Adam McFarland

Tonight my little sister Jenna graduated from 8th grade. I accompanied her and my parents to the ceremony held at the high school that I graduated from back in 2000. Being twelve years apart with no siblings in between, I always feel like there’s a huge gap between my generation and her generation. In reality, there really isn’t. Much of what she goes through is the same as what I went through twelve years ago. Take tonight for an example:

The principle gives a speech about reaching for your dreams, pursuing your passions, and striving to do something amazing. The teachers hand out all sorts of awards to the kids who have perfect attendance or have an average over 90. Each kid gets called up and given a diploma, a class picture, and a folder with certificates for their various achievements. My sister had nothing short of 20 different awards and certificates. Don’t get me wrong, she’s a great student. But is anyone that good? I’m guessing most kids went home with the same bag of goodies. We live in a world where everyone gets a trophy for just trying. Kids become conditioned to being rewarded for just showing up.

The question I kept asking myself was: does all of this give our kids the best chance to succeed? As the (very long) graduation ceremony began my mind started to drift back to the time twelve years ago when I was sitting in the exact same spot. I thought about who was in my graduating class and what they’re doing now. Some have gone on to start businesses (two of my partners - Mike and Greg - were in my 8th grade graduating class). Some are working in politics. Some have joined the peace corps. Most have settled for mundane jobs and given up on their dreams. Still, others have hit rock bottom and become addicts or criminals. Yet twelve years ago we all sat there just like my sister. We were all filled with hopes and dreams and promises of greatness to come. Why did some veer off course?

At that point I realized something - our parents don’t prepare us for greatness. They prepare us for mediocrity, to be average. Do you want your kid to cure cancer? Start their own business? Join the army or the peace corps? Work for a non-profit? Get a Ph.D? Teach inner city kids?  Help the disabled? The question parents should ask themselves deep down: do you really want your kid to change the world?

Every single parent would answer “yes” to that question. But their actions speak louder than their words, and the two don’t agree. They’ll go on and on about how their child will become president or solve our energy crisis, but what they don’t realize is that achieving anything great requires hard work, sacrifice, passion, focus, determination, and most importantly the ability to deal with failure. Because most likely, if you’re striving for greatness, you’re going to fail. Achieving great things is hard. Most of the great things in this world have been discovered or achieved by people who relentlessly fought for what they believed in even when they failed repeatedly, even when they ran out of money, and even when others told them to quit and get a “real job”.

Parents: how will you react when your kid has $20k in student loans and leaves a secure job to start a company like I did? Or when they take a leave of absence from college to go overseas to help in Darfur? Or when they decide to join the army and go fight in Iraq because that’s what they believe in? You’ll get nervous. You’ll push back. You’ll ask them to reconsider. Because it scares you to see them fail. But what you don’t realize is that your fear also prohibits them from doing something great. Your fear pushes them into working 50 hours a week doing something they don’t love because it’s “safe” or “secure”. Our world has warped our minds into believing that your 401K is more important than your happiness or what you do for others.

We do a great job of telling our kids to be great, we just do a horrible job teaching them the traits they need to become great.  My advice to every graduate this spring - be it 8th grade, high school, or college - you truly can do anything that you want with your life. Dream the impossible, then do it. Cherish that mentality - don’t let other people ever take it away from you.

As any college student will tell you, scheduling classes is an art form. My first semester I didn’t have much choice and had to take whatever was available. My second semester I loaded up on Monday and Thursday and had the rest of the week off. It sucked - Mondays and Thursdays wore me out and the rest of the week I had to spend 10 hours doing homework. My third semester I put large gaps between my classes so I’d have time to get work done during the day, but all I did was bone around on ESPN.com and AIM.

My fourth semester I finally got it right: 1 - 3 hour breaks between classes, equally spread out throughout the week. I got the same amount of work done in a 2 hour break that I’d get done in a 5 hour break the previous semester. I didn’t mess around and waste time because I was under a time crunch. A 2 hour break really means like 70 minutes of work when you factor travel time and setup time into the equation. You don’t have any time to mess around with 70 minutes: you’re always under a bit of pressure and that’s why you get so much done. You’re focused. This one lesson has stuck with me ever since.

