$700. After a futile and costly search for overseas manufacturers, $700 is all that Scott Hunter’s venture, Vedavoo, had left in its bank account.
Going overseas hadn’t been the original plan for Vedavoo, a maker of fly-fishing and outdoor gear. Hunter, MBA’09, had wanted to manufacture domestically, but swayed by the advice of others, he changed his mind. Months of frustration followed. Hunter thought he was set with one factory, but then orders from Nike came in and the facility ditched Vedavoo. At another point, Hunter was duped, thinking that he was dealing with the owners of a Chinese factory. The swindlers stole his designs, and Hunter never heard from them again.
In the end, all he had left was that $700 and a stubborn streak. People around Hunter thought he was a “little crazy” to keep going with his floundering company. “It was tough. Maybe it would have been easier to turn tail and run,” he says. “But I knew there was potential. My dreams and passions were this company.”
Start a business, and tough times eventually will come your way. It’s inevitable. “My grandmother ran a very successful business, and she used to say that ‘into each venture, some rain will fall,’” says Caroline Daniels, senior lecturer in entrepreneurship and a faculty adviser with Babson’s Butler Launch Pad. “She was right.” The smorgasbord of problems a startup faces can leave entrepreneurs feeling dizzy, depressed, and downright defeated. Somehow they must find a way to pick themselves up, dust themselves off, and soldier on. “The real question,” says Daniels, “is does the entrepreneur have the passion and resilience to see the venture through the tough times?”
Hunter did. Burned by overseas manufacturers, he decided to make Vedavoo’s products himself at his home in Dedham, Mass. He bought a $300 used sewing machine off of Craigslist and $300 in fabric and went to work in his garage. “I went to my garage literally having never sewn a stitch before,” he says. The uninsulated, unheated space grew stifling on some days, freezing on others, but Hunter kept at it. “I don’t give up,” he says. His first products came out in 2011, the first profits followed in 2012, and the dark clouds that once swirled about his business have cleared.
Awake at 3 a.m.
Ask any entrepreneur about the tough times, about the scars and bruises suffered while starting their businesses, and they’ll have a story to tell. Take Sherry Goff, MBA’86, founder and president of SherryWinks, a Marblehead, Mass., maker of the PocketBra, which, as the name suggests, is a bra with pockets for carrying personal items. “It’s 3 a.m., and you get this pit in the bottom of your stomach. You’re scared,” she says. “Then you wake up and the sun is out, and you just push forward.”
Many of Goff’s sleepless nights came after filing for a patent for her product in 2011. Patent applications take a long time, so even though Goff had a business loan to pay back and a competitor went to market, all she could do was put her business on hold and wait. She also was going through a divorce, which added to her stress. “It was a very dark time,” she says.
The darkest times for Joel Holland ’08 came not in the uncertain early days of his venture, but when it was taking off. Holland is CEO and founder of Reston, Va.-based VideoBlocks, a provider of stock footage. In 2012, Inc. named VideoBlocks the fourth fastest-growing media company in the U.S. In 2013, the magazine named Holland one of its “30 under 30” entrepreneurs. Holland, however, wasn’t happy. “I didn’t want to do it anymore,” he says. “I wanted to sell the company and go live on an island.” He longed for the venture’s early days, which seemed looser and less stressful. “It’s easy to be the underdog. There are no rules,” he says. “Once the car is moving fast, if you fall off, it will hurt.”
The low point for Jay Hoflich’s company came during the federal government’s sequester of 2013. Hoflich, MBA’12, is CEO and co-founder of ReconCraft, a Newton, Mass., manufacturer of military and law enforcement boats. With the sequester’s broad budget cuts, an $8.2 million U.S. Customs and Border Protection contract, a primary focus for the fledgling ReconCraft, suddenly was halted. “Basically, we had no money,” Hoflich says. “It was pure survival at that point. We didn’t know if the project would be canceled.”
The company shuttered a plant in Washington state and laid off employees, and Hoflich depleted his Roth IRA and other investments. At home, money was tight. Hoflich had a 2-year-old boy with another child on the way, and his wife’s income was irregular. Rice and beans became a staple of the family’s diet. Hoflich went on long runs to clear his mind, and he threw himself into work with the hope that the big government contract would be reinstated. Eventually, Hoflich resorted to selling his beloved motorcycle, a KTM Supermoto. “It was a rare model,” he says. “I loved that bike. It was a sad day. I had to part with everything of value.”
