[S1,E22] From drug addict in Wisconsin to tech entrepreneur in Silicon Valley: How Tim Schwab struck a deal with 500 Startups, raised over $1M and got fired from his own company for mental illness

Tim Schwab, founder of several startups and Chief Sales Officer at KnKt’d, is not the stereotypical Silicon Valley entrepreneur. However, though he doesn’t fit in the typical startup founder image, his story of drug addiction, mental illness and being fired from own company is not that uncommon. It’s just much less often told (and it’s easy to guess why).

Here is the outline:

After years of drug addiction and living an aimless life in Wisconsin with some criminal record, Tim created a travel insurance startup. He was acquired and found himself in the ritzy, celeb town of Tiburon, California. Despite being the poorest guy around Tiburon, he went through the 500 Startup Program, raised over $1M, and connected to a vast network of the who’s who in Silicon Valley. Eventually, because of extreme stress and lack of sleep, he developed a mental illness.

Oh, and he got fired from his own company.

How did Tim’s startup in Wisconsin get acquired by a Silicon Valley company?
How did Tim find himself in Tiburon, California?
How did he get accepted to the 500 Startups Program?
What happened between him and his former company that led to his termination?
When did his issues with mental illness start?
Why is Tim Schwab proclaimed as Portland’s least favorite startup founder?

In one of our most personal and honest interviews, Tim Schwab does not hold back when it comes to telling his Silicon Valley story!

Time Stamps:
[column size=one_half position=first ]Introduction to Internet and Gaming – 2:03
Beginning of addiction – 5:30
Criminal history escalation – 7:01
About the types of drug use – 9:52
About Tim’s transformation – 13:50
His first startup – 15:38
His relationship with Life360 – 18:01[/column]
[column size=one_half position=middle ]His experience in Tiburon, California – 22:07
The idea of Sales Beach – 25:00
Participation in 500 Startups – 29:34
The worst part of his termination of Sales Beach – 32:53
Issues with mental illness – 36:23
A good piece of advice – 39:59[/column]


A lovely shout out to our sponsor UnStock — mobile first marketplace for authentic video. Also, I’m very proud to say that I am wearing a dress by Kamila Dmowska.

Check out the highlights from the interview:

  • Hard prescription drugs were always a part of Tim’s adolescence.

    “My friends would come over [his father’s house] and we would all do drugs. In the beginning, we were playing video games and doing other stuff. But very quickly it started turning into ‘okay this is where we hang out and do drugs together.’”

  • There was no programming school, coding camp, or education of any sort. Tim spent his young life with the wrong group of people.

    “One day some of my associates that were living at my house decided it’d be a good idea to rob a veterinary clinic, and get Ketamine. Their plan was to throw a rock through the window, climb in, grab the safe full of stuff, and bring it home.”

  • After working on a business to business sales company and creating a great product, a simple and genuine compliment feels sooo good!

    “Robert [founder] took me out for some coffee and said ‘why don’t you take this and run with it. You’d be an awesome CEO.’ And that was the first time anyone has ever said that to me.

  • Sometimes you need to take risks when approaching a deal. Tim felt that he could align himself with 500 Startups since his product and business was growing.

    “[Parker Thompson] said ‘I don’t think you need these guys.’ I think I could reapply to 500 startups, take the name off that we had come up with, and I’d be able to get in.
    I eventually said let’s just do this: we’ll fix the cap table later. We’re going to raise more money anyway, we’ll fix it then.”

  • When stress and money (or lack of) play a role in business, partners could potentially turn on each other. In other words: when it rains, it really pours.

    “They start talking about potentially firing me. I found out through some of my advisors that I brought in. One of my advisors told them that ‘Tim is the lifeblood of the company. All the customers you have is from him. If he goes away, your company goes away.’ I took a break. I went to Austin. I came back, and I’m being served termination papers from the lawyer that I brought in to the company.

  • During times of great stress, Tim finds out he has a bigger problem.

    “I found out at that time, I had a mental illness. I am bi-polar. I started to experience a maniac episode. Now it was more of a hypo-maniac episode, which means it wasn’t psychotic. But I wasn’t sleeping, two hours a night, I’m working all day, I’m not eating. The problem is, the way mental illness works, that when you get closer and keep ramping up it’s like a black hole. You start getting sucked in faster.”

  • It’s not uncommon for startup founders to develop stress related, mental illnesses.

    “No one talks about it. And this is the thing that really bothers me because I am someone with a criminal record, a mental illness, no college education really, and I am talking about this. There’s guys from Ivy League schools that have a similar problem, that have a lot of shame, and there’s this stigma about it.”

  • But, through all that darkness, there is a little sunshine for Tim.

    “I called that advisor from salesforce and ask ‘what do I do?’ Go to Oregon. Be with my kids. Take some time off. And then come back at it, twelve months to year or two from now.”

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