The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future - Chris Guillebeau (2012)
Part III. LEVERAGE AND NEXT STEPS
Chapter 14. But What If I Fail?
HOW TO SUCCEED EVEN IF YOUR ROOF CAVES IN ON YOU.
“Your time is limited, so don’t waste it
living someone else’s life.”
Almost everyone we’ve met in the book so far has some kind of failure-to-success story. In many cases, the story is about a product launch that fell flat, a partnership gone wrong, or the loss of motivation for the wrong project. “I tried something and it didn’t work out … but then I moved on to something else” is a common refrain. All these stories are valid and interesting, but I’ve never heard a rise-from-the-ashes story quite as compelling as that of John T. Unger, a sculpture artist from a small town in Michigan. John’s story is a tour de force of failure and fear that turned into resilience and success.
As John tells it, the third best thing that ever happened to him was having the roof of his studio collapse from under him while he was standing on it, frantically trying to shovel snow. The building was completely destroyed, and John spent the rest of the Michigan winter alternating between shivering while he worked and warming himself with an illegal unvented kerosene heater. It was a nightmare scenario, but then a funny thing happened: The bank came out to assess the damage and gave him a $10,000 commission. John used the commission as a down payment on two buildings he had been trying to purchase for a while. “I don’t think the bank would have gone for the deal without the disaster,” he says. “It forced them to take a real look at my business instead of them just thinking of me as another broke artist.”
The second best thing that ever happened to John was losing his last day job as a graphic designer during the dot-com crash of 2000. The loss of the job led to the loss of everything else—his income, his girlfriend, his apartment, and even a piece of his thumb in an accident incurred while he was moving out of the apartment. While he was working the day job (seven days a week in 1999, seven days total in 2000), he also was working as much as ten hours a day on his art business.
After both of these experiences—losing the building and losing the day job—John was depressed and thought hard about what to do next. His friends advised him to suck it up and find work wherever he could, but in rural Michigan those days, John knew that there wasn’t much work to be found. It was now or never, so he stuck with his goal and continued making progress.
The best thing that ever happened to John, as he tells the story, was a late-night disagreement with a crazed cab driver, who pulled him into the back room of a diner and held a gun to his head for a full ten minutes, screaming and threatening to pull the trigger. John finally escaped and walked out into another cold Michigan night, sweating, trembling, and glad to be alive. “I get it!” John yelled at the sky as he hobbled away. “I’m just so lucky!”
“You don’t really worry about the small things after that,” John says now. “Everything takes on a whole other level of meaning.”
Unwanted Advice and Unneeded Permission
Much of this book contains various forms of advice, but don’t confuse advice for permission. You don’t need anyone to give you permission to pursue a dream. If you’ve been waiting to begin your own $100 startup (or anything else), stop waiting and begin. Charlie Pabst, a Seattle-based designer who left the corporate world to go it alone, said that the best thing he did was learn to ignore advice, even from friends who meant well. “My business and the life I lead now would never have happened had I not been obnoxiously stubborn to my own will,” he said. “The fact is that the majority of people don’t own their own businesses. And a certain percentage of that majority will not be happy or supportive about your exiting the nine-to-five world.”
While usually well-meaning, unsolicited advice from people who think they know better can be unnecessary and distracting. Here’s how Chelly Vitry, the founder of a Denver food tour business, puts it:
The biggest lesson I learned was to trust my own judgment. When I started my tour business, I got all sorts of advice from people around me, ranging from why it wouldn’t work at all to how things should be run on a day-to-day basis. I had researched it and knew it was a viable idea, so I decided to keep my own counsel and quit asking people what they thought.
People who know less about the business than me do not get to make decisions about it. I value input, but now I seek it out from people who have unique perspectives about how I can improve.
Sometimes the best advice is none at all. If you know what you need to do, the next step is simply to do it. Stop waiting. Start taking action.
What Are We Afraid Of?
Toward the end of many follow-up discussions with most of the business owners profiled in the book, I asked about their biggest fears, worries, or concerns. All these people had been successful, earning at least $50,000 a year from their projects (many were earning much more), but what were they worried about? What kept them up at night?
Their concerns fit into two broad areas: external and internal. External concerns tended to relate to money and a changing marketplace. For example, a few businesses had been created to exploit imbalances in technology. These projects can be very profitable for a time, but when the music stops playing, the ride is over. A business that grows primarily from strong Google rankings or good placement in the iTunes store (“favored by the gods of Apple,” as one person put it) is in danger of losing it all if fortunes change. Scott McMurren, who published the Alaska coupon books, said he was closely watching the online coupon craze, considering ways to update the business to be more digital-friendly.