Driveway Doctors, a mobile car-care company based in Woburn, Mass., was a hit with customers. But behind the scenes, founder Alexander Tallett, MBA’12, was frustrated by one maddening problem: He couldn’t find solid employees. “I never saw that coming, how screwed up the hiring process can be,” he admits. The headaches started immediately with his first employee, who was a good mechanic but never showed up on time. Tallett finally gave him a warning: “If you keep coming late, I’ll have to fire you.” The mechanic replied, “Yup, you probably will.” That attitude, the fact that the mechanic didn’t even try to pretend he would do better, was surprising. “I’m coming from the finance industry,” Tallett says. “I dealt with jerks, but they were hard-working jerks.”
Many more hiring misadventures followed. A mechanic stole $200 from Tallett, while an operations manager spent all day playing fantasy football and World of Warcraft on his laptop. Drug problems turned out to beset some new hires, one of whom disappeared for 30 minutes in the bathroom and then promptly backed a car into a van. Tallett looked him in the eyes. “Can you even see straight right now?” he asked before firing him on the spot. Another mechanic who had lost his license, a fact that Tallett was unaware of, took the company van without permission and was pulled over by the police. Eventually, Tallett gave him a second chance, but months later the employee took the entrepreneur’s truck, again without permission, and that inevitably brought his employment to an end.
The breakneck turnover was challenging. During the course of 18 months, Tallett fired 25 mechanics. “I wouldn’t have thought that finding a decent mechanic was an insurmountable problem,” he says.
Getting Through the Gloom
Lorena Scott ’99, founder and CEO of Toronto-based MommiesFirst, which mails monthly care packages to pregnant women and new moms, is another entrepreneur in the trenches. When she launched her business in 2011, she put in days that stretched well into the wee hours, all while raising two young children. “I wouldn’t recommend that to anyone,” she says. Scott wonders how other entrepreneurs handle the tough times. Typically, she only hears of the wild success stories and the flaming disasters, but not the people in between, those like her grinding it out day after day, striving for tiny triumphs and trying to stay sane and solvent. “There’s no case study for these roller coaster rides,” she says.
When facing difficult days, Dennis Ceru, senior lecturer of entrepreneurship, says entrepreneurs first need to make the time to manage their stress, however daunting that may seem. “Entrepreneurs get so wrapped up,” Ceru says. “They spend the extra hour at the workplace. They rush through a meal. They don’t get up early to go to the gym. Not sleeping or eating right only adds to the stress.” Because cash flow is often the greatest cause of stress for entrepreneurs, Ceru also advises managing it as closely as possible. Bill customers immediately. “The longer entrepreneurs wait, the longer they wait to get paid,” he says.
Perhaps most important, though, is the deceptively simple yet critical recommendation Ceru offers: Talk to people. “The worst thing entrepreneurs can do is isolate themselves,” he says.
Scott knows well the risks of isolation. “For the last three years, I’ve had my head down working,” says Scott. She laments not having a co-founder to commiserate with. “It’s a lonely road.” Facing worries like any entrepreneur, she often internalizes them. Not wanting to present a negative portrait of her company to others, she is cautious about sharing.
Still, Scott realized that she needs an outlet for her concerns and feelings, so she formed a personal board of directors made up of two close friends and three mentors. At least once a quarter, either by phone or in person, she checks in with them. They ask Scott hard questions, not just about her business, but also about her health and happiness. If they sense her life-work balance is out of whack, they might tell her to take some time off and spend it with family. “I need a board of directors,” Scott says. “If not, I will go crazy.” Her husband also is a help. He works in the investment world, and the pair have gone to his office, away from their home, to talk about her business. “We leave our relationship and emotions at the door,” Scott says.
Tallett of Driveway Doctors appreciates the value of such emotional support. As one employee after another proved unreliable, what sustained him was his life outside the company. “I got really lucky,” says Tallett. “My home life was great. I bought a house in New Hampshire. I got a dog. My girlfriend moved in and that was good. That kept me going.”
