How I Spent A Million Bucks And Ended Up With These Two Chairs.
on May 12, 2009 - 7:00 AM PST
I want to tell you this story of how I foolishly spent a million bucks so you can save yourself from making a similar mistake.
In the early 90′s, I was running a profitable business, we were doing several million dollars a year in sales and profits and I said, “I need an office space that will communicate to people that I’m finally important in the world.”
Spending too much
My co-founder and I looked all around Manhattan and found this floor of office space in midtown. It was a beautiful, functional space, but it was a FLOOR of office space, and if you know anything about Manhattan real estate, you know that it’s expensive.
So after I got an expensive office, what did I do? Well I figured I can’t put shoddy furniture in there, so I went out and bought furniture that was top of the line, spent a million dollars on furniture. I remember telling the architect who designed our office–can you imagine THAT waste, we had an architect–I told him, I need space that looks so good that people will forget that I’m in my twenties. I need to communicate strength, and isn’t the way to communicate strength to pay for office furniture, to pay for a big office, that lets people know how important you are?
Well, of course the answer is “no.”
Learning my lesson
When times got rough, I couldn’t fill up my office space, and I ended up with not just a floor office space but a floor of office furniture that couldn’t be used. My CFO–I had a great Chief Financial Officer at the time–found a way to not just sublet the office space, found a new tenant for it, but also found a customer for all the office furniture. And the day we moved out of the office, he said, “Andrew, all the expensive furniture is gone except for these two seats.” (See them in the included video.) He said, “I want you to keep these two seats as a reminder to never spend lavishly again.”
I took them into my home in Manhattan, and they are pretty much the only things, that I’ve kept over the years. They’re here in my place in Santa Monica, and I kept them as a reminder to never spend lavishly.
Why I’m telling you this
Now why am I telling you this? Because since selling the business I’ve been talking to entrepreneurs and business people all over and what they want always want to know is how to get funding and revenue. I have to tell you that those are interesting subjects, but it may be more important to know how to keep your costs in check. If you don’t know how to do that, all the funding in the world is going to get burned. But if you DO know how to do keep your costs down, you’re going to be able to run a lean operation and you may not even need funding.
So that’s why I’m telling you this, and it’s not just my own experience.
Learn from top entrepreneurs
Top entrepreneurs know this.
Richard Branson In order to get publicity for his company cheaply, he started doing balloon rides around the world and taking all kinds of risks with his life. I believe it was to keep his promotion costs low.
Harry Helmsley He laned a career in real state, but graduated right in the depression. He quickly saw that he couldn’t buy buildings, but was smart enough to realize that he could control building for less money if he managed them. A lot of people think he owned the Empire State Building. He didn’t. Owning the management rights was cheaper and more profitable for him.
Warren Buffett He’s one of the richest men in the world–I think his license plate says “Thrifty.” I went to one of his shareholder meetings where the jokes about how cheap Warren Buffett is were flowing just as much as the financial conversation. That shows you how much a part of his character thriftiness is.
J.P. Getty. He was the richest man of his time. He was an oil man, and he was so proud of how cheap he was that at the end of every day he would write down everything that he spent money on, from the sandwich to an oil rig. He found it that it helped him stay financially accountable to himself.
The takeaway
That’s how important saving money is in business. I forgot that at one point in my business career. I see a lot of entrepreneurs who seem to forget it. I want to keep reminding you that yes, profits are important, getting funding is also important, but keeping costs low might be just as important as both of those.
I want to keep emphasizing that point, not just here, but also in my interviews. And if you’ve been watching my interviews, you hear me ask people, “Where are you living? What are you spending money on?”Because I do my interviews by video chat, maybe you see me looking behind the interviewee to see what their office space is like and how much money they spend on their office space. There’s a reason for it, because I think it’s just as important to find out about how they keep they’re costs low as it is to learn about what they’re doing to grow their businesses.
Suggested comments
- Did you ever make a similar mistake?
- Is sharing my business experiences helpful?
- Do you agree with my point on thrift?
- This posts’s text was transcribed from my video. See any errors?
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May 12th, 2009 at 1:03 pm
Wow, I really like the new design of the site. *Great story too.
May 12th, 2009 at 1:09 pm
Andrew, thanks for the practical advice.
It's funny how often I'm reminded that people need to make the mistake in order to learn from it.
