This morning I had another thought… kind of like a “and another thing!” that just came to me. It’s a simple concept but very, very powerful. Imagine two scenarios:
Scenario 1: Get $100,000 of funding. For whatever reason, you need a lot of money to get started. This could be for equipment, tools, clothes, staff, rent, salary, etc.
Scenario 2: Fund-as-you-go, or funding through sales. You can start today, looking for a consulting customer, and you have everything you need (your brain, a phone, an email account, and… that’s it).
Here’s the thought I had this morning: Stopping a business that you have funded, with your own money or someone else’s, is kind of hard. Well, stopping it isn’t hard, but what do you do about the $100,000 that you borrowed? You could sell the stuff you bought, but you might not get dollar for dollar. What if you have a basement full of stuff (like a heat press machine for making custom designed shirts and hats and stuff), with a payment on them, or an investor that is expecting you to find customers and make sales… that is hard to end.
If you are funded through sales, then it’s easy to “stop.” You have no outbound financial obligations… you just stop working. Take a few days off. Take a few months off. Perhaps pick it up next year… no big deal. And what’s great about this? It’s just as easy to start it up again as it is to stop it again. I’m not saying to be fickle, but when we are taking about freeing and liberating, having a business that doesn’t start out with tens or hundreds of thousands of dollars in debt is more flexible…
One of the benefits of spammers commenting on old blog posts is they bring the old blog post back to my attention. Such is the case when a spammer left a comment on this post: Courage and the entrepreneur.
I wrote this post in May of 2009… JibberJobber was barely three years old. As I read this it reminds me of the feelings of despair and anxiety while much of my world thought I was killing it in my business. I’ll be the first to tell you that starting a business, while a great learning experience, is really, really, really hard. On many levels: financially, personal relationships, sanity, etc. Here’s my post from six years ago… not much has changed.
Sometimes I think I’m nuts. Even though I’m more sane than others. But seriously, what am I thinking, doing my own business? Where’s the safety net in that??
Sometimes I think I’m dense. Even though I got a hecka lot of education, and feel like I’m rather witty. This “dense” thing comes mostly when I compare myself to others.
Sometimes I’m lonely. Even though I have a terrific wife and family support, and thousands upon thousands of people who read my stuff in my blogs, LinkedIn, Twitter, etc. But when I’m sitting in my office, all by myself, with hours to go in the day, wondering which thing I should do next, I wish I had a team working with me.
Sometimes I feel poor. Especially recently as we paid for a new baby, a broken van and car, my doctor’s visit to get my calf looked at, working on getting our basement finished, and payroll… but then I think about the families I met in Mexico who know what poor, and poverty, and hunger, are, in a way that i’ll never have to know.
Usually I’m hungry. Not for food, but for success. Actually, not even crazy-wild success, just the kind of success that pays the bills for a family with a modest lifestyle. That’s what i told my publisher, and why I swore I’d make money from book sales.
Most of the times I’m scared. Scared of failing. Or scared to take steps backwards. I often wonder if I’m the right guy for the job, and then I just get back to work, day after day, to get the job done the best I can, and hope that indeed, I could be the right guy for this job.
I’m an entrepreneur.
I feel privileged, and hope that I don’t mess this up.
I feel like this is bigger than me… much bigger than me.
I feel like thousands of people need me to keep on plugging along, as my stuff (whether it’s JibberJobber or my books or DVD or blogs whatever) are making a difference to them.
I feel like my future is in MY hands. Not the CEO of Enron, or some board of directors, or some cranky boss… but my own hands. Please let me not screw this up.
I’m an entrepreneur. While it isn’t easy, it’s rewarding. I couldn’t imagine it any other way.
When I started JibberJobber I learned a little about how venture capitalists and angel investors fund businesses. It was a fascinating journey into a world that seemed exciting and a little dirty/sleazy. I learned about the Four F’s… have you heard about these? These are the four sources of funding that an entrepreneur should look at before they go to a VC or an angel. They are:
I used two of these sources to fund the early days of my business. It was necessary, and I’m forever grateful to have had those sources of funding to help JibberJobber get onto it’s own two feet.
But it bugged me that that is what I needed to do. I had this novel idea that my business should have been funded by… get this… people paying for it! That’s what you might call “self-funding.” Many companies are not self-funding… they rely on continual investments to fund their payroll, rent, parties, etc. Companies like Amazon, who seems to own the retail world, did this for years.
Anything wrong with self-funding?
For most of you, starting your own business, getting funding from VCs or angels isn’t the right route, and you might not be able to tap into the Four F’s. So how do you fund your venture (aka, pay your rent and buy food) in the early days?
The answer sits in understanding the basic nature of your business, and whether you are offering products (that you are creating) or services.
