Young entrepreneurs dive in to start their own businesses, despite the high failure rate

EVERY DAY DURING the spring of 2011, Matt Oppenheimer sat in his pajamas at the dining-room table of his aunt’s house in London, making call after call to pitch his new plan for a company. “It’s a terrible idea,” the voices on the other end of the phone told him, again and again.

Reetu Gupta spent months helping her daughter apply to The Overlake School, a private school in Redmond the 10-year-old desperately wanted to attend. Gupta paid the $2,000 deposit after her daughter was accepted. Then she dropped the whole idea so she could start her own company.

During work quarrels at L’Oreal Paris, Karissa Bodnar’s team would often calm themselves by joking, “You know, we’re not curing cancer.” After Bodnar’s best friend died at 24 from a sarcoma, Bodnar quit L’Oreal and started a makeup company to benefit women with cancer.

Gupta quit her high-ranking job at Honeywell, stopped contributing to her two daughters’ college funds and launched an education startup. Oppenheimer stepped down as head of mobile banking at Barclays Kenya and, ignoring the doubters, founded Remitly, a financial remittance company, though a slightly different one than he first pitched.

More than 1,000 entrepreneurs in Seattle are running startups — sacrificing financial stability, family time and often reputation to start ventures that have a 90 percent chance of failing.

TWENTY YEARS AGO, even five years ago, the world would have called them crazy. Some still do. But the success of companies like Facebook and Zillow, along with the following crush of media coverage, has made such ventures almost a cultural norm.

“Five years ago, doing a startup was the equivalent of you don’t have a career,” says Marcelo Calbucci, a serial entrepreneur in Seattle. “Nowadays if you tell your mom or family, they say, ‘Cool! Go for it!’ ”

Calbucci says at least 15 percent of his friends from his former life at Microsoft have left to launch or join a startup. It’s not just the Microsofties — all across the region, people are handing in resignation letters and moving in to co-working spaces or home offices or old Pioneer Square buildings to start companies. Seattle has the third-fastest-growing startup scene in the United States, according to Mattermark.

That booming ecosystem also means it’s psychologically easier to convince yourself to take the risk.

“It’s a little bit less scary than it used to be to go out and start your own business,” says Rebecca Lovell, the director of entrepreneurship and industry for the City of Seattle. “You can go work at any one of 75 other companies, or right back at the one you left if your startup fails.”

Many entrepreneurs in Seattle feel that way. A slew of technical job openings means that finding another job is very possible, if not necessarily easy. But that doesn’t mean the risk factor, or the innate craziness of what you’re about to do, ever wears off.

Starting a company often means less time with family. It nearly always means less money, even in the long run. And it means you might, probably will, have to deal with the heart-wrenching feeling of failure.

Budding entrepreneurs still manage to look past the odds and gather the courage to leave their jobs.

Says Gupta: “This … I tell you, was the hardest decision of my life.”

 

BODNAR, NOW 26 years old, sat down in her Queen Anne apartment in July 2014 and made a list of everything that could go wrong.

She could lose all the money she’d been saving since she was a teenager. She could look like a total idiot. She could make a fool of herself in front of family and friends.

“I sat there, and I was completely terrified,” Bodnar says.

She wrote down those three awful things. But then the list stopped. That was pretty much all Bodnar could lose — her savings and maybe some face.

What she could gain by starting her own luxury cosmetics brand was much more compelling to the young marketer who had spent years working her way up the ranks of Sephora and then L’Oréal Paris. Bodnar’s life had been marked by business success — she once raised $20,000 for her high school’s Future Business Leaders of America chapter by creating a Monopoly board for her hometown and selling advertising space to local businesses.

Still, she had grown up in a Camano Island household where sensible money habits were a given, where her parents emphasized the importance of saving and paying bills on time. By the time she was 25, Bodnar had saved about $100,000 from working her way through college at Sephora and Clarisonic, which was bought by L’Oréal.

Bodnar had long wanted to run a business, and this time she had a strong catalyst that showed her just what she wanted, and felt she needed, to achieve. Bodnar’s best friend, whom she had met in the dorms at the University of Washington, had been helping orphaned children in Chile when she noticed a bruise on her leg that just wouldn’t go away. Sammamish native Kristy LeMond returned home and was diagnosed with sarcoma, a malignant tumor. She died nine months later at the age of 24.

Losing Kristy was the ultimate impetus for Bodnar.

“I made the list, and I thought about really wanting to have an impact on the world,” Bodnar says. “Our time is limited, and we should be doing things that we are passionate about every single day.”

In 2015, Bodnar, a petite woman with a huge smile and vibrant makeup, launched Thrive Causemetics. The company donates an identical product with every purchase to a woman undergoing cancer treatment. The products are for women, all women, she says, regardless of whether they are dealing with an illness. Bodnar poured her savings and every ounce of her confident, bubbly character into the company.

“I have been fearful in my life, and I really just reject that at this point,” she says. “There is no point of living in fear and making decisions out of fear.”

In the extreme highs and devastating lows of running a business, Bodnar clings to why she started it in the first place. After all, that’s what keeps her grounded when a wave of orders comes in and picks her up when business slows.

 

IT HAD NEVER even occurred to Forest Key not to run his own business. For Key, a brazen yet matter-of-fact personality, being an entrepreneur had been ingrained in him from a young age. He watched his stepfather start a natural-food store in Marin County, then construction companies in Chile and La Jolla, Calif.

