Blog

The importance of being scrappy

This is the first company I've had the pleasure of founding, though I doubt it will be the last. One of the lessons that is constantly reinforced through my experiences is the importance of being ultra scrappy. Here are a few tips I've learned in the process of building Huddler about how to found on the cheap:

1. Get a great lawyer for less up front cash: I could, and absolutely will write a post about the importance of a good lawyer and how to find one. But for the purposes of this post, I'll just note that many of the premier firms in Silicon Valley are used to working with cash strapped startups. If they believe in your idea, then often they are willing to accept a deferral structure under which you only pay up front for your incorporation costs (which aren't much more at a premier firm than any other firm), then you are able to accrue legal fees with the firm that only have to be paid back after successful Series A funding. If you don't make it, they eat the bill, so they're incentivized to help you along the way. They can provide A LOT of help.
2. Function over form. This applies in many different areas of the business, but we were in the Hanky House for a full year (it's next to a strip club.) We made a lot of progress there.
   
3. Used stuff is good stuff. We've got all used desks, several used monitors and computers, a used couch, used fridge (cleaning it was harrowing, but it's great now), used conference table and chairs, used dishes and mugs, etc. I know we're not the first startup to do this, but I know plenty that don't. We've saved thousands of dollars that can be much better spent on new snacks and beer for the team. And marketing and stuff...
   
4. No recruiters. The cost of recruiters never ceases to amaze me. Perhaps when we're larger it will be justified, but at $10-$25k/hire, I was never able to get my head around it. We have a small team. We were incredibly fortunate to find David via Craigslist early on. Beyond that, it was all personal relationships that led us to the other members and gave us confidence in them.
5. Great Team Members deserve lots of equity. One way to keep salaries manageable for a small, early stage team is to ensure you appreciate the team members appropriately. We're certainly on the higher end of the spectrum for equity, and I hope to stay that way.
   
6. Act scrappy. When we run contests, we get the prizes donated. We meet with other teams and entrepreneurs to get free "consulting" when we can. When Peter visits from the East Coast, he sleeps in Ted's spare room. When you're used to being low on cash, it gives you a healthy skepticism for anyone and anything that wants your money and that leads to creative thinking. That's not to say if we had more money, we couldn't put it to AMAZING use (I'm looking at you VCs), but the discipline we've learned has been and will be good for us.
7. Align incentives. We try to be very fair whenever we approach others. When you're small and have nothing to offer, get creative and accentuate your strengths. For example, we have a brilliant technical team, so while we couldn't offer some partners traffic, spending extra time on a proof of concept/mockup of the future has opened lots of doors and helped us to seem legitimate.
   
8. Be born into a family with a really smart older brother. OK, that's tough, but if you can manage it, do so. I know a lot of brilliant operational geniuses just looking for the "right engineer" to get their vision off the ground, and vice versa. I was lucky to have Ted.

When it comes down to it, every aspect of running a business costs money, so hold on to it tightly and "buy" yourself the time you need to make your vision happen.



Categories: Company News | Misc

Name

Comments (You may use HTML tags for style)