The Resourceful Startup in Audio Format: Recent Episodes
Dan Daugherty
Being resourceful saved and changed my life.
The plane landed abruptly in Caracas Venezuela and the entire plane cheered. It was the year 2000 and I was a 20-year-old kid who received an externship to work at Banco Mercantil for three months. My classmate in Econ 101 was from one of the wealthiest families in Venezuela and his father was on the board of the bank. He went to Ohio Wesleyan University just as I did and decided to give back by offering 2 paid externships. I was lucky enough to get the job.
My ignorance of international travel became apparent when weeks before, I sent an email to my classmate to pick me up at the airport. He never responded to the email but I just thought he forgot to respond and would just pick me up anyway.
As we departed the plane, the 90% humidity immediately drenched my clothes and took the breath right out of me.
The night had fallen and I made my way to the carousel to get my luggage. It was quiet and I decided to go exchange my $20 USD for Venezuelan Bolivares. I was handed a stack of a couple thousand bolivars and I felt like I was the richest person on earth.
“Wow, for $20 USD I get all this”, I thought to myself.
As I made my way out the large glass doors to meet my driver, the silence turned into chaos. Over 100 people were screaming, holding signs and trying to grab my bag. As I looked at the sea of faces, my heart started to race and anxiety began to set in. “Oh no, what if he is not here?” “What if I can’t find him?” I thought to myself.
At that very moment, a gentleman grabbed my arm and asked, “Can I help? Senor, what is your name?”
I said, “Danny, I am looking for my friend Alfredo to pick me up.”
He replied, “Tranquilo, go upstairs and look down. You will have a better view.”
I thought that was a good idea, said thank you and headed up the stairs with my backpack and rolling suitcase. 20 minutes later I still did not see my friend. The same gentleman came up from the side of me and said, “ You should go use the payphone to call your friend!”
As I headed over to the payphone and began to figure out how to make a call, another man came from the opposite side wearing dirty jeans and a white t-shirt.
“Danny, I am with Alfredo and I will be taking you to your destination.” He said.
I thought for a second and before I could do anything he already grabbed my rolling luggage and began walking out towards the parking lot. After all, my classmate was from one of the richest families in Venezuela, I pictured a limo and a well-dressed man or women with a drivers hat picking me up. Regardless, I walked next to him and while walking, the other original gentleman was now walking right next to my “driver.”
Alarm bells were ringing in my head as time began to stand still, My heart was racing uncontrollably and fight or flight began to kick in. As we continued to walk, the faces of complete strangers were talking to me with their eyes saying, “be very very careful.”
The next thing I knew the trunk of a dark brown Chevy Nova with pitch black tinted windows was open and my luggage was set inside. I asked for some ID and the driver took out his ID and was covering the face. I asked, “Cuanta Questa para Caracas.” He said, “Ochenta” and I said, “Great, vamonos!”
It was pitch black, hot and sweaty. They opened the rear passenger door and let me in. Both gentlemen were now in the front seat and speaking to each other 100 miles per hour. I couldn’t understand what they were saying. As I looked around, I noticed that there was no handle for me to open the door or roll down the windows. It was like being in the back of a police car.
I said, “Hace calor, can I roll down the windows?”
They laughed and said, “La ventana pequena.”
They wanted me to open the very small window which barely let in any air. I obliged and began to really worry. The streets were well engineered but we had to go up through the mountains to get to the city. It was dark and I couldn’t see any of the city lights.
In the very beginning at rentbits, I was working more hours than I was at Google. It took a lot of effort, risk and time to get off the ground. I worked the first two years not making a single dime in salary and was writing a personal check to the company every month so we could meet payroll. The cash that was coming in was going back into the business but we were still operating in the red. I was getting burnt out. I was scared. My money was being drained. I thought about quitting many times. In my mind, that was the easiest thing to do. Throw it all away and just go back to Google. Most people quit right at the moment they are about to succeed. For those marathon runners that quit, most do so at mile 20, just 6.2 miles before they succeed. Imagine that, you run 76% of the way and your mind and body says quit, just before you are about to be successful.