I'm sure you read something similar to your article before you bought all the furniture? Either way, your comment “…to pay for a big office, that lets people know how important you are” just show's how our ego can affect our judgment.
“Whenever I climb I am followed by a dog called 'Ego'.” ~ Friedrich Nietzsche
May 12th, 2009 at 1:50 pm
I agree with your takeaway – have to learn what to spend on / what not to spend on.
I think there were several companies that got their start after the internet bubble of 2000 just from selling all the over-purchased goods from bubble companies.
Always helpful to share business experiences.
My feeling has always been that the old line of “Most new companies fail” is because most new company owners don't handle the finances well enough, or know finance well enough.
May 12th, 2009 at 2:08 pm
Funny…(well, ironic) that I did a similar thing with a startup in the late 90s and ended up with just one chair to remind me. I still have that chair too. :) Good article, great take aways, thanks.
May 12th, 2009 at 2:16 pm
They are mighty nice chairs, though.
May 12th, 2009 at 2:18 pm
I appreciated that, and would love to lunch with you one day.
May 12th, 2009 at 2:52 pm
1. The Power of being frugal can never be overstated, thanks.
2. A million in the 90's was pretty bad ass
3. I like you vids but I am really happy to see the transcription. ( i can read faster than you can talk :) )
4. Like the new site design
5. I tried to keep the comments frugal
May 12th, 2009 at 3:08 pm
Maybe i can crash on one of these million dollar chairs when i'm in LA next month :-)
May 12th, 2009 at 3:17 pm
Very true. Great post. I can't tell you how many books I have read that agree with this sentiment, including the famous Millionaire Next Door
May 12th, 2009 at 3:18 pm
Yeah, yeah. Why are you REALLY telling us this?
Because you know those hot women in Santa Monica are going to read your blog, and it's a nice subtle way to spread the word that you are loaded. “My place in Manhattan … my place in Santa Monica…” Yeah. Pretty transparent, dude.
May 12th, 2009 at 3:52 pm
@Mark (is Troll your last name?), even if what you say is true (which I doubt), so what? Good for Andrew. Even better for Andrew? This awesome new site! Mixergy was great before…now it's so much better.
BTW @Mark, your last blog post about your beenie baby collection was awesome!
May 12th, 2009 at 5:26 pm
Andrew -
Once again, great content (and great new design). I think you make some excellent points, and I would love to add to it. One of the conversations that I found to be the hardest with my less than online marketing savvy board at IMSafer was that there is huge difference between spending money on acquiring traffic, and spending money on acquiring customers. One is just throwing money out the door. The other is measurable, and something on which you can improve.
Ultimately, it comes down to the difference between vanity statistics (e.g. number of site visitors, or amount of paid for traffic) versus actionable statistics (number of customers – people who do something with your product, not just stop by, or number of organic traffic – customers you didn't have to pay for). If you are spending money that you can't demonstrate improves the business (like buying expensive office space or decorations) it's probably a bad idea.
May 12th, 2009 at 6:39 pm
Great advice! But how would you discern from spending too much and spending too little?
May 12th, 2009 at 6:47 pm
I really like how this post turned out. Your message is clear and I know you're living your own advice. My office went virtual 6 weeks ago in an effort to trim our budget. It's not perfect, but it's smart. Before that, we were never a livin' large start-up. Simple, simple. Sometimes 2 people to a desk, our own laptops and cell phones. The community that came of this is one of dedication and authenticity (although I wouldn't mind a company lunch or cellphone). Thanks for sharing your lesson, Andrew.
And the redesign looks *amazing*. Very clear and I feel like the content/interviews are more accessible.
Victorseo, I was not as frugal in my comments as you!
May 12th, 2009 at 6:54 pm
I grew up as a little poor kid, always wanting what my friends had but never was able to have. My parent were poor and could not afford to buy the things I wanted like bikes, super Nintendo, and so on. Now that I'm all grown up I can afford all these things and more. I really love technology and love having new gadgets. But when it comes to running a business it is very important to keep a record of all the things you buy in your personal life and your business. Thank you for making this video truly remind me that cash is king when running a business and we have to be as frugal as passable.
May 12th, 2009 at 7:15 pm
This post hits the spot Andrew,
I get frustrated when I see people with financial problems spending money on unnecessary things, and they always have an excuse for it.
