True Waterloo

“What is Waterloo? A victory? No. The winning number in the lottery.”

— from Les Misérables by Victor Hugo

I recently started reading Les Misérables.  There’s been a ton of hoopla about the new movie coming out and it reminded me of seeing the stage production way back in college but I don’t remember the story.  I’m not about to torture myself with a musical version again – not even one with Hugh Jackman – so thought I’d go directly to the source.  I always like “the book” better than “the movie” anyway.

I’m now about a quarter of the way through the 1,500+ page tome and happy for the effort.  Just finished the rather detailed description of the Battle of Waterloo which contains myriad references to people and places whose names might have been familiar to the French reader of 1862 (when the book was published) but are meaningless to me here in 21^st century Vermont.  Nonetheless, it was fascinating to learn the intricacies of the battle which ended Napoleon’s reign as Emperor of France…and is surprisingly metaphorical to my experience with TrueBody.

What struck me about the ultimate outcome of Waterloo was this:  despite Napoleon’s renowned military prowess and with no disrespect to the Duke of Wellington and his allies, a critical factor in the Battle of Waterloo was…rain.  The night before the main battle (June 18, 1815) there were heavy rains which soaked the ground and hindered the deployment of Napoleon’s cavalry and artillery, thus delaying the start of battle until late in the morning.  By many accounts, if the battle had started sooner it would have been over before the Prussian army finally showed up late in the day as reinforcement to Wellington’s beleaguered forces. So the “rain delay” actually worked in favor of the British and Prussians, and Napoleon was sent packing into exile.

Ok, so how is the Battle of Waterloo a metaphor for my experience with TrueBody?  A big reason why I’m writing this book is to really delve deep and figure out what happened?  I mean, how could a company whose product:

1. Has a loyal and passionate consumer following
2. Posted double/triple digit sales growth for four years running
3. Gained distribution in over 350 stores across the country – including Whole Foods and a division of Kroger, the largest grocery chain in the country
4. Is led by someone who has over 15 years experience launching successful consumer brands with big-name companies like P&G, Welch’s and Seventh Generation
5. Raised nearly $1 million of investment capital over five years (in the midst of the Great Recession, no less)

…not survive?  Now, don’t get me wrong, I’m not comparing myself to Napoleon (yikes!).  Reading about the Battle of Waterloo just underscored something that I’ve been thinking for quite awhile:  sometimes – despite good planning and execution, expertise, creativity and momentum – something happens that’s completely out of your control and that you just can’t overcome.

I’ll be the first to say that “things out of your control” happen all the time in start-up businesses and to survive you’ve got to be resilient, creative and fast-acting or they’ll shut you down so quick your head will spin.  I survived several such curve-balls that could have been the end of TrueBody, many of which I’m exploring further in the full version of my writing.  Things like:

• Launching TrueBody and my first significant capital raise two months before the Great Recession hit, sending angel investors into hiding
• Finally finding one lonely investor for this first major round and then hearing that he’d just ripped up a check for $50K and was pulling out (he later became my biggest and most supportive investor, not to mention a good friend)
• Having $75K worth of inventory declared obsolete and potentially un-sellable by my manufacturing partner a week before presenting to Whole Foods’ National New Item Review (which only takes place once a year)
• Being told by an investor two days before the scheduled closing of my second (and much bigger) round of financing that he was only putting in half the amount that he’d pledged, and then having to scramble to find that “other half” in two days so I wouldn’t lose the whole deal and all the other money I’d raised.  See a trend here?  This happens a lot….

These are just a few of the curve-balls, but I overcame them and kept the company growing for 4 years. But like Napoleon at Waterloo, there came a time when I had a major rain delay (a.k.a. Kroger re-scheduling soap category review by 18 months). And when I called for reinforcements, they didn’t show up.

So was the Kroger delay my Waterloo, or is this a cop out? Was my business model ultimately not viable, or did my luck just run out? I hope you’ll read my full analysis and conclusions once the book is published and let me know what you think.

Another “F” Word

“It is one of the most beautiful compensations of life that no man can sincerely try to help another without helping himself.” — Ralph Waldo Emerson

For anyone who’s tried to raise investment capital for a start-up business, the term “Friends and Family” is an early addition to your financial vocabulary.  It comes from the fact that when you’re just getting started, your friends and family are the only people you can convince to help you get your crazy idea off the ground.

Unfortunately, the term Friends and Family is usually appended with another “F” word:  Fools.  Venture capitalists and angel investors use the term all the time, as in “how much have you raised from friends, family and fools.” More often it’s just “how much F-F-F money have you raised.”  I’m not kidding, they really say that.  All the time.