JibberJobber is a product, which meant that we spent months to develop it before we went live. A book is a product… you spend months writing and editing and preparing for the publisher, and then you have one, or a thousand, or a million. Your job is to take this *thing* and market it.
A service might be something where you charge an hourly rate to do something, like an hour of consulting, a day of speaking, doing a haircut, writing a resume, mowing a lawn. Typically, you can start doing a service, for money, right now, today, without any investment. I have plenty of ideas of things you can do in exchange for money today.
Is one better than the other? A product can require a significant investment up-front, with the idea that you could sell it when it’s made, or you could sell the company if you prove it successful. Expect to continue to invest in R&D. The payout could be crazy. The failure could be ruinous.
A service might take no money to start, and you could get gobs of money per hour immediately (for example, consulting for $250/hour, or speaking for $5k an engagement). But you might not be able to sell your company later, no matter how good it performs, because for a while, YOUR ARE THE PRODUCT.
When I started JibberJobber I had illusions of grandeur about how much money I was going to make. All the while, I required investment from family and my 401k. It took a couple of years before my company was in the black. A COUPLE OF YEARS. That was not in the business plan!
The same month I started JibberJobber, I had a friend, also laid off, who started a business, but his was a consulting business. He was billing clients in week 1, and every week since then. Where I was burning through lots of money, he had very low overhead and was bringing in more per hour than he had ever done.
Who was the fool? Was it me, for not self-funding, or was it him, for going down a path that would not have a big payday (acquisition) in the end?
I’d say neither were the fool. But looking back on it now, I wish that I would have figured out how to consult for one to two hours per day back in the early days. That would have been a way to self-fund.
I know a guy who was starting a business while working at the grocery store at nights stocking shelves. Glamorous? Hardly. But it worked for him and his family. It was his way of finding funding for his venture.
Let’s wrap this up… funding a business can be hard. But there are many, many options. You don’t have to just hope to get on Shark Tank, or get laughed out of one hundred VC offices. Be creative. Many of the businesses that we enjoy today were started in someone’s basement, garage, or even bathtub (ecolabs). Without funding. With a dream and hope and elbow-grease.
Just don’t be too proud to consult for a couple of hours a day, or to work at the grocery store at night. Eventually, your own little business will be self-funding.
I somehow got turned on to Ari’s Take, an awesome blog of Ari Herstand. Ari is a musician who blogs about how to make money as an indie musician. I’ve been reading a number of his blog posts – they are awesome. Pretty much everything he writes about is the same stuff I’ve been writing about. Get the correlation between a job seeker and a musician trying to get on the map? Too many similarities to list. I’m sure the parents of a musician probably think they are unemployed.
Read the post, get inspired to call someone today… but also study his email strategy. He talks about one, two, three… even seven or eight emails! And check out the format, content, and message of his emails. Check out the email signatures (awesome, awesome!).
Folks, I’ve blogged about all this before. Now I’m sharing Ari’s post because I want to show you that improving your communication (email, phone, etc.) is something you need not just for this job search but for the rest of your career. Embrace this idea, don’t run from it! Get better at it NOW, consider your job search a time for personal training and improvement, and it will help you be better for the rest of your life!
Here’s a video of one of his songs, and here is his youtube page. Check him out!
I’ve run JibberJobber since 2006 and have found that January through March or April is the time when most people are (finally!) really serious about their own career management.
December feels like a month when you can’t really do anything… people complain that it’s a horrible month for the job search. Employees are out of the office, on vacation, and hiring decisions are left until the new year… so why try?
When I was in my job search I didn’t care what holiday it might have been, or whether it was a weekend or 3 am. I had anxiety, and I felt a great sense of urgency to do something to end my unemployment! I wasn’t doing the right things, but I certainly wasn’t going to celebrate anything (like a national holiday) simply because everyone else was. It’s hard to feel festive when you feel like an incompetent.
What’s more, many job search coaches say the holidays are definitely a time to do job search stuff, even if you employ different tactics. But let’s say you doing believe any of that stuff… what COULD/SHOULD you do between now and January 2nd?
Whether in a job search or not, smart, astute, “self-driven” professionals are going do something. It might be as baby-step simple as listing 10 – 20 people they need to talk to, or 10 – 20 companies they want to network into come January.
It might be something as in-depth and time-consuming as writing a book (even if it is a small ebook) with the purpose of establishing and enhancing their personal brand.
Depending on what your year (or last quarter) looked like, you might simply take this month off to do “nothing” – like read some books or articles you’ve been meaning to catch up on, take a real vacation and mentally, spiritually and physically recharge, to be ready for the next year.
