My first entrepreneurial safety net
My first year in business was primarily spent building mobile apps for clients. When I was in college, I thought that mobile apps would be pretty big, and I thought AI would be really important. I didn’t have any money to hire developers and I didn’t know how to build apps or AI, so I had to learn it all on the fly.
To save money, I lived with my parents for that first year, and I really enjoyed myself. I worked on projects I wanted to work on, I learned a lot, and I felt like it was a true year of growth.
My goals of my first entrepreneurial year were twofold:
Discover business models and customer groups that I liked and disliked
Build myself a safety net, both personally and professionally, so I could think longer-term
One business model I decided to try was a hybrid-SaaS model. My thesis was that mom-and-pop pizza restaurants couldn’t afford a mobile-order application like Dominos or the other giants, but they needed one to stay relevant((I later learned that one of the reasons they weren’t equipped for mobile ordering was because they didn’t have internet in their restaurants, so even if someone ordered, they wouldn’t know unless we set them up with a cellular data plan, too.)). This business model was fairly straightforward:
I would build one, template mobile application
Each client would pay me a monthly licensing fee, along with a setup fee to configure the app and launch it for them.
This was a year or two before Toast and Uber Eats and Doordash and all those other services got really popular. I’m glad I got out when I did, but that’s beside the point.
I signed the 12-month licensing agreement with our first client before I had written any code. The contract included an iOS and Android application.
In case you’re not familiar with iOS and Android apps, they look similar on phones and tablets, but they way they’re built is very different. iOS has one programming language, one IDE ((integrated development environment, the software where you actually write the code)), and one set of tools to use. It’s straightforward and it’s fairly easy. I had spent the last several months getting pretty good at building iOS applications, so that part was taken care of.
Android, on the other hand, is the wild west. There are dozens of sets of tools, IDEs and programming languages that you can use. Normally, I prefer to make decisions by evaluating all my options and selecting the best one, but since I knew nothing about building Android apps, not even the programming language, I was in trouble.
I knew there was a software out there that could allow you to use one code base to build both iOS and Android apps. Upon further research, you could write that code base using the programming language I knew how write. Jackpot!
I tried to get it to work for over a month and came up with… nothing. It was pre-release beta software, and was, unsurprisingly, too buggy.((Incidentally, my meeting with the CEO of that company where I explained what I was trying to do and asked him how to make it work was the last Skype meeting I ever had.))
I had a real problem. I didn’t have the money to hire a developer, I didn’t know how to build Android applications, and, even if I wanted to learn how to build Android apps, I didn’t even know the programming language to do so. My options were either start at ground-zero and learn everything or find a different solution.
I turned my attention toward another way to build Android apps easily. MIT had created an App Inventor where you could use puzzle pieces on an entirely graphical interface, and it would magically create an Android application for you! Brilliant!
I created an entire mobile-order Android application for my first client, complete with both the ability to create your own pizza and order off their unbelievably large menu, using MIT App Inventor.
Throughout the pizza app process, I proudly made progress on both goals, but I never forgot about how I launched an app made using puzzle pieces, and it worked. In fact, until this post, I never told anyone how I made the app, just that I made an Android app. It was something I was originally a bit embarrassed about. I knew the easy thing was to pay someone to build the Android app, but I didn’t have the money. In the beginning, I felt like I was making everything up as I went along, and if I told anyone how the app was built they would softly grin at me, as they tilted their head about 45 degrees, thinking “of course he came up with that, but will it work?”
The truth is, I didn’t know if the app would scale (it did) or if it would be easy to maintain (it was) or if I could copy all those little puzzle pieces and make another app for another pizza restaurant later (I did), and I didn’t want anyone planting any more seeds of doubt than I had already planted for myself.
While my out-of-the-box thinking had gotten me that far, I had no security it would work in the real world. I had the freedom to spend my time the way I wanted, which gave me the freedom to solve the problem the way I wanted, but I had no security that it would work.
This post was originally titled “Freedom vs Security.” My intention was to write about how beginning entrepreneurs, especially ones that start with nothing, have total freedom of time, but they don’t have freedom of much else. They have little-to-no security because they don’t have a loyal customer base, brand equity, or systems for ensuring their operations run smoothly.
Over time, as a business grows, often there’s a feeling of increased security. Businesses have more cashflow, more customers, more employees, and more brand recognition. Maybe the founders have taken chips off the table by selling shares, so they even have more cash in the bank, but there’s also a feeling of less freedom for the entrepreneurs. With increased security comes more administrative meetings, more time spent with the accountant, interpersonal issues that need mediated, and other boring stuff that didn’t exist when the business was a few people and an idea.
I was also going to talk about how increasing freedom while increasing security is a delicate balance. It’s possible increase security by increasing freedom, if you do it correctly. It involves hiring the right leadership team who builds the right processes in your business, replacing yourself several times over, and creating a role for yourself where you only do what you love every day, yet your business continues to grow. It’s very difficult, however, to increase freedom by increasing security. Some of the least-free people in the world have some of the most secure jobs.
When I was starting out, I felt empowered because I could do whatever I wanted to do during the day. While I could use my time as I pleased, it’s also the reason I found myself in the predicament of using MIT App Inventor. I had little money and I felt like all I had was time. I craved just a little more security than I had so I could sleep better at night, but I loved the ability to spend my days how I chose.
I realized as I wrote this post, however, that’s not true.
I also had my resourcefulness. Every entrepreneur has their own resourcefulness.
There’s a component of resourcefulness that falls into the category of “street smarts,” but there’s another, just as important component, that comes from scarcity. For beginning entrepreneurs with nothing but time, there’s a lot of scarcity.
I had chosen to enter a world where my ability to get paid relied upon my ability to create value in the marketplace. Moreover, my ability to get paid the type of money I wanted to be paid relied not only on my ability to create value in the marketplace, but also my ability to discover what the my ideal customers wanted but didn’t have, then build a solution, then sell it over and over again.
It wasn’t until years later, when I was thinking about resourcefulness as a ticket to fabulous success, that I realized it was my original safety net. It’s every entrepreneur’s safety net. There are often many more solutions to your obstacles than you’d expect, if you get creative enough. You just have to think far enough out of the box.
In between when I started writing this post and when I published it, I received a call from a friend who’s finishing his undergraduate degree and has his own business that’s doing far better than mine was in my first year. He’s considering going full-time into his business upon graduation but received a call from his dad who asked, “What happens if your business fails in 5 years and no companies want to hire you?” He was clearly flustered, but it brought back the idea of freedom vs security. What his dad really asked was, “What will you do if you fail, have no safety net, and can’t bounce back?”
My friend asked me the question his dad asked him.
“Start another company and solve a new problem.”
I was surprised that I hadn’t realized that I had resourcefulness as my safety net. My friend hadn’t realized it either. If I hadn’t realized it and he hadn’t realized it, how many other people haven’t realized it? So I decided to make it my first post.