Adam McFarland

Each of us is so unique that I always am amazed by what my partners can accomplish.  Anyone who follows Mike’s blog knows that he does a “charity of the month” where he profiles a charity and makes a donation. This month he chose the American Red Cross. The other day someone from the Red Cross left a comment:

Hi Michael. I’m Claire from the American Red Cross. Thank you for your endorsement. There are many people in need right now and we are doing everything we can to help.

Then today Mike noticed that a link to his post was on the home page of RedCross.org!  That my friends is NOT an easy link to get.  Congrats to Mike!

Back in February we made the somewhat difficult decision to self-fund our move and expansion by not paying ourselves for three months.  In retrospect, this was a riskier move than I think we all realized.  It’s really, really stressful to see your bank account dwindling without anything to replenish it.  It’s also really, really stressful to work 12 hour days and see nothing in return.  That said, it was the best move we ever could have made.

Taking no pay brought us together as a team - we united around the fact that we needed to work our asses off to get paid again. It also motivated each individual.  While stressful for me, the desperation of the matter made me block out the rest of the world for a while and dial in 100% to the task at hand.

And right around the launch of Tastefully Driven, it all started to pay off:

• We no longer had to commit time to moving and expanding
• Our initial warehouse expenses were gone and replaced with manageable fixed monthly costs
• The marketing we had worked so hard on has resulted in several months in a row of record sales.  We are consistently doing 3-4X monthly revenue from the corresponding month last year, which was on the high side of our estimations.
• We found a great new accountant to replace the unsatisfactory one we fired during tax season (who by the way seems to have cost us approximately $6,000 last year that we could have avoided….good accountants are valuable, lesson learned)
• We secured a large line of credit with our local bank.  We didn’t need it, but it doesn’t cost anything and ties in with our existing bank account, so it was a no brainer to apply for and have in our back pocket for future expansion if we need it.

All of this led us to the decision to start paying ourselves again early.  So yesterday, almost a month earlier than planned, I walked into the bank and cashed my first check.  Sure, I’m making exactly what I was a few months ago but it just felt so much better to cash this check, mostly because I know we’ve weathered our storm and are able to cover all expenses, pay ourselves, and profit - something we thought might take a lot longer to achieve.  We could have paid ourselves a raise, but we decided to play it conservative and do this for a few months just in case sales unexpectedly dip.  Come mid-summer, I expect we’ll be able to give ourselves another raise, which will be significant because it’ll give us each a little breathing room financially on a personal level.

Sometimes business risks like not paying yourself can backfire.  This one could have been the start of us falling apart if warehouse costs were more than expected and sales were less than expected.  Thankfully, a lot has gone right lately and everything paid off.  Looking back a few months, this post is probably the best possible outcome to our situation.  These are the times you live for as a business owner.

This morning bright and early the Pure Adapt team participated in the annual “Climb UAlbany” event for the American Lung Association. Each of us raised money in sponsorships to climb the 22 story Colonial Quad at the University of Albany. Our team was formed by our kickass lawyer David Green, and the ten of us that participated on the team were able to raise over $1,000 to benefit the ALA of New York State. According to the website, the total raised was $27,531!

We originally planned on walking the stairs, but the competitiveness in us kicked in and we decided to race them. Our exact times aren’t posted yet, but I think we all finished in under 5 minutes. I sprinted the first 15 flights and then hit a brick wall and walked the rest…I’m not a huge cardio guy - most of my time at the gym is spent lifting - so it showed in my conditioning. Mike, who is in fantastic all-around shape, walked a few laps with me and then sprinted the last few.

George took a great photo of all of us after the event, but he can’t seem to find it on his computer so you’ll have to take my word for it that we all participated. We were all given shirts and medals: Greg plans on rocking his medal for the next few weeks (we worked together after the event and ran a few errands, Greg had the medal hanging from his neck everywhere we went…you could tell people were wondering why some dude was walking around stores with a medal hanging from his neck…freaking hilarious).

