For anyone who doesn’t know what Seattle Startup Week is, it’s seven days of networking, learning and collaborating on ways to make your business better. Basically it’s just like any other conference but people who are interested in starting their own business, have already done so and want to build on it or are looking to contribute to a startup in some way whether it be throwing money at it or volunteering services.
Alas, it has come and gone. While I wasn’t able to attend all the sessions I set out too, I did pick up some nuggets of gold from one in particular: “From Student to Startup”. There was a panel of guys (yes all men) who had all founded their own company before the age of 25. The majority of them had either prolonged their stay in college to do so or dropped out completely.
Taylor Ward and Chino Lex both dropped out of their respective colleges; Ward, because he wanted to focus primarily on his gaming software company Hubtag before he would eventually relocate back to Seattle and re-enlist in school. Lex, on the other hand, knew by the time orientation ended, college just wasn’t for him. Thus he founded several companies, one of which is the illustrious TapTrax. Kevin Ye, the CEO of Tack (apps) is a fifth year senior at his university. The other two panelists, co-founders of the online business Candy Jar Connor Beckwith and Alvin Ko, both finished their degrees in four years before launching on their business venture.
All of these young men are accomplishing amazing things by embarking on adventures they professed to know little about in the beginning. Ward took apart the myth that you have to have a 25 page business plan before setting up a company and Lex Impressed upon the audience the little need for an in-depth knowledge of anything before you make your first step. Quoting Jeff Bezos among others, he reiterated that “you only have to know enough”. You have to know enough to get started and learn the rest as it comes up. Beckwith strengthened the argument when he told the audience that Ko once left him to run the business by himself for a week and he just had to learn what he didn’t know in order to get it all done.
If nothing else, these young men are poster children for the idea that all you need is guts and the self-discipline to teach yourself in order to get to where you’re trying to go. It sounds awfully similar to the themes in both of Tina Seelig’s books What I Wish I Knew When I Was Twenty and Insight Out. In her first book Seelig defines entrepreneurs as people who can find opportunity in whatever they’re doing and thus are able to sustain themselves on their own ability to spot and address problems – regardless of money. It sounds awfully close to the American dream; possibly a little too close.
When I first started to think of entrepreneurship, it came with trust funds and investors. I knew I didn’t have a fund so I was convinced that an investor was necessary. Seelig thinks otherwise though. She starts off her first book running with the idea that seed money is not a necessity. As a business professor, she has seen groups of students in her entrepreneurial class forgo seed money altogether to start businesses that resulted in revenue for her class projects.
When asked how these young men raised enough money to get their businesses going, Ye told the audience that you use savings or bank loans. Lex added that if you can cut costs, don’t hesitate to do it. If you can get by without renting office space or storage space, don’t buy it. The idea of running a business out of your mama’s basement is refreshingly down to Earth while somehow still reminiscent of the bootstrap mentality so many have come to decry. I don’t know many early twentysomethings that have enough credit built up to enter into a loan that won’t end up ruining them in some way or another down the line. On the other hand, I do know one or two twentsomethings that put college on hold in order to pursue their dreams while their mothers support their living expenses. Thus it’s encouraging to see that my friends who are burning the midnight oil to run ecommerce businesses from their parents’ living rooms are not chasing after something that is not possible.
Lex built on Ye’s reply with the simple but effective “don’t quit your day job”. Most startups are not going to be profitable for at least several months in the beginning. Working to put money into your startup that isn’t making revenue is just a reality of the business. Think of it as an investment where the return is worth the wait. That is the meager but valid way around a lack of familial wealth or credibility to tap into. It’s the working (wo)man’s creed to have a side hustle and the new side hustle is doing something you love for free now in order to equip you in such a way that you can bring in more money further down the line.
On the topic of money management, Ward offered the humbling advice that “CEO’s eat least”. As far as allocating resources, under meager means all of the little revenue Hubtag made at the beginning went completely to the gamers. He worked for free until all of his team members were compensated fairly. Moral of the story, you have to be willing to humble yourself and put all of your teammates before you when claiming the leadership title and founder of a company.
Lastly, out of all this money talk one piece of advice stuck out to me that had nothing to do with balancing a ledger. It’s easy to brush an idea off on paper, it’s harder to turn down expectant customers. Before you can even get into the in’s and out’s of handling money, you have to launch the business in the first place. How many times do you start a project and let your momentum fizzle out before you finish it? How often do you talk yourself out of a great idea? It’s a normal part of the adult desire for consistency but it’s detrimental to the launch of a business. The panel largely agreed with this simple but essential statement and pushed the importance of getting feedback from potential customers about whether the idea was feasible and what strategies would get the most out of it vs. which would send your customers running. That way you hit the ground running and bypass a good number of snags while you stumble through it all.
At the end of the panel, I felt like I had taken a behind the scenes tour of the companies. I appreciated the sincere and honest responses the panelists gave about the life of a startup. While I got the idea that most people in the room where overwhelmed, the session seemed to really speak to those who were about that startup life and weed out those who weren’t. In one word: effective.