7 Things to consider before launching a startup
My company is out of money, which you are never supposed let happen. And definitely never supposed to confess to. Because then investors can give you any terms they want. Rape. Carnage. Pillage. Everything. And in our case, it’s coming from the angels who invested in our first round of funding, which means that the people who are supposed to be on our side are killing us.
So two days before Christmas, I am going nuts, trying to close a bridge financing from the angel investors who funded us initially. Which means that these guys are very rich, and traveling for Christmas, and totally not interested in being bothered with the minutia of our depleted finances.
I’m desperate. We’ve already skipped one payroll, and it’s hard to think of a worse time to do that than the week before Christmas.
When 70% of young people say they want to run their own business, they are probably not thinking they will fund their business themselves. Since they probably have no money. So they are looking at taking in investors. But I’m not sure that 70% of young people want to take in angel investors, because here’s what it looks like:
1. You are on the phone all the time.
Tuesday before Christmas: I am glued to my phone: Investors don’t work on a schedule. They are millionaires. They are trying to sail their boat in Bermuda but they live in Wisconsin which means they have to make ten connecting flights from snowbound airports, and my chances of catching them between flights are slim. So I spend my day waiting for someone to call in with another clever idea for taking more equity from the company and redistributing it to the investors.
2. You’re always sick, but not take-a-day-off-work sick
And I have pinkeye. It started on Monday, when 20/20 was in our office to do a story on salary. Yep. That’s right. The company that is not paying salaries right now is featured on 20/20 as the poster child for transparent salaries.
The camera is right in my face while I’m talking about how the only people who benefit from hidden salaries are managers who made hiring mistakes and don’t want to fix them. “Management should not hide behind their weaknesses,” I say. And then I say, “Do you have something in that camera that can fix my pink eye?”
The camera man says, “Yeah. And I can make you thinner, too.”
So I suffer with the pink eye, because it’s not having all that gross green discharge yet, so I think I can deal with it after funding.
3. You always think of funding. No matter where you are.
On Tuesday, I’m driving to the office to tell everyone that we are going to make payroll any day now, and while I’m driving I’m talking to this guy on the West Coast because I think if there is any way to rescue myself form our angels it’s going to be with my relationships on the west coast, and then, I realize I can’t see. Did you read the book, Blindness? It’s like that, except in the book there is a great undercurrent of romance, and with me I just think I’m going to die.
I shut my eyes and pull to the side of the road with them closed. Then I tell myself people do not go blind in real life. I tell myself that it’s probably stress. That’s what all the doctors tell women when there is a mysterious ailment, and after decades of this, women internalize the diagnosis.
Wait—here is the best book in the world about the topic of misdiagnosing women. It’s a book of the real writings of psychologists in Germany during Freud’s heyday where the women were diagnosed as crazy from stress and the psychologists attempted to solve their stress-induced craziness by giving the women orgasms. So the book is the doctors describing themselves standing around a patient’s bed, giving her an orgasm. Really. It’s one of my favorite books and the blindness has been worth it now, because I am giving you the link.
Okay. So, in keeping with the history of Freudian psychology, I diagnose my blindness as stress related. I continue to talk with the guy about the future of recruiting, and luckily, I can talk about the future of recruiting in my sleep and still sound like sort of a visionary. Get it, visionary?
4. There is no time for family.
Then I sit in the car and I shut my eyes, trying to figure out how to drive home.
I can’t. So the house manager comes to get me. For those of you who wonder what I do with a house manager, now you know: She’s my go-to person for blindness.
She drives me to the urgent care place, which runs tests for an hour while my kids watch the Incredibles, probably catching obscure diseases, because who takes their kid to the doctor two days before Christmas unless it’s really bad?
We have to go to a different doctor because the urgent care place has no idea why I can’t open my eyes. My kids are heartbroken and I have to lie to them and tell them that opthamologists are reknown for having a great selection of children’s movies. “Way better than the Incredibles,” I say.
