A Bootstrappers Guide to Making the Inc. 500s (#511)
Is it the RIGHT idea?
For a bootstrapper to succeed with zero financial resources, there must first be the innate ability to anticipate an upcoming shift in a specific sector, a cultural change that will disrupt how business is done and an idea that people are willing to bet on simply based on the idea itself.
In 2010, Jason (my Co-founder) and I were working on a web series together covering social media news. Day in and day out I was soaking up the rapidly evolving social networks and itching to start a business in this exciting space. I was also spending time with my mother and sister who were managing two apartment communities, and my first business was LA Pool Guys, a pool cleaning company servicing apartment communities all over southern California. So I was learning social media, I had family working in the multifamily industry, I had a professional history in multifamily myself, and I was witnessing how social networks were dramatically changing the online world. That’s when the light bulb went on! If someone could tell high-quality stories about apartment communities and utilize social networks to distribute those stories, they could probably rent a lot of apartments.
That’s when GTMA was born. My new business baby was a combination of awareness of the shifting online culture plus strategic insight into a niche industry via family connections and past experience, and an idea people were willing to take a risk on.
The lesson here for bootstrappers is, since you have no money, you must have an idea that’s new and unique versus just a reinvention of the same old thing. There were no agencies focused solely on social media management in the multifamily space when we started the company. Marketers in multifamily would say to us they needed social, but they had no understanding of what kind of social strategy to implement in order to accomplish their primary goal of renting more apartments. Our timing was right and our formula for success was: Timing + Foresight + A Niche Industry = SUCCESS.
Build a culture BEFORE you go bust.
As we grew, we began the arduous task of building a team. As an inexperienced business builder, I hired for immediate need and neglected to hire key players early on, which was a mistake.
There is an abundance of amazing talent in Los Angeles looking to be part of something special, but that’s not who we hired. We hired people to execute tasks but failed to initially develop a culture centered around the idea we were building something special together. The only thing we originally stood for was getting the job done for clients.
Now, GTMA’s mission as a digital agency is to find people the right home for right now. What can be more meaningful than helping someone find their next home? That gives my team a shared focus and a much-needed purpose.
Next, I can say without a doubt that, after we established our core values of integrity, service, collaboration, authenticity and being ever evolving, my team understood our expectation of their behavior within the office as well as their customer service when working with clients. Early on, we allowed team members who weren’t the right fit to stay too long but, today, if a team member doesn’t display the kind of integrity we require, we help them move on quickly before they disrupt our momentum. Our growth was stunted a bit in the beginning because we weren’t willing to make the tough calls by breaking up with certain team members we needed to cut loose and, in my opinion, that’s the reason we’re #511 instead of IN the top 500. One bad apple spoils the whole bunch.
These days, our mission statement and core values directly facilitate our hiring process, giving clarity to our team in terms of expectations and, now, we have the best team that we’ve ever had!
The lesson here for bootstrappers is you NEED culture in order to build that initial core team of rockstars who will propel your business forward. The type of talent required in a self-funded startup with no money is passionate people who embrace your mission as a cause worthy of their time and creativity. Those more concerned with short-term financial gain than being part of building something bigger than themselves are never going to be the right fit.
Get ready to be broke.
I remember when I thought a million dollars was a lot of money. I also remember the first year our agency made over a million dollars and how little money I actually made. That was the same year I learned, when you’re self-funded and you use the profits of the business to fund your growth, you still have to pay taxes on those profits even though you didn’t take that money home.
Bootstrappers need to be prepared to be broke for the foreseeable future. When we started GTMA, I was blessed to have income from my wife’s job and income from a successful voice-over career that didn’t take up my entire work week. Jason also had a wife working as a teacher and he was a filmmaker being paid well for the work he did. When the two of us sacrificed time from our paying jobs to build GTMA, we subsequently experienced both the joy of owning a business making over a million dollars and the simultaneous pain of realizing just how broke we were funding expenses for months while awaiting client payments that sometimes took over 90 days to show up.
That was a turning point for GTMA. Jason’s and my commitment to sacrifice a larger, more steady paycheck to fund our growth made all the difference. That one commitment is a major reason why we’ve been able to grow so quickly without needing a rich uncle or a friend who’s a venture capitalist. I’ve heard other founders talk about the “pay yourself first” mentality and that mindset, in my opinion, directly hinders the growth of a business. Be prepared to pay the BUSINESS first and continuously.
The takeaway for bootstrappers here is be prepared to be broke for a while…maybe even a long while. With no investors and no debt on the company, Jason and I are uniquely positioned to benefit from the sacrifices we made early on…hopefully someday soon 🙄. When you take out that loan and/or accept venture capital investment, you’ve also acquired bosses and interest payments, which can easily delay (or flat-out prevent) your success as an entrepreneur.
Now, would I found another bootstrapped business given my current situation?? ABSOLUTELY NOT! Do you have any idea how hard it is to bootstrap!? At my age and with my experience, OPM sounds pretty good, but I’ll never regret the lessons I’ve learned from the many ups and downs of taking GTMA from nothing to the Inc. 500’s.
Does it get easier?
No. As your company grows, new challenges arise and it doesn’t get any easier. The challenges just evolve. For instance, we are blessed to continue growing rather quickly as an agency, but we continue to need to keep more and more cash on hand to fund that growth. So the financial sacrifice is still a reality.
Regarding our team, as I mentioned before, we’ve built the best team we’ve ever had. That also means we need to support that team with higher wages, more benefits, and educational opportunities to help them refine their skills with a path for future professional growth. We pay industry standard, but we want to be the best and pay top of industry; therefore, we’re constantly seeking creative ways to compete with larger publicly-traded companies by increasing our pay and benefits while still remaining competitive with our pricing and services.
In addition, we’re facing a false perception that all businesses should be like Google. Our talent reads Inc. Magazine, of course, and thinks all internet businesses should be like Google with their free lunches, 20% time, stock options and atmospheric salary increases. Inc., please stop publishing articles about Google! There is only one company in the history of the world that has been as successful as Google, and that company is Google.
Another challenge is that our industry has started to catch up on the innovation front, so GTMA (being the first creative social agency) is tasked with innovating as well. We are constantly coming up with new, exciting ways to tell stories utilizing the latest technologies, which takes time, energy and a dedication to practicing creativity. That can be tough to accomplish while balancing a growing company.
Again, it doesn’t get easier, but it does become increasingly rewarding to be in the arena competing on a much higher level than when we first started the business.
The final lesson here for bootstrappers is that your business will bring lifelong challenges, so prepare both yourself and your team to have the right attitude of accepting those challenges and committing to tackling them together. Remember, there’s always another entrepreneur out there watching you and deciding to start a business because they think they can do it better than you. It takes constant dedication to evolving your business in order to stay relevant and continue to grow. With the right attitude, you can stay in the game and continue to compete.
What lays ahead?
I’m incredibly blessed to be a part of GTMA. This honor of being #511 on the Inc. 5000 list carries with it a realization that a milestone has been reached and yet another crossroads lay ahead. As an agency, we’ve come so far, but we have so far to go in order to stay relevant and evolve ahead of the market. So we must choose to continuously evolve, evolve and evolve again.
I hope my experiences and advice will help other bootstrappers out there set accurate expectations as to just what they’re diving into when they enter the wildly difficult and abundantly gratifying world of being an entrepreneur.