A couple of random thoughts:

• You would be SHOCKED at how many people are in horrible shape. Seriously, if you walked at a normal speed you would do 22 flights in about 8 - 10 minutes and wouldn’t be very fatigued at all. By the time I was at about the 5th floor I saw tons of (mostly overweight) people pulled over on the side struggling and contemplating whether or not they could finish. I spend a lot of my time around people who place a high emphasis on health and fitness, so I’m always a bit taken back by how much some people neglect their own health. Not to get all political on you, but to a large degree I see a simple solution to our health care problems: eat right, exercise, and sleep. Cancer rates would go down, type II diabetes would go away, and our reliance on expensive drugs with horrible side-effects would be eliminated. I’ve always felt this way, but sometimes I forget how bad it is because I don’t see it.
• A few days ago it was almost 60 degrees outside and I went to the gym in just a shirt and shorts. Yesterday and today it snowed and was cold as shit. So is life in upstate NY. Unfortunately, whomever planned this event must have thought that at 8 AM it would be 75 degrees out and not 20 and windy/icy, because we spent about thirty minutes outside reviewing the rules and stretching as a group as we all froze our asses off. My bald head can’t take the blistering cold for that long.
• The event was horribly unorganized and inefficient. For example, it took Greg 30 seconds to register and the rest of us about 30 minutes. Why? His last name - Pautler - falls under the N - Z category. The rest of us, along with about 90% of the people there, had to wait in the ridiculously long A - M line.
• And yet we all were there for less than 2 hours and freaking $27k+ was raised for charity. How cool is that?
• This all led us to conclude that we would absolutely kick ass at organizing charitable events. We have some cool stuff going on with Tastefully Driven’s “Commerce with Conscience” program (more to come soon) and I think this will become and increasingly important focus for us as we grow.

One of the things we were most looking forward to when moving to our warehouse was having FedEx come daily to pick up all of our shipments. Previously Greg and George were driving any customer orders over to the local FedEx from Greg’s house where the products were stored. It’s worked out great - FedEx comes around 3:30 every day, which in theory means everyone can leave by 4 if they want to.

However - the flip side of the issue is receiving shipments, which has been quite a pain since moving. Mail doesn’t get delivered to our industrial park, so for all USPS packages and mail we have to use a different address…our P.O. Box. FedEx, UPS, and other shipments arrive at all sorts of hours, as I suppose you’d expect.

We had generally all been going in from ~9 AM - ~4 PM. The gas savings from carpooling has been nice (although I am not really a carpooling fan in general, which is a whole other post), but it doesn’t provide for the best coverage, specifically in the early morning.

After missing two shipments Friday morning, George called me and we discussed the issue a bit. At first, I thought “let’s call all the shipping companies and tell them we don’t open until 9 AM”. Then I realized that it was unrealistic to expect FedEx, UPS, DHL and every other private shipping company to coordinate around our schedule. Shipments are going to come at all hours of the day, starting at 7 AM and ending at 5 or 6, whether we like it or not. FedEx in particular likes to come right around 8 AM I’ve noticed.

I thought about it some more, and since I am still in early riser mode, I offered to start going in at 7 AM. Instead of going to the gym at 6:30 and then being ready to go into work by 8:30, starting Monday I’m going to work from 7 AM - ~2 PM and then hit the gym mid-afternoon. After that I’ll probably grab some food and work for a few more hours before calling it a night.

While this isn’t really my ideal schedule, I’m curious to see how it works. I’ve always been a morning gym guy. I’m hoping it breaks up my day a little more and gives me a little more freedom because I won’t be doing much carpooling. 7-2 is also a nice little 7 hour shift, so even if that’s all the work I do for the day I’m still getting quite a bit done. Of course, it could go the other way and I could hate stopping work mid-day and have trouble waking up without my workout…we’ll see.

Did I have to adjust my schedule? Of course not. But I think that as a four-person company we’re best staggering our shifts a bit so that we have as much coverage as possible. Right now it might not be a big deal if we miss a shipment or two a week, but we’ve vastly expanded inventory and plan on continuing to do so. Missing a few a week could become a few a day in six months. I’d rather just nip the problem in the bud right now. A minor schedule adjustment for me now could save us a bunch of headaches over the next year or two.

I’m going to take a step back from our pre-launch marketing for Tastefully Driven to go over our overall launch plan - from conception to where we are now to what we have left to do. I’m not saying that there aren’t different or even better ways to deploy a site, just that this process is how we do things, in large part based upon prior failures, successes, and other professional experiences (I’d be lying if I said my engineering background didn’t play a large role in the way I structure a project).

None the less, I’ve never in my life missed a due date on a project and a large part of that is my meticulous planning so hopefully this post will help other young entrepreneurs better formulate their business plan.

