10 Pieces of Wisdom for Startups: Lessons from the Trenches

tulum

Our first business was an amazing idea and we produced a great product, but great ideas can be crushed.

Starting a business is not for the faint of heart. Entrepreneurship is not about trying and succeeding, but more often than not, trying and failing, and then trying again. My experiences from working for startups, having my own contracting business, and starting two companies with my husband have thickened my skin and provided me with some wisdom I’d like to share with you.

If you are thinking of starting a company or know someone who is, heed this warning: Everything on this list is true. If you don’t think so, feel free to learn the hard way. Then, let’s go have coffee.

  1. Your Idea Isn’t That Great. I’m sorry to burst your bubble. It isn’t that your idea is bad, it is probably really cool. But ideas do not earn investment capital or customers. A good business plan and access to the market does. The only place you might be able to sell an “idea” is in Silicon Valley and that rarely turns out well. Thomas Edison was right when he said “genius is 1% inspiration and 99% perspiration.” That’s also why when Walt Disney was asked why he was so willing to give his ideas away he would say, “there is always another one.” It isn’t the idea, but the ability to execute the idea into a successful business that is the trick.
  2. Your Motive Better Be More than Money. Most people start off with a dream—a dream that stems from a passion. Money is not a passion. Our first passion was using new technology to educate the world and help create sustainable jobs in countries with struggling economies. We failed. Our next motive was survival. We wanted to create jobs here in the United States, especially one for us. And this time it’s working! We now have 23 people on the payroll. Yay! A passionate motive drives you harder than just a desire to make a stack of cash. And don’t expect a giant stack of cash to ever come, or come quickly. Your goal should be first and foremost to have a profitable company. And that is really hard to do—often a lot harder than just finding a job.
  3.  Inventory Your Sacrifices. Ask yourself what you are willing to sacrifice for the sake or your new company. Your house? Your car? All your savings? Your washing machine? Relationships with your family? Your free time? Make a list of how far you are willing to go and discuss this with your business partners and family. You all need to be in agreement of where the line will be drawn. And, you will likely need to come back to this conversation (see lesson #6). Play out each scenario as if you are going to lose it all. Dig deep and ask yourself if you are all willing to take that risk. One for all and all for one.
  4. Don’t Quit Your Day Job. Don’t think your great idea will allow you to sit back and only work part-time as the money rolls in. What you are signing up for is two full-time jobs, or more. In our case, at least one of us had to work and earn a paycheck during the day and then come home and help with the business at night, while the other worked the equivalent of two full-time jobs (without pay, for several years sometimes).
  5. Patience Is a Virtue for a Reason. Desperation is a repellent. When you are desperate — for example, when you can’t afford groceries or make payroll—the desperation oozes from your every pore. You will want to push people to sign contracts and move faster than they can or are willing to move. This ultimately irritates your customers and clients and drives your chances of success far away. Remember lesson #3 (sacrifice), take a deep breath, eat that two-year-old mystery meat in the back of your freezer, and stay the course.
  6. Cut Your Losses Sooner Than Later. After you have sunk hundreds of thousands of dollars into a business, it is very hard to say goodbye to your great idea, your product, and your passion….it is like a piece of you dying. But you need to let go and do it sooner than later. Listen to wise stakeholders and the market. If it isn’t going to work, cut your losses right away. Trying to hang on because you can’t let go of your dream will just hurt you more in the long run. Sunk costs are sunk. LET IT GO. Remember lesson #1 and don’t worry. You’ll have another idea and you’ll do better next time.
  7. Give It Away. Don’t be afraid to give large percentages of your company away. If you are going to succeed, you will probably need to scale and grow. This means you will need wise, influential, and lucrative business partners — larger companies or investors. Don’t be cocky or greedy and think your idea is so valuable, you can do it all yourself, and you can’t possibly share your “future pot of gold.” You’ll ultimately get more gold by growing and giving away large chunks of your company than you will trying to hoard your “big idea.”
  8. Investment Money Is Not Yours. I know a lot of people who need to hear this. And not just people who are starting out. If you just received investment capital or want some, please, listen. That money is not yours! You are a steward of that money. Investment money is not there to buy you a new leather desk chair or even pay your salary. Revenues should pay your salary. Investment capital goes to help build the business. Period. Investors are counting on you to not lose their money. They don’t want to bare the burden of all the risk. Your idea isn’t worth as much as you think (see lesson #1).
  9. Confidence Breeds Confidence. You will be surprised at what you can do and who you can get on board. Don’t be afraid to really show how much you believe in your product and what you are doing. Reach for the stars. You will likely find out that big corporations or seemingly “big players” in the industry are people just like you trying to solve a problem. They need your help and are eager to partner with you. Be confident.
  10. You Are What Makes the Economy Work. For every successful new business, there are many more failed ones. Just because you failed once, doesn’t mean you will again. You will be wiser because of it. Remember, every giant company started out in a basement or garage. Innovation and dreams drive our economy and create jobs. Someone has to do it. Don’t give up. Dream big.

