No Shortcuts - Financial Risk

Starting your own company is tough.  One of the toughest things, in my opinion, is getting the money you need to get it up and going.  EVERY option has major pros and cons.  Depending on your risk tolerance and your comfort level with family, friends and investors.....each option looks different.  

Friends & Family:  This is how Jeff Bezos raised his initial seed to start Amazon.  He had a lot of great connections from his previous work in finance and his parents could actually chip in a nice chunk.  He was honest with people and said that he thinks the venture had a 20% chance of success.  They believed in him and that investment paid off nicely for them.  That is the absolute best case scenario....maybe ever.  If the 80% happened, then there could be hurt feelings, disappointment and even anger from the investors.  Thanksgiving just got a lot more awkward!  

Angel Investors:  These are likely professional investors that are aware of the risks.  There won't be awkward Thanksgiving if things go south with their money, but they will want to know what's going on with the company.  That means regular (often monthly or quarterly) connects with them to report out how the company is going.  If things aren't going well, then they will let you know about it and give ideas on how to turn things around.  Those ideas might be different than what you think, but you have lost leverage since what you initially told them is not transpiring in the market.  Given the ups and downs of entrepreneurship you are most likely going to hit some rough patches. 

Personal Investment:  This gives you the most autonomy.  You answer to yourself.  This also has the most personal hit since you are pulling from your own bank account.  Are you taking away from your retirement?  Your kids education account?  From a potential down payment on a house?  Is your partner supportive of this?  Are you not able to go on vacation this year because the company needed some more money?  The autonomy is balanced out here with personal financial sacrifice....and the even whether you have the personal finances to support the needs of the business. 

Bank Loans:  This is a nice option, but the bank usually needs to see a track record of success to even loan you any money.  That means you will likely have needed to get money from somewhere else to get the business to the point where it is revenue producing and profitable.  Banks are wanting to bet on more secure businesses versus taking flyers on entrepreneurs. 

Professional VC Investment:  This route is highly publicized but is a tiny fraction of total investments in businesses.  To get into the offices of someone like Andreeson Horowitz means you are in some rarified air already.  You have connections.  You might have a track record already.  VC investments range from something as small as $50K at the very beginning to tens of millions of dollars.  The VCs are for profit companies, so will want equity with their investments and don't play around.  They are shrewd and are looking for 10X (or more) return on their investments.  Patience is not their game.  If you are not going on the trajectory they are seeing they will push you.  And push you.  They likely have connections for you since they are professional investors, but the expectations are very high on you making the business big. 

Sloane has done a mix of personal investment and bank loans.  I am personally uncomfortable taking money from family and friends.  The likelihood that the investment will be lost in this game is high and I just don't want to be on the hook for it.  I did take a $50K loan from a good friend to help with inventory and took 2X to 3X longer than expected to pay that off when the inventory didn't sell through like I thought it would. 

My friend was really cool about it, but I personally felt awful.  I didn't have the money to pay him off and it kept me up at night.  I do not want to go through that again. 

Since our personal investments and a nice boost from Kickstarter helped us get on our feet we were able to approach banks for a traditional loan.  This has been great for us and for what we want the company to be in the near term.  If we were trying to grow at 10X, then the bank loan would not be enough.  We would need to get money from somewhere willing to take a risk on us. 

Every company and individual is different.  Think through the ramifications of the choice long and hard before making it.  Money is a very serious thing.  The euphoria of starting your own thing and the confidence (potentially overconfidence) you feel at the beginning will be tested in the months and years ahead.      

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No Shortcuts - Step by Step

My journey continues to launch Sloane Golf.  I have a lot of very legitimate excuses to just stop.  Active baby.  Demanding job.  Sloane undershirt business.  Husband.  I will fully agree that I am stretched time wise, but don't believe that should STOP progress.  It slows progress, but should not stop it. 

I worked with a college aged designer on the logos.  We went back and forth over about 2 months to get things to a good place.  I like where the brand is going, but of course have no idea if I can guarantee success.  The next step is to put the logo on some clothing and see how it looks.  I want to start with hats because they're basic and I don't need as many color/size combinations. 

