The growth can be seen by just comparing the aesthetics of Tastefully Driven vs. Detailed Image from the launch of our cart about a year ago.  Back then we also used too much of a collaborative design process instead of letting Mike “own” the design and utilize our input.  I think that gives him - or any designer - the creative freedom to come up with their best work.

Unfortunately the existing Detailed Image design - modified in January - leaves a lot to be desiered in the modern web world.  We have plans for a major overhaul (probably by early ‘09, although it might take longer because we also want to launch concurrently with some user-friendly AJAXy cart features), but in the meantime Mike has made a huge improvement to the homepage.  He plans on going through the entire site and modernizing the graphics and layout in similar fashion, which should be enough to not turn away customers for the time being (you can never be certain if design turns away customers, but it can certainly help add to your professional image).

Great job Mike - can’t wait to work on the next version of the cart!

George took this photo mid-day of all of the domestic FedEx Ground orders for DI and TD.  This doesn’t include a handful of international orders (we ship those via USPS) or FedEx Express orders.  It also doesn’t include about 30 orders that we couldn’t ship because products are on back order.

Damn that’s a lot of boxes!

On top of that, Tastefully Driven orders have picked up in the past week or so.  I’ve also been having quite a bit of success finding talented authors to write for us for what we’ve now decided is going to be a re-launch of the blog portion of the site.  Overall, just a great day (well - except I got an email from someone who was upset that the Premium Price Guide Account on SportsLizard costs $4.99/month.  He used the phrase “fuck you” every other sentence, and also ended with “P.S. Fuck You”.  Gotta love people’s manners.  The Price Guide isn’t perfect and definitely has it’s flaws, but it still is a useful tool that makes us good money with no work, so I’ve learned to just ignore any pissy emails that don’t have substance.  I just wrote him back with a link to an article I wrote about various methods of pricing collectibles and wished him luck.  No sense in letting someone like that ruin a great day).

It’s funny - when sales are down or there’s other financial stress, everyone gets a bit down and starts to question everything we do and everything we’ve done.  Admittedly we all take it too far at times (myself included).  Then, when sales are great, we look/act/feel like rock stars who can’t make a mistake. The reality is that we’re somewhere in between.  So is the life of a business owner.

We didn’t know how good of cell phone reception we’d get.  We didn’t know if the router would cover the entire warehouse.  We didn’t know if the speeds would be adequate.  We could have totally fallen flat on our face with this risk…but we didn’t.   I wanted to make sure I wrote a follow-up post so that everyone knew how well this has worked for us. This solution for internet service has absolutely been one of the better decisions we’ve made.  In fact, I plan on using this same setup at home (being able to “take your connection with you” by just pulling the card out of the router and putting it in your lapper is sooo cool).

Before I get into specifics, keep in mind that we are about 30 minutes outside of Albany in an area that resembles farm land more than the inner city…meaning we don’t get the worlds best cell phone coverage.  Also keep in mind that the warehouse is a steel framed building, which certainly isn’t helping reception either.  After almost five months of use, here are my thoughts:

• Connection speeds are fast - generally within the range that the broadband card states (600 kbps - 1.4 Mbps download and average upload speeds of 350 - 500 kbps).  Now if you’re uploading movies you aren’t going to like an upload speed of 350 kbps, but for our daily activities these speeds are more than enough.  The router certainly doesn’t prohibit you from getting the maximum available connection speed.
• Connection is strong.  Everywhere in the 5,300 sq-ft warehouse you get a full five-bar connection.  It’s nice to know you can move around and not lose a signal.  Again, being in a steel framed building you just never know what you’re getting.
• Downtime is minimal.  In five months, I’d say we’ve only had one day where we lost connection for a significant amount of time.  It was about 2 hours one morning.  Otherwise, just clicking a button on the router to disconnect / reconnect always solves the problem in less than a minute.  My home internet service is down more often than this is.
• There’s no slowdown when all four of use are connected at once.  These broadband cards aren’t necessarily made for this, so I was worried that the connection would lag or we’d get kicked off if there was too much combined uploading or downloading going on.  I’ve never noticed a difference whether there were five computers using it (our lappers + the shipping desktop) or just one.

In sum:  if you have a Sprint Mobile Broadband card you’d be nuts not to pick one of these up.  For us, trimming a $300/month expense down to a $60/month expense was huge.  Every penny adds up, and that $240 is money we can use to market our sites, pay other warehouse expenses, or pay our salaries.

