What you need to know about Startups Part 2

This past summer, I worked for…myself. I co-founded a small business called Odd Job Bros(OJB) with my cousins Jimmy and Teddy Combs. What did we do? Odd Jobs. Everything from scrubbing toilets, to building decks, to painting the innards of an elementary school, we did it all. Every job we got a call about, we finished. After starting with an initial investment 120 dollars, by the end of 7 weeks we closed the books with cash profits in excess of 20,000 dollars.

Where could we have improved?

1.) Hiring 

In 2008, in an interview with TechWeb, Elon Musk spoke about his navy seals approach. He states that great employees are like the army. If a company has a lot of great employees they will most likely be in great shape. He then goes to clarify that although the army is good for a lot of military operations, sometimes the navy seals get called in to handle particularly tough circumstances. Elon also states that in order for a company to grow from a startup to a large business, they need to hire exceptional talent. In conjunction, these ideas mean that in order for a startup to be successful, you cannot just have the army, you need the navy seals.

After the first initial marketing campaign(Walking Door to Door for hours, days on repeat), OJB grew extremely fast through two principles: word of mouth, and top of mind. Our founders were ambitious, dedicated, and always did a good job. We had the navy seals, but in order for us to scale quickly, we needed to hire people who were friendly(skilled at customer service) and hardworking(fast, efficient, high-quality). We struggled hiring navy seals, and settled for the army. We eventually had to fire someone for incompetency. Luckily we recovered quickly, but the point is that hiring new team members is especially risky in the beginning because your brand is so new. You can never settle for the army.

My Advice: Your first employees are your most important. Find people you know, and work hard to build trust, it will go along way. Berkshire Vice-Chairman Charlie Munger says, “if you mix turds and raisons, you still have turds”. This is especially true in startups, one employee can ruin the company. If you do accidentally hire a turd, get them out quickly.

2.) Guesswork

Our business ran like this: a prospective customer would call the company line, we would go and give an estimate, then set up a date to get started. The hardest part in this process was estimate. For better or worse, as the CEO it was my job to handle most of estimates. However, I didn’t know the first thing about most of the jobs. I was “swimming in the waters of ambiguity”. The most discouraging estimate I ever gave was about painting a deck. The client wanted it done for 150. I countered with 100, and we compromised on 125. I have to be honest, this was my first “big” negotiation and I was pumped about getting a 25% raise after my initial offer.

It turns out that the job ended up taking over 30 man hours. At our standard rate of 15$/hr that would be 450$ profit, but because of my generous offer we were down 325 dollars… Thankfully, this was in the beginning of the summer and we didn’t have to pay anyone(We brought flood lights and painted all night).

My Advice: Get comfortable navigating the waters of ambiguity. This was only the first example of many times I was working in situations where I had to make a lot out of a little information and I’m sure it won’t be the last. Don’t try to avoid ambiguity- instead get comfortable working in uncomfortable situations.

Lessons from Success

1.) Quality

“We are what we repeatedly do, therefore, excellence is not an act, but a habit.”

-Aristotle

OJB’s growth came primarily from two principles: word of mouth and top of mind. In order for these principle to continuously fuel growth, we needed to produce high quality results. Like Aristotle says- excellence is a habit. We engrained excellence into the fiber of our company(and ourselves) when we learned to paint. For example, my co-founder Teddy Combs and I were hired to paint an attic. At this point, the only painting we’d ever done was in Mrs. Brosman’s art class.

We started by taping the edges, something not all painters do but we were inexperienced and didn’t know how to “cut edges”. In the beginning, taping was key. We understood that if we taped well, it would look good. If we didn’t, the paint would bleed through the tape and down the walls. In accordance with this line of thinking, we spent a lot of time taping… Perhaps too much, but we became meticulous, and made excellence our minimum passing grade. We ended up finishing the attic, and subsequently got hired to paint the same families’ porch, deck, and exterior doors.

My Advice: Details matter. Be meticulous- do not accept anything less that perfection. And always remember, the quality of your service(product) is the quality of your company.

2.) Customer Service

OJB relied heavily on extremely good customer service. We made it our top priority to treat every customer like royalty and laid out strategies to make sure that happened. For example, we mandated what my father used to call “Status Checks”. After each job, we would ask our clients “Will you come take a look at our work to make sure its excellent? We would be happy to change anything as you see fit.” This strategy worked beautifully. It established trust between OJB and our customers. At the same time it validated the clients perspective. This may seem like a stretch, but it’s not. It’s basic psychology- people love to feel validated.

My Advice: Solicit advice before it becomes criticism. Everyone in startup culture says “Solicit criticism and use it to improve your product”. With OJB, we did it before it became a problem. We worked for 7 weeks and served over 100 clients, doing over 300 jobs with ZERO complaints.

3.) Research

“Failing to prepare, is preparing to fail”

-John Wooden

One of my responsibilities as CEO was to solve the hard problems, and like I said above, we never turned down a job. As the summer progressed we began getting calls about broken things, inquiring if they could be fixed. For example, we got a call one evening about a screen door that had fallen off the hinges and the client asked if I could fix it before his open house the next afternoon. I responded like Sam in Holes, calmly stating “I can fix that”, but I didn’t know the first thing about screen doors, and I didn’t have much time to learn. I spent the whole night taking a crash course. I learned how hinges, springs, and door frames work. I became as much of an expert as I possibly could. When I got there in the morning I spent 5 minutes inspecting, 10 minutes reinstalling the door frame(which had partially fallen off the house as well), 10 minutes reattaching the hinges(screen door) to the frame, and 5 minutes reinstalling the springs(to prevent slamming). I was in and out in 30 minutes.

My advice: Do your research. You can never be over-prepared. Whether you’re trying to enter a new market, or building an app, if you want to succeed- study the process. You save time and avoid missteps.

To avoid getting to lengthy, I will hold off here and continue with OJB’s Lessons from Success in the next post. For now, remember Quality, Customer Service, and Research. They are invaluable.