Conceptualization

You have that “ah ha” moment where your entire perspective on the world changes and you think to yourself  “I’ve got to do that“. This is the start of what I call the conceptualization stage. For us, after the Detailed Image shopping cart far exceeded our expectations, we naturally asked ourselves how we could repeat the DI model in another industry. That led to us considering several similar high-end niches, and eventually the light bulb moment where we could combine those stores and a community into one large site - hence Tastefully Driven.

When I’m at this stage with a project, I’m so excited that I put a self-imposed waiting period on myself before acting (similar to my 24 hour rule). During this stage you’re likely to be so certain that you have just come up with the next big thing that you’ll ignore reality and down play very real road blocks. There’s no set time period, but I’d say wait at least a week before taking any action beyond registering a domain name.

In the case of Tastefully Driven, we conceived of the idea sometime around Thanksgiving of ‘07. For the next month we discussed the pros and cons - the features we’d want and those we wouldn’t, how we would market it, how it would impact the rest of the company, and how much of our resources could be devoted to it.

Aside from preventing you from doing anything stupid, it allows you (and your team, if you have one) to refine your vision. By the end of this period for us, everyone usually shares the same vision and knows what’s going through everyone else’s head. When you finally do start the project, you start it on the same page with the same vision for success.

Making it an Official Project

By late December we had decided Tastefully Driven would be our future. At that point I consider the project an official project. During this phase we started to get more serious: would we keep client work (ultimately, no)? how would this impact Detailed Image (we would finish all DI development work for 2008 before starting TD)? when could we realistically launch with several product lines (initially, we said 8/1/2008 at the earliest).

This is where I really shine. We have a MONSTER project and we need to figure out how to start tackling it. This is also where I think a lot of people get paralysis by simply being overwhelmed with what to do next. As Theodore Roosevelt once said: “In a moment of decision the best thing you can do is the right thing. The worst thing you can do is nothing.” In this case, the right thing to do is come up with a plan.

Up to this point, we had literally written nothing down and neither should you. Don’t get caught up in the minutia when you’re conceptualizing. However, once it’s an official project there has to be extreme attention to every single detail.

We tend to convene around our company wiki, so I like to write my project plans on the wiki. Since we had agreed to finish Detailed Image development before touching TD, I focused on that first. There were around 10 additions to the cart that needed to be completed (mostly stuff for me to do). I gave each an approximate completion time and I figured it would take until the end of February or early March to complete. Somehow I caught fire and wrapped it up on 1/12, which gave us an early indication that our 8/1 launch date for TD might have been too much of a time cushion.

Once complete with that I started an in depth plan for Tastefully Driven. The site will launch with 5 or 6 e-commerce stores, a community, a blog, and full integration of accounts between the three - by far the largest project we have tackled, and therefore the most daunting to plan. I started by breaking it up in to several key categories:

• Design (mostly Mike)
• Development, which essentially involved improving and scaling the DI cart (mostly me)
• Quality testing, which could fall under Development, but I like a whole section of tests to run prior to launch
• Product selection (mostly George)
• Content creation, including writing product descriptions
• Marketing ideas

Each category had a simple bulleted list, and each task that needed to be done to launch got an approximate completion time. The latter stuff - like marketing ideas - was more of a brain dump than anything else. Even though we create a marketing plan later on, it’s important that we have a place on the wiki to jot down an idea as we come across it in the development of the site.

Setting a Launch Date

Some people like to use Microsoft Project (or similar project manager tool) to plan out due dates and choose a launch date. I was forced into using these tools in college, and to be honest I just see them as complicating the matter. I like the freeness of one large blank wiki page. I am smart enough to know that keyword research needs to be done before launching a pay-per-click campaign, so I won’t assign a due date to the PPC campaign that doesn’t allot for that. With the entire project in front of me it became pretty obvious that we could finish it by 3/1 (a far cry from 8/1). We figured with the warehouse move and a little cushion time, that 4/1 would be perfect. Any later in the year is prime Detailed Image season so if we didn’t do April we’d probably have to wait until Fall…or launch with limited contribution from George and Greg.

As I touched on a bit in previous posts, the one key thing I grossly miscalculated was how long it takes to contact vendors. I figured a month would be sufficient time to contact a vendor, get samples, place our first order, and receive it. More realistically, that stuff takes several months and I’d like at least a 3 month cushion for that alone next time. Our final order just shipped, so miraculously we will have all of our products in the warehouse for weighing and photoing by 3/14, but we cut it waaaay too close in my book.