5. Life is painful.
So it turns out that I have this disease (Thygeson’s Keratitis) and it is a very very painful disease that most people don’t wait around to treat. So the eye doctor has not seen such an advanced case and she brings in the residents into the room for an educational moment.
The residents are impressed at the amount of pain I’ve tolerated.
I say, “You know what? My eyes are nothing compared to the pain of raising money in this market.”
6. You have to fake that you are in control. But sometimes you can’t.
So once we figure out that I’m not actually blind, I’m just so sensitive to light that I feel blind, I can focus on funding. The house manager drives me home and my new board member calls. I tried to get out of talking with him by telling him I had eye trouble, and while I didn’t lie and say I was dripping green puss, I tried to imply that it would be dangerous to meet with me. So I got a phone meeting, and at least I did not need to put on clean clothes. Which has been a problem lately.
It’s only the second time I’ve met this board member, and since he has not appeared on the blog before, and really, how can you blame anyone for not wanting to appear on this blog, let me just say that he’s a really nice, smart guy, and I’m happy to have him on the board.
Okay. So with that out of the way, let me also say that I really did not want to talk with him that day. Because your board is supposed to help you run the company but how can you think about running a company when your company is out of money?
I pretend, of course. And this is why he’s a good board member. Because I tell him I’m great under pressure, and I show him plans for spring. And he tells me he thinks it’s ridiculous to think about long-term stuff when I cannot even get tomorrow’s financing done. I am unrelenting in my tough-girl routine, and I tell him that there is nothing I can do about the financing. I just take the terms people offer and hope they close the deal before everyone disappears for the rest of the December.
The board member says he’ll write a check to bridge me to the bridge. Maybe this is a sign of how bad the financing world is right now. I do not think this is typical, but I think this is a good reason to have rich board members. Finally, here is a bit of career advice in this post: Get rich board members.
So he says he’ll write the company a check to get us through the payroll we missed.
And I start crying.
Not like, little, eye-doctor tears, but blubbering tears. Tears so much that I whisper to the board guy, “Hold on. I can’t let my kids see me this upset about money. Let me get out of the car.”
So the house manager pulls over and I get out and I cry to the investor from inside the lobby of Chase bank.
7. It doesn’t end.
That’s the end. I want to tell you there’s a nice, neat end here. But there’s not.
There are about 400 posts about how to be a CEO of a startup during a bad economy. Here’s a good one from Tech Crunch. They are all a little annoying because the authors tell you, in hind sight, how great a job they did at getting through the last downturn. I could write that post, except that it would have to include that the last time I was running a startup when the market crashed was in 1999, and my hair started falling out.
So just forget all that sunny stuff about how to run a startup during a financial crisis. Here’s what venture capitalists are telling me when no one else is listening: Try really hard to sell if you can, because getting through the next year in a bad cash position is gonna suck.
Just keep doing the best you can with what you’ve got!! If anyone could get the funding your co. needs, it’s you! And if it doesn’t happen, I have faith that you will turn that into something good too.
I still don’t know what your product is – and I read your blog on a fairly regular basis. I know you have a website out there for career advice, but is that your product?
What exactly is it other than a website containing blog entries?
Thanks for asking about the business model because now you give me another chance to say what it is. But if I told the business model in every post about the business, believe me, you’d want to kill me.
Brazen Careerist is a web service that helps companies locate hard-to-find candidates and decrease recruiting costs. If you want to learn more about my company visit the “About my company” page on my blog.
Thanks for your answer. I still don’t know how such a site can be a huge revenue generator.
I get that the idea is that companies who buy a spot the site – you have four listed – will attract potential applicants to their location, but how is it any different than using Monster.com or hotjobs.com? Or. really, even the newspaper or just foot traffic in general?
In other words, what is it about the applicants on your site that makes them stand out from hundreds of others other than they used your site as one of their means to find companies who are hiring?
Maybe I’m just missing something.
