Nothing to waste: The advantage of being under-funded
2009-06-29
In the comments to Version 0.1 = Start lo-fi, Larry Rood pointed out that start-up companies who have too much money often blow it. That there's an advantage to being under-funded to keep you from making mistakes.
It reminds me of what it was like to have a CD Baby booth in the exhibit hall of conferences:
- 1998
- Me at a plain table, talking with people and handing out flyers. Not many other booths.
- 1999
- Me at a plain table, talking with people and handing out flyers. Other booths have big LCD displays and fancy corporate backdrops.
- 2000
- Me at a plain table, talking with people and handing out flyers. Other booths have booth-babe models, fancy multimedia displays, and giving away $50 items.
- 2001
- Me at a plain table, talking with people and handing out flyers. Others have bought out an entire pavillion, laser light shows, giving away cars, offering a million dollar prize.
- 2002
- Me at a plain table, talking with people and handing out flyers. Not many other booths.
I remember being pressured during the dot-com boom to take venture capital. But my response was always, “I'm profitable and have plenty of cash. The company doesn't need more money.”
They'd come back saying we could “expand our reach” or other vague terms that to me sounded like blowing money on ineffective advertising.
They'd say we could have a big marketing budget, but I'd say, “Marketing doesn't cost money. ‘Marketing’ is another way of saying ‘being considerate’. It's all in how you talk with people.”
By then they'd decided I was just crazy and would surely fail, which was fine with me, because it let me get back to focusing on my clients and customers, undistracted by investors.
Positive Vibes and Respect to you, have a great week, thanks for the great article, I have the same approach of connecting with people in a real and sincere effort to bring something in their life to give more happiness.
Michael
Nicely done Derek. Staying true to one's self and vision is easier said than done especially when there are big dollar signs being flashed in front of one's eyes. Also, saying "thanks but no thanks" to investors puts the control of your business and life squarely where it belongs...in the palm of your hand. I knew there was a reason I liked you...
All the best.
Since I truly committed to following my heart and lead an entrepreneurial life, I am very conscious of money - how can I get the word out without spending a lot of money, and when I do need to spend money how can I do it creatively and in ways to support others.
Great posts. Thanks!!
Sandy
We are like water, we just find a way to go around the problem. Money is a false security.
I think for musicians, this translates to something like this: if you're a band with missing members, don't wait around until you find the perfect member. Figure out how to play your music without that piece. Or have a rotating slot for your friends and acquaintances to fit in. Just get out and play -- if that's what you set out to do.
If you stop, that means you're delaying your success by that much, whatever the excuses.
ari
this makes so much sense to me... thanks for sharing your vast experience of success with us!
t
really enjoyed your comments--I am a satisfied customer. Years ago I wrote you when my friend Jack Nielson died to let you know that you were going to probably get a lot of orders for his CD.
You wrote me a nice email back!!!!!
I was and am very impressed with the way you conduct business!
Very enlightening. Thanks.
Always inspiring Derek. Thanks!
Interesting point. I used to work at exhibitions and the I noticed was that most customers knew the 'booth babe' was just there to look beautiful. Very nice too, but very useless if wanted to actually talk about the business in question.
Meet and greet is mentally hard graft if you're doing it day in, day out. However I have come to same realisation. There is no substitute. All the really successful 'house hold' names I've met can really 'work' a room when they too. I don't belive this is by accident.
I love this! My own mantra for the uninitiated (and, sadly, easily bamboozled) is "Marketing is talking to people." Period. If you unpack that, there's all kinds of other stuff, like "you have to really listen to really talk" and "you have to really understand people before you can really listen" (or come up with a great product/service to market). But the germ of it is in that one statement.
Bravo to you, sir, for sticking to your guns and for telling the world to do the same.
Good news for those of us who are financially challenged!
Thanks for this great post Derek. I find this post very applicable. What if you're in an industry such as the cosmetic business or luxurious goods, that requires presenting a 'high end' image as 1st impression - surely you can't take the same approach in your marketing (ie you can talk to people, but they won't respond unless you meet a certain 'threshold' in image and presentation)?