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.

It’s crazy how much this has helped.  We all get the immediate positive feedback any time a sale comes through.  We also all have become great at inspecting orders at a quick glance for any errors.  As refined as our system is, there are infinite order possibilities - I’d say 1 in 100 orders still has one of us doing some manual work to double check that everything went through properly.  A few times each week I make minor tweaks to the code to prevent a wacky scenario from happening again.

BUT positive reinforcement also works the other way.   Weekends and Monday’s have been our biggest sales days the past few months.  Of course, the days where we get the most work done are probably Tuesday - Friday.  See where this could mess with you mentally?  I feel like in the middle of the week I’m working my ass off and seeing so-so sales.  Then we’re out drinking beers on the weekends, doing no work at all, and George pulls up our system on his iPhone and shows everyone how much money we just make during dinner.

Don’t get me wrong - making $1,000 while you’re out drinking for the night is a cool feeling that you can’t really get unless you run your own business.   However, waking up every day in the middle of the week and seeing sales slow down a bit kind of sucks.   You go from the high of all highs to just feeling OK about things.  Even though I know the weekends are when we make our money it still messes with my head.  I’ve become conditioned to seeing a sale as my positive reinforcement for doing a good job, whereas I used to just think that the completion of my daily tasks was enough.  Not saying that we shouldn’t be monitoring sales closely, but doing so often has the by product of being on a roller coaster ride emotionally based upon how many customers purchased on that particular day.

Businesses always have unique problems, issues, things that are unsettled that stress owners out.  It’s because of this that you either fall flat on your face or develop an extreme sense of optimism and a strong work ethic.  Unfortunately those are accompanied by a feeling of constantly being worried that this problem or that problem is going to crumble your business.  The same things that make it possible for one to succeed in business are the exact qualities that make it difficult to appreciate the hard work done.

For me, this week has been one big crap sandwich filled with twists and turns caused by the growing pains of our business.  It’s seemed like we were completely doomed several times in the past, yet we’re still around.  This is no different - we had a stressful week, but the big picture is still pretty good.  Nonetheless, it’s hard to see that right now we’re already a pretty impressive business, regardless of what the future brings.  Sometimes I even feel guilty for taking a few minutes and telling my partners they did a good job or for taking a moment and admiring what we’ve accomplished.  Not because I think it’s wrong, but because I’ve become conditioned to always pushing towards bigger and better things.  It feels like it’s a sign of weakness to be “content” with the company, if even for a second. Us business owners, we always have something bigger and better down the pipeline.

Then again, my personality is such that I am a pretty genuinely happy guy.  I  am very appreciative for what I have.  I do not lack any of the truly important things in life.  It’s like a personality split that pulls me back and forth.   The drive to do better is a blessing, but the inability to appreciate it when you actually have done better is a curse.  Very frustrating.

—-

Sorry for the lack of posts this week.  I had some good ones planned (or at least ones I thought would be good), but it’s been one of those overly chaotic weeks where even when I do get a free moment to relax or get some work done I’m so frazzled that I cannot think straight.  Not a week where my productive output plan really came into play much, although for all of the other more “normal” weeks I’ve been adhering to it pretty well.

The show follows the startup adventurs of Earth Class Mail, a company that receives, sorts, and scans your snail mail for you to view online or on your phone. It is a fascinating watch for anyone interested in startup life, particularly anyone interested in a large startup that requires quite a bit of Angel/VC investment. I highly recommend watching all of the episodes over on Hulu. There are only eight twenty-minute episodes as of this writing, so it’ll take less than three hours. I just finished watching them all and recorded my personal thoughts as I was watching. My notes are below the graphic, but I think it would be more beneficial to watch without my bias in mind, make your own observations, then come back to the rest of this post (and comment of course). I am interested to see if people pick up on the same things that I do.

