Have you made the conscious decision to jump into entrepreneurship? Many books and articles have been published in regards to entrepreneurship. I’m not sure that I can share with you anything that has not already been said. What I can do is draw from my own experience and share with you things that helped us to get Altra to where it is today. These things I have shared with other entrepreneurs as they work to build their companies. This is not an end-all article on starting a business, but hopefully, you will find it impactful in your journey. These tips will help you better navigate the challenges of starting a new business.
This country is built on small business so I commend you for joining the millions that decided to create something new. The passion to no longer build something for someone else is what built America. We often refer to this as the American Dream, but do we understand what that means? On to a brief history lesson. After the Jamestown settlement was established in 1607 many sought the free world. They saw it as an opportunity to own land for themselves. Not being of noble birth in European countries they were not entitled to land. Sailing to this land they could work as indentured servants for a period of time and earn their own land. Virginia and many of the Southern States were built through this methodology. Up north the Pilgrims spread forth from Plymouth to Boston and New England to build up industry and farming. Here, they had a similar approach. A man could begin as a tradesman without being dictated by rulers about their trade.
On to a brief history lesson. After the Jamestown settlement was established in 1607 many sought the free world. They saw it as an opportunity to own land for themselves. Not being of noble birth in European countries they were not entitled to land. Sailing to this land they could work as indentured servants for a period of time and earn their own land. Virginia and many of the Southern States were built through this methodology. Up north the Pilgrims spread forth from Plymouth to Boston and New England to build up industry and farming. Here, they had a similar approach. A man could begin as a tradesman without being dictated by rulers about their trade.
So this is the American Dream, to control our own destiny. This is a key reason that the Founding Fathers sought liberty from the bonds of England. Here are some of my tips that will help you to better fulfill your part of this great American Dream.
“Good things come to those who hustle” – Abraham Lincoln
In starting your own business you need to be a hustler. I am not talking about the guy in White Men Can’t Jump or the pool shark that hustles the bikers for money. I’m talking about a true, gritty, get after it hustler. Someone driven to excel at whatever they go after. Look at key examples like Mark Cuban, John Stockton, Larry Bird, Tim Ferriss, Oprah, and many more. These individuals didn’t have things handed to them. They didn’t start with a leg up or some great God given talent.
Larry Bird didn’t have Michael Jordan’s vertical or Magic Johnson’s finesse. He spent a lot of late nights in his backyard in French Lick, Indiana shooting baskets on his dirt driveway. Hard work trumped here. He became one of the greatest shooters to ever play the game. Mark Cuban started out with any little business opportunity he could. When he was 16 the local Pittsburgh paper went on strike. He headed to Cleveland with his buddies and they bought up the local Cleveland paper and started selling them in Pittsburg at a 2x markup.
We knew when we started Altra that we needed to be hustling all the time. We took every opportunity to tell the story. With little capital, we road tripped it when we needed to. We reached out to every retailer that we knew and then started contacting the ones that we didn’t. When we first launched product Brian and I hopped into his Outback and headed out to the Boston Marathon. Golden and Leslie stayed to work the Salt Lake Marathon Expo. Brian and I drove through Missouri, Illinois, Michigan, Ohio, Pennsylvania, and Massachusetts visiting key retailers. I then flew home from NYC while Brian continued down the Eastern Seaboard and through Texas. We solidified some of our best accounts on that trip. It was a great showing at both events. We were on the map. It wouldn’t have happened without hustle.
Obviously, you need to be more than just a hustler. No one wants to be the guy schlepping to make the next sale all the time. You want to manage a multitude of those guys. We all want to control your destiny. That is why the rest of these traits are key to your startup success.