Read the following excerpts and stop and think for a few minutes before continuing the post.

If you’re an employee, spending time on nonsense is, to some extent, not your fault. There is often no incentive to use time well unless you are paid on commission. The world has agreed to shuffle papers between 9 and 5, and since you’re trapped in the office for that period of servitude, you are compelled to create activities to fill the time. Time is wasted because there is so much time available. It’s understandable.

Most entrepreneurs were once employees and come from the 9-5 culture. Thus they adopt the same schedule, whether or not they function at 9 AM or need 8 hours to generate their target income. This schedule is a collective social agreement and a dinosaur legacy of the results-by-volume approach. How is it possible that all the people in the world need exactly 8 hours to accomplish their work? It isn’t. 9-5 is arbitrary.

Since we have 8 hours, we fill 8 hours. If we had 15, we would fill 15. If we have an emergency and suddenly need to leave work in 2 hours, we miraculously complete those assignments in 2 hours.

Tim Ferriss - The Four Hour Workweek, pages 73-74

ROWE stands for Results-Only Work Environment. In a ROWE, each person is free to do whatever they want, whenever they want, as long as the work gets done. Currently, there are two authentic ROWEs—Fortune 100 retailer Best Buy Co, Inc. and J. A. Counter & Associates, a small brokerage firm in New Richmond, WI. At both organizations, the old rules that govern a traditional work environment—core hours, “face time,” pointless meetings, etc.—have been replaced by one rule: focus only on results.

In the 4-Hour Workweek, you helped people understand that because of technology, people don’t have to defer living until retirement. They can design their own lifestyle. Now imagine what would happen if the entire culture of a workplace went through the same transformation. That’s what a ROWE is. A ROWE is a work culture that gives people the power to take control of their lives. As long as they get their job done, they’re free.

One of the misconceptions about ROWE is that it’s a work-from-home program. It’s not. If you want to work in a cube, that’s great. If you want to work from a coffee shop, then that’s great, too. The question in a ROWE is not “where is everybody?” but “is the work getting done?”

Cali Ressler and Jody Thompson in an interview with Tim Ferriss

The United States leads the world in two categories: work and waste. American employees put in more hours and take fewer vacations than just about anyone else in the industrialized world, and our individual ecological “footprints” are much larger.

Coincidence? I think not. The way we work drives our habits of consumption and waste. The more we work, the more we drive, the more energy we burn, the more styrofoam to-go containers we use. At the end of the day, we’re so tired, we devour more takeout and TV, often falling asleep in front of the latter. If we want to accelerate the recent trend of reducing waste, it may be time to consider the radical step of, well, relaxing more, consuming less, and living fuller lives. May the Wall Street Journal editorial board strike me down.

Naturally, most businesses blanch at the notion of giving up any competitive edge in a globalized economy. But it’s not as if moving to a four-day (or 32-hour) workweek would simply lop 20% off the economy. Cutting hours may actually raise per-hour productivity. France, home of the 35-hour week, creates more GDP per work hour than the United States ($37 versus $34, as of 2003). Norway spanks us too ($39), and Norwegians work 26% fewer hours a year than Americans. It’s a myth of modern hypercapitalism that an overworked, sleep-deprived, stressed-out workforce is a necessity. Studies have consistently shown that longer workweeks increase productivity only in the very short term. In a recent survey by Salary.com, workers copped to wasting about 20% of the average day Web surfing and gossiping. Sound familiar?

Companies can take the first step by reinventing the workweek. Then it’s up to us to devote our increased leisure hours to activities with low environmental impact — and not to driving around gas-guzzling cars or booting up power-hungry electronics. Then we could enjoy both continued wealth and improved planetary health.

