Starting a company in a down economy

2008 really wasn’t the best time to start a business - (Great Recession was December 2007 - June 2009) . So I did the smart thing and started two. And oh yeah, I had a new baby and still needed to keep my full time job. Here is what I learned from that experience and why I feel it is relevant still today ten years later.

First, having no money really makes you scrutinize your ideas. With the iPhone coming out in 2007 and the ability to build apps in 2008, we knew this was something important to be a part of. I had actually played around with the idea of starting a business for several years, but it wasn’t until Jeff held the new iPhone in his hand that we knew were literally looking at our future.

So how do you know if your idea is really good? I think it is more that you feel a certainty that you need to try. That “going with your gut” feeling. (Side not, scientists are actually starting prove there is an actual Brain-Gut connection.) So we followed our gut instinct and started the journey.

The truth in starting a business is that it is really a series of pretty small decisions formed by constraints. Our first product was actually our third or fourth choice. The truth was that we couldn’t convince a developer to be a partner and code on his own time in the evenings and we couldn’t afford to pay for one. The idea of borrowing or raising money to start the business honestly never even felt like an option. After all, who would give us money?

We decided on creating an iPhone app that would let users post to their Tumblr blog, the popular microblogging and social networking website. [Tumblr enables users to share text, photos, quotes, links, music, and videos. Yahoo! Inc. acquired it for $1.1 billion in May 2013 and has over 500 million users today.] At the time, Tumblr was a new social platform. It quickly gained popularity by providing a fresh perspective to the world of blogging.

We picked a Tumblr iPhone app because Jeff had been tinkering. Learning and tinkering tends to lend itself to finding an opportunity. Jeff spent the first few months learning to code and develop an app with literally no assistance available to him. I spent the first few months trying to understand what it meant to start a business. We viewed this as a our learning time. No real expectations besides a few bucks for lunches and hopefully some happy users. It was more of the joy of creating something - a product and a business.

You know you have something worth doing when you find yourself making the time to chase that idea. I think in the end, that is what both Jeff and I did in our own way. Got focused. I honestly didn’t even realize we were in the middle of a recession. It was more about finding ways to get through the next hurdle. Need an EIN? What’s an EIN? Need a business bank account? Well, we can’t afford to pay for one each month, can I get one of those without paying a monthly fee? Articles of Organization and a Business Plan? Ok, sure…

With no network, you need to create something of value that someone will want. And then build your network from there. Then continue to provide value. There, if I could go back and rewrite that first business plan, I think that would sum it up. We built something people liked. Tumblr rewarded us with an opportunity and then we turned that opportunity into something else of value. Rinse, Wash, Repeat…

The truth is that doing that first app for Tumblr shaped our path for the next decade. Our eyes were opened to what a real start-up looked like. We began to understand commercial software and human interaction. We began to grow our network for really the first time. Other clients soon reached out and it was on to the next challenge.

Looking back, the economy provided a natural set of limitations that allowed us to focus. The restrictions pushed us to really know if what we were going to do was worth it. It also minimized the financial implications and made us scrappy - which is key in getting and growing a business. After all, how many people can say that they started a business only spending $500.

With another down economy upon us, those same traits are important. For a small business, a new business, an existing business, the ways that you can find your passions, create time to build something of value, and execute is key.