The role of competition was mentioned frequently, although in very different ways. Several people said they weren’t worried about what other businesses were doing, because they found it more productive to keep moving forward with their own original work. Others did worry, especially about building something unique only to see it copied or “stolen” by a more established company. Marianne Cascone, who makes children’s clothing in a small partnership she runs with her cousin, illustrated this concern well:
Our biggest fear, since the beginning, is that our products will be “knocked off” and our prices will be undercut. We are covered by patents and trademarks, but it still happens from time to time. However, I am a firm believer that if I focus 100 percent on creating a quality product, we will rise to the top every time. We do not get sidetracked on other projects; we focus on keeping our customers extremely satisfied. There is still a chance that I will walk into Target and see my design on their shelf under another company’s name. We are just hoping to have a place in that market so they are truly competing with us and not stealing from us.
Those who had expanded by hiring employees tended to worry about making sure they had enough cash flow and recurring income to keep the payroll going. If you own a solo shop and business tightens up, you may be able to tighten up along with it. But if you owe people a fixed amount of money on a fixed schedule, you can’t do that. One business produced more than $2 million in annual revenue but earned only $60,000 in net income for the owner, in large part because of the high overhead of employing people and investing in infrastructure.
Holly Minch mentioned the Goldilocks principle: the idea that success is found within certain margins and not at the extremes. “I want the clients to get real value out of what we deliver,” she said, “but not at the expense of our bottom line. And I want the team to have enough work to live well but not so much work that we’re not living.”
Others worried about “faking it” or needed to keep the wheels rolling after the initial passion faded away. “My biggest fear is that my consulting and writing becomes mediocre,” said Alyson Stanfield in Colorado. “Success seems to be the ability to keep going, to keep the doors open,” said Lee Williams-Demming in Costa Rica.
“Be careful of letting clients take your business in a direction that makes you hate your job,” said Britta Alexander, one half of the husband-and-wife team running a marketing company in Hastings-on-Hudson, New York. “The further you go down that road, the harder it will be to correct course. And it’s really hard to quit your job when it’s your own company.”
Digging deeper, the fears and worries were more closely related to issues of identity. “I love my work,” someone said, “but what if I love only the work, or what if the thing I love is no longer fun because now it’s all work?” Statements like these usually were followed by clarifying ones such as “Starting this business, no matter the eventual outcome, has been worth the energy, effort, and sacrifices it has taken thus far to get it off the ground.”
One of our case studies, a Canadian manufacturer, said: “I used to be afraid to fail. I wanted concrete numbers telling me that we weren’t going to lose before I took the leap. But if nobody was going to die, even in the absolute worst-case scenario, then what the hell was I so afraid of? I’ve never looked back.”
A European designer was even more dramatic: “Do you want to know the honest truth? In the early days, I almost expected my business to be a failure. I believed that it had to be that way because it is the first business I have ever run, and I know the biggest successes have the biggest failures behind them. It sounds perverse but I almost wanted it to fail so I could look back and say, ‘Yep, that one failed, but I learned from it!’ ” (Fortunately or not, his business is doing just fine.)
The Moment They Knew
As I reviewed thousands of pages of survey data and made countless follow-up calls, I learned to ask people if the decision to start their business had been worth it. You might think that such a question is simplistic; wouldn’t most responses be “yes”? Well, perhaps … but one of the best parts of the study was hearing exactly how a group of diverse people answered this question. There was usually a story behind the affirmative answer, and the story often related to a particular day, event, or moment when they knew their business was going to work. As we come to the end of this journey, I thought you should hear from a few of them directly.
Book Your Award
I never thought that people would pay for the service that I offer, so the very first time I received a check in payment for services from my very first client, it hit me like a ton of bricks—there’s real money on the table here! And when I saw a letter from that very first customer published in a magazine recommending my service, I realized that there was both appreciation and demand for what I was offering.
Hazel Tree Interiors
Even with our excellent credit history, 2010 was a bad time in banking to ask for money. We didn’t need much, but we couldn’t swing it completely on our own. My husband Jon and I needed a small credit line to lease the building where we planned to house our interior design and framing business. Unfortunately, the bank said no.