David Roberts - Reinventing the Workweek, Green Business Practices - Fast Company: May 2008

OK, soak those in for a second…got it? Here’s what I think when I read excerpts like that:

The Logical Thought

So if I’m not an employee, and we’re in long term growth mode (past the start-up phase), and 9-5 is completely arbitrary, and it’s shown that less time working will make me more productive per hour spent, and if I’ll be healthier/happier by spending more time on things outside of work, and it’s better for the environment, why the f*ck am I working so many hours?

In the startup phase there’s a “cavalier” attitude that you have to have. Life = work and work = life, and that’s OK. But I’ve been doing that for two years and I don’t want to become that guy who works 24×7 for their entire life and misses out on everything else. I enjoy new experiences and new people. I enjoy experiencing life. A large part of that is being an entrepreneur, but there’s also a lot that has nothing to do with running a business.

I spent a lot of my engineering days in college, on internships, and in the work force working on Six Sigma and Lean Manufacturing projects and always thought to myself “why can’t these principles be applied to areas in business outside of manufacturing?” What 4HWW did for me was validate that increasing effectiveness and efficiency not only can be applied to all areas of a business, but in all areas of life too. Like everyone else I have become conditioned to 9 -5 and needed a little push to realize that I didn’t have to stay a part of it.

What I Want us to Become

I badly want us to become a model of efficiency and effectiveness. I want it because it makes us a more valuable company. I want it because removing the mundane and repetitive improves the quality of our lives.

In my head, all of this starts with our business processes. Unless you’ve got a ton of money (we don’t) you need to do the equivalent of hiring people by automating anything that is repetitive and can be done without human input. It started with our shopping cart software that automates inventory and shipping (side note: we had the owners of a large e-commerce store that’s been running for twelve years come visit us recently. The founder turned to George and said “I could fire two employees if I had that technology”. That made me feel all warm and fuzzy inside). It continued by moving all of our data to the web and automating backups and with George automating his accounting. In the future we’ll automate more of our marketing - while things like Google Base submission are automatic, niche newsletters based on customer behavior aren’t quite there yet…but they will be.

Once the business processes are set we can move on to us. We all want to work less hours. Some tasks - like packing and shipping - cannot reasonably be automated with technology so the way you “automate” them is to hire employees. I feel that by the end of ‘09 we’ll have the 2-3 people in place that we need to allow us to work 20 hour workweeks. That’s my personal goal for each of us - the other guys might be thinking less or more, but that’s what I’m pushing for.

How did I come up with 20 hours? In 4HWW Tim Ferriss asks the question “If you had a heart attack and had to work 2 hours per day, what would you do?” He asks the question to challenge you to think about what you really need to do to successfully complete your job. However, he bases this on the premise that you don’t like your job and want to work as little as possible. That’s not me/us. I love this stuff. One of the things I really want to do a lot this summer is white water rafting - I’ve been twice and it was fun as hell so I want to officially make it one of my hobbies. I’m pumped. But I equally want to expand upon an email marketing system that we recently launched (right now we send follow-up emails to everyone who makes a purchase asking them to review their products on the DI blog or TD forum, but there’s a ton of growth potential there). I also equally want to hike every state park in the Albany area. Of course I also equally want to bulk up my AJAX skills and improve the user experience on our cart.

Clearly I love our company as much as I love non-work related things. It’s a good place to be in life. 20 hours limits you just enough so that you get excited to work. If I can only work 20 hours the intensity in which I work will be multiplied many times over. I’ll also really look forward to those few hours a day instead of letting my mind drift to things that I might rather be doing.

What I’m Doing About it

I realize that this all starts with me. I’m the one usually “proposing” these wacky things to my partners so I have to prove the concept before I can expect them to get on board. 20 hours isn’t realistic right now because we don’t have an employee and won’t for a while. However, I’m always looking to make progress and prove my point so I’ve decided to limit myself to 35 hours of work each week. After a few months, I’m going to make it 30. Then I’ll stay at 30 until we have our 2-3 employees in place and trained.

