The Hair of the Dog is a sports bar located in the Lower East Side of Manhattan. Like most sports bars in New York, it has an ungodly number of televisions, a beer pong table and 3.5 stars on Yelp. More importantly, though, Hair of the Dog has a single dollar price rating, which is really important when your goal is to be drunk by 3 p.m..
In October 2013, my cofounder and I were in negotiations to sell Caskers, an e-commerce site we founded just one and a half years earlier that sold spirits (booze, not ghosts) online. The negotiations had already dragged on for a few months, and we were days away from our scheduled closing date. If you’ve ever been in the same situation before, you know that your mind starts wandering and thinking about all the possibilities that could derail the sale of your company. It also starts thinking about ways you could spend millions of dollars, but you try not to put the cart before the horse.
The week before my company sold, there was little I could do except sit around and wait. My team (there were three of us at the time — my cofounder, our first employee, and me) would come into the office around 9 a.m. and finish up whatever pressing tasks we had for the day by noon. Then, we’d go to Hair of the Dog and try to kill time by drinking until happy hour ended at 8 p.m..
The week we spent at Hair is a hazy blur for me, but I’ve had more than a year of sobriety to reflect on the business that I started, grew, and sold. These are the five most important lessons I learned from my time at Caskers.
While most startups these days seem to spend money lavishly, we built Caskers on a shoestring budget. We came up with a business model that didn’t require inventory (much less office space). The backbone of our website was an e-commerce plugin for WordPress that was free. We purchased a theme for $35 and customized it as much as we could, then hired a developer in India to help us build out what we couldn’t.
Our largest initial expense was actually our logo, which we got after running three design contests that cost $800. In total, it only cost us $1,200 to build our entire website before launching.
After we launched, we focused on growing the company as frugally as possible.
Being frugal was the most important lesson I learned at Caskers. Since we never spent any money, we never had to worry about running out of cash. In addition, being frugal allowed us to offer incredible value to our customers: every dollar that we saved on our own expenses was another dollar we could pass along to our customers in the form of lower prices.
When we launched Caskers, we had no marketing or advertising budget. As a result, I knew that we’d only be able to build brand awareness and acquire customers by making a product that people loved and shared with their friends, and getting editors at news publications to write about us.
I was relentless in hacking growth. Here are a few ways I did it:
Balcones Baby Blue Corn Whisky is now featured on Caskers. Go to http://t.co/i8U30vLn and enter code BALCONES to buy it now! @CaskersTeam
— Balcones Distilling (@BalconesWhisky) June 13, 2012
Ultimately, we were able to generate millions of dollars in revenue without spending a dime on customer acquisition.
We were focused on growing our community as fast as possible and experimented rapidly with new ideas. If something was working, we devoted more of our time to it. If it wasn’t, we scrapped it and tried something new.
Here are a few examples of ways we experimented:
Experimenting with new ideas to market our company and sell spirits consumed a lot of my time. Without experimenting, Caskers would not have been a fun place to work. More importantly, Caskers would not have grown as quickly as it did.
Ultimately, a startup is the sum of all the things you do and all the things you don’t do. There were many things we didn’t do, some for better or worse.
Being a startup founder requires making live-or-die decisions with limited information and finite resources under intense pressure. Making decisions quickly is important, but rushing into decisions is a mistake.
One of the greatest challenges I faced as a founder was to ignore the noise of other startups. While other startups were raising rounds seemingly effortlessly, it was difficult to accept, much less be proud of the fact, that my company hadn’t raised a dime and didn’t employ anyone (other than my cofounder and myself) for a long time. Looking back, it’s easy to wear our lean operation as a badge of honor, but at the time, it felt like we were failing.
Each startup is unique and the best way to build a successful company is to capitalize on your strengths and overcome your weaknesses. I learned that I couldn’t be pressured by the success of other startups — I learned to be resolved so that I could build the company I wanted to build.
In terms of what I’ve learned, in terms of the experiences I’ve had, and in terms of the friendships I’ve formed, starting, growing, and selling Caskers has been the greatest experience of my life. So far.