Hope you are feeling better and that there is some good news on the way for you. I am subscribed to your blog, but I do have the same question as Huck – what is it exactly that you are selling to the investors? I am impressed by the raw honesty of your blog :) LOVE IT and KUDOS to you…
I agree with Huck.
Your investors seem like fools to invest in a company that the lay person can’t determine what it is they sell or even that there is something for sale.
Also, who needs a board of directors to run a bloggin website. That is what entrepreneurship is all about – relying on your own skills to get things off the ground. It seems like you are putting the cart before the horse and your company is suffering for it.
I love the honesty and candor in your blog, but there is no way I would ever put my money in an organization with such an emotionally unstable leader. Perhaps this is why you need a board of directors?
I love the honesty and candor in your blog, but there is no way I would ever put my money in an organization with such an emotionally unstable leader. Perhaps this is why you need a board of directors?
Of course, Bill Brasky, no-one’s in a position to tell you what you’d do with your money … But I feel that this post slightly misses the point of what Penelope is doing with Brazen C.
Isn’t the openness and emotional transparency with which she blogs one of (if not the biggest of) her unique selling points?
She’s trying to build up a relationship, through the blog, with people of generation Y (in whose numbers, incidentally, I count myself). And she judges the best way to do this to be via a personal style, as opposed to the kind of rational, stable predictability you seem to be preferring.
Wouldn’t it radically undermine what Penelope’s doing if she were to reign in the ’emotional instability’? Her honesty and openness is precisely the reason for which I, at least, read this blog. And that’s — it seems to me — a key part of her strategy. Suggesting that investors would prefer a stable, predictable style is a bit like telling Innocent Smoothies that investors would prefer them to cut out the cheeky, informal tone on their packaging, use a more serious font and list the ingredients in the usual way. Totally undermining the carefully considered branding, in other words, and misunderstanding the audience with whom it seeks to connect.
That’s how it seems to me, anyway …
Very well stated Tom. I think Penelope has a very good handle on her strategy and brand. What stinks is the timing for her start-up (very bad economy) so cash flow is key for her business. I also don’t like the negativity of the ’emotional instability’ label and how it was used here. He’s making a comment about a company with a board of directors when he knows very little about the company structure and then tying it to the ability of the CEO to run the company. That’s my take.
I was born in 81, and I’m pretty sure that makes me a Gen Y, I cam across this blog by finding the aricle about feeling guilty quitting. I only had to read that one entry to know this is a blog I will continue to follow in the future. I read alot online, i found Penelope’s style to be awesome and refreshing. In regards to her business though, investors look at more than the business idea itself, in a lot of cases the personality that represents the business is just as important. I am part owner of another website. We were approached by investors, the woman who started this particular site just wants to sell it. The investors refused to invest in it, if she didn’t come with it, her personality and story behind the creation of the business were what they wanted to buy. They wanted to put her on oprah, yet she didn’t want to be famous. Good business plans are one thing, but people and communities rally around effective leaders.
Interesting comments you’re getting — I’ll definitely be subscribing to them in hopes you respond!
I must say this is one of the reasons I don’t intend on starting a start up. And my family owns their own business — but they did it with SBA loans, independently, only taking out as much as they’d have to. Just a few years later they are completely debt free. Is it a different business? Yeah — my mom runs an office of therapists.
Oh — and my mom started her own successful business, obtainted two masters degrees, and IS blind. So it won’t be the end of the world, you just might need a little guide dog — hers is named Cricket.
“I say, “You know what? My eyes are nothing compared to the pain of raising money in this market.””
Awesome. BEST line ever. Hope you are no longer dripping.
I have to disagree with Huck. To be honest, when the site first launched, I didn’t understand the business model either. But once the company profiles were integrated, it became clear. BC is not a job post site, and that isn’t what Chili’s and the other companies are paying for. It’s an extremely specialized community for interested companies to tap into. Rather than paying Monster so many dollars per month to post among the millions to millions of generalized job seekers, these companies pay BC to tap into their smaller, specialized market. They’re also paying to brand themselves as Gen-Y friendly employers.