What counts as “work” you ask? Good question. I’m counting everything that is related to running Pure Adapt with the exception of:

• Commuting time
• Blog posts on this blog
• Time spent reading business books or business magazines
• Time spent learning (for example, I have a few AJAX books that will take a lot of time to work through…those don’t count)

Everything else is fair game. I purposely waited until the end of Thursday to do this post because I wanted to test my limitation this week. This week is the perfect test week - if I can do it this week I can do it 95%+ of the time. Being that I got NOTHING done last week with our server mess, my to-do list was backed up a ton. On Sunday night I took all 20 action items and split them up equally among the days of the week. In my head I said to myself “you’re only going to have 6 or 7 hours to do all of this, so you better be focused”. It has worked. Every day I knocked each item off. I am getting at least as much work done in far less time. Some days I worked right up to the last second and others - like today - I was done early. Thus far here are the hours I’ve worked:

• Monday - 7 AM - 2:30 PM (7.5 hrs)
• Tuesday - 7:30 AM - 4 PM (8.5 hrs)
• Wednesday - 7:30 AM - 1:30 PM (6 hrs)
• Thursday - 7:30 AM - 1 PM (5.5 hrs)

That puts me at 27.5 hrs through Thursday. We each have four days at the warehouse and one “off”. My off day is Friday, so I generally do the most work Monday - Thursday. 7.5 hours for Friday - Sunday sounds just about right. I’ll probably work about 4 hours tomorrow, 3 hours on Saturday, and just check email on Sunday (Indy 500 baby….anyone else pumped!?!?!).

This past four days has been the best of my life in terms of work-life balance. There’s nothing outside of work that I wanted to do that I didn’t. That’s huge for me. I’ve also stopped doing work at home - I do most of my work at the warehouse and the rest at Starbucks/other local coffee shops, which helps me mentally unwind when I walk through the door of my apartment. Continuing this schedule will go a long way to ensuring I get the fulfillment I’m looking for out of both work AND life.

I’ll definitely continue to post updates as this unfolds…should be interesting.

“For everything you have missed, you have gained something else; and for everything you gain, you lose something else.

-Ralph Waldo Emerson

The word sacrifice is often associated with entrepreneurs. Young business owners like myself often get peppered with questions about making less money or living with their parents or spending less time at the bar with friends, all in the name of their company. As you get older you usually have to deal with paying a mortgage, balancing a marriage, and spending time with your kids.

It’s easy to second guess your decision to start a company. One truth that has always helped me: it is not humanly impossible to have everything in life. There are always tradeoffs with every decision you make, every day, large or small. Some people might look like they have it all together - they don’t. I’m sure you envy Michael Jordan for all of his fame and success…but I’m sure he envies you for being able to take a stroll in the park with your girlfriend without getting mobbed.

We’re in an interesting position with our company right now in the sense that our large development projects are done and DI/TD sales are good enough that we can all take our foot off the pedal just a little bit. From this point on I think we could each work a 40 hour work week (or probably a little less) and the company would still grow. In the 2+ years since I left my job I’ve never quite been in this position. It makes you really, really think about your choices and how you spend your time.

Adam Gilbert did a series of posts about How to Tell if Someone is Full of Shit a while back. His way of finding out what is really important to someone: take a look at their calendar. We all have a finite time to spend on earth and how we spend it tells others what we truly care about.

A lot of people always talk about what they want to do, what they want to accomplish, what they meant to do, their intentions, how they want to change the world and on and on and on.

It seems as though everyone has intentions of doing big things. Clearly, sadly and unfortunately, that’s not the case. Most people are talkers, rather than doers. Let’s face it. It’s a lot easier to talk than do.

In a world where people are moving a million miles per minute how can you actually tell what someone really cares about?

Look at their calendar! It’s that simple.

Your calendar never lies. All we have is our time. The way we spend our time is our priorities, is our strategy. Your calendar knows what you really care about.

I never understand people who work 20 hour days yet preach about how important their family is to them. Really?