I decided to persevere. To keep running, I was on mile 20 and I told my mind I wanted to finish the race. We started to gain momentum and gain even more customers and revenue, but this just increased the amount of time I was spending on the business. However, I started to see a tipping point in technological developments that helped to automate the business.
From 2010 to 2017, rentbits saw and utilized technology to automate processes, sales, operations, customer service, IT and marketing. This allowed us to become more streamlined without the need for additional resources. My time was now being spent on strategy, recruiting, marketing and sales, the things I love to do.
With this new profound knowledge and utilization of technology, we were able to increase productivity, sales, and profit dramatically. However, this all had very real and unattended consequences.
We had to say goodbye to some employees because some jobs were being replaced by automation. We closed our physical offices because everyone remaining was working remotely from various cities and countries throughout the world. The new automated economy was approaching us fast and we were actually feeling the benefits of it but were saddened by how this was affecting our previous employees whose jobs were being eliminated because of it.
For example, in the early days of rentbits we needed to find a way to track all of the phone leads that were coming into our system so we could help our clients quantify their advertising spend. We spent 6 months developing and building an IVR (Interactive Voice Response) system that would allow us to accomplish this. We spent approximately $35,000 on this new system and had one full-time engineer dedicated to building the feature.
Today, you can build the total functionality of the system we built within one or two days using the twilio.com API which we now use. The API fully automates the process of registering phone numbers, recording phone calls, doing SMS messaging and much more. You can do this all for a fraction of the cost (even free) compared to just 10 years ago.
Graphic design work has changed dramatically as well. Today, we do most of the design work for free using canva.com. There are also monthly services out there like designpickle.com that will be your personal designer for $370 per month for unlimited design requests.
We used to pay enormous licensing fees for CRM and Microsoft Office products. We now use Google Docs and email for $5 a month per user to be in the cloud.
Before there was the cloud, we would have physical and expensive dedicated servers that cost hundreds of thousands of dollars to maintain. This changed dramatically when Amazon launched AWS. We now save hundreds of thousands a year on server costs.
I used to think that you had to be willing to give up everything, in order to gain anything of significance. I gave up time, money and pushed off finding the love of my dreams to make rentbits a success. With that said, I now believe you don’t need to give up everything, you can find a happy balance and finish that race.
Kyle MacDonald sat at his desk and stared endlessly at a red paperclip. His mind went back to his childhood where they used to play a game called, “Bigger and Better,” where you start out with something small and then you trade it for something bigger and better.
“Hum, I wonder what would happen if I tried to trade this paperclip for something better.” he thought to himself.
He then proceeded to take a picture of the paperclip and posted it on Craigslist asking if anyone wanted to trade for it. Two women by the name of Ronnie and Corrina responded to the posting.
“Hey, this is pretty cool, we would like to trade with you. We have a pen shaped like a fish. Would you like to trade?” They asked.
Kyle jumped at the opportunity and was now the proud owner of a pen shaped like a fish, which was bigger and better than the paperclip. “How far can I go with this idea?” He thought to himself. He then posted the pen shaped like a fish on Craigslist again asking if anyone wanted to trade.
“Absolutely, my name is Annie and I have a doorknob with a crazy face on it.” said the Craigslist responder.
“Wow, this is even bigger and better than the pen shaped like a fish. How much farther can I go with this?” He murmured.
Kyle’s buddy Sean asked if he wanted to come over to his house for some burgers. Sean needed the knob with a crazy face on it to fix his stovetop espresso maker and wanted to trade his outdoor camping stove for it.
“We are moving liabilities into assets. We are creating value. We are improving each other's lives, albeit on a small scale.” Kyle mentioned to Sean.
Sergeant David J of the US Marine Corp. called Kyle and said he had been looking for that exact model camping stove and had an electric generator he could trade.
Kyle made the trade but unfortunately, the electric generator he thought had value turned into a liability since no one came knocking on the door to make a trade. However, a few weeks later, a young man did want to create power out of this generator and offered an empty beer keg, an IOU to fill the keg with beer as well as a neon Budweiser sign.