I’m thinking, however, that rather than continually seeking out investors, Penelope and team should focus their efforts on seeking out new clients, and keeping those clients involved. The job opportunities, for one thing, don’t see to have been updated since 11/20.
That the job opportunities haven’t been updated since November should be viewed as a serious bellwether for the current state of affairs. Is it that are no new jobs, or is it the site’s administrator didn’t see the need to keep users aware of potential career openings?
No matter which answer is more correct, either one leads me to believe there shouldn’t be much surprise that there are issues now raising capital.
Also, what does the working capital provide at this point? Is more development needed to expand the business?
I agree with Anna that the focus now should be to attract new users to the site and new companies to buy space.
Time to move past the venture capitalist/development stage and move to revenue generation.
Not trying to be crass, but these are serious questions potential investors likely would like to see answered.
Best of luck.
I love you for writing this response. Great analysis of the company and great insight for what to do next.
It seems like having the board member give you money would be a conflict of interest. That’s legal?
It all comes down to timing. Right now is just not a good time to be at a start-up. On the other hand who’s to say you’d still have your corporate jobs right now either way?
Hang in there.
Just wanted to say that coming from someone who has recently discovered you and already found several life changing pieces of advice, the people who are posting comments here seem pretty harsh and out of touch with what you are trying to do.
I think your central contribution is redifining how Gen Y intereacts with the workforce and thinks about work. (The comments above seem to be trying to button you back into the old way of doing things) I think this is invaluable and I hope that the way you view things will become the norm for my generation.
The honesty and openness about both success and failure is a big part of what you bring to the table. That you are getting beaten down for your greatest asset disturbs me a little bit.
The question then remains how to make money. I would say rather than selling equity you may be able to generate some cash by selling advertising on the Blog. You have obviously built up a significant readership. Your posts are also a targeted interest group. In that way, you have the ability to sell targeted advertising. Go to the companies that you have developed relationships with through your other web site and see if they are willing to advertise. Imediate cash for something you are already doing.
Second, like one of the other people posting has said, the web site has not yet reached critcal mass. You need some more companies and some industry diversification to really make this work. Maybe you can overlap seeking funding with seeking additional participants in the web site by seeking partnerships (equity or not) with firms that will use your job site. The more you can tie them in the better. You also need to cross advertise the blog and the site. People who are interested in your blog should also be interested in your site. The overlap should be natural and as a user I should be able to easily flow between the two. This is as simple as putting a highlighted link on every page.
Lastly, Keep up the good work. There is no better time to be starting a web site to redifine how people look for jobs than right now. Unemployment grows by the day and people who have tried all the avenues and not gotten there are your best customers.
I hope the best for you.
I can’t believe this is happening. I’ve followed you for three years now after discoving your blog on Yahoo! Finance. You (and Jesus) got me through the tough times at a job I hated. Though I’ve since earned a Master’s degree and landed my dream job, I still follow you. I subscribe to your feed (and Ryan’s) on my Plan of Study blog, and the articles at Brazen Careerist Network are both entertaining and enlightening. I hope everything works out for you.
Maybe you can sell more add space or charge a fee for running blog feeds on your site. You seem to have a huge following, and doing this could turn out to be a win-win situation for your company and for your readers–Many of which are fellow bloggers:)Just a thought!
Chasing money is a lonely and arduous task for an entrepreneur. You are a trooper! I am an alumni of a Springboard Enterprises 2000 venture fair (similar bad timing to what you are experiencing). Check out Springboard Enterprises. Amy Millman is the President and a great networker. Email me if you want a warm intro.
Dr. Nancy: what I tell my kids about money
All I can say is, you must really love this job if you’re willing to give up your health, your family, heck even your love life, just to keep it going. And I love that right in the middle of discussing funding, angel investors and making payroll, you take a whole paragraph to discuss how Freudian psychologists used to give women orgasms to decrease their stress levels. Where else, I ask you, can we get this kind of diverse information, all in one place?!?
