August 26th, 2020 | By: Wil Schroter | Tags: Strategy
At Startups.com, we built an 8-figure business by saying "no" — a lot.
We knew going in that if we’re going to have 100% control of our destiny now and in the future, that would only work if we could constantly say "no" in a disciplined manner.
But you know what? Saying "no" sucks. Just like saying "no" to delicious glazed donuts sucks. We know that we want them, but we also know the cost of saying "yes"! Now I'm hungry for a glazed donut. See what I mean? We knew that controlling our destiny would mean an insane amount of discipline, across the entire organization. In order to prepare ourselves for this discipline, like any good regimen, there were a few things that we'd have to stay incredibly focused on.
You know how we all get fired up about how this is an "opportunity of a lifetime!" and that we need to push all of our chips in on this one big bet? We had to ignore that, which is hard because we work with ambitious startups for a living!
Instead, here is what we focused on: "People will need help building startups for the rest of time. So as long as we're good at helping, we can work on this problem for an entire generation." We took fake urgency off the table and instead recast our opportunity as a long term play, not something that needed to "scale immediately" for some made-up reason (and it's always a made-up reason).
Early on, we were building Fundable.com as one of our first products. It was at the dawn of equity crowdfunding and every single market indicator was that crowdfunding was going to change fundraising forever. It didn't. Along the way, we had a million opportunities to pursue different extensions of the business, acquire competitors, or raise money to scale 100x faster. We deferred all of those decisions, partially because we had to (we didn't want to raise VC) and partially because we actually wanted to see how the market played out. It turned out we saved millions of dollars by just deferring our decisions. It's amazing how many good decisions you can make when you're not "forced" to make bad ones.
Our income statement has become as much of a management tool as anything else in our company. Our entire leadership team knows every last income line and cost in the income statement, and by way of that, how every decision impacts profitability. Before we even ask "Should we pull the trigger on this expense?" we sorta know whether or not we can.
Compare that to lots of other organizations that work in this opaque sort of world where the Head of Engineering asks "Can I hire another engineer?" (because product development is behind) without having any sense of what that impact is. In our world, we are all chained to the income statement, so that every move we make has a direct correlation to how we manage profitability.
That very same focus, company-wide, has prevented us from saying "yes" to lots of things, but it also has provided the knowledge of how to get to "yes". In the end, our ability to stay disciplined and say "no" in the formative years has given us the opportunity to say "yes" to just about anything we want once the business matured. Was it worth it? Hell yes!
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.