Be Willing to Fail
“Success is not final, failure is not fatal: it is the courage to continue that counts.”– Winston Churchill
Failure is part of the business game. If you think that everything is going to be a win every time then you need to reassess your thinking. Look at someone like Jeff Bezos. He is the epitome of failure. He has had all sorts of failures inside of Amazon. Yes, Amazon is a wildly successful company. Bezos is a billionaire and any of us would take his earnings for a day. He didn’t get to where he is without taking some risks and realizing that he might fail. And at some things he certainly did fail. The Amazon phone failed. It failed to the tune of millions of dollars. Each of his failures has brought him closer to successes.
Before I started Altra I had failures. I took risks. Some were calculated, others not so much. Altra itself was a big risk for me and my family. We certainly did not want to fail. We are blessed that we did not fail. Did we have failures inside of Altra? Absolutely. We launched 5 shoes within the first 15 months of Altra. Two of which were huge winners. Various versions of those two have won multiple awards. However, two of those first five ended up to be busts. The timing was too late and it wasn’t what we were truly committed to as a brand. We made adjustments from this and learned some valuable inventory and market assessment lessons. The final shoe was okay, but now where we wanted to be. We were able to hone the technology and now the more recent versions of that shoe are doing really well.
Though we had misses we have found success in these failures.
Know Your Partners
Here, I will give you some rarely discussed insight into the early days of Altra. We are three founders, but we were once four. As Golden and I begun as two, we felt we needed some help. We knew that we would bring Brian on board, but beyond that, we wanted some help in design. We brought in a third person (before Brian) that could help on the product and marketing design side of things. Note: this is stuff that you can easily find contract workers to do and no need to give up equity for this. We brought in an individual that Golden knew a little bit from working at the running store. He had helped to facilitate the story of Zero Drop. We felt okay with this decision in our naive state.
A few months down the road we put everything into writing. This meant that we needed to divvy up equity and establish our Operating Agreement. I would recommend to always do this sooner than later. It can save a lot of headaches. Also, determining a valuation and what each person’s contribution is worth will go a long way here. Leaving our discussion of equity everyone was in agreeance that what was down was fair across the board. However, a week or two later we were served with a lawsuit from this individual. He had stated that his contribution was of greater value than his provided equity.
To wrap up this story, we settled out of court and gave him a slightly higher percentage. But, his involvement with the brand stopped there. He was no longer involved in the day-to-day. That was part of the final agreement as we felt jaded by his actions and he had alienated himself from the group.
Know who you are going into business with. The rest of us have been friends for a while, but that didn’t keep from arguments and harsh feelings at times. Starting a company is a rocky road. There are risks that are at stake and it reflects on everyone. Be sure that you understand these things going in. Some experiences are strong and sometimes friendships are destroyed through starting a business. Understanding the relationships early helps to reduce a lot of the struggles.
Like your partners, you need to know what you are getting involved with when you look at bringing in funding. Yes, you need money to take your idea to reality. Sometimes that money can come initially come from friends & family, your own pocket, revenue, or a crowd funding campaign. These tend to be a tougher play, but often the most likely early on. Of these, some carry high risk and some very little risk.
Friends & Family
Getting money from friends or family can be risky on your relationship. If things go south, and sometimes they do, you could destroy a great relationship. If the money is taken as a loan then you can be paying it back for a long time. I have a friend that opened up a running store several years ago. He borrowed money from family to purchase inventory. He is still working to pay off that debt to his family members. Be cautious.
If you look to fund it yourself then be prepared to lose those funds. There is a degree of “burn the ships” like Cortez, but if your married that may not end well. If you have the spare capital to put up then by all means. This keeps the equity and control in your purview.
The last two options can be friendly options as well.
Finance from Revenue
Revenue allows you to sell and turn profits right back into more inventory. The challenge with this is you must start small and that can be hard if you need to meet minimum order quantities. Allow your orders to be small so that you can grow organically. If they need to be bigger then you need to get money from somewhere else. If you are building a tech company and you are the programmer then you can build out on the side and launch while holding a full-time job. This allows you to keep control and bootstrap your business.
