Launching a successful business often means doing things differently, sometimes in ways that DEFY CONVENTIONAL WISDOM. As proof, look no further than these entrepreneurial mavericks and some eccentric ideas that paid off big.
Ryan Carson had spent enough time working for “the man” to know that as an employer, he didn’t want to become the man; the soul crushing boss that employees love to hate. So in launching his online coding school Treehouse in 2010, he decided to try something different; a four day 32 hour workweek.
The reaction from the MBA types who had Carson’s ear was a chorus of “You’re nuts!”
But Carson’s approach, as unconventional as it may have seemed, had a near immediate positive impact on his company’s recruiting efforts. He felt vindicated… and inspired to stay the course.
The shorter workweek allowed Treehouse to compete for talent against companies with deeper pockets, and the business has prospered as a result. “We’ve done some things that you might call unorthodox. The confidence to make these decisions really is just believing something is a good idea and making it happen. It was scary to hear smart people tell me it wouldn’t work, but I don’t care if others aren’t doing it or don’t think it can work. If I have reason to believe it will work, I’m going to try it.” – Ryan Carson.
It’s in an entrepreneur’s DNA to make moves that fly in the face of convention. That said, the most effective ideas aren’t just pulled out of thin air… they tend to be grounded in solid strategic reasoning and are aligned with universal laws and principles.
“For every wacky idea that is successful, there’s a wacky idea that’s not successful. As a startup, you want to constantly be tinkering with stuff and looking for ways to innovate. But you also have to balance the maverick with logical business skills.” – George Deeb, Red Rocket Ventures.
Here’s a look at how a handful of creative entrepreneurs converted their unorthodox ideas into brilliant tactical maneuvers, even in the earliest, most vulnerable stages of launch.
EMPLOYEES FIRST
As CEO of Treehouse, Carson implemented a shorter workweek to attract the best employees to his new firm. He also believed the truncated time allotment would “help people work more efficiently.”
That was a success, but two years and 50 employees later, he started to hear grumblings about managers. It was “the unusual political BS and behavior that a normal management structure tends to engender.” So, in an effort to improve morale, he did away with manager titles altogether.
Soon thereafter, Carson torpedoed Treehouse’s internal email system, which he viewed as inefficient, replacing it with a social platform where communications are posted for on demand access.
The Results: With a shorter workweek, “we snap our fingers and get the very best people… people who choose to work for us over Google and Facebook” – Ryan Carson. What’s more, employee turnover over a 4 year period was nearly zero. (The staff has grown to 80.)
Dropping email in favor of a proprietary internal system called Canopy, where comments and information are posted, tagged for relevance and accessible on an as needed basis, has “changed everything”. It was extremely efficient and fun to use, and it allowed people to deal with internal communications on their own terms.
Meanwhile, ridding the company of its managerial layer has fostered “trust driven loyalty, efficiency and hard work.” Anyone can propose a project, then lead it. This allows them to be more nimble. Every employee has the freedom to propose ideas, then see them actually happen, without the potential of managers micromanaging them. When you give employees more power, you increase happiness and you increase results.
Not sure if you believe that? It’s hard to argue with their revenue… a cool $13.5 million in 2014 and projections to double on that figure.
GET THEM TO WORK FOR FREE
When Marco Hansell launched Speakr (the company was originally called twtMob) in 2010, he had a clear business concept: a venture that would coordinate influencer-based social media campaigns via Twitter for Fortune 500 brands. He was also clear about the kinds of designers and copywriters needed to help launch it.
“I knew I wouldn’t have the money to pay them, so I needed to figure out how to make it beneficial to them without costing me a lot. It came down to me selling them on a story and a vision they could believe in.” – Marcus Hansell.
Hansell doled out IOUs to the six contractors who did eventually buy into his vision. Each signed a convertible note agreement, whereby the moment the company saw sales of $250,000 or attracted its first $1 million in venture capital, they could either take their full salary for their work up to that point, in cash, or opt for an equity share in the company commensurate to their back salary, plus 20 percent.
They structured it so there was a little risk to both sides. This allowed the contractors to know that the company wasn’t just using them to make a quick buck, that they’d be making a shared sacrifice. That’s how they got the buy-in.
The Result: Within a year of the launch, twtMob hit the $250,000 revenue trigger; within 18 months it had generated close to $2 million in sales.
“Being resource -constrained made us very grounded, very resourceful and very smart about our decisions.” Marco Hansell
They did a smaller number of things at a really high quality.
That approach has paid off for all involved. Speakr has landed multiple rounds of VC funding, while the contractors who opted for an equity stake over cash now “own a sizable percentage of the company relative to the amount of work they did early on.
SELL FIRST, FIX LATER
When Jayna Cooke was brought in last year to fix the business model behind Eventup, an online marketplace that matches event planners with venues, she how the product had flaws. But rather than first trying to fix them, she hired a salesperson to try to sell what she knew was damaged goods. Given her background as vice president of business development at Groupon, she was convinced the right move was to get the salesperson to collect feedback from the market that they could use to fix Eventup’s operations.
It was a matter of being agile, of figuring out where they needed to go from where they were, without being rigid and stuck in their old ways, because being rigid leads to problems.
The Result: Using intel gathered from hundreds of calls she and her salesperson make over a few weeks, Cooke did eventually figure out what Eventup needed to do to save itself from shutting down. She proceeded to simplify the fee structure and streamline operations through a new customer relationship management tool for venues to track leads.
“We learned exactly what our customers would pay for if we offered it.”
By the end of the first fiscal year, revenue reached seven figures. Up next: A push to raise capital to fund further expansion.
ALL OR NOTHING
Industry colleagues questioned the mental state of food importer Craig Lieberman when he showed up at a major trade show in 2008 with a single line of specialty deli crackers instead of the 60-odd Australian foods he typically represented.
“People were approaching me and asking if I was okay?”
Earlier that year he had taken more than $500,000 cobbled together from friends and family and turned his import business into 34 Degrees, a domestic manufacturer of just one product: a wafer thin, Australian style cracker. The bold move required buying expensive commercial ovens from Germany and installing them.
Bakeries typically produce a range of products to spread the risk and satisfy break taste preferences, but Lieberman was different.
“It was an educated gamble that I took because the type of crackers we wanted to make were already selling really well, but the cost of entry to make anything like them was so high that I believed it would keep out a lot of competition.”
The Result: Within 12 months, Lieberman was filling repeat orders for Whole Foods and Costco. They had got the model right. To triple the business in the first year and become really profitable almost instantaneously… that validates this decision.
Many years later, with annual revenue expected to approach $10 million, 34 Degrees distributes its crackers to grocers in all 50 US states and throughout Canada, and its about to invent in two more German ovens to keep pace with demand.
Mike Johnston
Co Founder and Architect of Evolve