The ventures weren’t all smashing successes, but seeing the process created a frame of reference in Key’s mind — starting a business was very natural, he thought.

“The idea of running my own business my whole life was logical,” he says. “To work for someone else was illogical.” A past personal relationship with entrepreneurship is a common theme among Seattle startup founders, including Key. He says that absent the connection, starting a company could seem “too crazy.”

So when it came to decision time in 1997, he had few second thoughts about leaving Lucasfilm, George Lucas’ innovative production company in San Francisco. It was a prestigious job, especially for someone just out of college, but Key didn’t hesitate. Halving his annual salary didn’t matter. What mattered was the idea of creating something that was his, being able to move as fast as he wanted without having to answer to layers of management or ingrained corporate processes.

He started and sold a design company. Riding the adrenaline high that comes with successful startups, he tried to start three more businesses the next two years. All failed, never even getting off the ground.

Key, in a bright multicolored shirt, lounging on green couches in his hip Fremont office, shrugs it off. Success can’t be defined in such a clear-cut way, he insists.

“The successes are not the ones who don’t fail; they are the ones that don’t fail catastrophically,” he says.

After five years at Microsoft, Key guessed the economic climate might start an upturn after the 2008 crash. He took his chances and started an online hotel travel software company, Buuteeq. This time, though, he gave the decision to leave a bit more thought. Key and his wife had two young children, and it took a good six months to decide to give up his lucrative salary and invest a significant portion of his savings into his newest venture.

But his burning drive was still crackling, and he knew some of the risk could be mitigated.

“I think if I felt there was a risk I wouldn’t get another job, I wouldn’t have done it,” he says. “I was willing to burn through savings, but not give up supporting my kids.”

Buuteeq was, by any definition, a success. Key sold the company in 2014 to Priceline after nearly five years. Not able — or even interested in trying — to shake the startup bug, Key recently launched a virtual reality company called Pixvana.

 

MOST STARTUP FOUNDERS are not deluding themselves. They are fully aware what they’re about to dive into is not in any way a good financial bet, Calbucci says. Those who think they’re going to find a pot of gold are probably going to be disappointed.

Calbucci started his first company largely because his mind moved faster than Microsoft’s machine. The Redmond company is fine, he says, if you want to be really great at one thing. But there’s not a lot of room to branch into other areas and stretch your skills.

“Very few companies really allow for the kind of free thinking for someone who has a mind like that,” he says.

Calbucci is an angel investor and a partner at Pioneer Square Labs, a closely-watched startup studio in Pioneer Square that is creating and spinning out new companies. His current successes were not easy to come by, as he openly discusses, especially when he started his first company.

In hindsight, Calbucci says after he left Microsoft he should have joined a startup to learn the ins and outs of a small, fast-moving company. But at the time, Calbucci was confident he had found the perfect idea — software to make it easy for nontechnical people to create websites.

He ran the company, Sampa, for four years before facing the devastating realization in 2009 that it was not growing like it needed to be, and he had to give it up.

“I felt like I failed my family, and I failed my friends because I told them, ‘I’m going to do this thing and it’s going to work, and you can vouch for me,’ ” he says.

Some people would, and do, choose to head back to a big company after such a soul-crushing experience. Calbucci considered that for a long time, but ultimately it came down to not wanting to waste his life. Despite all of the failures and emotional whirlwinds of running a startup, he never felt once like he was passively watching his life go by.

“After a month into the fetal position, you have that moment when you accept everything that happened to you, and you have some clarity,” he says. “When I was at Microsoft and I had bad days, they were worse than the bad days I had at a startup.”

 

GUPTA’S JOB AS a general manager at Honeywell made her feel like she was somebody. Fifty people reported to her, she managed $500 million in revenue annually and there were only two people between her and the CEO. She felt, though, that she was “watering someone else’s plant,” helping someone else’s dream rather than her own.

Growing up in India, watching her mother run a school for 25 years, Gupta wanted to leave a legacy. She wanted to make a real impact on the world. She, too, wanted to work in education, and the perfect opportunity appeared as she spent months helping her daughter apply to The Overlake School.

She realized there was no way to easily organize the students’ portfolios during the application process. This was it. Her chance to make her mark, to leave behind the slow-as-molasses corporate structure to call her own shots.

For Gupta, launching her startup, Cirkled in, also meant giving up a good deal of the reputation she had worked so hard for, as well as time with her daughters.

Gupta’s husband works at VMware, so the family has a financial safety net. Still, leaving Honeywell meant losing her salary, which amounted to 60 percent of the family’s income. They made up by cutting back on shopping and eating out and by halting contributions to the kids’ college funds, no easy decision.

It also meant her daughter wouldn’t be able to attend the private school she had spent months applying to.

“That hurt me,” Gupta says. “Because I thought, ‘I’m compromising her education and learning for my self-satisfaction.’ … But she has her whole life in front of her. I don’t. So cuts were made.”

She’s giving up things, she knows. That was made clear late last year when Gupta realized her daughters’ grades had started to slip slightly at school. But Gupta is fully aware of what she is sacrificing.

“Pick your regrets now,” she says. “You will have some regrets when you’re on your deathbed, so pick your regrets now so it’s not a surprise when you’re dying.”

Most startup founders do not come out the other side of their risky ventures in a better financial state. They can gain other things, though. For some, it’s the chance to make a lasting mark, to leave a legacy. For others, they simply don’t want to miss out on an opportunity that could change their lives and impact even a sliver of the world.