VideoBlocks’ Holland benefited from talking with others after he realized that the cause of his unhappiness was a case of Imposter Syndrome, a common feeling among business owners that they’ve only lucked into their success. “I was frightened that I didn’t know what I was doing,” he says. “I wanted to run away.” Holland hired a leadership coach to help him deal with this uneasiness. “She talked me off the ledge,” he says. “She said, ‘You don’t need to know all the answers.’” Holland also initiated a 360 Review, which involved colleagues providing their reflections on his performance. “What came back was exciting,” he says. “It was positive and critical in a constructive way.”
Over at SherryWinks, Goff did win approval for her patent, albeit two and a half years after first applying. “It was one of the best days of my life,” she says. “It was a game changer.” Goff’s first PocketBras came out in 2014, and she feels 2015 could be a breakout year. Despite the success, she’s still plagued by occasional nights in bed where sleep can’t be found. Her business is never far from her mind. “It’s right there with me 24/7,” she says. “It never leaves.” Goff relies on talking and networking—what she calls “stirring the pot”—to help combat the anxiety. “When you’re in bed, you’re not able to do anything about what’s on your mind,” she says. “When you stir the pot, things happen. More and more opportunities open up.”
Reaching out to others also proved vital for ReconCraft in the middle of the government sequester that crippled its business. Hoflich and his two co-founders are Coast Guard veterans, so they tapped into the veterans’ business community where they found guidance for surviving in lean times, as well as an advocate for veterans at a bank. At a time when ReconCraft had no money coming in, the bank offered a crucial loan. “That line of credit was our lifeline,” Hoflich says. Ultimately, the contract with U.S. Customs and Border Protection was reinstated, and the company today is enjoying tremendous growth.
One More Time?
Sometimes the dark clouds that gather around new ventures never quite clear. Although Tallett dreamed of growing his mobile car-care company, the hiring hassles never ceased, and he endured constant problems with suppliers providing broken and mislabeled parts. Investors also fell through. In the end, Tallett chose to sell Driveway Doctors. “It wasn’t a business I wanted to be in any longer,” he says. “What killed me was having happy customers, and then having to sell the business. This was no glorious exit.” Despite the disappointment, Tallett says he loved the experience of starting his own company. He’s already working on his second startup, Argent Skis, a ski company launching later this year. “That’s my passion right now,” he says.
Such a decision, to step right back into the pressure cooker, might seem surprising. But some people are simply drawn to entrepreneurship. Serial entrepreneur Jamie Siminoff ’99 is one of these adventurous souls, though his startups have subjected him to some tough, knee-buckling experiences. For one of his early ventures, Siminoff had to sink serious money into the company, which wasn’t doing well. “That one was scary,” he says. “I had a new baby on the way, I just bought a house, the world was coming to a financial end, and I put the majority of my savings into a company because it was so crappy that no one else would.” He eventually sold the venture, which remains alive and well today.
In December 2013, Siminoff’s current startup, Ring, shipped its first product, only to discover that many of the units had a bug. About $1 million worth of product wasn’t working properly. “That was terrifying,” says Siminoff. Based in Santa Monica, Calif., Ring makes the Smart Video Doorbell, essentially a camera that can sync up with a smartphone and enable users to see and speak to visitors from anywhere.
At first, the company wasn’t sure if the problem was a software or hardware issue. If it proved to be hardware, 10,000 to 15,000 units would need to be recalled and fixed—an impossible task. “It would have been a death sentence,” Siminoff says. “The cost would have 100 percent put us out of business.” With his company’s future in doubt, Siminoff thought of all the blood, sweat, and money he had invested in Ring. “I think I cried,” he says.
On Christmas Eve morning, two long days after the problem was discovered, Siminoff’s co-founder figured out that the trouble was an easily fixable issue involving a server. “That was the greatest Christmas ever,” Siminoff says.
Ring literally had driven Siminoff to tears, but entrepreneurship remains his work and his passion. “This is what I do,” he says. The sleepless nights, the risks, the heartaches—none of that matters. “You don’t let anything stand in your way,” he says. “Once you cross an insurmountable obstacle, you realize it’s not insurmountable.”