Well there you go - not helping feed the marketing cottage industry that thrives on being opaque.
And taking money out of many many small business with little or no return.
Seriously - good points. If people would stop trying to find ways to bilk money for the short term and instead build a real solid company that serves customers, we'll be better off.
Alas won't happen.
Great blog and article. I'll put you on my feed for sure! Keep it coming.
Absolutely.
I've been doing this for years one customer at a time. Offer great service, a premium product, a clean easy to understand web site, and just be pleasant and caring of everyone who asks you for help.
No expensive marketing campaigns. Just keep plugging and be where your clients are.
EC
Good stuff... a great example of being different as well.
Sweet trailer for your bike. I could get a marshall stack and my rack on that! LOL
I remember those days, Derek...Indiegrrl was the booth next to you with no big displays, no giant giveaways, and our sponsors were CDBaby, Oasis, and like minded businesses. When Revlon came to us in 1999 and wanted to sponsor the first Indiegrrl tour, we said, "You seem to be missing the point..." We sat and talked to people and handed out flyers at the first Rockrgrl Conference and at the second one...the only difference between conferences was that there were tons of .com companies that had gone out of business by throwing money out the window by the time the second one came around.
The slight, subtle panic that comes from being underfunded (or underemployed, for that matter) is incredibly motivated. As a writer/editor in my non-musician life, i worked as a freelancer for many years -- making a go of it full-time in September, 2001. Not the best time, considering i didn't have much savings in the bank. But i was so motivated that it didn't take long to be successful. It's not about the money, in music or in life -- it's about the persistence and commitment to longevity.
Absolutely! Money is not the miracle cure so many people think it is. The belief that a lack of money is holding you back keeps the power to build your career in someone or something outside of yourself. But that's not where your power resides! Thanks for the reminder, Derek.
You always amaze me with your common sense. Too many people worry about what they don't have and let opportunity pass them by.
That's why you ROCK! Derek...you've kept things real and simple,You're attention to all of us when you were with CdBaby has made us Indies very proud of you and we owe a tremendous respect to you for your unselfish work for us to succeed.
p.s. Tony's not doing bad either...He was a good pick btw...
Bigdaddy L of GP-101
MadMouse Records
"Electronica from the Hills of the MidWest"
Inspiring reminder, Thank you!
Why baffle 'em with BS when you can be genuine. Either you've "got it" or you don't. And you've got it Derek! Thanx, Peace & Love
It just doesn't get more elegant than this. Brilliant as always. BTW, I just noticed your creative commons license for the first time. Thank you. I've wondered how to propagate your words. I send people to you but now I can go pandemic. Are there any new words for cool?
LOL!
SongNet!
Still giving out flyers & educating the community for free!
Looking back on it all now, you made the right choices. The rub, of course ,is how to know what is right? the best answer I suppose is: you don't. Just move forward with faith ( and some crossed fingers) I admire your confidence Derek, the ease with which you seem able to know what has been right for CD baby. this is something I am sure we all struggle with. Thanks for the insight. WEjen I work this music conference in September with my fairly plain table and some (good lookin)flyers, I will think of you.( and cross my fingers)
The lack of funds in The beginning of The New York Songwriters Circle has actually been the reason we grew. we learned to work with each other and with very little. We Kept it simple and never lost site of who we were and why we started the company. There were a lot of people who didn't take me or my partner seriously but it didn't matter. In a funny way, because we didn't start out with huge funding, (just our own picket money) we didn't have anyone telling us what to do and we stayed the course.
I guess the challenge is to manage that same feeling as you grow financially.
It's good to stay focused on what you really want, the outcome will always be more pleasant if you succeed while keeping your own path.
...enjoyed it tremendously, it takes vision, common sense, and maturity to withstand such hype and to keep it real, and it appears you had plenty of all.
A tip of the hat to Derek and to all the entrepreneurs who keep it real.
Ky Ekinci
Co-Founder
Office Divvy
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on twitter: @OfficeDivvy