Whatever you do, please don’t give up on December. Whether it is a strategic and very tactical job search to hopefully get some interviews or offers lined up in January, or a more long-term career management strategy, take the time to do something on purpose to finish out this year.
I can’t tell you what it should be – so you tell me… what will it be?
Nick Corcodilos writes a weekly newsletter that is worth subscribing to. Today he wrote his 500th edition, and it’s great. He normally answers questions from readers (many know him as “Ask The Headhunter”). He wrote his own question this week, instead of using someone else’s, and it’s very blunt:
Nick talks a lot about a lot of the aspects of employment (and the job search) in America. His article is worth reading, and marking it up with a highlighter. He exposes a key problem with HR departments, and the horrific affect of outsourcing hiring to recruiters, etc. He again exposes the ridiculousness of job boards, which according to a hiring survey are horribly ineffective but still a huge destination for corporate spending. He talks about some ideas on how to fix the problems at a meta level. He even talks about believing in yourself and starting your own business, if the hiring thing isn’t working out!
I have been asked a lot about Kickstarter. Bottom line: I love it. It is an awesome way to get your “thing” (company, product, etc.) funded.
Check out this really cool Kickstarter campaign I learned about on a LinkedIn group I’m on: Lono Sprinkler Controller. They had an idea (allow you to control your yard sprinklers with an iPhone app) and asked for $75k to get it up and running. As of right now they are almost at $90k. Clearly, people want this.
I love the humorous video at the top of the page. The details of the product/solution/benefits and the technicalities of the product and project are listed below the video.
On the right side you can see that donate as little as $15, or as much as $899 (or $5k), and what you get for those levels.
This is a brilliant way to fund a project. No longer do you need to go to Angel Investors or VCs (which is overkill for most people/startups). If you have an idea, dig into Kickstarter and see what others are doing, how they are doing it, who is successful, etc. Very cool stuff
The job market should get a lot more complex as people are getting dumped into it, or they need just a few more hours (less than 30 thank-you-very-much) to make ends meet. People are going to be confused and the government will be overtaxed trying to explain and educate, and sign people up, as well as chase down the bad guys they can charge the penalty to…
It sounds like one big hairy mess.
If there is one big hairy mess, there is an opportunity to HELP. Politicians might not have read the bill (ha! I said “might not have”… I should have written definitely haven’t), but what if you read it, study it, become expert in it, and find ways to consult to companies to help them? I am guessing a lot of people who are helping companies right now are doing it based on an incomplete understanding of the meanings and consequences of the bill… which means rash decisions are being made. Rash could mean wrong solutions.
Obamacare should create more jobs in the government to administer the bill. I’m guessing this will be a big growth area for jobs. We’ll need more IRS cops to break down doors and put people in obamacare prison for not paying the tax (or whatever they’ll do to the offenders).
But will there be opportunity for YOU to create a business?
I don’t think this type of business will be small. If you could figure this out and help companies navigate implementation, I think we’re talking about millions, maybe billions of dollars.
If you could help employees and families who have been cut from insurance, had their healthcare increase to a point where it is unbearable, or lose 10 or 20 hours and HAVE TO pick up more work, there could be a revenue stream there.
I don’t know how it will play out but it looks like a crisis is brewing, and if there is a crisis, there is opportunity.
Diane Kohler’s tagline is “Career & emotional intelligence coach parlays experience, enthusiasm & humor to help people & orgs thrive!” She got one of the early copies of my book and wrote this in an email to me (her comments bolded and indented):
I am just finishing reading your book and I hope you are already working on its sequel.
I told her it would depend on how this book did … writing a book is a BIG project
MY hope for your book is that job seekers don’t just scan the table of contents and decide they don’t want to paint numbers on curbs, etc, and leave the book unexplored.
This is my hope and my fear, really. If I picked up the book and looked at the LIST of ideas in the table of contents, I probably would not buy it. But, if you read the stories and experiences and tips that are in almost every idea/chapter, that is where you get the good stuff…
You are so right that it’s value is in providing kindling, sparks, catalysts for HOPE.
This book is 99% hope and catalyst, and 1% list of ideas.
People need to read it not to necessarily to find THEIR next idea there, but to fan the flames of their own imagination.
Humans are much smarter than we think. If you think the list is limited at 51 ideas, or 501 ideas, you are wrong. YOU might have something completely unique to offer.
Thank you, Diane, for sharing these thoughts with me and my blog readers
I hope this short interview inspires you – I really get jazzed talking about this stuff. This is the stuff that helped me go from hopeless and depressed in my own job search to hopeful and excited when I expanded my vision from looking for a traditional job to being open to creating other revenue streams.
Enjoy the interview! (click the icon to go to the blogtalkradio page, then push play there or click here to download)