Sharon Kan: The CEO & Co-Founder of Pepperlane On the Hard Decision to Stop Her Start-up [Live in Boston] – EP. 172

About This Episode:

Sharon Kan is the CEO & Co-Founder at Pepperlane, a start-up that helped mothers transform their ideas, skills, and passions into businesses that fit into their busy lives. They raised millions with her brilliant concept.

Alas, like so many others, COVID had a massive negative impact on her business, and she had to make the difficult decision to shut it down earlier this year.

In my conversations, I’m keenly aware of survivorship bias—that only talking to people who’ve won the lottery can give us a false impression about what it’s like to play the lottery. Or as Mitch Hedberg said: “You know when you see an advertisement for a casino, and they have a picture of a guy winning money? That’s false advertising, because that happens the least. That’s like if you’re advertising a hamburger, they could show a guy choking. “This is what happened once.”

Today we talk about life after a start-up, and how this unpleasant aspect of the journey led to Sharon finding a new voice and a new passion.

Now she’s mentored hundreds of women CEOs and business owners, and she’s building a new life behind the scenes. If you’ve ever tried to build something ambitious, this episode is for you.

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5:18 – “As a CEO, I have the responsibility for stakeholders, which are my customers, my employees, and my investors. And you would think that I could now talk about all the exits that I had, I can talk about how people really advanced under my own wings. I can talk a lot about that. But I don’t know what I learned from that. What I did learn is what success looks like when you have to put your idea to rest.”

6:39 – (Ross) “So I grew up playing baseball – last night in Boston for the very first time, went to Fenway Park. Beautiful night. Perfect, I think, absolutely ideal day for a ball game. And we get to the stadium, walk inside. I think I’ve got to have a beer at Fenway Park and my dad and my brother will be thinking about this, and they’ll be super jealous, because the big green monster and all these things from my childhood, between the time I arrive in the stadium and order a beer and go out, it starts pouring rain instantly… and rain delay, and all the people are leaving, and it looks like it’s going to be shut out. You’re not going to get to see this game. Now I try to cultivate that spirit of see the good in bad, see the opportunity in a negative time. But I’m not always successful. And in that moment I think, ‘Oh, just my luck. I get to the first game ever and it’s a rain delay the second I get there, I’m bringing bad luck to this situation.’ That’s the thought that I had. Ramses, the CEO of this company [Neurable], he’s a lot more optimistic, he’s honed that muscle a lot better. And when we get there, he says, ‘No, this could be a good thing, let’s see what happens.’ All the people leave and it’s pouring. We go down right to the field and we wipe off some seats. We’re sitting in the rain. I didn’t have rain gear – just shorts, getting poured on. A lot of people left and the rain stopped and eventually they restarted the game. And the people who were sitting in our seats, they never came back. So these are seats that you would never get. And it turned out that Stephen King was sitting in my chair and he said, ‘You know what? It’s not worth it for me. I come to all the games,’ and he leaves. And Ramses kind of knew that that was going to happen but I must admit that I wasn’t totally convinced that it was going to have a happy ending. So I admire the ability to see the good in bad, which you mentioned at the beginning, I mean, I can tell myself that, I have a hard time feeling it in those moments where something bad is happening, like really believing it versus just saying, ‘Oh, it’ll be good somehow, someday.’”

9:45 ­– “I founded a company, a couple of years ago, Pepperlane. And the idea behind Pepperlane, the idea was born after so many conversations with mothers around the country, that have not seen the opportunity either to be part of the workforce or to stay at home and feel okay with that. And looking on the numbers, we’re talking about 20 million just in the US. And where they can apply their skills, there’s not too many options. There are certain industries where you can do some hustles, but there was nothing that really inspired them to put their talents to work. And the mom network, we know how powerful it is…and based on my own experience and spending hundreds of hours with – I mentored now probably 400 women how to build small businesses. I thought about the opportunity – why not giving them the tools to monetize their skills? And there’s a trust between moms that I really saw the opportunity to really capitalize on that. So, when I met with them, over anywhere in any state, what I found is that they thought, ‘Oh, maybe it’s too late for me. Maybe it’s too early.’ And to be honest, once they became moms our priorities change. We’re putting our kids first. And so that spark, how do you cultivate that and how do you make it so simple to build what I call ‘microbusinesses?’ And if you put the numbers together, if you really cultivate what I call the ‘mom economy,’ you could add to the – just to the US itself – $150 Billion, just to our economy. So we started with this big vision.”

