This first zig requires sheer grit and raw determination. I often joke that when I am starting a new business I will go out in the street and dance in a tutu if that is what it takes to get to profitability. And while my efforts have never come to that, I will do what it takes, within the framework of my values, to get enough cash to move forward. Operating from the black gives you a much higher level of confidence and a sense of durability that you can’t have if you’re always worrying about draining your bank account. If you have money in the bank or cash in your pocket, you can breathe a sigh of relief as you keep trying different things until you get one of your ideas to work. And if you can’t get an idea to be profitable, then check it off your list and try something different. (This is what I call failing efficiently, which we’ll discuss in more detail later in the chapter.)
Just before the dot.com bubble burst in the early 2000s, I was working as the general manager of a company called MyJobSearch.com. It was a heavily funded business in the web 1.0 Internet bubble phase. This was a wild and crazy time when companies were being built and funded by people writing business plans on paper napkins. This company had hired forty or fifty employees, and we didn’t even know what the exact product was that we were building. And, because we were living on investment bankers, we had no clue how we were ever going to get to profitability. Heck, we didn’t need to!
When the bubble burst, everything imploded. Not just for this company but for almost every other company in the web industry. The reason this company and those other companies failed was because they were not built for profitability. We had never needed to pursue that strategy. In fact, during this time, the strategy for most of these companies was to get an IPO and then get bought up by a bigger company. But, as countless people who lost huge sums of money found out, that is not a business plan that can be sustained.
So many businesses I’ve seen think that all they have to do is head straight for that beacon in the fog. It doesn’t work. The first zig always needs to be to get cash!
Finding Hidden Assets
When I am starting a business, the first question I ask myself is, “What skills do I have that can get me to profitability the fastest?” (And this same question should be asked whether we’re trying to build a business or any other part of our life.) The answer doesn’t have to be perfectly aligned with your beacon in the fog, just something that is close enough and is an inch or two up from where you currently are. (Remember, we’re zig zagging.) While I was in college majoring in electronic engineering, I found a job at a computer repair shop. It certainly wasn’t where I wanted to end up, but I was able to get cash for my family and also learn skills that would bring me closer to my goal of graduating in engineering.
When my partner, Ron Porter, and I started CastleWave, I had a knack (for which I had been well paid) for getting key words to the top of the search engines on the Internet. I had sworn I would not share any of my search engine optimization (SEO) secrets and mental knowledge with other people because I was done making other people rich and I was in the mode of creating my own businesses. But in the earliest days of CastleWave, I realized that the fastest way to cash was to fill the need other companies had for SEO work.
I had some contacts in New York City who I knew wanted to get their own web sites to the top of the search engines. So Ron and I flew to New York and sold these contacts on search engine optimization. We were almost instantly profitable because I was willing to do what I regarded as the equivalent of going out in the street and dancing in a tutu. I did not initially do what I wanted to do; instead, I zigged to the fastest source of cash I could identify because I understand how important that first zig is.