There are many ways that I could comment to this post so I’ll limit it to one – the most important one. Take care of yourself first. Period. Your family depends on you and your company depends on you – in that order. I think you already know this, though. It’s the same ‘tough it out’ mentality that I have and made me see my GP and a specialist in October of last year even though I ‘suffered’ for several months. It didn’t feel like suffering, though, until right up until I finally decided I had to see a doctor. It wasn’t even a money issue. I’m hoping that my experience taught me a lesson and I’m hoping your experience with your pinkeye will do the same for you.
Practical advice I forgot to include here. Enter emergency contacts in your cell phone address book under the name “ICE” (In Case of Emergency) for first responders. More background and information can be found at the Wikipedia page –
Wow. That seriously sucks. I don’t know how you’re holding yourself together…er..as together as you’ve been able to. lol. I think that you and your company offer a valuable service. I hope your investors see it that way as well and I hope things start getting better for you soon.
The difference between Penelope and other startup owners is that she tells it like it is. You think that every man running a startup is stable? I could tell you stories. I have worked for some of them. They pretended they were totally in control when they were having a nervous breakdown and taking it out on us. Making us have meetings with them at 5:30 in the morning because that was the only time they were available. Berating everyone that they need to go to the gym but when we went to the gym they would call and have us paged to give us directives (hey, what happened to email)?
There is so much jealousy here from people who post. They don’t get what you do so no one could possibly find any value in it. What a narrow life view.
How funny, this is like the anti-Four Hour Workweek advice.
Prayers sent for Penelope to find peace and rest and comfort in the coming weeks which she has more than earned with her hard work. :)
I can’t believe the commenters who have kicked you when you’re down. I don’t need to critique your business — what I know of you I learned in this blog and it tells me you must be on top of your business model, even if the economy makes it hard to keep the finances going.
I guess I just wanted to say “buck up”, don’t let your health suffer anymore, and I hope all your troubles resolve at least to their normal level of chaos soon.
I disagree with all the critics of the “critics.” Giving her feedback on her business is exactly the kind of thing Penelope needs right now. These people are trying to help, not hurt. It’s clear that Brazen Careerist has a problem and people are offering free advice on how to fix it.
This is not kicking someone when they are down. This is responding to a cry for help. If I were Penelope, I would be taking this feedback to heart and incorporating some of the suggestions posted here.
I absolutely agree. I think Penelope is putting so much time into chasing money that she is not thinking about ways that her service can be earning money. Who is actually running this business? She is generating content for the blog, but beyond that who is developing content that will keep paying customers coming?
I, like, many others had no idea that there was an actual business attached to this blog. Why has this been a secret? There are hundreds if not thousands of great minds with great ideas who are reading this blog and are evidently willing to help you be successful….for free. Harness woman, harness!
Once that eye-puss thing clears up you should have no trouble having orgasms again. I’ll volunteer to help if necessary.
Or did I misunderstand the subtext again? ;)
I remember a quote from a senior manager when I was working at McDonnell Douglas before the Great Aerospace Slaughter, and seeing a number of engineers and technicians who had left to start their own buisnesses, return to their old positions:
“If you’re not making money with your business, all you got is an expensive hobby.”
It’s good to know that the more things change, the more they stay the same.
You never cease to come up with the perfect, if cynical, comment.
If I am cynical, it’s only because we’ve seen this all before, and no one seems to have paid attention and learned anything. Santayana gets his revenge again.
Think I’m kidding? Check out “Burn Rate” by Michael Wolff. It was published in 1998, and Penelope’s story seems almost identical to his.
Burn Rate : How I Survived the Gold Rush Years on the Internet
You are very creative and a killer writer. You should be able to make a sane life for yourself and pull in a comfortable six figure income.
You burned through 700K in a year – on a site that no one can figure out.
Time to focus on your strengths and let everything else go.
damn. i mean really. you must be so stressed. i hope you’re remembering to breathe.