Developing the Site

The development portion is different for everyone. Some people use open source software like WordPress or osCommerce with very little customization and this portion isn’t much more than design work to get the aesthetics right. Others hire an outside developer….which I’ve never really done so I have no clue how to integrate that into a project plan. We develop everything ourselves, so we were able to relatively accurately estimate our ~2 months of development work.

*side note - if you or your developer don’t develop with SEO in mind, this is the time to start building and structuring things properly. Do your homework - it will pay off.

When I do development work I do it with the understanding that we’re spending a few weeks solely on quality control testing at the end of the project. That means that while I’m developing I test every scenario and interaction I can think of, and once it works I move on.  I usually miss some stuff, but that’s OK. In most cases there will be other interactions created later on, some of which we won’t appropriately test - which is why having a QC testing phase is so important. I also encouraged Mike to think the same way with his design. Essentially - lay it all out and get it working most of the way and fix the nitty gritty shit at the end.

I always map out the entire site - every feature and function I can think of - before touching anything. Once that’s done, I create the database that should encapsulate every single possible scenario. This is pretty obvious: you need to be able to enter test data to see if what you’re trying is working.

All of this resulted in a more detailed list of features to develop, how long they’re going to take, and what order to do them in. By far the most challenging part of Tastefully Driven was to get our login and user information to work seamlessly between our forum (built upon bbPress), our blog (WordPress), and our custom built cart. Every project I’ve ever been a part of has those “if we can just get this to work, we’ll be fine” features and this was the one thing we were really uncertain of the difficulty going in. It’s important to identify these types of issues at the start and try to tackle them as soon as possible so you know where you stand. These are the things that will throw off a time line and screw a launch date.

Announcing the Launch Date

For the reason in the last sentence, we have an unwritten policy of not announcing a launch date until the development work is nearing completion. While internally we set 4.1.08 as the date, we always knew it could be delayed if need be. Once I announced the launch on my blog, I considered it set in stone and - short of an extreme emergency - will make sure it happens.

Every company has different pressures and a lot of times those pressures dictate premature launch dates, but if you can help it I encourage you to set a date and stick to it. A launch date really forces you to buckle down and focus on the task at hand. It forces the BS stuff out of your project plan and dictates that you work on only what is necessary. We’re in this phase now, and I’ve been knocking things off of our wiki list like crazy. Some get moved to “post launch” and others get canned because they just don’t matter.

I normally work a lot more hours prior to a launch. The past few days George and I have been doing a double shift (8 AM to 8 PM type of stuff) to ensure that we get everything done on time.

Creating a Marketing Plan

Up until this morning we just had our marketing list on the wiki. We created the splash page, the pre-launch blog, and the teaser business cards, but the plan wasn’t really formulated. Today I finally created our marketing plan. Some people like to do this sooner than now (a month before launch), but I encourage you to wait to create a marketing plan because so much changes in development that much of an earlier marketing plan would be rendered useless.

I’m not going to rehash all of my favorite web marketing tactics - my free e-book does that - but I will say that for an e-commerce site we’ve pretty much got a formula down pat that we are sticking to. The majority of our marketing will consist of:

• Content creation. Articles, forum posts, podcasts, and videos where we do product comparison, tests, and case studies. Since our site is perfectly SEO friendly and we will produce quality content, over time this will suck in a ton of targeted traffic. It will also become viral and hopefully spread through social bookmarking and social networking sites (we have a “share this” button on every product page, blog post, and forum post).
• Pay per click marketing. PPC is such a simple formula if executed properly: pay $x per click, y% of clicks turn in to purchases. As long as the number of clicks/sale is greater than your margin, you win. Split testing and refining ads can push your cost per click down and conversion rate up.
• Google product search. So many sellers don’t take advantage of this. It’s free, and in about 2 hours I automated the process so that we automatically create and submit an updated product feed daily to Google via FTP. DI gets a lot of sales this way.
• Email and RSS marketing. This is really just maximizing the sales we can get out of our existing members. I’d also include great customer service in this category - every customer service email is an opportunity to positively influence someone who could become an evangelist of your site. When you’re starting with zero members, email marketing can take a while to have an influence. We see it now with DI though: every newsletter results in a wave of sales. This is one of the reasons why the pre-launch splash page is important: the faster we can build an email list, the better.