I love crunching numbers so I know every dollar counts. Perhaps there’s a correlation between people who likes numbers, and thrifty spenders?
May 12th, 2009 at 7:42 pm
IKEA wasn't open that day? ;)
Seriously, It must be really hard to manage such money. On one hand, you want to build a strong brand, while on the other, you try to cut the costs.
Personally, even if I don't deal with huge sums, I think that being insanely careful with your expenses is never a bad thing.
Before starting my website, I sat down and asked myself if I should hire someone to build it for me. The real question was: “Do I have more free time or money right now?”
Being a health student, learning isn't a problem. Knowing very basic PHP, I picked up a couple of books of the subject and threw myself into the project. Almost a year later, the site is up (even if it's not exactly how I want it). With some of the money that I've saved, I hired a programmer to review my code and make sure that everything was secure. Over time, more features will be added and it should look the way I drew it. Keeping the initial investment to a minimum is a priority for me.
You have no idea how your experiences are helpful. Your story keeps the entrepreneurial part of me alive and full of ambitions.
May 12th, 2009 at 9:31 pm
Alex,
I clicked on your name and i laughed my head off because I thought of this idea about 4 years ago, and you actually went through with it. I still have some other dollar projects in my note pad. haha
I think that's awesome that you built the site. I just started a site today based on ideas, and I think your site is a great reference for my site. I'll be done with the site within a week, and I'll keep you posted if you want.
Awesome simple site. Take cares.
May 12th, 2009 at 10:12 pm
Haha thanks. Sure, keep me posted on that.
May 12th, 2009 at 10:28 pm
I could not agree more.
Everyday at EventsInIndia.com I get advice that you need to spend money to make money. The missing part is *wisely*. You need to spend money wisely to make money. Just spending money is ,well, just spending money for nothing.
When the economy turned south companies started tightening the belt. I believe a company needs to always always operate in the mode of recession and keep checking their belt. This is true not only for startups but for big guys too. Just look at GM, Lehman and Circuit City
May 12th, 2009 at 11:03 pm
great story but I think I miss a point .. What the early stage look like… before you move to that office…. I mean to scale and still be profitable… do you have a book of your story cause I can’t find it.
Great interview .. but more focus on the though time and early stage could be great too anyway I follow each interview since 3 weeks…
May 12th, 2009 at 11:12 pm
Great post Andrew. Thanks for recommending some good books. I just picked by Ted Turner's Call me Ted.. Also, cool to hear your personal entrepreneurial experiences. The new site theme looks great..
May 13th, 2009 at 2:23 am
Andrew,
That's why I still work from Home. Its a big damn house that also acts as office and hotel… but its still home and cuts costs in 30 ways.
I looked for an office and balked at the extra expense.Maybe sometime in the future.
Will Jessup
May 13th, 2009 at 7:38 am
Excellent, practical advice as always Andrew.
P.S. Love the new look site.
May 13th, 2009 at 11:19 am
Andrew knows what he's talking about. He learned the hard way, from experience. Listen to him and take his advice. Learn from Andrew's experience and you can save a million. We should learn to learn from other people experience.
Thanks Andrew
May 13th, 2009 at 1:14 pm
You bring up some good points, but what I am not hearing you say is “our ego gets in our way of running a profitable business”.
I started LeanStartups.com to share my experience and knowledge I have amassed via my mistakes, successes, and watching others hit or miss. I think there is a need for more of us with heavy “scar tissue” to hammer at those new entrepreneurs what is really important. Too many go down the wrong path of following what their ego says (wasting money on expensive office space, prestigious address, funky furniture, and etc.) and forgetting what businesses are for – making profit and having positive impact on the society.
That all said, great job on this blog.
May 15th, 2009 at 8:16 am
Even though I agree that the costs of a business operation should be kept as low as possible – I do not see anything praiseworthy in living in frugality while being rich. The jokes that were made about Buffet and how cheap he lives and works would have made me cry, if I was in his place. There should be a line between your business spending's and how one lives his life, but it doesn't work this way. Once you start being “thrifty” in your business – you will start living your personal life in the exactly same way… And honestly – what's the point in having money and living cheaply? And what are the money and profits for than?
May 15th, 2009 at 2:12 pm
Do we really need to “learn” how to lose money? I'm no genius but i'm pretty sure i know how to lose money.
