Why playing by recession-era rules is good for your business

About nine months ago, my business partner, Rustin, and I both quit our full-time jobs to start a Web2.0 company that builds social features for blogs. We had no funding, no office, a few customers, and operated the company from our savings. We both have families to support, mortgages to pay and college educations to save for. What person in their right mind would quit their job during the worst economy since the Great Depression?

Starting a company in the middle of a recession certainly has its challenges. Funding is hard to come by and investors are gun-shy. It’s tougher to get loans and skilled employees who have jobs are less likely to leave for riskier ventures. Consumers have less money to spend on products and are very selective about what they do spend money on. While all those things might be true, with tough times comes great opportunity. There are pools of extremely talented people who are looking for work and willing to take below-market salaries to join a great team. Employees are more flexible about relocating, work hours, and job sharing. Commercial property rates are lower and the cost of travel is down. The challenging economy also means fewer companies will start new ventures, which results in fewer competitors.

From a product perspective, a tight economy and skeptical investment climate forces us to be ruthless in our product development. We don’t have the luxury of going in ten different directions and chasing features that are cool but way outside our core vision (we call those “bright shiny objects”). If we spend one day on something that doesn’t further the goal of solving our customers problems, we have wasted precious time. Competitors with more money and resources will eat our lunch if we take our eye off the ball for a minute.

And we wouldn’t have it any other way.

We are conditioned to think fast, test often, be brutal with priorities and involve feedback from real customers every step of the way.

We still don’t have a fat budget, fancy office or corporate salary. What we do have is a customer base of over 22,000 customers that grows every day. We launch features in weeks, not months. We’re able to advance swiftly in a market where others have retreated with a wait-it-out mentality. We are making significant progress and have overcome hurdles with customers, investors, and competitors. We’re even driving revenue sooner than we thought we would.

Being forced to play by recession-era rules is good for our business. Our gutsy move is paying off and we’re months ahead of where we would be if we’d played it safe and waited. Sometimes what looks like a challenge is really fate handing you a lottery ticket and inviting you to play a bigger game.

BlogFrog and The Children's Hospital

I love it when I get to do marketing that not only benefits our blogging members, but gives back to a worthy cause, too.


This month, BlogFrog is hosting the "Give the gift of community" challenge. For every BlogFrog community that adds 20 new participants between now and the end of the year, BlogFrog will donate $10 to The Children's Hospital, one of the top 10 hospitals serving children and teens.

Here's how to participate:

1. Install a BlogFrog community on your site (if you already have one, you are one step ahead!). Just visit BlogFrog to get instructions on how to install a community (takes 5 minutes).
2. Make sure the widget is high enough to be easily seen by your visitors.
3. Announce your community to your readers in a post and tell them about the "Give the Gift of Community" challenge. For every community that adds 20 new participants (someone who has not participated in your community before and starts a discussion or replies to one) before the end of the year, BlogFrog will donate $10 to The Children's Hospital (up to $400)!
4. Spread the word about your new community by sharing discussions on Twitter and include the #blogfrog hashtag so other BlogFrog members can join and re-tweet.
5. Every community that adds at least 20 new participants during the campaign will be promoted in our next newsletter and on our website as "Blogs that gave the gift of Community".

BlogFrog keeps track of new participants and will be posting about the fund-raising progress in its member's community, on Twitter, and Facebook.

Thanks everyone!

13 ways running a start-up is like having a baby

I have given birth to one child and at least 5 start-ups. I might have a few illegitimate start-ups out there that I don't know about but we'll save that for another post. I had a blinding moment of delusion today with my current start-up where I experienced the exact same feeling I did as the mother of a newborn. It was a day where one microscopic sign of progress overshadowed months of endless challenge, preparation, and self-sacrifice. How can that be?! How can the joy of one tiny hint of improvement elicit a feeling so out of proportion to the work that led up to it?

Then it hit me. The absurd number of ways that running a start-up is like having a baby. Here are my top thirteen:

1. The idea to have a baby, or quit your job to run a start-up during a recession, usually has something to do with tequila.
2. Nausea is the first sign that you are pregnant or have agreed to join a start-up.
3. The vomiting eventually stops in the 2nd trimester, or when you release your beta version, whichever comes first.
4. You are for sure pregnant (or are a shareholder in a start-up) when your partner now owns half of everything that gets produced.
5. You will be too tired for sex until the baby is sleeping thru the night or you've hired someone to handle customer support, whichever comes first.
6. The average birth costs about $50,000 depending on your health insurance policy and PR agency fees.
7. You'll resist the urge to rip a total stranger's kidney out thru their left nostril when they tell you your baby is ugly or that your interface doesn't conform to the latest GUI standards. Even if they're right.
8. It is inevitable that your baby will make a mistake that lands you on the front page of the local paper and gets virally propagated across every social network. You will be subject to much public humiliation and embarrassment until another start-up makes a bigger blunder.
9. Plan to fork over an allowance and expect nothing in return. Somewhere between $10 to $100,000 per week, depending on the economy and the cost of a movie-sized box of Milk Duds.
10. Expect to be infinitely patient as your baby (and start-up) experiments with its identity and then eventually grows up to be something far removed from what you originally planned.
11. You will spend the next 18 years teaching your baby, and your start-up, how to earn money on its own.
12. You will instantly forget how much pain you went thru the moment your baby is acquired by a search engine giant for $230 million dollars.
13. Despite being broke, exhausted, aged, and divorced, you will decide to do it all over again.
    

Wordless Wednesday: What happens when you take teenagers grocery shopping......