I’m not trying to say that running a business isn’t hard or doesn’t require tough decisions (read any random five posts on this blog and it’s evident we’ve gone through our fair share of struggles as a company and that I’ve had many of my own personal frustrations). My point is this: stop saying “what if?” and “I wish I did that”. Think really hard about what’s important to you and find a way to spend time doing that. If you factor that into every decision to make, there’s no reason to second guess yourself. “Failures” are learning experiences just as much (or more than) “successes”.

Every once in a while I ask myself “what if” about an array of topics (business, sports, life, relationships) and I always come to the same conclusion: I’ve spent my time doing what I love most, each and every day. Several times I’ve even written out my “ideal day” on a sheet of paper and each time I realize that it pretty closely resembles my real day right now…how cool is that? Sure there are other things I’d like to do. Sure I’d like a little more work-life balance. But how can I call what I’ve done “sacrifice” when I’ve gained so much in return? Just because what I do is different from what most people do in their twenties doesn’t make it any harder or any easier than the norm. As I age and priorities change, my ideal day will change and in turn so will my real day. In the meantime, I’ve met so many great people and had so much fun building our company that I can’t imagine anything making me happier.

Every once in a while I have one of those moments where I say to myself  “holy crap, I can’t believe this - I’m 25 years old and my partners and I run a company.  We’ve built our own e-commerce platform and have our own warehouse, and we did it without giving up any stock or taking any outside money.  I am living my dream.”  It’s so easy to get caught up in the day to day crap that I forget that sometimes.

Things are going good right now for us.  We weathered the storm of all of the moving expenses.  Our sales have been on the high side of what we were projecting.  The only way we don’t pay ourselves before our June 1 deadline is if we choose not to do so - cash flow is very good.  On a personal level, I’m moving into an apartment closer to the warehouse in a few weeks (cutting my commute in half).  It’ll be my 7th move in 7 years by my count, so hopefully I’ll stay at this place for a while.  There’s some stability after a few years of chaos, and it’s refreshing to be able to focus on my work without it consuming the entirety of my existence.

Dare I say it without coming across as lazy or satisfied:  I’ve finally made it.

I can finally say that without a doubt I can do this for a living.  It’s no longer a pipe dream.  I’m no longer a “lost” kid who left his career to tool around for a while with a business before going back to the “real world”.  This is for real, and it’s so f*cking awesome I can’t put it into words.   It doesn’t matter to me that we aren’t “rich” because that’s not what it’s about to me:  it’s about the experience, it’s about living your life to your full potential without others getting in your way, it’s about building something great with other people who believe in it as much as you do.  All of the ideas I’ve really wanted to pursue - SportsLizard, iPrioritize, Music-Alerts, the shopping cart, etc - I’ve been able to get to market and see what the market thinks about them.  How many people get to turn their “best” ideas into a reality?  Yes, it’s come with a lot of sacrifice, but I wouldn’t have it any other way.

Like most of us, the time in my life when I met the most new people and developed the most relationships was in college.  Lately - for some reason known only to God - I’ve been hearing from and running into a ton of people that I haven’t heard from in years.  It’s been great catching up with everyone and seeing what they are doing.  However, I’ve noticed a pattern - many of them aren’t doing what they want to be doing.  In and of itself, this isn’t a huge deal…as long as you’re working towards what you want to be doing, or what you feel you are called to be doing.

But most of them aren’t working towards what they want to be doing.  They aren’t trying.  They aren’t even thinking about trying.  I’ve spent a lot of time thinking back to conversations I had when I was in college.   I thought back to discussions about passion and drive and determination, and what these friends wanted to do with their lives.  We all had big dreams.  Sadly, in a matter of five years or less most of the people I know have given up on their dreams.  This has nothing to do with being married, having kids, or working a crappy job for a while:  I understand that circumstance often dictates what you do for money.  It has to do with the fact that they’ve given up - you can hear it in their voice.  They are content to not pursue the things I was so sure they’d pursue only a few years ago.  It’s sad and it boggles my mind.  How can they not even try?  How can they not even  take a chance?  Won’t they wonder what if?  Why don’t they just spend a few hours a week working towards their dreams…at night, on the weekends, over their lunch break?  I just can’t comprehend that.  I can’t comprehend giving up.

