In 1997 I was just graduating from high school and started to design small business websites using Microsoft Frontpage and a variety of amateurish HTML hacks. In 2001, I dropped out of college, two classes away from graduating to work full time at a tiny web consulting business with my Mom. That didn’t go very well.
From 2001-2003, we took out nearly $150,000 in loans, mostly from credit cards and a few equipment lenders, ostensibly to help “grow the business.” Instead, it made us foolish investors in low ROI projects, contractors, office space and a variety of too-good-to-be-true salespeople.
By 2004, we could no longer pay the minimum dues on our bill and our debt skyrocketed. Credit cards with $30,000 limits quickly ballooned to $75,000 in “total owed,” thanks to nasty penalties + fees. After 4 years of attempting to make our consultancy work, the only logical move was to quit.
But, of course, we didn’t do that.
I’d love to say that we had simply believed so strongly in our own ability to make it work that we kept going, but that’s a lie. The reason we didn’t declare bankruptcy, suffer 7 years of bad credit scores and try something else is simple; we’d never told my Dad we were in debt.
Instead of nobly fighting on against increasing despair-filled odds, we were actually just working to cover up a lie of omission, and one that might have had disastrous consequences for our family. The weird part is that it worked.
From 2004-2007, we shifted from building small websites (and spending a fortune on outsourced contractors, non-pay-upfront projects, expensive office space and the interest on our debt) to growing a small SEO consultancy based on the notoriety of our blog. That shift helped us earn press, paying clients and a renewed sense of purpose. By the middle of 2007, we were debt-free (not by paying them off completely, but by settling with each lender for between 10-30% of the total sum owed – be forewarned, this screws your credit history for even longer than 7 years). At the end of 2007, we raised a small round of venture capital for our nascent software business and the rest is history.
These past few weeks, the software business that sprouted from the seeds of our near-destruction had its first ever $10mm+ run-rate month. We had our backs to the wall with no other way out, and eventually, it paid off.
Two recent articles highlighted the value of tenacity in achieving great things in the startup world. The first, on Reid Hoffman at LinkedIn, details the not-so-sexy, but ultimately remarkably rewarding story of a decade-long struggle to make the professional social network into something great.
I don’t mean to suggest that the key to every business is blindly pushing ahead even when failure seems certain. But I would say, as someone who’s been down a deep, ugly fiscal hole with their company, that refusing to quit brings a strange and special power.
In my opinion, it’s impossible to build that into a business at a later stage. Founders either have some internal or external motivator driving them to succeed in the face of any odds, or they don’t. Being devoid of that motivator won’t necessarily result in failure – in fact, I know plenty of entrepreneurs who’ve given up on project (or company) A, B and C only to have a breakout hit with D. But I do see something special in those whose tenacity makes them unable to give up. Folks like Dave Schappell of Teachstreet, Don Charlton of theResumator, Will + Duncan from Distilled, Dave Snyder from Blueglass and Chris Savage of Wistia (along with many more I’ve met) embody this quality.
I wish, in my case, that it was solely intrinsic passion, but in the end, I’m just amazed and thankful that we found a way.