May 15th, 2009 at 9:46 pm
Quick question: if your CFO was so fantastic, how come he didn't pull you aside BEFORE you were about to make all these lavish purchases? Maybe he was angling for one of those expensive chairs for his office too LOL
Good article, and good advice. Keep up the good work.
May 15th, 2009 at 11:19 pm
For you we need a much more comfortable setup.
May 15th, 2009 at 11:19 pm
I don't think I hired him when I bought the furniture.
Poor guy came on after the buying spree.
Thankfully he was able to help us unwind it.
May 15th, 2009 at 11:20 pm
Hopefully this story will help you not lose money.
May 15th, 2009 at 11:24 pm
You're right. I don't mean to create misers. I just think we need to avoid
wasteful spending.
May 15th, 2009 at 11:27 pm
Yeah, ego can get in the way.
I should though say that if I didn't have an ego, I might not have had the
guts to take on such big competitors. So I don't mean to dismiss the virtue
of ego Apollo.
May 15th, 2009 at 11:29 pm
Thanks George. That's my goal here with Mixergy, to help us all learn from
entrepreneurs' experiences. I don't like the “instant gurus” that sprout up
everywhere. I want to bring real entrepreneurs to talk about their actual
experiences so we can learn. And if I ask them to do it, I should open up
about my experiences too.
May 15th, 2009 at 11:29 pm
Thanks for the compliment Ansar.
May 15th, 2009 at 11:32 pm
Seems all experienced entrepreneurs are keeping their office costs lean.
I was just at Mahalo's office and noticed all the startups they're renting
their excess space to as a way to save money. GumGum.com is leasing space
from some law firm on 3rd Street Promenade. And I could go on and on like
this.
May 15th, 2009 at 11:35 pm
You know, at one point I said, why don't we just buy IKEA furniture. But
someone talked me out of it. I'm not sure if it was the architect, but I
have a feeling that's where the resistance came from.
That's the problem with getting involved with this stuff. You rent expensive
offices, which leads you to hire an architect, who naturally costs a lot of
money. Which leads to buying expensive office furniture. Before you know it,
you lose focus and waste time on nonsense that has nothing to do with your
business.
I want to be sick when I remember how I was on that ride.
May 15th, 2009 at 11:36 pm
One of the things I love about that book is all the quotes from people who
Ted told he was going to be a billionaire. You can see how focused he was.
May 15th, 2009 at 11:39 pm
I don't have a book, but you're right that way we built a company that could
afford to spend this much money is interesting. (At least I think it is.)
I just need to find a way to comfortably talk about it. I don't like talking
about myself too much. Feels arrogant.
May 15th, 2009 at 11:39 pm
Right on. “Wisely” is what people miss.
May 15th, 2009 at 11:43 pm
Profits are the result of low costs and high revenue. Everyone praises
entrepreneurs who can bring in revenue (and I think they absolutely deserve
the credit), but we forget to value people who can keep costs down.
Harry Helmsley, who I talked about in the video, built a real estate empire
that included the Empire State Building because he was smart enough to know
how to save money on light bulbs and other basic expenses. I'm not
exaggerating when I say that avoiding wasteful spending that others didn't
notice helped him build an empire.
Thanks for your contribution here Andy.
May 15th, 2009 at 11:44 pm
Thanks for encouraging me to post this. It's something I strongly believe
in. And it looks like others do too because this is now my most popular post
ever–by far.
May 15th, 2009 at 11:48 pm
That's a challenge.
In my experience it's about being mindful of costs. Seems simplistic, but I
didn't mind the expenses here. I didn't ask myself “how can I reduce these
costs.”
You forget the basics sometimes.
Hopefully, you'll be in a situation like this one day and say, “Oh wait.
This is the same spot Andrew was in. I can see myself going down his path.”
And stop before it's too late.
May 15th, 2009 at 11:50 pm
Yeah. Everyone who sees them in person says that.
Meanwhile you should have seen the ugly couch that went along with them.
Glad I left that behind. I don't know how I was talked into buying that.
May 15th, 2009 at 11:51 pm
I'm thinking of getting together with some entrepreneurs from SoCal.
If you're in the area, let me know.
May 15th, 2009 at 11:52 pm
Thanks.
All the talk of transcripts during Neil Patel's interview got me to finally
try Mechanical Turk. It's great. This video cost me about $2.50 to
transcribe. And I got it within 30 minutes.
