I have been blessed with being able to found a company. This really wasn’t my plan starting out my career, but after spending more than 20 years in corporate America, I decided to try my hand at being the boss. There are definitely some good days and some bad days, but in the end, life is about the journey and this has added to the adventure.
Preparation – Leaving Corporate America
I held a management position with one of the world’s largest e-commerce company. I loved working with such smart, dedicated people, and I truly thought I would retire from there. In 2010, I decided to passively explore external opportunities, and I was presented an role to become an executive with a smaller company. In many ways this was a step down, but the draw was that many of their former employees had gone on to found companies. This was a huge discussion point with the family as we had a safe, secure job that I enjoyed, and I was trading it in for at best an education and a chance to learn first hand about a startup. We chose to take the plunge, and I spent the next two years leading the tech department while diving into the practices of every other area within the company.
Building The Plan
In 2010, I had a high level plan of starting a B2C website, but I had little else. I immersed myself in understanding what made my employer successful. I wanted to understand both what had been done right, but also the mistakes they had made along the way. I set aside $20k to incorporate with the state and get the business off the ground. Because of my business education, I started with the financial models before I decided on a product or had begun designing a site to sell it. After attending several tradeshows/conventions, I finally came upon a product that met all our criteria so we jumped in with both feet.
The First Steps
The product we decided to sell was Venetian style masks that people wear to masquerade balls, proms, or weddings. I was looking for a product that had an average product price below $50 in a niche that didn’t have a few major players already established. I also felt it was incredibly important that we have something that separated ourselves from the competition, as Buffet described it, “A Moat”. Venetian masks were a perfect choice as my fiance had been collecting them for 15 years, and we already had a large collection. Additionally, we are able to have several exclusive masks because we are able to modify/enhance them. Finally, masks are incredibly delicate and have to be packaged by hand. This fact means that many larger companies are likely to stay out of the market because they are focused on economies of scale rather than the more precise effort required to safely ship the masks. This too plays to our strengths as we have years experience at knowing how to package these types of items for shipment.
One of the key mistakes people make when starting a store whether it’s physical or online is to be perfect on the first day. This is problematic for two reasons. The first is that you are delaying the revenue and incurring many more expenses than necessary. Being profitable is all about the race to get revenue to exceed expenses before your run out of reserves and waiting for the perfect store to launch can drain huge amounts of the company’s capital. The second reason is that your customers will help you decide what works and what doesn’t so you can assign your resources to improving the pain points rather than solving issues no one really cares about. Our first site was built using a WSYWIG editor in a SAAS e-commerce platform. The site had 40 products, and I viewed the entire site as a disposable site that would help us determine what the final store would be.
Taking the Leap
After spending a year tweaking and working on the initial site, we had made it profitable enough for me to believe a business existed so I resigned my full time job to focus all my energies on our new family business. Within four months, we had launched our second site and had increased the site’s categories to also include many other types of masks and now carry over 300 masks. Additionally, we found that many of our customers had questions about what mask was right for them/their event, so we started a blog .
One Step At a Time
We’re still a very small, family run business, and I have been extremely surprised at the number of expenses. We’re approaching our third year in business, and I still earn considerably less than I did working in corporate America, but the key is that each day I look forward to work that I am going to do. I feel good about what I am accomplishing knowing that in the long-term, I will have built something that will provide for the family. Right now, I don’t know where I’ll be in two or three more years, but that’s one of the most exciting parts about running a small business.