most underrated leadership tool in a founder's kit.

In this episode, you will:

• Learn about 'resulting': why confusing luck for skill costs founders in both directions

• Hear how Mike pivoted Tempo from building a Visa/Mastercard competitor to partnering with Mastercard, only to have the entire model wiped out overnight by a Senate amendment

• Discover the 'dreamers vs soldiers' framework for building teams that hold together when adversity strikes

• Hear Mike's hard-won playbook for layoffs: why founders almost always cut too little, too late; what day two feels like; and why a smaller, denser team is often more productive

• Get a clear framework for staying accountable for the process when the outcomes aren't in your control

Timestamps:

00:00 Coming Up...

00:34 On Today's Show: Mike Grossman on Managing Failure

02:02 The Role of Luck and Timing

03:41 Poker Strategy and 'Resulting'

08:55 "The Business Model Is Not The Business"

11:27 Tempo's Pivot

13:28 Why Values Matter In A Crisis

19:21 Talent Density and Layoffs: Cut Once, Cut Deep

28:15 How AI Changes Hiring Pace

32:15 Leading with 'Radical Honesty'

36:33 Dreamers vs. Soldiers

38:02 Managing Investors

41:43 Luck, Agency, Process

48:39 About 'Failure Is An Option'

51:29 Closing Thoughts

Resources mentioned

• 'Failure Is An Option' by Mike Grossman: https://www.failureisanoption.com
• Mike Grossman's Substack: https://failureisanoption.substack.com
• Thinking in Bets by Annie Duke (the 'resulting' concept discussed): https://www.amazon.com/Thinking-Bets-Making-Smarter-Decisions/dp/0735216355
• 'Incorruptible' by Eric Ries: https://www.incorruptible.co/
• Eric Ries's TSP episode: https://youtu.be/HQ7cP1lGyiM
• 'Powerful' by Patty McCord: https://www.amazon.com/Powerful-Building-Culture-Freedom-Responsibility/dp/1939714095
• Patty McCord's TSP episode: https://www.youtube.com/watch?v=BefnNLBEmXA
• The Durbin Amendment (the legislation that killed Tempo): https://en.wikipedia.org/wiki/Durbin_amendment

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Key links

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The Startup Podcast website: https://www.tsp.show/episodes/

Learn more about Chris and Yaniv

Work 1:1 with Chris: http://chrissaad.com/advisory/

Follow Chris on Linkedin: https://www.linkedin.com/in/chrissaad/

Follow Yaniv on Linkedin: https://www.linkedin.com/in/ybernstein/

Producer: Justin McArthur https://www.linkedin.com/in/justin-mcarthur

Assistant Producer: Steph Hefferan https://www.linkedin.com/in/steph-heff/

Intro Voice: Jeremiah Owyang https://web-strategist.com/