There’s other stuff too, but these are what will drive sales. Obviously PPC and Google product search will help immediately, while the other two will take time to develop. We’ve launched so many sites that we understand that you don’t truly see the impact of great content for months and even years. With this project, we know that what we’re doing works and we’ll be as patient as we need to be to make it work correctly.

Quality Testing

Maybe it’s because I spent my engineering days as a QC engineer, but quality testing is a big deal to me.  Test every single page and every single possible function of your site.  Do it in every browser, every operating system, and under every condition you can think of.  Test your emails in every email program available.  Do REAL transactions and make sure they work.  Recruit a handful of BETA testers (i.e. friends and family) to try everything out.

You’ll never catch 100% of the errors, but the difference between 80% and 97% is huge.  I allot a minimum of one week for QC testing and it’s usually the week prior to launch.  That means that everything else should be done at least a week before launch day.

Launching

I always create a launch day checklist.  While you should pause to celebrate (for like five seconds), once you pull the trigger there’s a lot to do:  announce it on your blog (if you have one), submit your product feed to Google, submit a sitemap to Google/Yahoo/MSN,  activate your PPC campaign, email friends and family, etc.

You’ll likely start discovering some of those errors you missed in the QC testing phase as real people do stupid things to inadvertently challenge your software like it never was before.   The better job you did in QC, the more you can focus on your first order coming through and the less you have to worry about your first users getting pissed off and leaving.  When it comes to Tastefully Driven the platform is built upon Detailed Image, which we know is stable, so I’m more worried about minor integration issues than I am about all-out systems failure (which was definitely a concern of mine when we went live with DI….even if I never let my partners see it).

Bottom line:  it’s a fun day when you launch, but in reality it’s just the beginning.  Take a day to catch up on sleep and then get to the “real work” - getting people to actually pay you money.

Ongoing Development

I have a rule: other than fixing errors, don’t make any major development changes or additions for at least a month…three to be safe.  Why?  Because on the second day you’ll get an email from Aunt Betty telling you that she thinks the site would be better if it had feature xyz and you’ll think “if she thinks that, other people must be too” and then you’ll begin to hack up your code and try to rush xyz to market.  Not only could this make your site worse, it’s also a poor use of your time.  You’ll get emails like this all the time, and if you concede to all of them you won’t make much money and your site will suck.

If you have confidence in your project (and you should if you got this far), there’s a good chance that you launched with a pretty solid site.  That’s good enough for now.  Take in your customer feedback, study your analytics, and focus on sales right now:  in the grand scheme of things you’ll look back at the launch version of your site as a piece of shit but you need to let those things play out so that you’ll know what you should and shouldn’t do to improve upon it.

For Detailed Image, we waited from September to January before I started on the laundry list of features for 2008.  The result, however, was a million times better than if I kept programming in September.  Some features were deemed unimportant and scratched from the list, some were re-affirmed by our data….justifying our time expenditure, and some became simpler to program because of everyones more intricate knowledge of the cart.

One thing I think most developers look past:  just because you made the software, doesn’t mean you know it.  Often times, customers will use things vastly differently than you intended.  By letting those things play out naturally you save yourself a ton of headaches and ensure that the changes you do make are worthwhile.

Conclusion

Phew.  Can you say longest post ever?  I think I’ll get back to work now….after all, I’ve got a lot to get done to launch this site

Today we finally start the move to our warehouse.  All week long Murphy’s Law  - whatever can go wrong will go wrong, and at the worst possible time, in the worst possible way - has been in full effect.  Among my favorites:

• The hard drive on George’s brand new laptop died yesterday, and his most recent backup was the end of January.  He has been the main point of contact for everything move-related, so this was a big hit.  Remember to back up your files kids!
• I’ve been jumping through hoops trying to get my identity theft situation cleaned up.  I’m one step away from getting my lawyer involved.
• The National Weather Service has issued a snow advisory for the next two days while we’ll be moving.  Because loading stuff on and off a huge truck and driving several 30 mile round-trips isn’t hard enough, we now have the element of snow to deal with.  There are just enough hills on the way there to make it a challenging drive.