And it makes me angry, so I’d like to give big props to all the F&F (just two Fs) out there and encourage them to keep believing in their crazy entrepreneurs.  These are people like my room mate from business school and her dad, and the best man at our wedding, and a dear cousin who came into an unexpected inheritance – just to name a few.  All in all, 12 friends/family members accounted for just over 25% of the total I raised over five years and most of that was invested at the very beginning, before I ever made a single bar of soap. They believed in me and my crazy idea, and I couldn’t have gotten as far as I did without them.

Without F&F, a lot of successful businesses would never get past the idea stage.  A lot of innovative products and services would still be just a dream rattling around in a frustrated entrepreneur’s head instead of breaking into the market where it might do some good.  Plain and simple, F&F investors support and encourage creativity in our economy which, unfortunately, appears to be on the wane.  This blog post on The Vanishing Entrepreneur and the underlying article “The Slow-Motion Collapse of American Entrepreneurship” from the Washington Monthly give some sobering statistics on…well, the titles pretty much tell it all.

Access to capital is a big contributing factor to the decline in entrepreneurship according to the blog post/article mentioned above. It certainly was in my case.  Even though I was able to raise nearly $1 million over the course of five years, it took me almost all of those five years because I could only get it in small chunks, and thus fundraising became a full-time job.  Here I thought my job was to launch and grow a company…. Since I started working in earnest on TrueBody (i.e. quit my “day job”) in January 2008, I had only five consecutive months – from Aug-Dec 2010 – where I could put 100% focus on building the business.  As a result, sales grew 94% in the following 12 months, imagine that!  And imagine what more I could have done if I could’ve kept that laser-beam focus on growing the business.  But in the winter of 2011, I was back on the money trail again.

I’ll tell more of this story in the book.  I just wanted to show my appreciation for all my friends and family who believed in me.  And even though they did not see a financial return from their investment, don’t you dare call them fools.

Being an Entrpreneur is Like…Knitting

If you’re reading this sentence, then the title hasn’t scared you away yet.  Stick with me, there’s good stuff here and knitting knowledge is not a prerequisite.

A couple years ago, a good friend taught me how to knit after I told her how much trouble I had sleeping.  I’ve never been a good sleeper but after starting TrueBody, I’ve been plagued more than ever by what I call monkey brain:  the incessant trains of thought about what I need to do, what I could do, what I want to do, what I forgot to do.  I’ve tried meditation, breathing exercises, journaling, yoga, a glass of wine (or three), but pretty much the only thing that works is reading myself to sleep and even that has its drawbacks if it’s a really good book…. So I was willing to try anything.  My friend said the knitting would help “unravel my mind” as I unraveled a ball of yarn into repetitive patterns of knit 1, purl 2.

Surprisingly, it does help, when I stick to easy patterns in nice rectangular shapes.  But one can only knit so many scarves and baby blankets.  Plus I suppose it’s just part of my nature that I like to challenge myself, so I’ve moved onto things with more intricate patterns and less rectangular shapes.  Now I find myself having to interpret instructions like “yfwd, s1, k1, psso” and getting really fancy making cables and bobbles (actually haven’t figured out how the hell to make a bobble yet, but give me time).

Each time I get a new pattern and try to interpret the knitting Greek, I feel a little sense of apprehension.  Like I’ve gotten myself in over my head this time.  But I just dive in and do what I know until I get to the tricky part and usually once I get there, I discover that now I can figure it out.  Because I can see how things are coming together and I have a better sense of where I am going.  And on the few occasions when I can’t figure it out myself, I ask for help.  (Asking for help is an important thing and will get a chapter all to itself!)

This is how being an entrepreneur is like knitting.  If you get too fixated on the challenges that are looming 10 rows – or two years – away, you might never get started.   You get caught up in analysis paralysis.  So you’ve got to just dive right in and do what you know with the confidence that you will learn things and meet people along the way that will help you deal with the challenges once you get there.  It’s all about the confidence really.

Lots of people have a vision and great ideas, but when it comes to starting, it takes a certain confidence and courage to take the leap (ok, you can call it craziness if you want).  For me, I’d much rather test out my vision and trust in my ability to learn and adapt, than not to try and be left wondering what might’ve been.  After all, if it doesn’t come out as planned, just like knitting, I can unravel it and start again.  I’ve learned more about knitting by having to take my mistakes apart and then trying again.  The same is true with TrueBody.  I’ve dug into what didn’t work and re-started many times, with a much better idea about what needs to be done to succeed.

