The Distance Project

The Weeds Pt. II: Energy Level

Posted on April 4th, 2008 by Zach.
Categories: General, Industry.

The second point about The Weeds stage I wanted to bring up is energy. Every day I bump into people who are so pumped up about their product or idea, that it seems like they have been snorting NoDoz for 72 hours. I don’t understand these people. They are like happy little elves, you just want to smack them.

Now I’m not talking about the start up phase here, because we all feel like that to begin with. Start Up is frenzy. It is a set constant firsts. First press coverage, first product roll-out, it is like raising an infant - everything is new. It is a constant adrenaline rush basically, you feel like you are going to change the world in some way.

No I am talking about the people who are four, five, six years in and are still gonzo over their idea. I don’t get these people. Now maybe that works well for them, and if so - great. For me four years in, the novelty has worn off. I still love what we have started, I love what we make, but I can’t be on that high anymore. It’s kind of like claiming that your are “just experimenting” with heroin in your forth four year. I hate to break it to you buddy, but four years in, what you got there is called a habit.

My feeling is that in The Weeds, you need to try and remove yourself from the extreme highs and lows of the startup. The Weeds are a grind – product development takes time, you have little freak outs where you panic that you may have invested four years of your life into this thing and you can’t see the horizon (stability, reward, etc.). In these moments it is essential that you not be riding the wave of startup adrenaline. On the good days you get all crazy (see the NoDoz reference above), and on the bad – well let’s just say the lows can sometimes be rough.

It is difficult, but these days I try and remain somewhere in the middle, avoiding the highs and lows that are so tempting. I try and socialize as much as I can where work is not the topic of conversation, where every interaction feels like something I should take advantage of in the work context. I am trying to find a set of things that have absolutely nothing to do with work to keep me grounded. I learned this lesson the hard way in the late 90’s trying to start a Non-Prof in San Francisco. The highs were high, but the lows were really hard, both on me and I assume the people around me. Live and learn.

Yet this is all fine and good, but somewhere you have to mix in enough passion to keep what your business moving forward, and that is an equally difficult task. So how to balance? Where do you find inspiration? Vacations help, they give you a little space to reinvigorate. But I was also recently was reminded of a good solution when I walked into a new cupcake business around the corner.

I am totally jealous of their simple business model – bake cupcake, sell cupcake, how deliciously simple.

I managed to fight the crowds at the door on the first day, and said hello to one of the founders. Her eyes were bugging with excitement as they had sold out of their full day’s worth of cupcake supply in the first 45 minutes of the day. The space wasn’t quite done, and in the frenzy one of the guys who was building out the space (clearly a friend, or husband, or relation) stopped to pitch-in, running the cash register. So much excitement, so much frenzy, I returned to the office with a proximity startup high…and of course an excellent Red Velvet cupcake.

Mmmm… Go on with your bad self Georgetown Cupcake.

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In The Weeds

Posted on March 27th, 2008 by Zach.
Categories: General, Industry.

I have been in The Weeds recently. It’s a place that start-up addicts know well because it happens to us all. In my humble opinion, The Weeds are that stage between the start-up frenzy and the full fledged company. I am not actually sure if other people use the term, but I like it because that’s exactly how it feels.

In our case the weeds have huge upsides - everything we have going, seems to be booming along: Reware and Juice Bags are going global with growing sales around the world, the PowerCube’s first couple of units are rolling off the assembly line and are due to be deployed this summer, and a couple of new projects are looking like they are set to pop in a big way.

That’s the upside of the weeds: If you make it this far, you have settled into a model that actually works. You have figured out your processes and managed to the survive the huge challenge of covering expenses. Every business in the startup frenzy has enormous obstacles that look like total doom. If you make it into The Weeds, then you have managed to avoid most of those. Congrats.

But there are serious downsides to The Weeds too. The vast majority of these arise from the fact that in The Weeds you suffer from having all of the problems of the start-up stage nipping at your heels, while at the same time “real company” issues are booming onto the stage for the first time. There are two that pop instantly into my head as I write this; the never-ending challenge of managing cash flow, and managing energy level.