May 16th, 2009 at 12:19 am
I don't think it is the ego that gives you the guts to go after the big boys. It is the confidence in the ability of yourself and your team.
Ego just gets too many entrepreneurs in trouble. Ego makes you forget that great rule: “do you want to be right, or do you want to be wealthy?”
May 16th, 2009 at 12:27 am
That's a good question to keep asking Apollo.
May 16th, 2009 at 7:15 am
Interesting,
You are right. If we don't know how to save money then how can we suggest other to do that. I was impressed a lot for this line. Most of the people around the world foolishly spent a million bucks, because they used to do that. We have to think before before spending each and every buck that Am I using for the right purpose or else Am I wasting my money? If we think so then we can save a lots of money in our life.
Thanks
Sankar Datti
May 16th, 2009 at 12:52 pm
Great story dude. Soooo true.
Best skill to have:
“Delay gratification.”
Keep the awesome posts coming :)
- Chris
May 17th, 2009 at 7:01 pm
Thanks Sankar. Little points like this are very meaningful in business.
May 17th, 2009 at 7:03 pm
Yeah. Delaying gratification is one of the most important entrepreneurial
and life skills.
That, plus the ability to trust that the gratification will come in the
future.
May 18th, 2009 at 3:51 pm
My parents are in the office furniture business, its a good business to be in office furniture is very exspensive .Lol ..My dad is the same way, he writes down every last cent he spends a day, but thats why he is a sucessful business man. great post!!
May 20th, 2009 at 10:42 am
I find your point on thrift very very instructive this day. I need to focus on personal accountability. I loved how you shared this. I was searching for information on vanity statistics versus actionable metrics and found this.
In the big picture, maybe it was what I really needed to look at.
And those two chairs.
May 25th, 2009 at 9:42 pm
I've tried writing it all down. It's a lot of work. But it really does keep
me disciplined, when I do it.
Thanks for the comment Alex!
May 25th, 2009 at 9:42 pm
Having those two chairs is a good reminder for me too.
Thanks for the note!
May 29th, 2009 at 8:50 pm
Oh. My. G-d.
I can't believe you have those f'ing chairs.
May 31st, 2009 at 5:20 pm
I'm surprised you remember the chairs. Do you remember when we bought all
the furniture?
Out of all the furniture in the office, I think those two chairs are the
only things that I liked. If Rich saved the couch for me, I probably would
have gotten rid of it by now. But these two chairs look great and they're a
good reminder for me.
May 31st, 2009 at 5:58 pm
I do remember all that purchasing, it seemed to take forever to go through choice after ugly, expensive choice.
I think in general the person who led that project was a little more comfortable spending money than was typical in the startup culture you were developing and I seem to recall it getting pretty exhausting for you to have to be checking on everything and debating every purchase, not to mention how hard it was to sell yourself as the voice of reason when you'd never had to make those types of decisions before.
________________________________
May 31st, 2009 at 6:47 pm
I do remember all that purchasing, it seemed to take forever to go through choice after ugly, expensive choice.
I think in general the person who led that project was a little more comfortable spending money than was typical in the startup culture you were developing and I seem to recall it getting pretty exhausting for you to have to be checking on everything and debating every purchase, not to mention how hard it was to sell yourself as the voice of reason when you'd never had to make those types of decisions before.
June 1st, 2009 at 10:46 pm
I bought 60 cupcakes from Costco and had to throw them away.
June 20th, 2009 at 2:03 am
[...] How I Spent A Million Bucks And Ended Up With These Two Chairs. / Mixergy [...]
June 23rd, 2009 at 2:58 am
I've watched this story over and over again… its so valuable information! It's a great REMINDED!!
A quick question that came up though. You spent $1.000.000 and then you sold them all (but hte 2 chairs). What was your total lo$$ on that ?
June 23rd, 2009 at 2:59 am
I've watched this story over and over again… its so valuable information! It's a great REMINDER!!
A quick question that came up though. You spent $1.000.000 and then you sold them all (but hte 2 chairs). What was your total lo$$ on that ?
June 24th, 2009 at 8:46 am
Brandon – your post is great, thought inspiring.