Later that day, Jon was on the phone with the landlord of the building, telling him that we just weren’t going to be able to make it work and that he could release the building to the other interested party. As I heard him saying those words on the phone, I had an incredible surge of hope, and I remember shouting, “Jon, no! We have to give it another shot! Tell him we just need a few more days to try again. We’ll have to go back in to the bank and make them hear us out. If they’ll just sit down and listen, they will believe in us.”
It totally worked! The bank did hear our plea, and we eventually got what we needed to get going. Two years in, and we couldn’t be more thrilled. But we almost accepted the fact that it wasn’t meant to be and carried on with our lives. I am so glad we put in more effort. It meant everything to us to give it one more passionate plea.
LaunchBooks Literary Agency
For me it was when I signed a big client after flying out to their corporate offices, making a pitch, and getting a tour of the grounds. When I got the call from his marketing VP that they wanted to go with me over a couple other agents they had met, that was the moment when I knew LaunchBooks was going to work. Truth be told, I didn’t even know that I had any doubts about it working before that call, because I had been an agent for more than twelve years already and knew what I was doing. But because of the way my employment worked at the old agency, I literally had to leave with nothing—no income stream whatsoever from the 1,000 books I had sold while I was there—so I was literally starting from scratch. But when I got that call, I had this enormous feeling of relief and excitement wash over me, and I just absolutely knew it was going to work.
The funny thing was that the client ended up being an unbelievable jerk and pulled out of his book deal over repeated problems with the publisher. He didn’t like a mock cover that they put together and their preference that he actually follow the proposal we had sent them for the content, so rather than trying to work anything out, he just decided the publisher “didn’t get it” and pulled out. Then a little while later he had his assistant send me a termination letter without so much as a conversation, even though I had managed to generate a decent offer for what was a brutally difficult book to sell.
It didn’t matter, though. I still had that first moment on the phone and never looked back. I’ve since been on my own and selling books for more than ten years.
My husband and I were traveling around Europe after I had been hit by a car. We were going to travel and then go back to Chile to shoot weddings until the bookings stopped coming in and then go back to having “normal” jobs. We had been CouchSurfing to try and save money, but after a month and a half on the road I was sick of it. So we decided to splurge in Italy. We checked into an amazing room at the Meridien, and I decided to pay an ungodly amount to use the Internet for ten minutes. And that was when I saw the email. It would be our second U.S. wedding and our first wedding where I had quoted more than simply travel costs. The bride had decided to hire us, and she was going with our biggest package, over $5,000.
I freaked out. I called my mom and then I called my dad, screaming—stupidly using the hotel phone, which ended up costing another hundred bucks. I should’ve paid for another ten minutes of the internet and used Skype. I wasn’t freaking out because of the money, though. It was because for a bride to pay that amount of money to photographers who don’t even live in her country requires a huge leap of faith. And that was when I realized that if there was one bride willing to hire us and fly us in, there were probably more. And I started to think that if we could work both in Chile and outside of Chile, we could make this work. So we did.
The Tapas Lunch Company
Spain and Norwich, United Kingdom
The big day for us was August 20, 2008, also known as the day when we realized our dream of moving back to my partner’s native Spain. When we set up the company in England in 2005, it was with the aim of eventually being able to move back to Spain and run the business remotely, although we weren’t sure how long this would take. We had set up a perfect infrastructure, with cloud-based business management software, VoIP telephones, and so on, but the logistics of outsourcing was proving the biggest hurdle. We couldn’t find a company that could deal with the complexity of 250 different products, most of which were labeled in Spanish.
When we finally managed to set up the contracted logistics operation and drove away from the warehouse knowing that we no longer had to do all the shipping ourselves and that the following day we were getting on a boat to Spain, I knew we had achieved what we set out to do.
As I traveled the world meeting our group of unexpected entrepreneurs, I heard story after story like these. Over and over, they echoed a similar theme: When you have these moments, hold on to them. They provide encouragement and positive reinforcement when times are hard.
The $100 Recap
Before we close it out, let’s look back at the key lessons of this book. First and most important, the quest for personal freedom lies in the pursuit of value for others. Get this right from the beginning and the rest will be much easier. Always ask, “How can I help people more?”
Borrowing money to start a business, or going into debt at all, is now completely optional. Like many of the people you met in this book, you can start your own microbusiness for $100 or less.
Focus relentlessly on the point of convergence between what you love to do and what other people are willing to pay for. Remember that most core needs are emotional: We want to be loved and affirmed. Relate your product or service to attractive benefits, not boring features.
If you’re good at one thing, you’re probably good at something else. Use the process of skill transformation to think about all the things you’re good at, not just the obvious ones.
