The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future (35 page)

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lmost everyone we’ve met in the book so far has some kind of failure-to-success story. In many cases, the story is about a product launch that fell flat, a partnership gone wrong, or the loss of motivation for the wrong project. “I tried something and it didn’t work out … but then I moved on to something else” is a common refrain. All these stories are valid and interesting, but I’ve never heard a rise-from-the-ashes story quite as compelling as that of John T. Unger, a sculpture artist from a small town in Michigan. John’s story is a tour de force of failure and fear that turned into resilience and success.

As John tells it, the third best thing that ever happened to him was having the roof of his studio collapse from under him while he was standing on it, frantically trying to shovel snow. The building was completely destroyed, and John spent the rest of the Michigan winter alternating between shivering while he worked and warming himself with an illegal unvented kerosene heater. It was a nightmare scenario, but then a funny thing happened: The bank came out to
assess the damage and gave him a $10,000 commission. John used the commission as a down payment on two buildings he had been trying to purchase for a while. “I don’t think the bank would have gone for the deal without the disaster,” he says. “It forced them to take a real look at my business instead of them just thinking of me as another broke artist.”

The second best thing that ever happened to John was losing his last day job as a graphic designer during the dot-com crash of 2000. The loss of the job led to the loss of everything else—his income, his girlfriend, his apartment, and even a piece of his thumb in an accident incurred while he was moving out of the apartment. While he was working the day job (seven days a week in 1999, seven days
total
in 2000), he also was working as much as ten hours a day on his art business.

After both of these experiences—losing the building and losing the day job—John was depressed and thought hard about what to do next. His friends advised him to suck it up and find work wherever he could, but in rural Michigan those days, John knew that there wasn’t much work to be found. It was now or never, so he stuck with his goal and continued making progress.

The best thing that ever happened to John, as he tells the story, was a late-night disagreement with a crazed cab driver, who pulled him into the back room of a diner and held a gun to his head for a full ten minutes, screaming and threatening to pull the trigger. John finally escaped and walked out into another cold Michigan night, sweating, trembling, and glad to be alive. “I get it!” John yelled at the sky as he hobbled away. “I’m just so lucky!”

“You don’t really worry about the small things after that,” John says now. “Everything takes on a whole other level of meaning.”

Much of this book contains various forms of advice, but don’t confuse advice for permission. You don’t need anyone to give you permission to pursue a dream. If you’ve been waiting to begin your own $100 startup (or anything else), stop waiting and begin. Charlie Pabst, a Seattle-based designer who left the corporate world to go it alone, said that the best thing he did was learn to ignore advice, even from friends who meant well. “My business and the life I lead now would never have happened had I not been obnoxiously stubborn to my own will,” he said. “The fact is that the majority of people don’t own their own businesses. And a certain percentage of that majority will not be happy or supportive about your exiting the nine-to-five world.”

While usually well-meaning, unsolicited advice from people who think they know better can be unnecessary and distracting. Here’s how Chelly Vitry, the founder of a Denver food tour business, puts it:

Sometimes the best advice is none at all. If you know what you need to do, the next step is simply to do it. Stop waiting. Start taking action.

Toward the end of many follow-up discussions with most of the business owners profiled in the book, I asked about their biggest fears, worries, or concerns. All these people had been successful, earning at least $50,000 a year from their projects (many were earning much more), but what were they worried about? What kept them up at night?

Their concerns fit into two broad areas: external and internal. External concerns tended to relate to money and a changing marketplace. For example, a few businesses had been created to exploit imbalances in technology. These projects can be very profitable for a time, but when the music stops playing, the ride is over. A business that grows primarily from strong Google rankings or good placement in the iTunes store (“favored by the gods of Apple,” as one person put it) is in danger of losing it all if fortunes change. Scott McMurren, who published the Alaska coupon books, said he was closely watching the online coupon craze, considering ways to update the business to be more digital-friendly.

The role of competition was mentioned frequently, although in very different ways. Several people said they weren’t worried about what other businesses were doing, because they found it more productive to keep moving forward with their own original work. Others did worry, especially about building something unique only to see it copied or “stolen” by a more established company. Marianne Cascone, who makes children’s clothing in a small partnership she runs with her cousin, illustrated this concern well:

Those who had expanded by hiring employees tended to worry about making sure they had enough cash flow and recurring income to keep the payroll going. If you own a solo shop and business tightens up, you may be able to tighten up along with it. But if you owe people a fixed amount of money on a fixed schedule, you can’t do that. One business produced more than $2 million in annual revenue but earned only $60,000 in net income for the owner, in large part because of the high overhead of employing people and investing in infrastructure.

Holly Minch mentioned the Goldilocks principle: the idea that success is found within certain margins and not at the extremes. “I want the clients to get real value out of what we deliver,” she said, “but not at the expense of our bottom line. And I want the team to have enough work to live well but not so much work that we’re not living.”

Others worried about “faking it” or needed to keep the wheels rolling after the initial passion faded away. “My biggest fear is that my consulting and writing becomes mediocre,” said Alyson Stanfield in Colorado. “Success seems to be the ability to keep going, to keep the doors open,” said Lee Williams-Demming in Costa Rica.

“Be careful of letting clients take your business in a direction that makes you hate your job,” said Britta Alexander, one half of
the husband-and-wife team running a marketing company in Hastings-on-Hudson, New York. “The further you go down that road, the harder it will be to correct course. And it’s really hard to quit your job when it’s your own company.”

Digging deeper, the fears and worries were more closely related to issues of identity. “I love my work,” someone said, “but what if I love only the work, or what if the thing I love is no longer fun because now it’s all work?” Statements like these usually were followed by clarifying ones such as “Starting this business, no matter the eventual outcome, has been worth the energy, effort, and sacrifices it has taken thus far to get it off the ground.”

One of our case studies, a Canadian manufacturer, said: “I used to be afraid to fail. I wanted concrete numbers telling me that we weren’t going to lose before I took the leap. But if nobody was going to die, even in the absolute worst-case scenario, then what the hell was I so afraid of? I’ve never looked back.”

A European designer was even more dramatic: “Do you want to know the honest truth? In the early days, I almost expected my business to be a failure. I believed that it had to be that way because it is the first business I have ever run, and I know the biggest successes have the biggest failures behind them. It sounds perverse but I almost wanted it to fail so I could look back and say, ‘Yep, that one failed, but I learned from it!’ ” (Fortunately or not, his business is doing just fine.)

As I reviewed thousands of pages of survey data and made countless follow-up calls, I learned to ask people if the decision to start their business had been worth it. You might think that such a question is simplistic; wouldn’t most responses be “yes”? Well, perhaps … but one of the best parts of the study was hearing exactly
how a group of diverse people answered this question. There was usually a story behind the affirmative answer, and the story often related to a particular day, event, or moment when they knew their business was going to work. As we come to the end of this journey, I thought you should hear from a few of them directly.