"In 2004, I was running the online sales and operations groups at Google. I had joined the company three and a half years earlier when it was an obscure startup with a few hundred employees in a run-down office building.” - Sheryl Sandberg, Lean In
How is it possible to have a few hundred employees and still be an obscure startup? I feel like answering that question should be more obvious.
Even as a startup founder I found myself bewildered at the above statement. Apparently identifying a thriving business from a startup company isn’t as easy as one might think. So I turned to the founder and CEO of Budsies to shed some light on the startup journey he experienced going from startup founder to CEO.
Alex Furmansky pitched the idea of Budsies to me at a coffee shop in West Palm Beach, Fla., just a few short years ago. His pitch went a little something like this: Budsies takes kids' drawings and turns them into 3D plush toys.
Following his journey over the years, I’ve seen him take his company from an idea on the back of a napkin, to a scrappy startup, to a sustainable business with sizable revenues. Most notably, Budsies has been featured on Shark Tank, has a team of over 130 people, and has deals in place with GAP, Celebrity Cruises, and plenty other reputable brands.
In an effort to decipher the difference between sustainable business and startup, I asked Alex to identify three startup environments he had to work through during his journey.
1. Startups Have a Much Higher Appetite for Risk
Because you have nothing to lose, you take much bigger risks. You find yourself cutting corners every chance you get. For instance, you may not have an attorney read through every contract because you can’t afford their fees. And that’s alright, because the risk-benefit analysis looks very different on Day 1 than it does on Day 1,000. Fearlessness is quintessential for rapid growth.
2. Startups Say 'Yes' to Every Opportunity
At the onset, you have no idea which sales channels have positive ROI and which don’t. You also have a sense of Founder FOMO ("fear of missing out") – jumping on every opportunity. Over time, the cost of your attention becomes measurable. Similarly, you start to develop heuristics for evaluating the values of each opportunity given past attempts. With real metrics, you qualify leads more thoroughly and start to say “no” far more often. Focus becomes your hottest commodity.
3. Process, Process, Process
In the early days, each task is viewed independently and often done in response to an external event. Mundane things like paying a bill or filing a tax form are done in response to a notice. Social-media posts are often made independently as sparks of ideas arise. Employee hiring is done ad hoc, based on whoever applies for the job. As a company finds its footing, anything repetitive is turned into a process. While process may feel like it’s the antithesis of innovation, you find that process around rudimentary tasks actually unlocks your focus to chase larger growth.
In truth, Alex believes that the line between a startup and established business should be intentionally blurred. For Budsies, his goal is to maintain an established and stable platform that gives employees the security to stay hungry and take risks. There’s a big difference between stability and complacency.
This is similar to Google’s strategy, where Larry Pag and Sergey Brin committed early on to unconventional thinking and staying uncomfortable for the sake of relevance. G is for Google, which launched Alphabet their new parent company, supported by Google’s core advertising business, in order to fuel smaller bets on ideas that drive innovation.