Kyle then posted this Keg, an IOU to fill it and a neon Budweiser sign to Craigslist again and called it an “instant party.” “Do you want to trade for it” he wrote.
Kyle was starting to generate some publicity around this project. Newspapers and magazines were beginning to see the power of the story.
Michelle Parise, a famous radio and TV personality in Canada responded and said he wanted to trade his worst snowmobile for it. Kyle made the deal and considering it was the middle of winter in Canada, this snowmobile had more value than if it was in the middle of summer.
A snowmobiling magazine called “Snowriders West” called Kyle and said they would like to exchange two trips for two to the Canadian Rockies in exchange for the snowmobile. They said it would give their magazine some publicity and everyone wants to go to the Rockies this time of year. Kyle made the trip to Canada to do the trade and sure enough, they got more publicity and were interviewed on the national news. While doing the interview, Kyle was wearing a hipster shirt with the company logo “Cintas” on it. The head of Cintas saw Kyle on TV with their company shirt on and met Kyle and said, “I’d like to make you a trade. I would like to trade you a Cintas van for the tickets for two to the Canadian Rockies.”
Kyle accepted and wanted to keep moving forward. How far could he take this? He then received a call from a recording studio and they wanted to trade a recording contract for the van. He then asked if anyone interested in music wanted to trade for a recording contract. Jody, an aspiring musician in Arizona and owner of a duplex, asked Kyle if he wanted to trade the recording contract for one year of rent. Leslie, her tenant in the other half of the duplex wanted free rent and asked Kyle if he wanted to trade an afternoon with her boss, Alice Cooper.
I started this audiobook to help anyone start their own business or help their company grow with very little resources. I hear people all the time say I want to start a business but say things like I don’t know where to begin, I don’t have any money, I don’t know how to code, I am awful at sales, I don’t have the time, I am not a marketer, no one will buy from me, the time is not right, and many other excuses. When you say these things, you are not being resourceful. You are already giving your mind excuses to fail. Stop it. Get out and make it happen. There are no more excuses. We are in some very exciting times where technology has decreased the cost and time it takes to start and run a profitable business. I wanted to write something I wish I had access to when starting my companies over 12 years ago.
In the following posts, I will show you how to be resourceful in every step of starting and running a successful business. From generating business ideas to marketing your products, you will be prepared to significantly grow your business with very few resources. I will show you how automation will lead to liberation.
I have structured the bulk of the material into what I call the IDEAL method for resourceful startups. Within the IDEAL method, there are various stages that have been proven to launch and run successful startups. These stages run in a cycle that continues for the life of the business. The Idea and Thinking Stage is the foundational stage to ensure you are successful in all the other stages. The Development and Iteration Stage outlines how to get to market quickly, build an MVP (Minimum Viable Product) and do it at the lowest cost possible with very few resources. Within this stage, I will also explore how to collect real-time feedback from sample users and move it in and out of The Idea and Thinking Stage again so that you can iterate the product or idea and move it into the final Execution and Growth Stage. This stage is the most important as it helps you generate cash flow quickly while helping to collect feedback to improve existing products and launch new ones. The cycle is a continuous process that should never end. I refer to this as the IDEAL Method for Resourceful Startups.
Along with the three stages of success, Idea and Thinking, Development and Iteration and Execution and Growth, it is also important to continuously ask yourself the below automation and liberation questions during every stage of your journey. Remember, to automate is to liberate. Automation Have we automated or have we thought about automating everything we can. If not, why? Liberation Will the decisions and ideas we generate now liberate us to be less stressed, have more time, earn more money and help us live a more meaningful and purposeful life? I will help you, step by step, build a very profitable business with very few resources. Even if you are not starting a company but working at one, you can still use these techniques and strategies to grow your division, generate more profit, and automate your process. Life is too short not to live a more meaningful and purposeful life. You can accomplish extraordinary things with the right tools, a lot of hard work and a powerful purpose to set your sails in the right direction. Let's take this journey together.