It’s been a while since I added a new category to this blog, but it’s time, because I’m entering a new phase in my life. I’ve already done the startup thing. In fact, I’ve done it more than once. But I now realize some of my “startup” attempts were really “startovers” and not “startups”. A startover is when you start up the same business twice. In some ways, I feel as though I’ve started up MWI 200 times–every time I’ve realized I was doing something majorly wrong and changed it. But objectively there have been four primary “startup” moments:
1. December 1999 – Recently married and a college student, I quit my good job and bright future at MyComputer.com (now Omniture, recently acquired by Adobe for $1.8B) and start my freelance web design business under the dba DonLoper.com (yes, the very url of this blog was once the url of my company).
2. August 2000 – I bring on two partners and some employees and change the name to Mindwire Interactive.
3. January 2003 – Mindwire is acquired, my remaining partner goes to work for the acquiring company, and I start MWI, which is ostensibly the same company as Mindwire with a different name and a different set of employees.
4. April 2007 – I start making a profit. How? By letting all full-time employees go and only using contractors, moving from a $5K/month office to a home office, and I start paying myself after four years without a paycheck. On top of all that, I pay off about $90K in debt the first 12 months after making these changes, plus I work 30-40 hours per week instead of 80-90.
Every one of these events has felt like starting a new business from scratch. The two most successful attempts (in terms of profitability) were #1 and #4, wherein I have been the only full time employee, and other employees have been either nonexistent or on contract (right now I have about 15 contractors doing work for me).
For the past two and a half years I’ve been quite content. Scaling down back in 2007 was the right move at the right time…although that’s a bit misleading of me to say it like that, sort of like steering your car off a road and towards a cliff, then turning back towards the road and saying “I felt it was the right time to get back on the road.” But so what, I made a mistake and I corrected it. The point is that now, after these two and a half years, I’m ready to scale back up. But only if I can avoid the mistakes I made previously which resulted in me being buried under a mountain of debt, not being able to take a paycheck, and rarely paying my employees on time. If I’m going to scale back up, I’m going to do it right, and that means there are a few basic rules I’m going to stick to:
1. I take a regular paycheck.
2. I don’t work more than 40 hours in a week.
3. I don’t use any debt.
Wish me luck. More details will be forthcoming, but don’t expect anything drastic. Most likely this is going to be a very slow, deliberate process.Liked it? Share it!
Sweet. Can’t wait to read more about how it works out.
Thanks for sharing some of the details of this progression. I find it very interesting as I’m kind of in your “Stage 1” right now–married, college student, and freelancing (but no bright future at a soon-to-be-bought-out company ;-)). Let us know how it turns out!
Just read this yesterday, then thought of your post:
It’s a great discussion on growth, both that which is too fast, and also that which is too slow.
I read the article, and I totally agree with it when it comes to software development since there’s a inherent commitment when a customer chooses a certain software package, but I’m not sure how applicable it is to my situation as a service-provider, since it’s easy for a customer to switch from one to another and so it’s unlikely that a “market leader” will ever emerge in my space, the way one can emerge in the software world.
But I think there’s something to be said in the larger sense that when it comes to business, you’re either growing or dying. Maybe there are businesses out there that can do the same thing day in and day out, never growing, never scaling back, never changing, never competing–just consistently making money. But I think I would die running that kind of business due to sheer boredom. I’d rather dig ditches or do anything else other than run a stagnant business year in and year out.