Managing Cash Flow

In the startup stage you don’t really worry about this, you are so psyched to be selling anything, so excited to be in existence at all, that this doesn’t come up all that much in discussion. Overhead is lower in your garage, you beg/borrow from friends on an almost constant basis to get what you need done. Life on the cheap. The hustle.

The Weeds bring office space. Friends are not quite as excited to loan out their services the fourth time, and you are tired of asking. The Weeds bring cash crunches where larger transactions from customers and suppliers don’t always overlap in time to pay the bills. Cash Flow management is a fascinating thing to ponder from the outside and a total pain from within. You see plenty of money coming and going, there might even be a fair amount in the bank account, but there is also something always looming on the horizon that is going to suck that cash away. In The Weeds while your overhead is pretty mature, your networks of distribution and overall sales need to catch up.

Cash flow management is the single largest challenge to companies. Recently I have been talking to people who run successful businesses much larger than ours, and it is frightening to realize that these issues never go away. The numbers you are dealing with just get bigger. Oh Joy.

Founder’s salaries are always the first casualty of cash flow. The Weeds often force a decision between your own paycheck and something that will help the company grow. You own the company, you believe that it is a great investment in your future, so of course you are going to sacrifice a small, short-term paycheck for long term success. But there comes a point where you need to pay for the day-to-day of your own life, you can’t always be working for the future.

Reluminati, has had two points where we have had to make a leap of faith in the cash flow department. The first was a couple of years ago when we needed an office big enough to grow into. We were worried that our sales per month would not cover the rent, but the space made us a real company and so we took the risk anyway and made it work.

The second leap came recently in trying to figure out how to pay ourselves consistently, essentially factoring in our work as a cost to the company. We have taken that leap as well, and though it is stressful at times, it seems to be working. I’m not sure if this is as huge a step for everyone as it is for me, but I really think this is when a company becomes real.

Managing this has nothing to do with the amount of money coming in, because there is always plenty of that. It is about managing the flow of cash successfully. This is when it feels like you have a job, that playtime is over. It feels good.

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The Startup Addiction Defined

Posted on April 13th, 2007 by Zach.
Categories: General.

I was asked recently what it takes to start a company. Having no idea really, I had to think about it for a bit. What exactly had we been through recently with Reware? In the end I really couldn’t give a good answer, but here are some thoughts that come up when people asked things like this.

Someone once told me that every start up takes at least 3 years to even remotely feel like a normal business. You know - semi-regular paychecks, some pretense of business infrastructure, and that always elusive concept; cash flow.

Every new entrepreneur says the same thing when they get advice like this: “Yeah, but we are going to do it differently”. “It will go faster with us. “This idea is the killer app”. And on it goes. Typically you say this for about three years, until such time as the company takes off, or crashes in a horrible ball of flame taking your oh so fragile ego with it.

High stakes poker this stuff, and yet that is the appeal. The idea of going to the same workplace to do the same job day in and day out is too unfathomable for most startup junkies. I let you in on a little secret: essentially entrepreneurs are lazy. Not in the “lay on the couch and do nothing” sort of way. No, it is a more deceptive laziness - One where you work way too many hours and feel like there are not enough hours in the day to finish what you need to do. See? So Lazy.

OK so maybe that doesn’t exactly jibe, but here’s the thing: The startup is a project, not a job. It has a beginning, middle, and most importantly – a finish. When we started Reware for example, I am pretty sure I had my own project finish in mind. I didn’t know what that point was exactly, I just knew that I always have a notion that this is not forever. That there will be other adventures, other companies, other projects to come.

That is the startup addiction – work like crazy all day everyday, get to a point where the business is stable and plan to have much smarter, more organized, and reliable people run the thing. Maybe change your title from “Managing Partner” to “Creative Strategist”. Come in two days a week. Surf a lot. This is the dream that keeps you going. And it’s not the life of leisure that drives this, in fact that leisure is boring after about four days. No, it is the idea that the job or the project is done. That you worked like crazy to an end point. You achieved something. And then you took a much needed break.