Despite the general stress of moving, taking no salary, and all of the obstacles getting in our way, it’s a really exciting time for us.  The silver lining in this week is Detailed Image sales are just going bonkers, which bodes well for the busy spring time just around the corner.  I’ve also had good luck contacting vendors and placing initial orders for Tastefully Drive, which is a good sign.  Overall I think we all are a bit over-stressed and are working with the mentality “if we can just get through the weekend, everything will be OK”.

Today we’ll be packing up, with tomorrow being the big move day.  I’m going to try to remember my camera to take some pics.

It’s the dirty little secret of running a business. I hear about it all the time, but rarely hear it publicized. It’s glossed over by Karen Northup of Corefino in this Churchill Club Video, and it’s mentioned by store owner Dan Fox in this article: founders of seemingly successful businesses who don’t take a penny of salary for themselves.

The reasoning is quite simple: it’s expensive to run a business, and faced with the choice of paying themselves or furthering the business, most entrepreneurs will choose the latter 10 times out of 10. This past weekend we made a similar decision to not pay ourselves any salary from now until June.

Crap. I thought you guys were doing great. How are you going to live? Should you be moving in to a warehouse? Why did you get rid of clients if you need money? Aren’t you freaking out?

I’ll get to those in a second, but since I was the one who pushed for the idea, let me explain my reasoning.

Our Problem

We are thriving in our current situation. We could continue to ship from Greg’s basement, pay everyone’s salary, chip away at our revolving credit card debt, and save some money. But we’d be slowing our growth…to the point where we’d be turning down great opportunities solely because we couldn’t handle the capacity.

While cash flow is good, it’s not good enough to cover:

• The costs of moving into a warehouse. Hidden expenses are everywhere: a $700 deposit to the electrical company, oil heating (meaning we need to fill our tank in advance), the Town of Guilderland requiring a Knox Box, etc. On top of that, there are the not-so-hidden expenses like almost $10k down (first months rent, last months rent, February pro-rated, + a security deposit) and the cost of furnishing the place.
• Expanding Detailed Image. We have vendors that want to work with us, with products that we know will sell at great margins, but we don’t have the space to carry them right now. At a minimum, we’ll probably need $10k - $15k to do this right.
• Initial expenses for Tastefully Driven. On top of development and marketing, we are going to need to spend $10k + on initial inventory to do that right.

All of that adds up on top of normal operating expenses. It was causing us quite a bit of stress.

Our Options

Here are our options to pay for it all:

1. Take on more debt, something we don’t want to do. Revolving credit card debt for inventory is one thing…building up credit card debt and maxing out every line we have is another.
2. Ask for a personal loan. Banks don’t like loaning money to companies that have been incorporated for less than 3 years. We know a handful of people willing to loan us money, so this would be a definite possibility.
3. Give up equity in the company for an influx of cash. This is what most growing companies in our situation would do (I think). However, we’re not really into giving up our stock and our control.
4. Pay for it ourselves.

What would you do? #1 would put us in a bad spot for the next few years. We’d constantly be floating credit between cards and taking on new lines/cards to pay it off. #3 is something we just don’t want to do at this stage in the game. We’ve put in so much sweat equity that we want to have 100% of the company when it reaches the next level. #2 is a good idea, but it’s my belief that you should never ever ask anyone else for money until you’ve exhausted every penny that you have. How hypocritical is it to ask for $50k or $100k and then pay over half of it back to yourself in salary? Just doesn’t seem right to me.

Which leaves us at #4. Each of us has done a good job saving money, so it would seem to make the most sense to have the owners pay for the growth. We certainly have enough cash between the four of us to make it happen.

FAQ About Our Solution

Why not just take the money out of your bank, give it to the company, and keep having the company pay salary?

Every time we do payroll, we have to pay the payroll company and pay taxes (matched by the company in some instances…so it’s double). But by living off savings and taking $0 salary, we avoid those expenses and make the impact on the company’s bottom line all that much better. Plus, we will all show less income on our taxes at the end of the year, which is another tax break. Doing it this way will add an extra 30%+ to the money we’re all putting in.

How are you going to live?
As I said, we all have enough in savings to live for 3 months. We wouldn’t have done it if we didn’t. Down the road when we need another wave of funding to expand we might have to consider other options, but this solution is ideal for this instance. Sure I’ll have to be a bit more careful with how much I spend, but nothing extreme.