This part of the process is called building a prototype.  MVP (minimum viable product) is the goal here.  You don't need it to be perfect.  Just make something and start showing it to people.  Do they like it?  Are the colors bad?  Get feedback and keep iterating.  

If you can break the process down to baby steps, then things feel a lot easier.  Its too hard to try to conquer everything at once.  Just ask yourself what is the very next thing you can do to progress.  

I love Martin Luther King Jr's quote related to progress.

“If you can't fly then run, if you can't run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward.”

When you are so busy and feel like you just can't make progress on your side business be ok with crawling.  I am crawling with the progress on Sloane Golf.....and I am ok with that.  I am not beating myself up.  This is all I can give at this time.  I actually enjoy seeing the mini-steps that I am taking to bring it to life. 

Be patient.  Just keep going.  


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No Shortcuts - Smart AND Caring

There is an obsession with being smart.  School trains us that way since kindergarten.  We get graded.  The "smart" kids get the good grades.  Life is much easier when you are the smart person in school.  Teachers love you.  Your parents are proud.  Classmates often look up to you (on the downside you could get stuffed into trash cans!).  You get to go to college.  You might even get to go to a prestigious one, which makes you look even smarter.  

As you progress up the ladder you then are around smarter and smarter people.  Since you went to college you get a good job.  People there are smart.  If you do well, then you get promoted.  The group there is even smarter.  This is a very fine process and its natural.  If you are smart you deserve to rise. 

What ends up happening as you get higher though is EVERYONE is very smart.  You are unlikely the smartest.  You probably don't want to be the smartest anyway.  So you're surrounded by smart people where many have the same skillset (ie. marketing, engineering, etc).  So what makes the the difference in who REALLY succeeds and who does ok? 

The people who can build healthy teams and organizations around them are the ones that really win.  You then can influence a lot of people behind your smarts.  Oftentimes in running up the smart ladder you forget to build the organizational skills.  Stuff like motivating your team, mentoring, setting a clear vision, communicating effectively, etc.  

The org building stuff comes down to you CARING about others.  Do you care about your team?  Do you care about your organization?  Do you want to take the extra time to help a co-worker? When you do those things you build into people and they want to work for you.  Many might actually be willing to run through walls for you.  

This is the goal.  Creating a healthy organization where people are happy, productive and producing results.  Your smarts are spread more broadly than just your immediate work.  You can impact many people and maybe a whole company.  

Smarts are great.  They are basically the cost of entry as you get to higher levels  Then what?  What else are you adding?  Can you positively influence the org under you or are you content with being the smart person?  

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No Shortcuts - Always Be Impressing

I had an eye opening experience this week that showed to me the importance of ALWAYS be impressing people with your work.  We tend to focus a lot of time impressing your direct manager and immediate leadership, but you really never know when someone else could very impactful.  

In a previous role I met a guy who I really liked.  He worked in another region and had zero direct connection to impacting my the time.  3 years later he had a critical part in influencing a key leader to trust and choose me for an important role.  There was ZERO way I could have predicted this turn of events.  

The most important thing was that I worked my hardest to help him even though it didn't seem like he would be an important connection for me.  My attitude is to work my hardest and do my best ALWAYS.  Not just for my manager.  But for everyone I come in contact with.  

I see others who like to work only when it serves them best with their leadership.  These people are incredibly annoying.  They don't help anyone, but are the most vocal in meetings to try to come across like THE expert.  In reality people don't like working with them and would run as fast as they could from them if they could.  I have actually seen this strategy of throwing others under the bus and only promoting yourself work.  It only works for a short period though.  

It can get you a promotion.  It can impress some people.  Things eventually catch up with them though.  Word gets out that they are terrible to work with.  People start leaving their team.  Culture starts declining.  When it's clear the person actually isn't good, then it's all over.  The individual is stuck and they have to leave.  

There is a good book called Infinite Game by Simon Sinek.  It talks about how you need an attitude that this game doesn't end.  If the game doesn't end, then you need to be good at all times.  You need to treat people well at all times.  You need to work hard at all times.  Too many people think of it as a finite game and have a short term mentality on everything they do.  

When I heard this week how the person I helped 3+ years ago had an impact on my career today I just smiled.  That's what it's all about.  Be a good person.  Help others.  Work hard.  If you do that and you're patient, then things start coming together.  

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