Indiana-Plan-B-style startups
Guy Kawasaki once (famously?) said of RedPost, “Interesting business — going after the long tail of in-store advertising. It might just work.” Rousing words of endorsement…not really. But that’s ok, I don’t fault Guy, in fact, I read his blog(s). He posted last week on the OPEN Forum by American Express a post about “Plan B for Fund Raising.” Summarized, his 5 steps to Plan B are:
- Step 1: Dig, scratch, and claw yourself to $100,000 of funds from friends/family.
- Step 2: Gain reputation by digging, scratching and clawing some more (i.e. don’t hire a PR firm)
- Step 3: Release your prototype (late)
- Step 4: People like your product. Bootstrap your way to growth, 10-15% a month.
- Step 5: Lots of options! Sell, get more investment, or keep bootstrapping to growth.
For RedPost, Guy’s Plan B has been our Plan A. I believe we’re at Step 4 (although sometimes I think we’re still back at 2). Steve Johnson of The Chicago Tribune took on this whole philosophy, summed up so nicely by Mr. Kawasaki, in an article called Cyberstar about “Chicago-style startups” and the nifty EveryBlock startup:
“There’s the dot-com, Silicon Valley, blow-all-your-money-on-booze style,” says Holovaty, 27. “Then there’s the Chicago thing: Do something, do it well and be modest about it.”
Google‘s Chicago office, a few blocks north, has an espresso machine, Lava lamps, free lunches. EveryBlock, located in a room it sublets from a map company in a drab 4th-floor office overlooking the downtown “L” tracks, has desktops and electrical outlets.
Indiana-style startups must take Chicago-style a step further. We have desktops, electrical outlets AND a leaky roof. It rained 10″ this past weekend, remnants of Hurricane Ike. So I spent quite a bit of time over the weekend moving desks, wet-vac’ing water, emptying buckets, draining Signs (no damage, what a great design!), and setting up fans. At $.12/square foot for our 60 year old former-dry-cleaner’s, we don’t have too much room to complain. (On a side note, oddly, the formerly biggest leaky area didn’t leak at all…and a new biggest leaky area formed. Weird.)
Sometimes I envy the Plan A companies. It’d be great to have an espresso machine and lava lamps (ok, we actually do have an espresso machine. It was $200 on eBay, and Hannah’s a former barista so we needed to keep her in practice). Envy aside, I thoroughly enjoy being at a point where we’re getting actual real live customers who actually really like our product and tell us things like “I didn’t think it would be that simple.” (Thanks Daniel). 10-15% growth is happening. At that rate, we double in size every 6-8 months.
Slowly but surely. Indiana-Plan-B-style.