Find out what people want, and find a way to give it to them. Give them the fish!
There is no consulting school. You can set up shop and charge for specialized help immediately. (Just remember to offer something specific and provide an easy way to get paid.)
Some business models are easier than others to start on a budget. Unless you have a compelling reason to do something different, think about how you can participate in the knowledge economy.
Action beats planning. Use the One-Page Business Plan and other quick-start guides to get under way without waiting.
Crafting an offer, hustling, and producing a launch event will generate much greater results than simply releasing your product or service to the world with no fanfare.
The first $1.26 is the hardest, so find a way to get your first sale as quickly as possible. Then work on improving the things that are working, while ignoring the things that aren’t.
By “franchising yourself” through partnerships, outsourcing, or creating a different business, you can be in more than one place at the same time.
Decide for yourself what kind of business you’d like to build. There’s nothing wrong with deliberately staying small (many of the subjects of our stories did exactly that) or scaling up in the right way.
It only gets better as you go along.
When we last left off, Jamestown Coffee Company was opening for business in Lexington, South Carolina. Owner James Kirk had moved south from Seattle and kicked things off. What happened next? Did a flood of loyal visitors show up right away?
Not exactly. It was a tough start, settling into a community not familiar with specialty coffee. The shop grew one customer at a time, with a focus on providing personal experiences and encouraging repeat business. One weekend, James and his crew gave out coupons for a free coffee at a local golf tournament. A man stopped in to redeem his coupon and mentioned that he normally picked up his morning cup at the gas station but was inspired to try something new. The next day he returned, saying it was the best cup of coffee he had ever had.
A morning group began to gather most weekdays, consisting of regulars from all kinds of backgrounds—a lawyer, a clergyman, a computer guy, a mechanic. People who used to buy instant coffee at the grocery store began making a special trip every week to pick up the superior stuff at Jamestown Coffee Company. Slowly but surely, the business stabilized.
James thought back on the discouragement he had received from well-meaning friends when he first told them about moving down south. “You can’t start a business during a recession,” they said. “You can’t move across the country without a job.” “Most small businesses fail within one year.” “Almost all mom and pop restaurants fail within the first year.” On and on it went. And every time someone gave him a reason he couldn’t succeed in what he had set out to do, he made another note in his “non-planning” folder: merely one more obstacle to overcome.
Elsewhere, Jen and Omar continued making their maps in Columbus, Ohio, expanding to wholesale accounts in addition to the direct sales with which they started. They were featured recently in an Expedia commercial and are thinking about opening up a boutique travel store as part of the next adventure.
Karol Gajda and Adam Baker produced two other mega-sales, each one bringing in a six-figure payday for themselves and their affiliates. I asked for their help in producing the launch for this book just as soon as they finished carrying the bags of cash to the bank.
Brandon Pearce was planning a family move to Malaysia. The business now brings in over $50,000 a month.
Benny Lewis was still language hacking his way around the world, moving to Istanbul for a crash course in Turkish. Next up: a planned attempt at learning Mandarin Chinese in Taiwan.
The Mondo Beyondo course started by Andrea Scher and Jen Lemen has served more than five thousand participants, producing $500,000 in revenue for the two partners.
Brett Kelly’s $120,000 e-book has become a $160,000 e-book. His wife continues to stay at home with the kids, and they are now completely debt-free.
Perhaps the most important lesson arrived in an email from Emily Cavalier, who had recently left a high-paying job in Manhattan to pursue Mouth of the Border, a tour and events business focused on ethnic foods. I asked how often she still felt motivated to go it alone, and she told me: “Every single day. The greatest benefit has been going to bed just as excited as if not more excited than when I woke up. I get to work day in, day out on something that fully engages me and elicits not just my passions but the passion of tons of other people, too.”
Yes, like Emily and everyone else in this book, you can do this too. You aren’t alone out there.
Sure, you can learn through failure, and most likely you’ll have at least one false start on the road to freedom. But failure is overrated—who says you’ll fail? You can just as easily succeed. You can apply the lessons from these stories and create the new life you want.
Advice can be helpful, but you can also just step out and take a big leap. Don’t wait for someone to give you permission.
More than competition or other external factors, the biggest battle is against our own fear and inertia. Thankfully, this also means we are in complete control of managing it.
When you have a success or “moment you knew” story, hold on to it; these experiences are powerful and will help you later if times get hard.
The most important lesson in the whole book: Don’t waste your time living someone else’s life.