Good luck Penelope!
Blog. Just blog.
Penelope, I have to admit that I think that if things are this bad (money and stress), either the business or you (or both) are going to break down before too long.
We are just at the start of a recession, and we have a long way to go before investors will feel comfortable investing again, and before banks feel comfortable to lend again.
I also think you need to improve the stability in your life, for your kid’s sakes, if not your own.
You have the talent, energy, and drive to run a business, but what you don’t have is unlimited time and resources.
I think sooner, rather than later, you will need to realize that this new business, no matter how great the concept, just won’t work for now. My advice is to turn down the gas, make survival a priority, then return when the time is right. Focus on yourself, your family, building a base of capital (so you no longer need loans and investors), then you will have a more solid footing to come back on. In the meantime, be a writer, a blogger, a columnist, a developer of young talent, or whatever you need to be to pay the bills, and try to live a less stressful life.
Lastly, as a single guy who lives not too far away… I find you attractive, I think you are a fun, energetic, exciting person, but I would never want to be in a relationship with you. I think you run yourself ragged, and I don’t think I would have the strength to be part of that.
Let me know how I can help out.
I think the comment about seeking new clients is apt. After all, you’ve got a track record of finding gems in the mines, right?
That said, clients are more likely unloading than adding salaries and “making do,” rather than seeking top talent.
So your job is to show them why now more than ever they need the top talent you can find. Hire some new sales people with equity.
I may be way off on that last comment, too. I’m not a business person per se, and must admit, I’m not really sure what the phrase “business model” refers to.
Services/products offered which are then traded for cash/demand deposits in quantities large enough to be profitable?
And thanks again for sharing some of your favorite reading.
To end, I can only reiterate support of others, and you’re doing what you do best–writing honestly and accurately–very well.
And that buys lots of credibility.
This too shall pass, Pen.
Take care of yourself.
PS I’m guessing you’re the rare woman who does the sniffing-the-armpit-of-the-pre-worn-shirt trick.
Penelope – I’ve been travelling with your blogs and emails since well before 9/11 (1999? 1998?) and have learnt at least one thing about you in the past 10 years – your ability to bounce back from adversity. As years go by, it becomes harder but if anyone has the ability to forge a route out of trouble, it’s you. That’s your greatest strength, so stick with it…
As I was watching the news about all the people who lost money in the market and especially with the 50 billion now gone, it occurred to me that now is the time to invest in a start-up. If low-interest funds, with low-risk, aren’t making any money, at least some of the money wealthy people should be invested in a high risk venture.
It might take longer, but they would have a better chance of making it investing in a high risk company where people really care, the company is small, watch where their money goes, and working their asses off, instead of taking the safer route and investing in the low-risk funds where the companies don’t give a damn and spend like there’s no tomorrow.
You have talent. I have confidence that everything will work out for you.
I have read your blog for a while now and appreciate the advice you dish out. Today when I read about the “eye disease” I gasped “Oh no”.
I know you believe in fast paced(GO GO GO) existence but do slow down a bit every now and then. You can then hear your body when something is wrong. I’m not even worried about your ability to raise money cause I believe you can do it.
What keeps coming back to your blog is your ability to glean lessons from daily struggles-or what most would consider to be.
Wow. Thanks for sharing — a great, insightful read… Do you ever have issues sharing such candid thoughts about the investors and others you work with?
I hope you feel better soon,
I feel really sorry for you, Penelope.
Your troubles remind me of a software entrepreneur who advocates keeping your burn rate as low as possible (to have a better chance surviving tough periods) and not selling out equity (to keep control of your company).
About burn rate: those 8 employees of yours… are they absolutely necessary?
Thanks, as always, for the brutal honesty. You’re always a fabulous writer — that goes without saying. You could spin a yarn about practically anything and it would read well. What I love hearing about is how unpretty things are sometimes and how you respond to them. Love that resilience!