I thought you guys were doing great?
This is the hardest to explain to people. We are doing great. Revenue for February 2008 is over 3x what it was in February 2007, our first full month with DI as part of Pure Adapt. Sales have grown exponentially and will likely continue to do so. But there’s only so much you can do with your revolving cash flow without giving it a “boost”. We needed that “boost” to get us to the next level, and we’ll probably need another one in a few years.

Why didn’t you just keep client work for a little longer?
The cash from client work was nice, but it was offset by the impact it was having in slowing down that exponential sales growth. The time required to raise $30k - $50k in client money would wipe out so much of our time that we wouldn’t be optimizing the use of our best assets: our e-commerce platform and our warehouse space. To be blunt: I’d rather take $0 salary and work on what I believe is best for the company and what I enjoy the most. My partners all agreed.

Aren’t you freaking out?
It’s kind of the opposite. We were freaking out when we were worrying about where the money was going to come from. Now we can all focus on the task at hand. Consequently, I think we’ll all be happier and be more productive.

There’s also something to be said for sacrificing for something you believe in. Had someone swooped in and gave us $2 million I don’t think we would have had the same unity, focus, and drive as a team that we do by making a common sacrifice. We’re all giving up a lot to make sure we do it right.

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In the end, I feel like by doing this for 3 months we’re advancing our company by at least 9 months. It’s the quickest means to the end that we are working towards.

I *almost* didn’t write this post. I thought it might be a case of too-much-information. I thought about it for a few days, and I still wanted to write it - mostly because I felt I’d be cheating the readership of this blog by not painting an accurate picture of our company and how it impacts my life.

Last night George and I went to the post office and mailed in the final copy of our signed lease. Wow does that feel great! We’ve been looking for a place since back in August, and after having a few places fall through we finally found the perfect location for us.

First things first - in our struggles to find the right place we learned that there are a lot of grimey people in this business that are difficult to work with and try to rip you off. This location is managed by the Galesi Group and I wanted to make sure that I gave them the credit they deserve for being a pleasure to work with. Not once have they not returned a phone call, or not given us a completely honest answer. Even more amazing: our location is by far the smallest that they manage. You know you’re working with good people when they treat their least important client like gold.

On to the warehouse. It’s located in the Guilderland Industrial Park, about a 15 minute drive from Albany. I really love the Guilderland area (and so does everyone else) so I anticipate that we’ll all move closer to the warehouse within the next year or so. The warehouse itself is exactly what we needed: essentially a big freaking empty room that’s in good condition.

The park used to be a military depot (and is still zoned as such) so we get cool little perks like 24-7 security and no sales tax on anything shipped to our warehouse. I’m not sure if this has to do with the zoning or not, but it’s my understanding that the park charges a flat yearly rate per square foot to everyone. This worked to our advantage immensely because we got prices that a 200,000 sq-ft place would get, which is why we were able to afford a 5,300 sq-ft place for the price of a 1,500 sq-ft one. The lease is a 3 year lease, but we built in a renewal provision to renew at only an increase of 20 cents/sq-ft/year, which means we’ll probably be in there for 6 years unless we explode and need a larger place. We’ll only be using about 1,000 sq-ft to start off, so we’d have to grow a lot for that to be the case.

Here’s how Google Maps shows the massive industrial park - we’re just a tiny corner of that building…about the size of a football field:

We’ll be moving next weekend (2/22 - 2/24) so I’ll be sure to post before and after photos.

Now that I’ve got all of the client stuff out of my system, I want to “officially” announce our upcoming site Tastefully Driven.  Here’s how it came about:

• Towards the end of 2007 we realized that our Detailed Image shopping cart was outperforming our expectations and started brainstorming other types of sites where we could ‘copy’ the cart and get similar results, the most obvious being a re-branding of many of the cleaning supplies on DI as home electronics care products.
• Then we had a handful of other site ideas before that one ‘ah ha’ moment:  all of our ideas all focused around high quality products that appeal to upper-middle class males in the 25-40 age group.  Why not start a whole site around premium male products - be it health and fitness, electronics care, cologne, or just about anything else you could think of.  The site would have several different “stores” within it, but would all be seamlessly tied together into the same shopping cart.
• In addition to the obvious SEO benefit of keeping everything in one place, we’d only be maintaining one site instead of many.  We’d also - and this is the big kicker - be able to build a community around the shopping cart because of the commonality among product lines.  If you’re into nice cars, you’re probably into good wine and nice clothes, for example.
• We had previously purchased the domain TastefullyDriven.com to use for a future car forum, but fell in love with it because in our minds it signifies someone who is “intrinsically driven by tasteful products”.

