No Capital? No Problem. What You Get For Free Is Priceless

By Dharmesh Shah on June 10, 2011

The following is a guest post by John Williams.  He created Logo Garden to give everyone starting their own business access to professional looking logos. John is a long time member of the advertising industry and has written about branding on leading websites. His experience with branding led him to make an easy to use logo maker available to startups and DIYers.

No Capital?  No Problem.  What You Get For Nothing Is Priceless

You have an idea for a business.

But you've got obstacles.

You weren't born with a silver spoon. You sold your silver spoon last year to pay your mortgage. You've got no connection to deep pockets. Your idea is so far-out no one listens long enough to grasp its brilliance. Whatever the reason you can't secure capital for your start-up, or whatever your excuse for not moving forward with your idea, forget about the opportunity your non-existent investors are missing out on and think about the opportunity you're missing out on.

Starting a business without any capital can be a hugely rewarding experience.

Here's what you can expect to get in return for starting a business with no outside funding:

Organic Growth

A large infusion of cash might instigate growth your business isn't ready for. Using only your own money means you can grow at your own pace as your business has the resources to handle it. Investors, on the other hand, are all about the bottom line and the deadlines for getting there. Who could blame them? But sometimes a business needs to flesh out its problems and work out the bugs in fits and starts without the pressure or forced reckoning of goals imposed by someone on the outside. Being small and independent means you can be flexible and adjust your business as needed. Being beholden to investors means you may have to adjust according to their say or their expectations rather than taking your business the direction you see fit.no cash

As you grow your business organically you benefit from constant reality checks at every turn - whether it's unexpected expenses or a sudden change in market conditions. No one is pushing you forward or filling your head with dreams of newsworthy buy-outs or what you should name your super-yacht. No one is letting you feel as if you have a cushion where you don't and then comes calling for a pay-out.

Recession-Hero Status

During economic times like these the hedge-fund-manager manner of excess is downright tacky. Instead, what's in style is the image of a frugal and innovative operator who thrives in the face of daunting conditions using only his or her wits, sweat, and discipline. Steve Wozniack and Steve Jobs quite famously started Apple in a garage. Barbie got her humble start in a garage as well when Ruth and Elliot Handler began a business making picture frames. Being resourceful they made dollhouses from the wood scraps and before they knew it the doll-houses were outselling the frames. That dollhouse business became Mattel. Clients, customers, and potential future investors love these stories. They're hugely inspirational. And while Apple and Mattel grew to bounds their founders could never have imagined, think how many highly successful smaller businesses are out there quietly growing and earning profits after starting from nothing? Entrepreneurs sporting frugal style and practices all the way to the bank and inspiring people along the way.

Efficiency and Operations Boot Camp

With financial backing not of your own making, you may get a false sense of where things stand. In a recent Harvard Business School newsletter, HBS Senior Lecturer Shikhar Ghosh warns that one of the reasons start-ups fail is too much up-front funding: "It covers up all the mistakes, it enables the company and management to focus on things that aren't important to the company's success and ignore the things that are important." But when it's your own seed money you must depend on, you are all too aware of the implications of each expense. You are constantly reevaluating operations to make them more cost-efficient and productive so that your hard-earned money isn't wasted but is smartly invested in the growth of your business.

From the initial budget to managing overhead, creating a business from slim funds is a hands-on sink-or-swim crash course in keeping a business afloat. When it's your money, your whole livelihood is depending on every choice you make so choices are made carefully and thoughtfully. You'll quickly dismiss fancy office space with high rent and fashionable interiors and think about working from home for the time being. You may even have to keep your day job to pay your bills at first. You'll want to work hard because you won't be able to pay anyone else to help you. You'll want to start with an idea that costs more in sweat equity and time than expensive materials or manufacturing. You'll want to bend over backwards to provide superior customer service because it costs you nothing and it just may separate you from your more established competitors.

The Fruits of Your Labor

The credit, the satisfaction of single-handedly guiding your creation from conception to execution, the experience, and the profits are all yours when you're on your own. The fruit of your labor could even be a character-building exercise in failure, but at least you can own and learn from that experience instead of having to navigate it via someone else's terms. Independence can be scary, but that scary reality is all yours.

Whether you succeed or fail, you will emerge as a business-person with experience in every aspect of owning and managing a business. That experience will serve you well in future ventures, and you will know that you've done what others said was impossible. That's the kind of confidence that breeds more confidence and more success. The story of how you did it is something you will carry with you from the garage to the corner office or to somewhere you haven't even thought of yet. The journey is yours and where it will take you is up to no one but yourself.

Topics: guest capital
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The Most Underrated Quality of a CEO

By Jason Baptiste on May 24, 2011


under rated startup ceo trait resized 600You usually hear a lot about the early days of being a founder CEO, but I'm going to try to write more about the days of being a founding CEO as a company grows.  The articles will probably be shorter and more frequent.  Earlier today, someone asked me on Formspring what the most under-rated quality of a CEO is and I responded very simply with this: The Ability To Let Go. Late last week, I was lucky enough to get advice from a very successful CEO that told me: only focus on tasks that you yourself can specifically do. If it's something someone else can do and it constantly eats into your time, then you should find someone to fill that role if you have the resources. It resonated with me heavily as I find Onswipe growing faster than ever before and thinking about what tasks I should be taking on every day.

You Can't Do It All Yourself

As a growing company, there is absolutely zero chance that you can do it all yourself. Even if you had 24 hours in a day, there's no way to do it all. Eventually deals will start to take time, hiring will take numerous interviews, product will be in different divisions, and more. You need to realize this and find someone who can start taking over the burdens. As entrepreneurial CEOs, it's in our DNA to feel like we can do everything. The great CEOs realize they actually can't do everything all by themselves.

Find People Smarter Than Yourself

The best way to do this is to find people that are way smarter than you in the area of expertise. A CEO has to do a great job at setting the vision for the organization and orchestrating it. When your company starts expanding, you need to find people that are just way better at the specific task than yourself. It might be cutting deals with partners in BD or finding top notch engineers. You have to find those that are smarter than you.

Make Sure You Set The Vision

Make sure you set the vision as CEO before bringing people on board. Everyone needs to have cult like zeal in the mission and exact vision of what you're building. If they are not on the same page, it will ultimately destroy your belief that they carry it out when you defer your trust to them. Take the time to make sure everyone is on the same page with the entity that is your startup.

Trust and Defer

The phrase I use internally a lot is "Trust and Defer". I trust certain people with making decisions on certain areas of the company and defer to them for domain expertise. I do my job well by setting the overall course and vision for the company, so the decisions within their domain expertise fit within those confines. You have to trust the people that join your company with your life because that's literally what your product is.

It Will Hurt

There's no way around this. It's going to be a weird feeling if you're used to bootstrapping and running a company with 1-2 cofounders. When you're all of a sudden 10+ people working across the globe, it hits you in the face. It's okay, this is normal. If you've found people you trust and are smarter than yourself, it will work out better than you ever expected.

We're growing faster than I ever thought. A few weeks ago we got to the point where there are teams handling BD and teams that are handling Engineering. I've learned to make sure that the vision is set and make sure that I'm focusing my time solely on the things that solely I can do.  

You Should Follow me on Twitter: http://www.twitter.com/jasonlbaptiste, Friend me on Facebook: http://www.facebook.com/jasonlbaptiste, Email Me: j@jasonlbaptiste.com, or even call: 212.361.9743

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