Joy Is an Empty Basement and the Birth of a Company

new office

This office probably looks boring to you, but this sunny yellow space is an amazing accomplishment and my ticket to privacy.

Fellow bloggers and readers: I am writing this post from my basement. This may not sound extraordinairy, but it is! Please celebrate with me! It is the first time in many, many months I have been able to sit at my desk at home. I’ve officially reclaimed my basement (and the rest of my house).

Over the last year, I have happily relinquished control of my basement, my garage, my guest bathroom, my dishwasher, and my kitchen to accommodate the startup company growing in the womb of my home. On any given day there are 15 plus men, sometimes more, coming in and out of my front door. (You cannot win the toilet seat battle, ladies).

But today, they have finished moving into their own, albeit temporary, office space. So exciting for them… and for me!

Things I Can Now Do

  1. Run around my home freely in my pajamas.
  2. Work from home one day a week (even in my pajamas).
  3. Buy a lot less toilet paper (in my pajamas…ok maybe not).
  4. Lock my front door.
  5. Yell at the dog less.
  6. Clean out my refrigerator.
  7. Get my carpets cleaned.
  8. Set up my bike on its trainer.
  9. Beat the CEO (my husband) in ping pong (statistically speaking I will…and in my pajamas).
  10. Know whose food is in my refrigerator (it’s mine, I think).

My friend, Mrs. Afthead, asked if the basement dwellers (as we like to call them) were astonished to come above ground and see the sun. She had imagined them as mole people down there. But alas, we have a walkout basement, so they had already been acclimated. But, I did notice they painted their new office a bright sunny yellow. Good choice.

Congratulations guys! Ratchet will miss all of your pets. You will not miss all of his barking during telephone calls. I will miss seeing your smiling faces…but I’m quite sure I will still see you frequently.

Now, where is the number for the carpet cleaner? Yikes! I better change out of my pajamas before they get here!

Lessons from Hurricane Wilma: 10 Years Later

guatamala

The girls in Guatemala and me. Who knew we had so much in common?

Anniversaries are a good time to reflect. This week (technically, October 26, 2005) is the 10th anniversary of Hurricane Wilma, the fourth costliest hurricane on record according to the National Weather Service.

It was the first costliest for me.

I can still remember watching the TV, our eyes glued as the storm sat over the Yucatan Peninsula for three days instead of the predicted 28 hours. The newscasters said things like, “The fact that this Category 5 hurricane is sitting over Cancun is really good news. It will take some of the strength out of it before it reaches Florida.”

Oh, really? That’s good news? Not for the people in Cancun. Not for our friends and employees. And definitely not for us.

It has been a very long 10 years. Ten years of recovering financially from a startup business, which was quite literally destroyed with a gust of terror. Ten years of rebuilding, not once, not twice, but multiple times. Being innovative and on the cutting edge wasn’t as marketable as we thought, especially when we later hit speed bump number two: the economic recession.  Ten years rebuilding careers and rebuilding bank accounts.

This week also marks the first time in 10 years my husband and I finally looked at each other and said, “I think we are finally there.” We are on a trajectory that doesn’t take us back under water (knock on wood). A trajectory of hope. Wow! Almost exactly 10 years later. It has been a long 10 years.

When I was in Guatemala doing a home visit with my friend’s sponsored child through Starfish, we sat in a circle with her family and they asked us questions. In the midst of her little bedroom that she shares with four siblings, she asked me, “Have you ever experienced any hardship and what is your advice for getting through it?” She explained. Her perception of people from the United States was that we are very rich and we don’t have to struggle.

I told her my story. How we had built a business and worked multiple jobs to survive while we built it. How we had put all of our time and money into it and how it was crushed in an instant by a hurricane. How we lost everything and that put us into huge debt and how we had to muscle our way back. I told her it was because of our education and a lot of caring people that we were able to recover. You can lose all your money and all of your things, but nothing can take away your experiences and your knowledge. Those are treasures beyond value and that is what makes it possible to rebuild. To dream again. (I think it was the best “stay in school” speech I’ve ever given.)

I remember the shock on her face as the translator relayed the story. She couldn’t believe that someone in the United States would have those kinds of troubles. Both of our eyes were opened that day. We are all alike. We all have wounds and struggles and hardships. They are not all the same, but this broken world is broken for us all.

The lessons I’ve learned in the last 10 years have changed me in so many ways.

I’ve been humbled. And I’ve learned how to humbly receive. Having someone pay your water bills or help you with your mortgage will do that.

I’ve been loved. And I’ve learned how to have an incredible marriage.

I’ve been judged. And I’ve learned how to shake it off and be understanding.

I’ve been hungry. And I’ve learned how to feed others.

I’ve been given gifts. And I’ve learned how to give more.

Do I wish it never would have happened? Sometimes. Am I glad for the perspective it has brought me? Absolutely.

As an added bonus to my learnings, my husband and I are now expert couch critics when watching Shark Tank. Here’s to the next 10 years! I can only hope I gain as much perspective as I’ve gained over the last.

cancun-office

In memory of TekTrek and our little office in Cancun. A dream that blew away.