The Hunger Games

Why being broke is the best start-up strategy there is.

Startups are hard, but not because entrepreneurs don’t have an appetite for hard work.  Rather, it’s the constant rejection, the inability to convince people of your glorious vision, and the ever present threat of failure that make pushing forward seem like reckless insanity.  The secret to startup success is in embracing that insanity.

I look back to opening the first restaurant, at a time when I had no money, no network, a few close friends, and a cat named Monty, so named for his awkward resemblance to one Mr. Burns.  He wouldn’t win any beauty contests, but he had the kind of human personality to make you think twice about the possibility of reincarnation.  Opening day of the restaurant, after pulling a complete 30 hour work day to get it open, Monty got hit by a bus.

I got the call at the restaurant as I was doing the books trying to figure out how to manage the ridiculous amount of debt we had just put ourselves in.  I was alone in an empty building, sitting in an empty kitchen, and felt like the last part of anything beautiful and hopeful had drained out of me for good.

I saw that memory as a tragedy, a sad time in my life, but recently I found my thoughts drifting, and the memory wafted into my mind for a moment with a different perspective.  I remembered the terrible crushing sadness, and then the cold, clear certainty that followed.  If there was a fate, destiny, or karma, it was trying to push me down, kick me in the junk and make me quit.

Obviously I did what any male in his 20’s would do, and promptly gave fate the finger and did my level best to make sure it couldn’t see me cry.  Fuck fate, I’ll make this shit happen until it throws me in front of a bus, too.

We did, eventually, make it.  It was hard work, and we were young enough to know everything, which meant we had no idea what we had to learn.  The lessons came fast, and were unforgiving.  Every single mistake cost us precious money, and they came like waves, so that just as we caught our breath, another was upon us.  We were destined to drown, and saw it clearly.  With no moves left, we just started trying to earn one customer at a time.  It sounds simple, even cliché, but it forced us into a mentality that analyzed every single second of our customer’s experience, what went well, what needed to improve, and what they really wanted.  Not surprisingly, it worked, and after three weeks we saw a huge increase in sales, most of our new customers had become regulars, and we hadn’t done a lick of advertising or promotion.  Six months later we were playing to full houses, a great staff, and some of the best years of my life.

It taught me that my best work comes when I’m seriously fucked and out of options, and maybe I’ve been ignoring that lesson for too long.

Success does funny things to entrepreneurs.  At some point they lose the ‘entrepreneur’ mentality and become businessmen and ‘managers’.  Some of us get nervous, like we got lucky, and if we don’t fight like badgers to keep it, we’ll be right back in the kitchen crying over a dead cat.  For me, each new venture required slightly more capital, was slightly more ambitious, and required hiring more and more staff to manage them.  I was trying to build a fortress, as if the rolling tide of mistakes would keep crashing forever, and the only defense was bigger walls, more sales, more cash reserves, and more venues.

When I sold, I remember feeling that I had lost the spirit of who I was, and the spirit of what had created the success to begin with.  I had become a manager, and it was a betrayal of the philosophies that had brought me this far.  It was time to divest.

Starting Nickler was a perfect tonic, not only was it something I was driven to create from over a decade of hating paperwork, but it was in a completely new industry, technology and accounting.  It was pretty clear I was about to get schooled like the new kid in gym class, but the deep end of the ocean was beckoning, and this time I was wearing water wings, and had developed a taste for brine.

The learning curve was just like the last time, except fate was kind enough to spare my cat.

I still had some bad habits, like hiring fast, pushing to product, and pitching before we were ready.  I tried to raise investment like we did with the restaurants.  This time, however, the investors weren’t impressed by a nice bottle of wine or a cute bartender, and selling them the dream got me kicked out of too many meetings to mention.  I was sure the quickest path was the best path, and that meant raising enough money to hire a big team.

So I spent, and pitched, and hired, and pitched, and bitched, and pitched some more.  I knew I needed to learn how to pitch better, and relished the opportunities to practice, but we were about to be out of money, fast, and I was running out of moves, and investors.  Finally in February, I sat down with the team and we had ‘the talk’.  March 1 was the end of the money, and it was up to Don (our CTO and my co-founder) and I to take it the last 10 yards.  We stared deep into the abyss that day, and questioned every decision that had brought us here.

And then we jumped.

It was time to embrace the insanity.  Don sold his car, dropped every expense but his phone, and moved in.  I started looking for odd jobs to keep the coffee flowing and the internet on (thank you ayoudo.com!).  Shit just got real.

The world changes when you have no goals left but to get yourself fed, survive, and make it until the next day.  Your heart gets hard, but your mind gets focused.  There isn’t any question of motivation, because the luxury of choice is removed.  There is no think, only do.

Two weeks ago, after getting rejected by Ycombinator, we sat down and chose one of our beta customers.  This will be our first customer to earn.  We took apart the entire app and rebuilt it, piece by piece, in a painstaking process of perfecting what our users want from Nickler, and removing everything that didn’t make the workflow smoother, simpler, and relevant.  It was gut wrenching to delete features we’d spent weeks building, but we need to eat, we need to continue, we need to earn the first one, so that we can move on to earn the next one.

I heard a quote from an old movie on Paul Gaugin, who, upon learning his neighbour who worked in government was also an aspiring opera singer, told him quite succinctly “you’ll never make it as an artist, because you don’t have to make it as an artist”.  Basically, feed yourself with your craft, and you’ll soon learn whether you’ve got the stones for it.

I’ve never been happier with our company, its goals, and the vision of where we’re headed.  I’ve lost ten pounds, I’m running every day, and can just barely hear the Rocky theme going on constant loop in the back of my mind.  Our partnership has never been stronger, as we support, motivate, and challenge each other to get through another day.

Sure, I’m broke, but I’ve never felt more alive, more focused, and more determined to make this happen.

I’ve never felt more like an entrepreneur.