Spending money on acquiring traffic has value if you are trying to build for a certain type of business exit. I'm not suggesting the early 2000 dot.com mentality revival but right now – some statistics can be better “sold” to certain buyers.
imagine – a Red shiny Corvette with curb appeal but a leak in the transmission which makes it incapable of working over the long term versus a Mercury Sable with a dent but in condition to transport the driver for more than the distance and time required – some types of buyers will ignore all the info and still go with the shiny Corvette and some will even pay a premium.
Lesson here, know the reason you are in business and understand if you are attempting to sell captured value to a business buyer or build revenue and value for your firm from the end consumer.
July 3rd, 2009 at 4:25 pm
Really cool article. My fiance and I have a great business selling wool bedding online. We decided not to open a retail location, and instead focus our money and time on expanding our reach online and in the local community, and I have to say it is a huge relief to be able to spend time with my daughter after school, and out in the community, rather than sitting in a storefront all day. And so much less stressful!
July 15th, 2009 at 10:33 am
That example of the spending,aplies to a whole country called Venezuela.
It has being spending all the incomes in lavish and political projects, and making the mistake of no-saving for the future.
In short, the Gross Income of the Country its about 80 billions per year and no Invesments in new Industries and Agriculture.
You dont need to be a PHD ,to understand that at the end ,the country will not have any savings and a decent Infraestructure.
July 18th, 2009 at 12:13 am
Do you have pictures of your old lavish office space?
July 23rd, 2009 at 10:48 pm
Andrew I'd love to see a book of CEO's most expensive mistakes ever. Personally, and this was only $100k or so (ha ha… vs. your millions), my #1 mistake was underestimating or not accounting for the cost of client acquisition.
I used to run Toonshoppe, a company I was trying to build into Pixar, but I was too much of an artist, not enough of a sales / business man and wasn't smart enough at the time to hire someone who was. Anyway, it was a fun ride but in the end…left me with about two chairs too.
July 27th, 2009 at 11:33 pm
totally amazing story Andrew…you were really thinking big but had to learn a lesson…Neil too is a pretty thrifty guy (Tina's Day Care, etc.)…you guys seem to think alike a lot of the time…thanks for the book recs as well
August 5th, 2009 at 2:32 am
Just watched your video and read the post! I'm going through a similar process now and I recognized the fact I was going down that road but in the end I found what got me into trouble was just not being able to say “no”. No to high priced cars, dinners, lunch, latte's, gadgets, and in the end…. stuff. I've got loads of stuff. Too much stuff!!
I spent 3 weeks in China on business in 2007. I remember getting by on clothes from a suitcase, a single laptop computer, a bookbag/briefcase, and a taxi now and then. I never once missed the “stuff”. But once you come back to it, the “stuff” seems important again!
Two chairs and my books. I should be so lucky lol!
Any events coming up in SoCal?
August 26th, 2009 at 11:34 pm
Thanks very much for the reminder! It's very easy to spend money, especially as costs for services come down. It's important to think about what (a) your company REALLY needs, and (b) will this thing you are spending on really move the needle??? We're trying our best to keep costs down at RateBrain, but it's a daily challenge :)
August 30th, 2009 at 6:21 pm
How can we inspire people to take pride in their thriftiness rather than be ashamed of it? This video is a great start. Thanks.
August 31st, 2009 at 8:50 pm
I saw your site. Interesting business. Whenever you're ready, I'd love to
hear more about your business by email.
I'm curious about your goals with it. Revenue model. PR ideas. Anything.
August 31st, 2009 at 8:50 pm
Good point. As a kid, dreaming about being in business, I fantasized about
the view from my office. I'm smart enough now to realize that it's about
what we create in the office not see out the office window.
September 1st, 2009 at 7:36 am
Watched this video several times.
It reminds me about my career also as a software engineer. Even though I was not starting up my own company, but I used to like spending a lot. But then the economy turns south and I regretted that I should have saved money to battle the unemployment etc.
So, I think this video is not only useful for startups, but also for professionals too.
I am trying to build my website these days as a startup practice, still not successful yet. But this video teaches me an important point about running the website, keep the cost low so that the website could last longer (I am paying out of my pocket, no outside funding and no profit yet)
September 1st, 2009 at 7:36 am
Watched this video several times.
It reminds me about my career also as a software engineer. Even though I was not starting up my own company, but I used to like spending a lot. But then the economy turns south and I regretted that I should have saved money to battle the unemployment etc.
So, I think this video is not only useful for startups, but also for professionals too.