So sometime around the beginning of December we made the decision that Tastefully Driven would be our future.  Since incorporating Pure Adapt Inc in December of 2006, we’ve really only focused on growing existing sites like DI and SportsLizard and have yet to do one project from scratch as a team.  This is finally that project, and above all else we need the camaraderie that comes with doing something all together.

From a programming standpoint, Mike and I have been working ridiculous hours the past few months to turn this cart into something that’s measurably superior to DI…or any shopping cart short of Amazon or Buy.com that I’ve experienced.  We’re probably 90% done with the design and development of the site, which is cool because we’re not launching until 4/1 and we’ll actually have time to pre-market the splash page and acquire email addresses (something I’ve never had the luxury of doing before).

At the earliest we’ll be moving into our warehouse next weekend, which leaves about a month and a half to contact vendors, get approved for accounts with them, receive our first orders, input the items into the database, photo them, and put up content around them on the site.  So while programatically we’re waaaay ahead, this side of it is going to be tight.  George is up to his neck in warehouse-related stuff right now, so hopefully once that’s settled he’ll be able to dig in and take care of this before it becomes a real issue.  And I suppose that this is not too big of a problem to have considering all of the other potential issues out there.

So if you get a chance, head over to TastefullyDriven.com and sign up on the splash page.  We’ll be giving out $100 gift certificates randomly to people who sign up (the number is not yet determined….if we get 1,000 emails we’ll do a few, but if we get 10,000 we might do 10 or 20).

Also, special thanks to Scott Middleton who emailed me a correction to the layout on the splash page that he saw in his browser.  Clearly we threw that up quickly and didn’t give it the QC attention we normally give a page.  It’s all fixed now

Business decisions are rarely easy, and are almost never cut and dry.

Last week we made the difficult decision to stop performing client services effective 3/1/2008 and focus solely on our sites. It certainly wasn’t an easy one, but it is something that we had to do. There are only four of us. Providing top-notch design, development, seo, marketing, ppc management, and hosting is hard work and your entire company needs to be focused on those things to give your clients the attention and quality they deserve.

That’s just not us. Mike and I did the majority of client work, but we were also working hard on re-developing Detailed Image and growing our e-commerce sales, which is what George and Greg spend all of their time on. And it has worked. It worked so well that it forced us to make a decision because we couldn’t possibly do both for much longer. Sales have grown faster than expected, and we really need everyone aligned working towards one sole goal. I know I will be much happier not changing directions five times a day - answering client emails and phone calls takes a lot out of you and if your heart isn’t all the way into it you can’t possibly do the job at the level that it should be done.

The four of us are much more well suited to be a great e-commerce company than we are a great anything else company - be it client work or web 2.0 services or whatever. Now we can focus 100% of our efforts on our e-commerce side, and it couldn’t have come at a better time. We should have a lease signed for our 5,000 sq-ft warehouse by the end of the week, so when we move in we can have a fresh start and a fresh focus. Other sites like SportsLizard, Hotteeez, iPrioritize, Music-Alerts, etc all require minimal maintenance and provide value to the company either in the form of supplementary income to help pay our expenses or in positive PR for Pure Adapt.

Obviously once we get into said warehouse, we’ll only be using about 1/5th of the space. The remaining space will be used to expand DI and ramp up inventory for the launch of our new e-commerce site Tastefully Driven, which is going to be a mix of a social community and shopping cart (more to come) and is due to launch 4/1.

I spent the day today contacting our clients, and some of the emails were very very difficult to write because of the relationships we’ve developed and a sense that I was ‘letting them down’, even if it’s something we need to do. Below is the letter that they all received (side note: isn’t docstoc pretty cool?):

Pure Adapt Client Letter - Get more free documents

Bottom line: the other day I said “I crave the ability to throw a lot of shit against the wall and see what sticks, and the web world makes that possible.” Well, we’ve been doing that as a company for the past year and now we’ve found what works: we all enjoy e-commerce, we’re all good at aspects of it, and the market is clearly there…especially in the high-end mens niche that we’ve targeted and will continue to target. Now that we’ve found what works for us, it’s time to focus on that and take it to the next level.