Gosh some people can be so brutal and careless with their comments and feedback? Unless you have something constructive to add the comments are merely just abuse? What are their successes and credentials? Are they going balls out to follow a vision? -and lets remind them, its been a SUCCESSFUL vision prior to the economic downtown.
Stay on track. Read Richard Branson’s ‘Losing My Virginity’ -and if you already have, read it again. Don’t give up, just change your strategy. The companies who struggle in an economic downturn are the ones who don’t evolve their business strategy.
Keep to your core vision but look to diversify where you can bring in revenue. How else can you monetize the eyeballs you have to your site and business? What else can you offer these candidates beyond what you currently do?
If you partner with another business who is struggling to reach a quality audience, and perhaps take a revenue share if you have to, then at least that’s revenue flowing in.
Once you get one of those partnerships working -try more- or broaden the audience. This is what will keep you afloat, and if you target your partner so you choose a meaningful partner it won’t feel like you’re randomly trying to prostitute your clientbase. It could be greater learning, seminars, image consultancies, budgeting organizations etc. It all works with your client base and is complementary.
You may lose some people, you can’t suit everyone, but it may also help a lot. You certainly won’t be helping your current candidates if you are no longer in business. Lets face it -you are in one of the best businesses in an economic downturn -and with unemployment rising.
Good luck! I look forward to hearing about your continued successes!
Remember -CHANGE- if you don’t change something, nothing will change.
Do you have a PR practitioner working for your company or your column/blog? I’ve been curious about how you landed the interview with Vargas – 20/20 – *or* how they landed the interview with you. Did you have a PR talent dedicated to helping make that happen? PR is my industry. It’s served me well, but looking back, I really wish I had a degree in theology. I mean, it’s so much more lucrative. Hahahahahaha. Anyway, I was just curious. And, are you going to tell us when the program will air so we can watch you LIVE?
I didn’t want to put it on the sex post, but is your editor gay? He’s got it wrong – that 95 percent is way high. Way, way high.
One of the television networks should snap you up. You are quite entertaining Ms. P.
When you are going through hell keep going. (Props to Churchill for the best inspirational quote ever.)
Enjoy the New Year. Everything will be fine in ’09!
I recommend the book “Don’t sweat the small stuff…and it’s all small stuff.” It is about simple ways to keep the little things, like in your current but temporary situation of “no money” from taking over your life. The author also speaks about being in the “Eye of the Storm” near the end of the book.
Everything will be fine in ’09!
This post is great. It really gives the raw truth behind running your own company. Sure everyone wants be the boss but no one wants to acknowledge the stress and long hours required. As an early start-up, I also found some great insight on http://www.brandfasttrackers.com. They have a three part series on “Don’t Quit Your Day Job”. Worth checking out.
Thanks for the great post!
Wow, you are such an amazing writer. I’m sorry about your eyes and about this funding, it somehow doesn’t seem fair that you couldn’t even rest when feeling sick. If I were rich, I’d write you a big check right now just because of your honesty and wisdom. I would also pay a subscription fee to read your blog, or even if you made a book of your blog posts. Crossing my fingers that 2009 is a good year…
I have no clue on how to fix your business, and I don’t care. I’ve been reading your blog for the past month, and one thing is clear to me : You’re an amazing writer.
I strongly suggest you give up the stressful business (unless you love it too much) and start freelancing. You already have a column, a great blog, and a following. Wouldn’t you like working from home, in your PJ, without worrying about financing?
That’s what I do. I write in french, in a ridiculously small market called Quebec. I wake up in the morning when my two year-old daughter enters my room with Winnie the Poo. We take at least an hour and a half to eat and dress, and I then walk her to daycare. I get back home to read the papers, and drink another coffee.
I possess a third of your talent. And I’m able to live a comfortable life. I have no doubt you can make a six-figure income freelancing.
Just a thought.
(Well, of course, you’d have to fix that eye problem, but I’m sure you’ll be fine soon.)