• Startups take after their founders. CEO Ron Weiner loves to talk about how this is a “billion dollar idea” and how he would be lying if he said he wasn’t in it for the money. Consequently it seems like when they ask employees why they are involved in such a risky career you get two answers: the money and the love of startup life. Nothing wrong with that per-se, but Earth Class Mail can literally change the world. It can improve lives in major, major ways. Just would have been nice for one of them to say that they wanted to be a part of something that makes the world a better place. Maybe I’m naive, but I thought all entrepreneurs had a little of that “change the world” attitude in them.
• They changed their company name and their domain to Earth Class Mail (formerly known as Document Command and Remote Control Mail). First off, changing your name that many times is crazy. Second, they didn’t initiate the DNS changes until the night before a major convention. They are flipping out that the domain hasn’t propagated, they can’t demo the site, and that the press release has already gone out. They make a big deal about how stressful it is. They celebrate like they won the Super Bowl when it finally does propagate. Everyone knows it takes up to 48 hrs to propagate fully - you caused that stress yourself. Stop acting like this major unforeseen error occurred and by the grace of God everything worked at the exact second you needed it to. You f*cked up, why doesn’t that get mentioned?
• Phil, a sales executive who is by all accounts very important to the team, is totally left in the dark about the financial situation. It seems as if Ron and Chief Marketing Officer Natalee are totally secretive about when funding is coming and how much. He says “when I started, I was under the understanding that funding was a month a way and that it was all locked and loaded and ready to close. I guess there are some hiccups there that I’m not quite aware of”. Not the way I’d run a company. Transparency - especially to critical employees - is key.
• Going to that RV rally was absolutely stupid. They didn’t have permission. They didn’t have a plan. The people really aren’t their target market. What an absolute total waste of time for three important people to kill a day doing that.
• Let’s be real here: all startups are stressful for their own reasons, but 99% of the stress this company is enduring is related to Angel and VC funding. It seems like all of their resources are poured into securing tens of millions of dollars. I understand why, but it’s also the #1 reason why I plan on always self-funding my ventures. How is the company supposed to grow when everyone - marketing, sales, accounting, executives - spends all day long scrambling to prepare numbers or presentations for VC pitches?
• Natalee “Our lawyers wrote the website and engineers built it so now we have to create a marketing website”. Oh boy. That’s how a web company fails. How can all these smart people allow such a thing? You’re trying to raise millions of dollars and you HAVEN’T built a site with the customer in mind?
• I disagree with Ron when he says you need to acquire customers “not like the company you are, but like the company you intend to be”. Fortune 500 client “Cheetah” essentially re-writes their business plan and puts immense stress on the entire team. You can grow too fast, and as I’m watching this it seems like taking on this client could do that to ECM. If it destroys your systems by forcing them to scale before they are ready to do so, it’s a bad move.
• Maybe I’m overstepping my boundaries here, but when Natalee gets into a car accident and is sidelined with whiplash all she does is bitch and whine about how “unfair” it is and how she should be in meetings. She doesn’t seem thankful that she’s OK at all. No one likes getting in a car accident, but there are far worse things in life than getting hit up with whiplash and being sidelined for a few days. She comes across as a five year old who throws a tantrum because their work at a startup is more important than everything else in the world. All the fellow employees also just blab about how much her getting injured has cost the company. No one at all seems grateful that she’s OK or mentions that an injury like that puts things back in perspective and makes them realize that her health is more important than her day-to-day tasks. A bit saddening.
• I HATE when people say “9 out of 10 startups fail”. They say it at the beginning of each episode, and each time I cringe just a little bit more. It’s a total myth. “Using Census Bureau microdata of firms started from 1989 to 1992 and tracked through 1996, Headd found, among other things, that about half of new employer firms survive beyond four years, and about one-third of closed businesses were a success at closure.”
• Watching the marketing team review their PPC results is interesting. They have outsourced their campaigns and seem to only review them monthly. They get frustrated at the results, but don’t have enough time or know-how to dig deeper as to why they aren’t optimal. Sounds like every single company I’ve ever known. PPC is one of those things that seems simple, but is absurdly complex. It requires a lot of keyword research, time to write ads, and a whole lot of split-testing. When you’re relying on PPC results as much as Earth Class Mail seems to be, reviewing and tweaking the campaign needs to be a daily task (whether done internally or outsourced). I learned this the hard way.
• They also mention how frustrating PPC can be in the beginning: you don’t know what works, but you have a fixed budget to figure out what works. If something seems to be working, you can pour more money into it, however you don’t get an opportunity to test for something that could potentially work even better.
• If I ever start a VC backed company, I will need a partner with experience raising money. Ron seems to be VERY good at schmoozing VC’s and Angel’s. I would need a mentor to follow around and learn from before I could ever get to that point. I know the bootstrapping world, not this stuff. It’s basically a full time job for Ron to constantly secure more funding.
• Mid-stream they switch from developing on an open-source platform (maybe LAMP or Ruby on Rails?) to .NET because they are an official partner with Microsoft at a conference. Ballsy. They must have some hella good programmers.
• I thought Ron was a bit of a douche in the beginning, but he’s really grown on me. He knows his shit. He loves what he does. He will do ANYTHING for his company to succeed. Hard not to get on board with a guy like that. Hell, seems like he handles the stress better than I would (or better than the rest of his team does for that matter).
• They’re meeting with Venture Debt Bankers to get more funding without giving up more stock. Pretty interesting - I didn’t know this was possible. Apparently they come in after the VC’s have done their due diligence and will give you a business loan. It seems like the assumption is that they know the VC firms and how much work they put into researching the company, so they feel like they are backing more solid companies than just any company off the street. One interesting thing: they prefer the money be spent on capital equipment like buildings and machinery as opposed to marketing or software because if the business fails they can recoup some of their investment. They even state that you get lower rates when you use the money for those things.
• Honestly, there are SO many business processes and contributing factors to success in a company like this that I would find it tough be be CEO or even a VP. As of now I can’t really see myself being involved in something of this magnitude with this many people involved. Just doesn’t seem like much fun. I think I’ll always be a small startup guy with relatively simple business solutions that meet one specific niche need.
• Ah, they did develop on PHP. Holy f*&@! that’s a lot of work to re-build everything from scratch and deploy it on .NET!
• Love the Red Bull’s on all of the developer’s desks. They are really pushing these programmers hard, almost to the point where you wonder if they can possibly be productive.
• Wow, looks like all of the crazy gambles have paid off so far. Ron is the shit - dude pushes everything to the limit and definitely wins more than he loses.
• The last two minutes are nuts - almost every member of the senior staff leaves for one reason or another. Makes you wonder if they just pushed this thing too hard too fast.

