Startup Diaries: Value Decisions ... and the Monster Goldfish!
When is the right time to ‘splurge’ on expenses as a start-up?
When I was maybe eight or nine years old, my dad brought home an aquarium. It was one of those 80-gallon tanks that almost looks like a four-foot wide moving picture on the wall. He filled it with a couple of what I called "fancy fish" as well as a few small goldfish, and I soon found myself infatuated with the beautiful and calming vertebrate. Over time, however, we noticed something strange happening with the goldfish - they were becoming monsters! Those small orange fish that were once dwarfed by their fancier friends had grown to nearly the size of their peers.
The idiom suggests: It is better to be a big fish in a small pond – but if you’re a small fish in a large pond, do you grow into your surroundings? I’ve always wondered if those goldfish would have remained little had we put them in a smaller fishbowl.
Penny Pinching and Carpet-Bagging
I recently made two financial decisions that were somewhat terrifying. The first was hiring the first paid staff member of my company, The Collective Good.
Lauren, our marketing and social media associate, is fantastic and without her help, this article may never have seen the light of day. Yet taking on the obligation to pay someone when my consulting business is still in its first year was a risk.
The second decision was moving into our own office space – a very cozy unit on West 20th Street that is also fantastic. I second-guessed both commitments, not because I doubted that we would be able to honor them but because there was part of me that questioned whether we were ready for them.
When I thought of start-ups, I pictured people working all hours of the day and night, in a garage, having bootstrapped everything they have, from pens swiped from random offices to bad coffee dripped from someone's hand-me-down coffee maker.
This was, to me, the picture of entrepreneurship; starting your own business was certainly not spending precious dollars on expensive Manhattan rent.
So, I waited. I consider myself lucky to have found two remarkably hard-working interns who have taken on research projects exploring complex topics like social impact investing and medicinal in-kind donation accounting. And they are doing this work pro bono! They want the experience and TCG needs the help: a perfect fit.
I also tried various free or inexpensive office options, like coffee shops and shared workspaces, before growing tired of lurking in Starbucks for hours waiting for a seat - only to notice my computer battery had just died or that I’d accidentally grabbed the wrong folder on the way out the door. I realized that being an entrepreneur did not mean I had to become a nomad.
Finally, I splurged.
What was it that convinced me, a fairly indecisive and frugal individual, to spend money I hadn’t earned yet? Two things: value and the goldfish.
Getting a Bigger Bowl: Value Investing, Startup Style
When I started my advisory group, there were a few things that became painfully clear to me pretty early on. One was that I hate selling. My entire career I was the "doer". That is, I run the model and create the slides; someone else does the pitch. I design the system and collect the data; someone else markets the product. In short, the sales process is not my forte and probably never will be. I much more prefer doing, and helping others to do, the work.
Understanding this, and after reading reams of articles and peppering anyone I could find with questions about business development, sales strategy and "closing the deal," I decided to invest in a business coach. I say "invest in" rather than "pay for" because I truly view this expense as an investment in my business. An entrepreneur quickly realizes that her greatest resource is her time, so she must use it wisely. I could spend a lot of time reading and figuring out these techniques myself, or I could simply have someone who has a talent for marketing and has led sales organizations for years explain it to me.
Just as condensing into an hour all the tips and exercises needed to improve my sales skills seemed like a really good idea, jumping from one coffee shop to the next with my laptop and papers in tow in search of an empty seat seemed like an incredibly bad one. As did spending an entire afternoon tweaking the design of my business cards when I could find someone who has worked in publishing and has a better eye for graphics. These investments are worth it – they allow me to spend my time with clients, helping nonprofits become more data driven and effective in their programming and fundraising efforts.
Though, at first, I was uncertain about my decision to expand, it is comforting to know I am not alone.
I constantly read articles about what it takes to be a successful start-up, and am always coming across the advice to grow before your enterprise is ready. Hire help before you truly need it so that when the clients do come, you have the bandwidth to support the work. I must admit, initially I was not entirely comfortable with this approach. I am the type to take on the work first, making sure there is a paycheck in sight, and then scramble to deliver, often working 24/7 if I am unable to find help in short order. But as I deliberated over hiring Lauren, I found myself thinking of the goldfish. I wondered, would they have gotten so big had they not been given the room to grow?
I quickly realized that hiring staff and renting office space was not only to satisfy an immediate need, I was also giving myself a bigger fishbowl.
Rather than restricting myself to my dining room table and an unfinished website, I would, again, make the investment, and equip TCG for scale. And although I'm still a ways from being able to say I've made it, the business is better positioned to make it to the next level. Recognizing the value of investing in my business has already paid off, both in efficiency gains as well as encouraging me to take on the bigger pond.
“Growth is never by mere chance; it is the result of forces working together.” – James Cash Penney
Britt Hogue spent over a decade developing and implementing business and operational strategies in the financial services sector, climbing the corporate ladder from a research analyst at JPMorgan Chase to managing a division at Thomson Reuters of over 400 employees across eight countries.
In 2012, she formed The Collective Good LLC, a consultancy that helps cause-based organizations mature their programs and achieve goals through results-oriented planning and data-driven execution. Britt leverages her experience and best practices in strategic planning, business development, global operations, metrics and analytics, and program management and evaluation to partner with nonprofit and philanthropic clients to drive social change.
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