Being a scrappy bootstrapped startup has its advantages. That’s where we started, a scrappy no money operation. Unfortunately we were a little too lean, we couldn’t get off the ground with our site.
Then we decided to put a fair amount of our money where our collective mouths were.
Photo Credit: Dina Aranguri
Unfortunately this led to an unexpected series of failures and here’s why.
When you have the cash to just sign checks you can fail in some exceptional ways. You can hire an advertising manager and employ that person for many months even when they don’t make a single sale. You can have a marketing budget that balloons up with no accoutability for its efficacy. You can spend an enormous amount on a media kit before you have the sales team to use it, then find out that they hate using it and don’t (we still have boxes of them). We used to joke that our company motto was, “Put the cart before the horse.” And we really did, time and time again.
We of course learned valuable lessons from these experiences, but the real lesson we started to learn is that you can learn a lesson for a lot less money!
We started to embrace failing faster. By accelerating our pace, if and when we fail, it’s not a long drawn out process. Obviously having a large budget is not inherently bad but once we combined our good financial position with efficient experimentation things started to work a lot better.
We landed a salesperson that grew our sales for 0$ a month to nearly $20,000 a month in a little over a year. We used media kits that were simply printed out by the sales team and we put a strict budget on our marketing department. We started by eliminating the marketing department and incorporating it into sales (what kind of small online publisher has a marketing department anyway?).
When you are short of funds you have to fail fast because you can’t afford to keep a failing project going. Much like Twitter’s artificial limitiation on characters, we learned that an artificially limited budget (also known as having a budget) can be a big advantage. Imagine that you didn’t have a lot of money at your disposal, would you do what you are doing the same way?
Sometimes I look back and cry over spilt milk. Big chunks of money went out the door and little but a life lesson came back in return. It felt a little like we were ripped off by Bernie Madoff, but even worse since we were both Madoff and his poor victims all in one.
But when you fail fast there’s a lot less of this, because overall, there’s just less failure.
EDIT: How about this for a #FAIL, no link to the damn prompt I was answering, whoops!