I spent many years earning a six-figure income from writing. I got bored. It’s a problem. But I appreciate the vote of confidence and good advice :)
Read E-Myth by Michael Gerber
As a corporate schelp, I work with start-ups but I have never worked for a start-up. I appreciate your post as well as the other comments.
Like a few others, I don’t see how you can make much money with your business model. And it sounds like the real work of a start up is securing funding, not product development/sales – your post leads me to that conclusion. I also realize that because I don’t “get it” that means I should not be working for a start up. I wonder how many companies are started without the commitment to search for funding. It seems like many business plans aren’t scalable on sales.
I’ll take my paid vacation and benefit package, good luck with your business plan!
* Business model – it will work and funding will show up so stick with it. Firms still need talented people in tough markets – but the cost of recruitment is under scrutiny in every firm and every single corporate recruiter I know is looking for cost effective ways to hire. You have such a channel as well as a specific niche in web and tech savy Gen Y – who most corporates dont know how to engage with
* Other revenue streams – you have a large, loyal following so how about monetizing this blog to build a passive income stream to support the rest of the business? Get a tech person to do all the stuff and pay them on a commission only basis where they get percentage of income. It’s zero risk for you but an upside for both if it works
* “Emotional Instability” – we’re all emotionally unstable. Most people don’t share that with anyone else – let alone the world at large. But by sharing so openly is a bug part of your personal brand – and big part of the reason you have a big following
Wishing you much success in 2009
I think the problem has multiple aspects to it. One side of the story is that it is a lot less expensive to get something started and running online (initially – not for the long term). That makes a LOT more people wanting to start their own businesses, which in turn implies that VCs have such a wide choice. Unlike before, VCs also get to choose from a number of startups that are already producing considerable revenue …..
On the flip side, Paul Graham recently talked about how VCs might not be in that much demand either (they are too much trouble to deal with). I have links to this post and couple others in my post here
I am sure it has got to be hard, but the best thing to do is to start slow and stay lean (which you have probably already done). I hope it gets better for you!
Burning through 700k in 10 months is not bad for a start up of the web service in recruitment..but did you forsee that you needed more funding, what was your business plan and did you miss big or small…and what was your reasons…and you are correct..run your company into the ground and you are open to commercial rape by new investors..hope you turn it arround…you had a hard year, with a lot of change..but the funding guys do not take that into consideration…I am afraid you will have to show a more even face to them, and let loose your passion for what you are doing…
Barukh ata Adonai Eloheinu melekh ha – olam, ha – gomel lahayavim tovot sheg’malani kol tov.
I’d like to tell you that I admire the way you write. You describe some scenes so vivid that when I am reading them it’s like I am also watching them. And also, you describe your whole situation (feelings etc.) so good, that I’m impressed, taking into consideration that I read your blog for business purposes.
All the best
p.s. I am from Greece and, surely, you know that Penelope is a Greek name (the wife of Ulysses, in mythology)
I can’t believe this is what I’m getting myself into..I must be crazy…
Whoa. This must be the most honest thing I read this decade. And painful. But I suppose I can understand why you still do this thankless run-your-own-show thing, because one is either cut out for a corporate job or not.
If you’re not, there isn’t really much you can do – you just have to bite the bullet (and employ a house manager) and face the VCs and payroll dramas.
I’ve been struggling with this myself for a while, so while I can’t volunteer anything of any use by way of advice I can still wish you good luck. Hold on to your hair. This too shall pass. The situation, not the hair. Really.
Not to make light of your situation, but this seems like the post you should have written, then deleted to get it off of your chest before re-writing a less emotional post.
While would-be entrepreneurs may appreciate the candor, it doesn’t give would-be investors ‘warm fuzzies’ about the security of their money.
Perhaps it was all intentional, and that is certainly a valid approach. I will admit there have been times when I have wanted to ‘tell all’ as a business owner, but after weighing the cost, the benefits (in terms of resolving my problem) did not outweigh the risk of a marred reputation.
I sincerely wish you the best. This too shall pass.