So of course I added “sign up for Live.com” to my to-do list. When I finally got to it this afternoon and tried to sign up, it unfortunately looked like a closed beta so I had to fill out a long form and wait to hear back from Microsoft. However, in filling out the survey they asked me what other shopping networks we advertised on:

At which point I realized that we only did Y! and Google on that list (and Amazon, which for some reason isn’t on there). I had looked into a few of the other ones in the past but for one reason or another never pulled the trigger. Many of the ones on that list I hadn’t even heard of. I then went to each site and decided that I’ll sign up Tastefully Driven for all of them except the CNET ones (seemed like too much work).

Thanks for the idea Microsoft. Your reward for triggering this thought and introducing me to these shopping networks is that you’ll be getting a much lower cut of our ad spend.

Over the past six months I have spent time daily doing fun tasks such as:

• Filing online disputes with Experian (3 times) and TransUnion (1 time).  Equifax did not have this charge appearing on my credit report (go Equifax!).
• Filing written disputes with supporting evidence.  These forms usually come after you lose an online dispute, giving you a “second chance” to prove your case.
• Sending certified letters to both the collection agency (3 of them) and to the credit bureaus (1 to each).  Each time I paid about $5 for priority mail with delivery confirmation in case I ever went to court and needed evidence of my mailings.
• Retracing my life for the past few years to gather old bills, pay stubs, my social security card, license, fathers license (to show I’m not a “jr”) and pretty much anything else that I could think of to show that I have never lived in Brooklyn, did not start a home phone account with Sprint in Brooklyn, and that I’m not Adam McFarland “Jr”.
• Talking to our lawyer, who re-assured me that I was doing all that I could.  Essentially no lawyer or company would do much more than what I was doing: file disputes over and over and send supporting evidence to both the credit bureaus and the collection agency.
• Checking my credit report every few days to see if anything has changed.
• Calling the collection company, which I eventually realized was an utter waste of time.  These customer service reps here all sorts of stories all day long.  They have no real power to do anything.  They never let you talk to anyone with real power.  So you pretty much get a bunch of miserable reps whose sole goal is to get you off the phone and be as mean as possible in doing so.  One told me my dispute would take up to 30 days to resolve.  When I called after 30 days I was told it would be 45.  When I called after 45, I was told it would take 90 - 120 days.  Always with a snippy attitude, always with the implication that I was lying.  Enough to drive a man insane.
• Researching this stuff online, which pretty much served no purpose other than stressing me out more.

Finally, finally when I checked my credit report yesterday via Experian’s online console - for which I pay $15/month - the account was gone!  I had almost given up.  When we applied for a business line of credit at our bank earlier this year, the process took about an extra month because the underwriters had to review my situation.   I had figured that whenever I went to buy a house I would have to present the mortgage company with a book of evidence just to get approved.  Alas, it looks like my credit report is back to normal and my score is back to a respectable 747.  Sure, I have some student loans and a car loan on there, but I’ve never missed a payment and the info on there is MINE.