I am trying to build my website these days as a startup practice, still not successful yet. But this video teaches me an important point about running the website, keep the cost low so that the website could last longer (I am paying out of my pocket, no outside funding and no profit yet)
September 21st, 2009 at 4:35 pm
Sharing your business experience is very valuable. You might run the show but also have so much info to impart!
Can I suggest you get someone you trust, who is ALSO passionate about educating entrepreneurs, to interview you in the same way you interview others. That would be cool!
Warm Regards, Dale
October 19th, 2009 at 4:21 am
spazz
October 20th, 2009 at 3:51 am
Well sharing your experiences is always good – though I suspect you live on a different planet to me :-)
Andrew – i TOTALLY agree on keeping a business lean but I'm not keen on the “personal” thrift examples – cause If that's what 'rich' people turn out like – i sure don't want to be 'rich' like that.
I believe in generosity & kind heartedness, even if all you can afford to give away is a smile – give that.
BTW – JP Getty was supposed to be a truly awful person – not a legacy i'd like to leave.
Interesting blog post – first i've read
Rich
November 14th, 2009 at 4:05 pm
I agree with you Andrew and I believe this is what differentiates entrepreneurs from the rest of the crowd – living simple (sometimes cheap) and concentrating on creating value rather than spending.
Most people see top entrepreneurs as guys who can BUY anything they want, so they believe spending lavishly is the ultimate pleasure when in fact this is so not true. I think doing things right and serving people along with the feeling of mastering your own life is what drives entrepreneurs. Big sums of money and spending come as byproducts.
Cheers!
November 16th, 2009 at 7:39 am
How big was your office space? In square feet?
You can buy a few houses with $1 mil so I cannot imagine how much furniture you had.
Let's say the two chairs represented 1% of all the furniture and let's say the cost was proportional – that is $10,000.
Since you were running an online business I don't see the need for such opulence.
I know from my experience that running an online business requires investment in online appearance more than anything else.
I'm just baffled by the amount of money you dedicated to offline embellishments.
November 30th, 2009 at 4:58 pm
Andrew is right, it is about avoiding wasteful spending and finding VALUE in spending, in other words, being thrifty. The thing is, Buffet is so old and so rich, but what does it matter? Will he take his money with him? Why work so hard and save so much and then live in a simple home till death? You only go around once and you should splurge proportionally and on value-based items/services. I laugh at people who save and save and save and one day their kids take it away for college or some other stupid expense (i want a porsche dad!), or they die and they leave it to some stupid charity. I see no value in working so hard and yet living poor…but SPEND-not-save-thrift? yes.
November 30th, 2009 at 5:04 pm
buying a $6000 shower curtain by TYCO exec dennis koslowski was one of the funniest and embarassing purchases by a CEO. the new york media ripped all over him in the daily news during his trial. interestingly enough, he had made a list of 60 places he possibly would have retired to and one of those places was not prison…now he will probably die there.
November 30th, 2009 at 5:07 pm
another reason why people may spend money above and beyond is for personal reasons. many people substitute purchases or “retail therapy” for solving their personal problems, and not always business decisions, yet use business decisions to justify those purchases. this is often overlooked. we are animals first, businessmen and businesswomen second.
December 21st, 2009 at 2:08 pm
Great point. Profit can only be salvaged if you watch the spending.
January 5th, 2010 at 2:02 pm
I read this story a little time ago, and now again, I lust like your blog. You inspire me in every case, and I hope I'll get into succes (if I'm not already in) with my Akon Online Blog at the end of the year. Just keep up the good work and I'll have further looks in the future.
Cheers!
January 13th, 2010 at 9:52 pm
Great blog, this could be the best blog I ever visited this month. Never stop to write something useful dude!
January 14th, 2010 at 4:52 am
Great blog, this could be the best blog I ever visited this month. Never stop to write something useful dude!
March 18th, 2010 at 10:53 am
[...] The Startup Wheels. Nothing against riding a bike or taking transit, but a car is simply more efficient when you’ve got to fight a bit for every meeting you book and are consequently at the whim of the other side’s location and timing. “Every legitimate startup has a beat up car” – so true. Why beat up though? The biggest mistake you can make is splurge on functional things like cars or nice office furniture. Rather, good startups will spend all their money on people and product. This anecdote captures this point very well: How I Spent a Million bucks and ended up with these two chairs. Alternatively, meet my car: [...]