How I Learned to Stop Worrying and Love the Burn

New Years is the traditional time to focus on personal soul searching, but as the founder of a start-up, my mind wanders to professional and management reflections. 2022 was the first year Longshot had institutional support, a real shop, a real prototype, and real money. In 2021, we were some dudes finding stuff in dumpsters and gluing it together to summon a space gun into existence. 2021 and 2022 felt pretty different. COVID and the capital intensive nature of hardware work made it difficult to get the ball rolling on fundraising. After a lot of rejections from VCs and Angels, we managed to get some ‘friends and family’ investment in early 2021—most of which was in the form of free rent on an old industrial cargo ship, and $30k in cash.

For those of you who have never run an aerospace hardware start-up, $30k is not a lot of money. We were engaged in more than a little dumpster diving, borrowing, and begging to get very basic materials and tools. Yet, by the end of 2021, we had a prototype that could drive a light projectile to mach 1.8, providing a very basic proof of concept and showing that we could execute on something. I had spent my savings down to zero and was borrowing from my loved ones to try and prove to someone that this idea was real and that we were the people to build it.

Directly before Longshot, my wife had supported me through a Master’s degree, and she agreed to continue to support me while I took a run at becoming a space gun tycoon. While she never wavered, I felt like a huge pile of garbage for leaning on her and my friends. I never questioned if the ideas underpinning Longshot were good or worthwhile, but I did question whether the sacrifices I was making, and asking my loved ones to make, were sane.

In Q3 of 2021, we had $4k left in the bank. I was preparing to ball the company up and go get a real job when we received word from the Air Force that we had been awarded a direct-to-phase 2 SBIR for $750,000. Apparently, the Mach 1.8 prototype was enough to convince them to throw some cash at us. That was a huge breakthrough. After that award, we went back to many of the VCs who had declined to invest earlier. To venture capitalists, Air Force interest represents technical validation, proof of demand, and provides non-dilutive capital. With that momentum, we managed to get some very cool investors onboard, notably Space Fund (our first institutional investor) and Sam Altman (who ended up doubling the size of our pre-seed round to $1.5 million).

By the time the Air Force and VC’s cash hit the bank, we were into 2022. I had gone from $4,000 to ~$2,500,000 in the bank. It’s hard to articulate that feeling. It was a massive rush of validation. When you’ve been rejected that many times, people believing in you enough to commit funds is a big deal. Checking the bank account went from being a furtive excuse in suppressing panic to megalomania fuel. But that feeling didn’t last. The scar tissue of the preceding year and a half struggling for survival quickly reasserted itself. I soon found that it was real emotional labor to spend that money. Rapidly I had gone from a situation where it made sense to spend a day of my time to avoid a $200 dollar outlay, to it being crazy NOT to spend $200 to save the company an hour.

That whiplash is hard to get over. Perhaps for me in particular. My family was about as poor as you can be in America and not be homeless. Multiple bankruptcies, food stamps, trailer parks, section 8 housing etc. My childhood was financially rough and deeply unstable. That cultural, and practical, experience equipped me well for start-up scrappiness. I’m totally comfortable begging for free stuff, dumpster diving, and leaning on friends to work for free. If you’re a certain kind of broke, that's just the normal stuff you have to do to live. I find that for many of my acquaintances with a more white collar background, those things seem to be galling to them. I generally consider dignity to be a silly reason not to do something useful.

My co-founder (a guy with a more solidly middle-class upbringing) cares a lot about doing things the right way and has an instinctively higher valuation of his own time. That difference between us is part of the reason we make a good team. My class background is also part of the reason I feel I was able to survive the long period of scrabbling Longshot demanded in the first ~18 months when basically nothing could be done the right way and where I treated my dignity like a combustible fuel.

As I reflect on 2022 (in which we actually had a real budget), I can think of instances where my instincts pulled me to conserve capital while, with hindsight, the best thing would have been to spend the cash and buy a little more speed. I’m really fortunate that I have a co-founder who’s got experience working at companies that have money, and who knows me well enough to push back when my instincts are pulling me in a bad direction. Several people warned me about this impulse early on in 2022 as well. But it’s one thing to hear it and know it’s the right thing to do, and another thing to feel it and live it.

In early Q4 of 2022, we were awarded 2 phase 1 SBIRs from the Air Force. This gave us an unexpected windfall of $150k to work with. With that wind in our sails, we hired up two extra technicians and pumped up the hours of a few of our existing contractors. Over the last few months of 2022, it made a palpable difference in our rate of progress. If there’s one thing I would change if I could go back in time, it would be to increase the hands on deck at the beginning of the year. The extra cash gave me the courage to do it, but in reality I think that the budget could have supported it earlier and that the speed we would have gotten in hitting our technical milestones would have totally paid for it.

I suppose my New Year’s resolution is to listen to my co-founder and CTO (the estimable Nathan Saicheck) more on these issues. He’s pointed out several times that we still have no hot water at the office/shop. When we moved in, the old water heater had been taken out and we ended up using the closet as a server room. When people have brought it up (particularly this winter), I have typically responded with something along the lines of: “We have a teapot! What do you need a water heater for!?” or “Ooooh look at the pampered Silicon Valley employee. Are your hands cold? Would you like me to warm the water for you personally, yOuR mAJeStY?”.

In 2023, I’m going to try and take a deep breath, relax, and embrace the fact that we can afford some basic comforts, automation, manpower, and longer-term investments in our productivity. I’m going to try and stop worrying and learn to love the burn.