This is a psychosis of some kind, I am not sure where it comes from, but there are some specific criteria of the disease:

Work can’t feel like work. It is part of everyday life, in my case the things I am reading at home pertain directly to the places I am traveling for quasi work/vacation hybrids, to the things I am doing in the office. It is the perfect combination of OCD and ADD, both obsessive and impatient, hyper-focused and scattered. I recently took a trip to Mexico where I did absolutely nothing related to work. A true vacation and it was wonderful – for about 4 days.

Denial. 90% of the work stinks, but the other 10% makes you forget that fact. Anyone who as ever been to sea for an extended amount of time knows this phenomenon. Most of the time at sea you are cold, wet, and tired. It’s that one sunset that is so beautiful it makes you tear up. That’s what puts you back out there again. Startups are no different, you forget the pain. I hear pregnancy has similar aspects, but I can’t actually attest to that. Maybe someone else can comment.

There is an inability to pace one’s self. I always wanted to be a teacher, and I think I was a pretty good one – for about 4 weeks. What I could never figure out was how modulate my energy level to last over a whole year, let alone a career. Not only that, but I didn’t want to. There is something fundamentally appealing about the project that swallows your life, and then lets you go surfing later. By the same token there is something horrifying about evenly paced work day in and day out. I just can’t do it. And this is why I leave teaching (one of the most difficult and important job on the planet, incidentally) to people more talented than myself.

In the end I don’t understand the point of work. I understand the value of projects that will fundamentally change the world and I can get into that idea, that is what drives everything else. But work everyday, just sounds horrible. Don’t get me wrong, I have friends for whom work is just a mechanism to do the other things they love. Work is not a calling, but a way to pay the bills, put food on the table. It enables the real passion for them - creation of art, travel, sailing, whatever. Work is just a means to an end, and I can respect that - even if I could never put in that kind of time.

No, give me something that swallows my whole life for three years. Give me something where I will be alternately swearing and whining because I am trying to make things happen that have never been done before, but I think they should be easier. Give me something that sucks my savings and credit down to nothing. Give me the chance to make the big change.

And this is called entrepreneurial. Or stupidity, they really are pretty hard to distinguish.

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Hello world - Take 3.

Posted on March 18th, 2007 by Zach.
Categories: General.

So TDP has been gone for a minute, but now we’re back - call it the third generation.

A little background:

For those of you who have tracked our evolution through the years may remember that we started as a small group in San Francisco in 1999. While the mission changed fundamentally a couple of years ago, we have always tried to keep true to the original concept - A little edgy, a little irreverent, avoid myopia as much as possible.

When we refocused in 2003, we really wanted to talk about the rising “Green Economy”. At that point the frenetic energy around renewable energy and sustainability had yet to rise to its current heights. Credit Al Gore, Rising Oil Costs, whatever you wish - the point is “Green” is everywhere you turn, and by this I mean The Oscars, WalMart, G freaking E! You can’t get more disparate than that. It is an exciting time, and there are a set of news sites that will come up on this blog again and again in the coming years: Grist, Treehugger, Renewable Energy Access, Greenwire. We love these sites, and we felt like didn’t need to compete for attention when they are all doing such good job representing the space.

Additionally, it felt like sustainability and the green revolution, was just one piece of a larger shift going. It was something we could see going on everywhere, in every facet of life. Yet I seem to struggle framing the whole picture for myself.

And with that we begin. I don’t have answers, just a gut feeling that something big is on the horizon. Bigger than any of us can even imagine. Treehugger and Grist, GE and WalMart, these are tangible examples of the shift. Friedman touches upon it, as does Gladwell. Add in Jared Diamond into the mix.

Architecture, Global Trade, Rising Population, the changing strategy of messaging around the environment, Pop-Culture - the shift is everywhere.

And all of it fits together somehow, I just am not sure how yet.

It is my hope that I can use this site to help explain this shift for myself, maybe bounce some ideas off people I respect and start to build a framework of the new order of things in the world - what is coming and what is here.

Thanks for checking in.

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