In an age where striking out to start your own business takes little more than a laptop and a WordPress site, many of us still fail to “start lean.” We may praise the likes of The 4-Hour Workweek and the Silicon Valley founders who stick to their Hondas, but we look right past the most useful message every Mixergy success story should teach.
That is, what you needed 15 years ago to start a successful business has been reduced to almost nothing material. Nothing that costs much money. Nothing that would traditionally signal, “I’m legitimate.”
Instead of discussing what you likely do need in order to launch a successful business–like a proper work ethic, and a customer–let’s take stock of what too many of us still spend time and money on when bringing together a new venture. For as much as I hang around startups, it’s clear we all could use the reminder.
Fancy Office or Any Office?
First on the list has to be office space. Far from innocent on this one, one of my previous companies quickly sprung for a $6,000/month, two-year lease before we really knew what we were doing. “We will fill it with sales guys!”
It didn’t take us long to realize that it was best for the sales guys we did hire to be out of the office, not in it. Our spacious environment did allow for multiple ping pong rooms and storage; the space did nothing to produce incremental revenue. We could’ve likely operated out of someone’s basement.
Common tale, right? Then why does it keep happening? Ignore the temptation. Heed the stories of the startup in the garage. Garages are free.
I think entrepreneurs want fancy offices to feed their egos, and to feel accomplished. Some might argue it will help with recruiting. That’s true. But if you’re in Month 2 of your company, any recruits should expect some scrappiness, and those same recruits should be skeptical of Google-like work spaces on Day 62 of company existence. Perhaps the person leading this charge–you–has the wrong priorities.
Stay scrappy. Get the big office in a few years.
The Pricey Website
It seems every month that passes, it gets easier to build a legitimate website. Squarespace, WordPress, Magento. I’m sure there are 20 others. It’s drop-dead simple. If you can create a Word document, you can build a website. Use a template. Pay $50 for a logo.
Again, I’m not the first to state this; it’s common knowledge. Yet, over and over I see first-time entrepreneurs dropping $50K on a website. It ranges from wealthy real estate agents who have the money, to 45-year-olds starting a side business that don’t know any better. In 1995, it cost a lot to build a website. It is essentially free now. Figure it out. It’s hard to argue that if you can’t put in the mental energy and time to figure out how to make a presentable website in 2015, it does not bode well for your chances of success as a businessperson.
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I have a drawer filled with business cards from the past eight years. A few boxes for each company. Nearly 95 percent full, each one. Why? Because I never used them. Few do.
Don’t get carried away on Day 3 of your new business because your logo is done and you want to show your mom things are legit. A business card is about as far away as possible from a signal of a sustainable, profitable business–especially in the early days. This isn’t 1960.
In many ways, the cheap website you should build is your business card. Stick to that. Spend the mental energy on the website (or better yet, making a sale!). Forget the business cards.
A Round of Funding
TechCrunch and Shark Tank confuse even the best first-time entrepreneurs. The path to success doesn’t require an angel investor. I know, you take your big idea and put it into a presentation. Go pitch the rich guys. Get them to back you so you can hire a team, to make it all a reality. It doesn’t have to play out that way. Actually, it’s more often a better play for you to get the business launched without funding.
Why? Outside funding comes at a cost. You give up part of your company. You immediately have a partner, or more appropriately, a boss. You inherit an alternate timeline of expectations for the progress of the business. It’s the early days and you’ve already lost much of the things that allure someone to start a business. You lose a portion of the freedom to determine your destiny.
“I have been giving more and more advice to entrepreneurs lately telling them not to raise money. Focus on building a good business, profitably, and then think about raising money once you prove the business model. [Nine out of 10] times this is the best way to do it,” says Danny DeMichele.
It’s Your Ego
We’re supposed to cover five things that first-timers often go after that they don’t need to. Well, the fifth one is pretty all-encompassing. Much of these unnecessary accoutrements to starting a business are driven by ego. The pricey website is what you need, because WordPress is for crappy ideas that won’t be successful. The business card is the immediate signal that your business is real, and people should take it seriously. The round of funding? A smart, wealthy person has put real dollars behind your idea! Time to recognize, time to party! Raising money is far from the time to celebrate.
Check your ego at the door. Your garage door. Ignore all of this stuff and go find a customer to sell to, and then do it again and again. They won’t notice that your garage is company HQ, and that the business cards “got lost in the mail.”
About Chris Warden
Chris Warden is a seasoned entrepreneur and executive. Starting his entrepreneurial career at age 19, he has performed in numerous capacities owning and managing both offline and online companies. Chris now serves as CMO of Fox Powers, a San Diego-based investment banking firm. You can connect with Chris via Linkedin or Twitter @ChrisWarden_SE.