In the words of the immortal Jimmy V:  Don’t give up, don’t ever give up. 

re·sil·ience (noun) - ability to recover readily from illness, depression, adversity, or the like;

I was on the “golden boy” path. The one that every mother understands and is proud to tell the world her son is on. I got good grades in school, got into a great college, continued to work hard, got several job offers prior to graduating, and landed an impressive job. At 22 my path seemed pretty certain: continue to work hard at job, get MBA, rise up through company (or jump from company to company) to VP level, retire.

There really wasn’t much getting in my way. Sure, I had the occasional hard class or boneheaded project partner, but every single road block could always be overcome by hard work. I knew if I worked harder than everyone else (which, by the way, isn’t very hard) I’d almost always rise to the top and get the best opportunities. Nothing really got in my way.

Entrepreneurs are such a tight click because we learn true resolve through our business experiences. We can identify with each other in ways other people can’t.  The problems and the pressure are at a whole different level, mostly because if something goes wrong there is no one else but you left to clean up the mess. You learn quickly that crazy things can and will happen to you and your company, and many times your optimism, persistence, and passion are all that keeps your company alive.

This past week alone, we’ve had to deal with: George and I being sick, George’s laptop dying, Detailed Image being down for a day because of server issues, and the heater in our warehouse failing (still no solution here….hopefully Monday - the temp is ~40 degrees in there now, but if it goes below freezing our products are in trouble). For a four person company, those things happening in one week’s time can crumble you if you’re not careful. Thankfully - assuming the heater gets fixed soon - we’ll have dodged several bullets at once and lived to fight another day.

For me, veering off the “golden boy” path has tested my character above and beyond anything else I can imagine experiencing. It has forced me to regularly ask “am I happy?”, “do I really want to do this?”, and “am I using my precious time here on earth doing something that gives me meaning and purpose?”.

Being forced into thinking about tough questions like that enables me to live a more satisfied and peaceful life (even when I’m working long hours and paying myself nothing). Whenever the answer to one of those questions is “no” I am able to make a change for the better. The resiliency I’ve learned from embarking on this entrepreneurial journey will help me when life throws other roadblocks at me. I feel like so many people go through life without learning how to deal with true adversity, that when real problems do arise they are unable to deal with them appropriately and start panicking and searching for the easy way out. Or - even worse - they realize they’ve chosen the wrong path but don’t know how to get off of it.

I’m not saying that you can’t learn resolve from athletics or being in the military or about a million other things. In my situation, however, entrepreneurship has been far and away the best experience for testing my faith, my character, and my resolve.

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.

——-
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.

Up until about 2 weeks ago when we launched Faceup I had spent the previous 6 months or so on programming projects…not because I really wanted to do that much programming, but because I knew it was for the good of the company.  So far, it’s paid off:  SportsLizard is making good money without much work, Detailed Image has had it’s best month ever in October (traditionally the slowest month of the year) and most of that can be attributed to the new site, and we’re jam packed with clients for Faceup in only two weeks.

Now I’m transitioning from programmer to true business owner.  My days are filled with a little bit of everything, and I absolutely love the thrill of seeing each part of the company operating at its peak.  Things are going so well that we’re planning to accelerate our expansion and are considering taking on a small outside investment to kick-start everything.  And while I’ve been really busy, it’s been the kind of busy I love:  good things are coming from every direction and I’m just short of being overwhelmed.

It’s only noon on Tuesday, and here’s what this week has shaped up like thusfar:

Monday:

• Up at 7, back from the gym and showered by 9.
• Answer emails and post on Craigslist for Faceup from 9-10.
• 10-1 eat with Mike and George, call a client, prep for another.
• Meet with the largest accounting firm in Albany (with whom we are a client of) and land their web design job…a simple Wordpress site on the front end and a complex system on the back end.  A perfect, perfect client for us.
• 1-3 team meeting to discuss a potential investor, and how much stock we’re willing to give up (less than 10%, probably 5%).
• 3-5 answer emails, call another client, prepare proposal for potential investor.
• 6-10 meet with Mike to work on marketing for Faceup and discuss client work that’s piling up already.
• 10-1 emails, shower, sleep.