The last item to discuss that keeps you in major control of your finances is the do a crowd funding campaign like a Kickstarter. These can work great for a product based business. This allows you to market your concept without purchasing inventory. You can then push it out there and garner pre-sales. If you don’t hit your desired number then you don’t make the product and everyone gets their money back. If you hit your desired number then you move on to production to fulfill your new customer orders. With the money raised, you should have enough to buy additional inventory. This will allow you to start to drive business into retail and online. I sure wish that this were an option when we started Altra!
Other Funding Options
The last options require you to part ways with some of your company and sometimes your say. These are Venture Capital, Seed Investors, and the like. These can be great partners to have on your side as they have experience and tools that you otherwise may not have. They have helped a lot of companies get started and grow. With that experience, they are able to bring a lot to the table. However, this does not come free. They tend to take a chunk out of your business and often will want their opinions heard. Do your due diligence of individuals and firms that you look into here. Make sure that they understand your business class and that they can align with your brand vision.
Finally, you could opt to sell. If you do this then you give up all control of your company and work for the parent company. This can work out really well. It can also be a drag. Do your due diligence on this option just as you would with a VC firm.
Whatever option you go for on funding your business be aware and cautious. Explore all of your options and make the decision that you feel is the best. Sometimes following your gut is the best way to go.
When Golden showed me his concept for shoe alterations and explained the biomechanics behind it I didn’t hesitate. I told him that we needed to start a shoe company. This seemed like an opportunity that I needed. These moments have happened many other times through starting Altra and in subsequent projects that I have been involved in. I have learned that opportunity abounds and little things will often pop up. When you see these be sure that they are in line with your values and goals.
Sometimes opportunities come up that seem off of the beaten path. Just trust your gut. There have been times that this worked out in my favor, but other times they seemed to be a setback. Don’t overanalyze and know that failure is part of success. Learn from the opportunities that you latch on to. Whether they fail or succeed they will teach you a lot.
Tell Your Story
Everyone loves a good company story. We remember the experiences of Mark Zuckerburg developing a college networking software in his Harvard dorm room that later became Facebook. Then there is Bill Bowerman using a waffle iron to make the famous waffle racer that put Nike on the map. Steve Jobs was working with Wazniak to produce a quality personal computer. There are hundreds of these stories. They become part of the brand and what the grain of your company is. Stories are relatable. They make things real and personal.
We were committed to telling our story at Altra. We wanted to help everyone be the best runner that they could possibly be. This fed to working to design and development the footwear and products that would fulfill this mission. It all started in a basement with a passion. Our goal was to help the consumer and the market understand this passion that we had to help runners be better and run better.
Always Focus On The Bigger Picture
It is easy to get lost in the day to day grind. Everyone wants you to focus on the immediate flaws, small competition, or financial struggles. These are important but you need to set your sights higher. You need to be looking to where you know that your company can go. I am often asked if we believed that Altra could be what it has become today. I have to answer with an emphatic, yes, or we wouldn’t have gone through the heartache and stress to do what we did. We needed to know that we were going to be a legitimate brand to get us through the hard times.
Recently I had a conversation the other day with a business owner. I brought up a competitor of his and he made the comment, “I wouldn’t compare myself to them”. I asked him why not. His response was, “they are much bigger than we are”. I then followed up with a question of, “where do you see your company?” It’s okay if you want to stay small. There is nothing wrong with being a small business. But, if you want to be a major player then you need to think like a major player. I was aware of the brands that were our size, but we always wanted to be among the top running footwear brands. That is where we saw ourselves. It is how we marketing. That is how we built product. It became the way we sold ourselves.
We were going to be among the best. Altra is now in the conversation and getting closer to that each year.
If you are not having fun then you won’t be committed. As you probably already know, it is really difficult to start a company when it is not fun. Just go out and have a good time.
Starting your own business is a series of ups and downs. There are constant challenges that will come along. Each one will test your stamina and commitment. You will find great success as you learn from your failures, go out and have fun, and remain to committed to your cause. Now go out there and build a great company!