It might not come out perfect but as long as it still looks like what you envisioned, keep going.  And hopefully you won’t run out of yarn….  (yarn = metaphor for money; that chapter coming soon)

The End is Near…

…and what a crazy unexpected end it is.  Of course, this is not the ending I expected five years ago when I “quit my day job” and dove into TrueBody full-time.  That bright-eyed first-time entrepreneur thought that by this time she’d be transitioning a successful start-up into the next phase of becoming a steady-state profitable business, and thinking about her next venture.

Well, I got that last part right….

But this is not even the ending I expected three months ago when my board and I decided we couldn’t keep the company running as is and needed to find someone to buy TrueBody.  I thought I would find a buyer who would want me to stay on with the company and continue to lead it, at least for awhile, to the success that I still feel is just around the corner.  That seems to be the way acquisitions go from my experience.  Over the summer I found a couple viable prospects which yielded two offers along these lines.  I set a goal to have a deal finalized (or darn close to it) by Aug. 31.  And I thought I’d gotten there, albeit by the skin of my teeth.  I got the call around 7pm on Aug. 31 from one of those prospects saying “let’s do it!” and even got a small portion of the capital invested the following week.  But things started falling apart after that and on Sept. 28, they pulled out.

So here I am on Oct. 2, waiting to hear from one last prospect who promised me an answer this week.  If he doesn’t come through, it’s pretty much the end.  I’m almost out of inventory and if I can’t ship soap, well….

I met with a bankruptcy attorney last week  – just in case.  And I’m feeling today that it very well might be the way things end up.  I sent out a long email to my investors last Friday to let them know what might be coming.  That was the scariest email I’ve ever written.  Most of my investors are my friends and family and I couldn’t help but feel like I’m letting them all down, not to mention causing them financial pain.

Now four days after I sent that email, I’ve got to say I am totally blown away by the caring and supportive responses I’m getting from those people whose money I’ve lost. One says he’d invest with me again, another is offering possible work on a project, one even offered to help out with my family’s finances if we need it.  Each of these and many others have said I should be proud of what I’ve accomplished and that I haven’t let them down at all.  Wow. I never expected this!

Whatever the outcome in the next few days, whether it’s acquisition or shutting down, I will celebrate either way.  Life will go on.

An Entrepreneur is Born

I never considered myself an entrepreneur.  I followed a somewhat traditional career path.  I went to college.  I worked for four years.  Then I went to business school.  After which I worked for big corporations…and then small entrepreneurial companies, but I didn’t see myself as the “ big idea” person so I didn’t think I was an entrepreneur. 

Then one day, 17 years into my career, out of the blue, I found myself out of a job.  Granted, it was a job I hated and had been trying to get out of for over a year by creating a new job for myself within the company.  I guess that‘s what we now call an intrapreneur:  being creative within an existing company, but it’s really not the same.  It’s safe. Well, it’s safe if you can be free and creative, and keep your nice salary and benefits.  But that’s not how it worked for me.  I was told “we like what you’re proposing but the company just can’t afford it right now and since you don’t want to be in marketing anymore….”  Yikes! 

In the end, it was a much needed shove out of the nest, and happily, a gentle one.  Of course, I could’ve tried to find a new nest (i.e. job).  I suppose that’s what most sane people would do.  But the crazy entrepreneur in my head started telling me I could leave the tree altogether, test my wings and fly.  I chose to fly.

Now, I didn’t jump right from that job into being an instant entrepreneur.  When I lost my job, I was three months pregnant with my second child, as well as being the significant contributor to our family income and source of health insurance. Double, triple, quadruple yikes!  But even with all that responsibility on my shoulders, I couldn’t help but feel that this was an opportunity of a lifetime to do my own thing. I’d been thinking about doing my own thing for a long time and I guess I was always too scared…or actually, I think I was too comfortable to make the leap.  It’s hard to give up salary and benefits and a job that’s easy (if not mind-numbingly tedious), especially when you’ve just started a family.  Security is a seductive thing. 

When I get really honest with myself, I admit that I initiated that job loss even if it wasn’t the way I wanted it to happen.  I’m just not one of those people who can “do what you gotta do” to earn a paycheck and then try to find my passion after hours.  I want to love what I’m doing.  And if something isn’t working, I try to fix it. 

That’s what makes me an entrepreneur.

But as I said, I didn’t jump right in.  I negotiated a very nice severance package that allowed me to finish out my pregnancy as an employee and then have enough money in the bank to spend six months with my newborn daughter.  From there, I eased back into work doing consulting.  I wrote business plans and helped clients start new businesses and a non-profit organization.  That’s when the crazy entrepreneur in my head started screaming.  I wanted to do this myself, not consult others.  Luckily, my friend, Rob, came to me with his crazy idea he called “natural Dial.” 

That day in early December 2006, TrueBody and an entrepreneur were born.