By Dennis Carroll, Head Hooligan
Wine Hooligans is my 4’th and final (I promised my wife) start up business venture. Two were successes, one was a bomb and we will see what happens with Hooligans. Hopefully I will be batting .750 by the end of Hooligans and not .500.
Start-ups have a strange addictive quality to them that brings people back time and time again. Intellectually, it makes no sense to keep coming back. The only thing I have been able to equate it with is having a child. Women grow a human being in them, go through tremendous pain and in most cases swear they will never do that again…and more times than not, parents start talking about having another child about a year later. Everyone has forgotten about the lack of sleep, disruption of routine, worrying about college tuition (don’t worry, you will find a way to pay for it), feelings of incompetence when you bring the baby home from the hospital, etc. A year later, you simply see a beautiful child that you have created and how that child has made your life infinitely more meaningful.
That’s how I look at start-ups. It’s a painful process to start a company. It’s painful to get through the first few years of the company’s life. Starting a company will challenge you in ways you never thought were possible. There are no small decisions. Everything is important, and more often than not you are making it up as you go along. Start-ups are completely different than working in an established company that has an existing business with history and ongoing operations. Systems, processes, sales contacts…all of these things are already in place when you go to work at an established company. All start-ups are different, but one thing seems to be universal….there is no infrastructure. You have to create it. Quick story…
At one of the start-ups I was involved with, we had a problem getting accurate data up from the retail stores. This caused problems for the merchants tasked with carrying proper amounts of inventory. At an early board meeting one of the Venture Capital investors was complaining about the amount of inventory we were carrying at the stores. The merchants responded they weren’t getting good information about the inventory. The investor looked right at the merchants and said he didn’t care if we didn’t have electricity, he expected acceptable inventory levels. Like I said…start-ups are different. They focus you to find the solution, not talk about the problems!
After that “incident”, I developed my “Man In The Desert” theory. Everyone who has worked for me over the years is sick of hearing it. It’s simple….if you are a man stranded in the desert, the only thing you care about is getting to the water. If you don’t get to the water, you die. Everything else becomes irrelevant, including reasons why you can’t get to the water. I like simple.
If you are fortunate, or unfortunate enough, to get an opportunity to participate in a start-up, I will give you my version of a survival manual that hopefully will give you a few helpful tips:
· Start-ups are usually begun with some seed equity and some debt. I call this oxygen. Why oxygen? Well, when a company is in the start-up phase it doesn’t generate enough cash or earnings to be self-sustaining. It needs oxygen to survive. Whether its equity or debt, the oxygen is provided in the form of cash. The less oxygen you need to buy, the better off the company will be. It’s a balancing act to have enough money to get your head above water, i.e. start generating cash and earnings at acceptable levels, so you can start breathing free oxygen, but not too much money where you are at risk of making careless decisions.
· The most important part of that process is SELLING whatever good or service your company makes or offers. Seems pretty straight forward, but you would be amazed at how many companies forget the importance of this first step. If everything you do in a start-up isn’t geared to selling, you either have bought too much oxygen or you are going to drown very quickly. Sales is the life blood of every start up I have been involved with. I am not saying that operations, accounting, etc. aren’t important, but they are irrelevant without SALES. Anyone contemplating getting involved with a start-up should watch two you tube videos; a spoof on a “A Few Good Men” called “A Few Good Expenses” and the clip of Alec Baldwin in “Glen Garry-Glen Ross.” If you’re not willing to have this as your reality...don’t get involved with a start-up.
· Congratulations, you are part of the start-up team. No matter what you have been hired to do, you will need to make yourself the company expert in it, or at least be confident that you can figure it out and keep moving the ball down the field. There is no training manual or supervisor to guide you through. You need to be comfortable with living in a world of chaos and uncertainty. I wish there was a more nurturing way to run start-ups, but I have yet to find it.
· Like they say in Navy Seal training…look around gentlemen, most of you won’t make it to the end of the training. Most of the people initially hired in a start-up don’t make it through the first few years. Either the environment is not for them, or their skills don’t evolve. The key to making it is to make yourself indispensable in whatever function you are involved with. That gives you a fighting chance. There still might be financial reasons why you might get cut. You can only control what you can control. Don’t get shaken up when shake-ups happen. People will come and go. The reasons are not important (most likely you will never know the real story anyway). What is important is to stay focused on getting to “the water”.
· Don’t hang your head if the company fails or you don’t make the cut. It might be painful and it won’t be evident for a while, but you will have learned many, many great lessons at your time in a start-up. If the only thing you learn, is that start-ups are not for you…that’s very valuable.
So why do it? Why take the risk? Why endure the pain?
Is it the elusive chance of a “monetary” event? Is it being your own boss? Is it being on the ground floor? Is it that you can’t get a regular job?
Everyone has different reasons. For me it’s about the creation and seeing the business become successful. It’s turning ideas into realities and seeing them work in the most competitive and opportunistic market in the world…the United States. It’s the drug that keeps bringing me back (however at 57, I think my wife is right…time for me to hang it up after Hooligans).
I love US history, and I find that most situations have been eloquently addressed by our great leaders. Teddy Roosevelt expressed it best for me:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
If you choose to get into the “arena”, you are part of the club! Brace yourself, it’s a wild ride.