• March 14, 2023

Staying Present: What the Silicon Valley Bank Collapse Can Teach Founders

Staying Present: What the Silicon Valley Bank Collapse Can Teach Founders

Staying Present: What the Silicon Valley Bank Collapse Can Teach Founders 700 500 Arthur Gallego

Right on the heels of Expo West 2023 – and all of the emotional highs that it created for founders – came the news of the Silicon Valley Bank collapse. The nation’s second-largest U.S. bank failure could jeopardize the day-to-day operations of so many established businesses and promising startups, including CPG brands. SKU mentor Arthur Gallego shares advice for emerging brands to help them stay positive, even as they listen to daily SVB updates.

Many young brands already are sharing on social media how they’re being affected by this mess, and asking for support. And we should support them, but also acknowledge that buying their products cannot compensate for seven-figure lines of credit that suddenly evaporated. These are funds many relied upon to float their operations.

What happened at SVB is yet another test of the founder psyche. And that’s true not only for those directly impacted, but also for the aspiring entrepreneurs who were about to throw their hat into the ring this year. You think you want to do this only to realize there are variables you never considered, like a bank’s inability to forecast the impact of rising interest rates on their day-to-day business.

Many start a business to have greater control, and the collapse is reminder of those things you cannot control. That’s when you especially need the support of knowledgeable mentors.

I love mentoring people worth mentoring. That sounds exclusionary but the truth is that the best mentees – the ones who thrive after being shown their own reflection in a cracked mirror – give engaged mentors the greatest satisfaction. Seeing a mentee’s – or anyone’s – self-awareness grow, and watching them become stronger because of it, makes someone who enjoys mentoring, want to give back even more. It feeds feeds an important cycle in how we do business as people.

The Entrepreneurial Roller Coaster

The emotional highs and lows of being a founder, even if you’re a repeat founder, are palpable. A typical day could flow as follows:

  • At 9 a.m. you find you’ve received authorization from a major grocery chain.
  • At 11 a.m., you are advised of supply chain issues that will kill 2 margin points for your brand within the next six months.
  • By 1 p.m., you’ve been alerted of a shortage of the key ingredient that makes your product unique.
  • At 3 p.m., you get a sales report that shows velocities are up in your biggest channel that suggest it’s all working.
  • And at 7 p.m., over dinner, your partner tells you you’re not present enough and that your startup seems more important than your relationship.

What is the best advice I can offer anyone in this situation based on my own experience? Sometimes it’s best to just stop, drop everything, and ask yourself the following questions. Why are you entrenched in the entrepreneurial hustle? What gives you your daily joy on the journey.

It’s not always about the mission of the brand or closing a big sale. Sometimes, it’s about the human connection of working with others who want to create and build something, if you take the time to see it. These little accomplishments all add up on that journey with others.

The Power of Relationships

There is also power and personal growth in working with likeminded people who also love having a significant, personal impact. So many people leave Corporate America for startups for that very reason – to have a greater influence on the results of their work. Seeing that same satisfaction in someone else is a shared human experience, if you are present for it. An entrepreneur’s journey can have an impact on others who join their business, regardless of a successful exit.

And it’s not always about building something category changing. Sometimes it’s about creating and connecting with other people who simply enjoy building something from the ground up. There are few founders who don’t find joy in a total stranger discovering and buying their brand. And that joy and pride is usually shared by everyone who works with them.

Staying optimistic

Finances are always the looming element for any startup. How much cash are you burning and how long can you burn it? And when a champion of startup business like SVB goes belly up so fast, dominating the news cycle, it shakes our faith. Faith is a critical tenet of any entrepreneur’s ability to build a business.

Even as many CPG startups are impacted by the SVB collapse, these founders must not lose sight of the optimism and camaraderie that helped them get to this point. If an an institution took a risk on you and your brand, even as other banks passed, then there is a future beyond this if you have the proper mindset.

About Arthur Gallego

Arthur Gallego is a C-suite level executive with experience as both a CMO and, since
2020, a startup CEO. His background includes CPG work with leading food and
beverage brands, and prestige and mass market beauty products. His broader
expertise includes hospitality, real estate, fashion, and media. He has helped build brands and also categories.

He was one of the earliest marketers of coconut water, starting in 2004, and he has advised popular brands like Vita Coco, Health-Ade, OLIPOP, Flow Spring Water Bulletproof 360, CANN CBD Beverages, MUSH Oats, Chomps meat snacks and others.

His skill set and experience make him a very well-rounded CPG expert. Gallego is
fluent in product development, supply chain, branding and packaging, sales and
marketing, go-to-market strategy, and investor relations. He has also advised on
going public transactions for CPG brands. His expertise is regularly sought by the
media, researchers and analysts.