January 12th, 2017 | By: Kevin Yamazaki | Tags: Market, Planning, Model
We built our company, Sidebench, without funding because we wanted to and because we could. Our focus from day one was on building a fundamentally sound, multimillion-dollar business.
Giving ourselves a pile of unearned cash and putting ourselves in a hole up front seemed like a bad way to do that. We knew that, for a technology services company, all you truly need when starting a business is a client, a computer, and internet access.
We saw a market opportunity that aligned with our skill set, obtained paying clients on day one, and spent time understanding and refining our business model to ensure that it was indeed viable.
Instead of looking for funding and spending time worrying about investors, we spent all of our time on growing a profitable business and improving our unique methodology for tackling complex digital products.
• Experience: From our time in the tech consulting space, we understood how market leaders secured/structured deals and ran engagements, and we knew which pieces of the consulting methodology we wanted to adopt and where we wanted to diverge. We felt strongly about our own ability to succeed by learning the space and adapting as Sidebench grew.
• Opportunity: We had seen firsthand where existing market leaders fell short when it came to user-centered design and keeping pace with the ever-moving technology landscape. To adapt, larger tech-focused consultancies were (and still are) buying up smaller, more agile design-focused shops to try to keep up.
• Demand: We saw a demand for a forward-thinking, user-centered product design consultancy, not only in a broad sense, but specifically in our own Los Angeles network. We felt we had the skill set, knowledge base, and initial network to successfully capture a share of the market.
That’s not to say we realized those opportunities and in one day built a company; there were definite challenges we had to work around. As founders, we weren’t in a position to forgo income.
More challenging yet, in regard to building a top-level team, we couldn’t offer competitive salaries (or salaries at all, initially).
To solve the first issue, both my co-founder and I kept our full-time jobs while we continued to build up Sidebench to a point where we could afford small monthly draws for each of us to stay afloat.
It took a year and a half from our inception to the point where my co-founder could leave his full-time job and rely exclusively on Sidebench and another six months for Sidebench to support me as well.
While not everyone will have this luxury, we were able to swing it by putting in lots of extra hours and making personal sacrifices when it came to free time.
To recruit a team, we had to get even more creative. In our infancy, we had zero brand recognition and couldn’t afford to pay top-level talent as employees. Our solution was to use connections in our personal networks and find talented, motivated people who were excited to be part of a new, exciting project or two on a contract basis.
For some of our early team members, it was an opportunity to make a little extra money, and some were just excited to take on more interesting work than what they saw in the larger consulting world.
In a number of cases, working with us offered them an avenue to build their skill sets and résumés in areas they wouldn’t have been able to otherwise. We also worked to find less-experienced candidates who weren’t employed with a salary outside our budget, but who we felt had top-notch talent and motivation.
It isn’t to say we didn’t have our fair share of ill fits in the beginning, but overall we did well with finding and holding on to talented people who fit our budget.
No two company beginnings will look exactly alike. Even so, there are a few tips any budding entrepreneur can use to bootstrap a company:
When you’re still employed while starting your business, you have more time to zero in on a plan that clearly brings in revenue at a profit. Laying the foundation without the immediate financial pressure results in better decision-making, and it may contribute to why “hybrid entrepreneurs” are one-third more likely to succeed than those who go all-in right away.
You need to define exactly what kind of resources you need to turn a profit as a company — from both cash and talent perspectives. Fully understanding and validating your business model means obtaining clients and managing your cash flow, so you have to maintain a laser focus on the numbers you need to succeed to stay afloat.
Most small businesses (and nearly all consulting businesses) acquire clients through word of mouth, so grow your network in your intended industry to build both your base of knowledge and your relationships. Some of these connections may turn into clients, employees, advisors, or other helpful resources.
Don’t worry about your business being sexy. It’s easy to get caught up in the niceties like a shiny office, nonessential perks, and substanceless networking events, but those take away money and time from the core of your business.
In the beginning, you should be holding on to every cent and second possible. Those early stages are for grinding away and getting it done however possible. Trust us, it’ll make enjoying the fruits of your labor later even better.
Building a company from scratch, without any outside help might sound intimidating. And, at times, it is. But when you overcome those hurdles and create a solid, steady business, the reward is often sweeter than you had imagined.
Can you relate? Share your own founder story in the comments below.
Kevin Yamazaki is the founder and CEO of Sidebench, a leading digital product and venture studio that creates custom software and apps. As a passionate solutions architect and product designer, Kevin is driven to create. Because of his unique innovations, Sidebench has a growing reputation for solving its clients’ largest unique challenges through custom integrations, internal tools, and consumer-facing applications. Forbes listed Kevin in its 30 Under 30 Class of 2017.
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