Tuesday

• Up at 7, out the door at 7:30 to meet with one of my mentors up in Saratoga (30 min drive).  He asks me to be on the board of advisors for his company, which coming from your mentor is absolutely AWESOME. He values my tech knowledge enough to take advice from me, which excites me because he’s always been someone I’ve been able to lean on for advice and now I can return the favor.
• Back home by 10, I spent the last 2 hours answering emails and am writing this post before digging into some programming.
• The rest of the day will be doing some work for a few clients and prepping the final quote for that accounting firm.  I’ve also got to write an article for SportsLizard because I’ve been slacking on that lately.
• The rest of the week includes a meeting with our potential investor and the possibility that we’re able to begin shopping around for the office/warehouse that we really want and need.

I’m not sure how all of this looks to someone on the outside.  It could sound mundane and normal for a business owner…or it could sound really cool.  But being in the middle of it is amazing.  All of the hard work is coming full circle and showing on the bottom line a lot faster than I thought it would and I’m surprised at how fast we’re moving.  Of course, I LOVE being busy and moving fast so I wouldn’t want it any other way.  There are days that are predictable and stable where I accomplish quite a bit and those are definitely good to have.  However, the chaotic days where I’m pulled in a million directions are the ones that I live for.  That’s how I know everything we do is working.

Last night, after debugging from 9 AM to 9 PM we went to launch the new Detailed Image site, which has been a work in progress for all four of us the past 3 months or so. The first thing we did after uploading everything was test the redirects - which of course didn’t work.

I’m no rookie when it comes to migrating sites and redirecting old pages to new ones - hell, I did it a week ago flawlessly with this blog! After exhausting our options until 2 AM and getting nowhere, we started again this morning and finally found and successfully implemented a solution at about 3 PM today. Turns out the guy who runs our server (and does a great job by the way) had configured *something* in Apache that was messing with our .htaccess 301 redirects. We found a work around, which I will post on this blog in the near future because I wasn’t able to find anyone at all with the same issue after doing a bunch of Google searches.

Anyway, here’s the new homepage:

I’m planning on doing an exhaustive series of posts related to the programming issues I encountered with this site.  I came to one conclusion - with all of the e-commerce platforms out there, very few people attempt a 100% custom cart like we did.  I was shocked at how hard it was for me to tackle 4 or 5 different issues, primarily because I wasn’t able to find any help from Google and the blog/forum community.  So I figure I’ll post all of that up so next time someone runs into the same situation they’ll have something to reference.

All of that said, I am 100% completely drained - I’ve got nothing in the tank right now.  For the past 3 months, I’ve pushed balls out everyday to launch this site so that our company can make the efficiency gains from the automation of this site, which in turn enables us to focus more efforts on marketing existing sites and developing new ones (the key right now to our successful growth).  Every bit of expendable energy has been directed to the site the past 3 months.  Couple that with the PayPal disaster last week and this redirect fiasco last night, and those two “crisis” have worn me down.

Honestly, if I had a wife and a house and 2.5 kids I wouldn’t be able to do it right now.  Even after a few years, I still need to give the business priority.  We all acknowledge that this is the turning point for the company and it’s uphill from here, but the focus, determination, and sacrifice that all of us have given lately is evidence of just how hard you have to work to get to the spot that it looks like we’re at now.  We’re all talented guys, but nothing replaces relentless hard work.

So I don’t burn out, I’m taking the next few days real easy (i.e. unless there’s ANOTHER disaster, I’m not working).  Come Monday we should all be back to a little more “normal” working schedule and I should be able to spend some more time recharging away from the job…certainly no more 9 AM - 2 AM days like yesterday.

I’m off to eat and nap - two things I’m very much looking forward to doing!