Experian is supposed to notify the other bureaus so let’s hope that they do and this never arises again.  My reports all have fraud alerts on them so *supposedly* nothing can be added without my permission and maybe, just maybe this is all done.  The lessons from this are hopefully obvious:  protect your SS# and credit cards as much as possible, check your credit report often, and if something does go wrong fight like hell until it is removed.  This was a hell of a battle I had to fight for something seemingly simple, but I’m glad I continued forcing the issue and finally wore them down.  It is utterly satisfying and an immense weight lifted off my shoulders moving forward with my life.

Thus far, features like the shopping cart are how we’ve gotten our competitive advantage, how we’ve gotten as far as we have as guys just out of college with no outside funding.  Anytime something takes up a lot of time we’ve either automated it or eliminated it.  However, we’re rapidly approaching the time when four people just can’t handle it all.   Today Mike, George, and I spent from 9 AM - 3PM packing our orders from the weekend.  That’s 18 man hours doing warehouse work!  Don’t get me wrong, we shipped close to 60 orders - many of which were very large - but no owner in their right mind thinks that 3/4 of their resources should be poured into $10/hr work while the high level stuff (mostly marketing) gets ignored and pushed back.

So why not just hire right now?  A couple of things add to the difficulties:

• 18 man hours is not the norm.  The norm is probably 4/day, but it’s not uncommon to have a few slow days a week that only take 2 man hours.  Mondays are always larger because you have an extra 2 days of orders being shipped.   In short, the pure warehouse work is sporadic.
• We don’t really have a lot of other work for “warehouse workers”.  Shelves need to be stocked for maybe 30 minutes to an hour a day.  Inventory needs to be updated (15 minutes a day maybe).  That’s about it unless we want to cross train them in other areas, which I personally do not think is a good business move.
• We recently instituted a new check/balance system where one person pulls orders and another packs.  Both check the invoice against the products before passing it on (either to the packer or to the outgoing packages area).  This prevents errors due to pulling the wrong item, and highly reduces errors from missing an item all together.   We’re pretty serious about it:  if you take the product off the shelves, you are absolutely not allowed to pack and ship it.  If this is the case, do we hire 2 employees?  Or do we still have an owner paired with the full-timer?
• Our salaries aren’t as high as we want them to be right now.  We are all getting by, but still underpaying ourselves.  Everyone is living tight and that is stressful.  An employee will increase revenue long-term, but we’d like to get one more raise in there for us before hiring someone.

My gut tells me that in a few months we won’t have a choice:  we’ll need to hire.  IF our threshold is where I think it is (fingers crossed), we’ll already have our raises and it’ll be a question of:  do we hire one full timer or two part timers?  I’m leaning towards two part time college age students with flexible schedules.  This eliminates the need for us to provide benefits, meets our check/balance requirement (if one isn’t working that day, one of us will chip in), and enables us to have them only come in 3-6 hrs a day.  I realize that there are downsides to these types of employees, but I think the pros outweigh the cons.  Who knows, maybe we’ll have 3 or 4 at some pt to ensure that we get 2/day.

The good news in all of this is we’re growing.  Nonetheless, every “hump” is stressful.  The “getting into a warehouse without going under” hump is passed and this is the next logical part of our growth.  The warehouse stuff was only February, so things are happening fast, even though a lot of days it feels like growth is happening at the speed of molasses.

On a somewhat related topic:  we’re considering getting an intern or hiring a virtual assistant (usually based in India) to do a lot of the more monotonous marketing and customer service tasks.  One example would be to create a list of sites for us to contact to participate in our wholesale or affiliate programs.  There are many many more, but those illustrate the point that there are long tedious tasks that us, as owners, shouldn’t be spending our time on.

On a completely unrelated topic:  this heatwave is ridiculous.   I was sweating balls all day long doing manual labor in the warehouse.  Average high temps this year:  ~70 degrees.  Beautiful weather right?  This week:  close to freaking 100 degrees with humidity that makes it feel like you’re in a steam bath all day long.  Our boxes - despite being “dry” - felt mushy when we were trying to pack orders.  The packing slips and invoices were curled up like you took them in the bathroom with you while showering.  Last time I checked I lived in Upstate NY…not the swamps of Florida.