Just These Two Chairs

I found this blog entry, and video, entitled “How I spent a Million Bucks and Ended up with These Two Chairs” and had to comment on it.

This is almost what I went through in two start ups, money being spent on “appearances” that for the most part didn’t matter. I’m not denying that having a nice office impresses people, but it’s a surface impression. If you can’t deliver on that impression with real value and services (or products), then it’s wasted.

I worked at one startup, renting the penthouse of an office building in the Denver Tech Center. We spent a bunch of money on a nice conference room, including a patio outside, thousands on a fancy reception area, and (of course) nice offices for the executives in a circular part of the building.

As expected, us workers were crammed into cubes and shared offices except for a few that had private offices with western views of the mountains. I had one, and I have to admit it was nice, but over the year or so I was there, we didn’t deliver on some of our promises, and we had issues on many more. I visited a few of our clients that paid us (literally) millions of dollars a year to provide a service and they all said that they’d be more impressed with better service and software than our office. We were profitable, but I felt that we wasted a lot of money that would have been better spent on a couple more developers and new hardware.

My other startup literally started from scratch. I was employee 22 or 23, and we packed in people into offices, we seemed to be doing things right, literally with people working on card tables in hallways as we grew. We added a second office down the road, and that’s where things failed. The plan was to keep people in both locations, being thrifty with space. However once again the executives wanted to “decorate” to impress people, primarily our Venture Capital investors.

Wasted money, that eventually doomed the company. Actually that company might not have made it in either case, but we could have been more thrifty.

Spending money you don’t need to, until you' are at least comfortably profitable, is not a good way to run your business.

If you want to learn more about the business of Software, attend the Business of Software Conference. I plan on going, and thought it was worth the time and money last year.

Grow Slow

I’ve thought this for a long time, and it was nice to see Time Magazine with a piece on growing slow. It talks about some Internet businesses that aren’t looking to hit a home run in the short term.

I’ve thought this for a long time. You don’t need constant growing sales, don’t need to be achieving 20% growth year after year. There’s nothing wrong with that, or for even trying to get there, but that’s not for everyone.

Slow growth, or even steady sales that are better than break even, is perfectly acceptable. Look around you in the local community. How many of those businesses that you frequent are happy and content with fairly steady sales, or slow growth?

Some people are gamblers, but most of us are not. Owning a business is a big gamble for many people, don’t compound the stress and concern by obsessing over the stories of those people that have hit it big and grown by staggering amounts every year.

Set reasonable goals that make sense for you, and that you are comfortable. Keep working on your business, but don’t measure yourself by the success stories in the media. There are hundreds, if not thousans of slow growth, steady sales businesses that provide their owners with a yearly profit for every Facebook story.

There are also hundreds of busts for every success story because the owners gambled or planned on exponential growth.