12:57 – “So Pepperlane was born and we raised capital. We really got, I think so many investors excited about the opportunity to create what we call the marketplace. And the idea was that moms will serve other moms mostly in-house…here’s the thing. We need a second wife. We need help….We had accountants, we had marketers, we had financial planners, you name it. We had over, I think, 100 skills on the platform, in various areas where they can support…We created businesses by providing them tools, and make it easy, and really, I think, inspire them and give them the confidence that they can do it. So that was the story. And I recruited, I think, the best team. A team that were, as I said, CEO, COOs, I had really senior team behind that and then Covid hit and the whole idea of having marketplace in-house, – who would want to bring anyone to anybody’s house? So, year one we held it, we were trying to pivot. Year two, it started to look, it’s not going to end. But meanwhile, we put thousands of women to work. So what was dangerous for me was to skip that and not see that, and instead of that worry about the idea that I haven’t reached the multimillion dollar business that I knew how to do. I’ve done it. But in this case, I couldn’t. And now I had two choices. I had the choice to see that as a complete failure. Which, let’s face it, in our textbook, it is a failure, right? Or I can celebrate it.”

17:46 – (Sharon) “When it was ready to shut down, I had to inform my investors. And that is the hardest thing for me, at least. If you look on my record, I never lost money for investors. I always made money for investors. So when it’s your number four and you’ve never really lost money. I always say to my girls, my daughters, ‘Why don’t you just fail now?’
(Ross) “Yeah. Just get it over with. And then never again.”
(Sharon) “Because when you get to where am I, you lose your sense of humor. It’s not funny. And the way I told the story to the investors mattered. I knew if I’m going to come from a failure, they would feel that it was a failure. And when I had to announce the shutdown, not only I explained the situation, but I also was super proud of the women that not only we put to work, but they made money. They are making money today. They know how to build their own businesses. So that was the mission. And I have to say that I got back not only validation, but I call it love letters, which you would say, ‘Oh, really? Are you kidding me? I lost money.’ But investors, when you communicate to them how do you see that? And you take them through the process while you know what is going on that is super important. But it starts from you. It’s what do you believe? And I did not believe it was a failure.”

19:40 – (Sharon) “How do you tell your customers that that’s the end? And that was the hardest one. So I chose to celebrate…I really gathered all of my leaders. I had in my team about close to 30 of them and announced that this is it. And, we took the time to digest, and we dance, and we celebrate. And then we announced the rest of our community and we gave them some time and we made sure that they have the space. We left all the systems working for a couple of weeks where they can really digest. It’s very important to let people digest. You know, people are afraid of, ‘Oh, you know, they’re going to say something bad,’ but you got to let people, you’ve got to take them on your journey.”
(Ross) “It seems like the ethical way to do it anyways. I don’t know if everybody would agree that you have to do that, but I appreciate that.”
(Sharon) “It’s nonconventional because if you look on what people will tell you is ‘do the shutdown, close it, shut it down, get rid of it. You don’t want anyone to sue you, blah, blah, blah.’ I took my time to shut down. I took a couple of months, stakeholders by stakeholders, I wanted to make sure that everyone is being taken care until the last employee that I’m so happy to say that was, yesterday started his first day of a job. He stayed with me until the end.”
(Ross) “Wow.”

36:08 – (Ross) “So in those moments where somebody is feeling in a low period, where they have some bad news, and again, in your case, it’s an act of God, I mean, that’s what it’s called. It is a literal pandemic. When you’re feeling in those moments, knowing that confidence – I mean, intellectually, you can know that confidence is so important – how do you feel confident in that moment or how can you cultivate that sense in a moment where you might instinctively feel the least confident that you’ve ever been or you might be doubting everything about yourself?”
(Sharon) “So, we’ve got to remember that, when do you really experience growth? When you’re doing well? No. You’re experiencing growth in the most difficult moments. So in a way, I’ve learned to love those moments because I hate those moments. So you’ve got to remember that. The other thing that I keep practicing is that in every obstacle, no matter what, any obstacle you’re going to give me right now, there’s an opportunity. So the muscle you need to develop is, how do you turn an obstacle to an opportunity?”

42:43 – (Sharon) “I’m not a coach because I don’t know how to be a coach, and I’m not interested in that. Call me an activator, call me a co-collaborator. So I’m working with very few top entrepreneurs that are going to change the world. And what I do is I activate their genius zone because I’m an operator, I can really put myself almost in any single department other than rocket science – that’s not going to work. But other than that, I’ve been there. I’ve done that, and I understand what it takes. And what I’ve learned is when I partner with them the conversation has no strings attached. We’re not just talking about business. We’re talking about everything. And that gives me the ability to clear so many things on their way that are not really given to us, nobody’s teaching us in business school. They all care about the business plan, how to raise capital, all of that crap. But they don’t give us a map of how to build ideas from a place of joy and pleasure. And so my methods are super non-conventional. They’re super confidential. And here’s the fun part – I am searching them around the world. In other words, I pick who I want to work with, and that is something I’ve never done.”
(Ross) “That’s the dream.”

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