One Year In — Lessons Learned on Bootstrapped Entrepreneurship at Proof of Talent
“One Year In” is a reflective series of takeaways from my first year operating Proof of Talent, a recruiting firm that works exclusively with companies and job seekers in the blockchain and cryptocurrency industry. This will be the first post in the brief series.
On June 27th, 2019, I left the comfort of a salaried role for the first time in my career and jumped into the world of entrepreneurship. I’ve always been interested in entrepreneurship, starting with selling tomatoes from my dad’s garden for $0.25 a pop when I was five years old, to creating the Crypto Bobby podcast.
Yet while that interest has always existed within, I never really thought I had an idea worth pursuing that would be worthwhile to leave the confines of Corporate America. Luckily, on a drive up to Boston for an Easter holiday with my family, the idea sprouted that there wasn’t a go-to recruitment resource in the blockchain and cryptocurrency industry. I couldn’t shake the idea from my brain and after a few weeks of market research, decided to register an LLC and get the infrastructure in place to launch a business.
Over the past year, one thing I’ve noticed is there is no shortage of success stories on high-flying, venture backed startups. However, there isn’t much on the subject of bootstrapped companies.
Proof of Talent is a recruiting firm specializing in working with companies and talent in the blockchain & cryptocurrency industry. Recruiting firms aren’t typically attractive companies for venture financing, so bootstrapping it was for me.
I started the business with some cash from my personal savings account and the esteemed financing of a personal, unsecured loan. Not exactly Sand Hill Road.
No venture backing, no other employees. Just me, myself and my hope that I wouldn’t lose my savings and be back begging for a job in Corporate America after a few months.
With that as my backstory, I’d like to share some lessons that I’ve learned in the past year of operating and building Proof of Talent. Whether or not you have your own dreams of starting a business, I hope you enjoy and find the lessons helpful in some way.
Solo Founding is LONELY
As I mentioned earlier, when I started Proof of Talent, I was completely on my own. There are some obviously great aspects to that; I own 100% of the equity in my business, I don’t have to answer anyone but my customers and I have total autonomy in decision making.
Sounds great right? Well, there is (at least) one downside.
It’s lonely. Really lonely.
As a solo founder, every day you’re grinding away, trying to build something special. And while you may be able to talk to family, friends, partner about the journey, no one is truly sharing in that day-to-day working journey with you.
Having a network of professional contacts to bounce ideas off of and generally stay sane, was crucial for me in the early days of Proof of Talent. Luckily, I have a number of friends and former colleagues who are recruiting professionals and leaders. The ability to share my experiences with them and ask for feedback was a life saver.
Thankfully, as of March 2020, I am no longer solo! Big shout out to Proof of Talent’s stellar Senior Recruiter, Colton Kirkpatrick.
Lesson: If you’re going solo in a business, beware it can get a little (or a lot) lonely. However, if you lean on your support system and build a network of professional contacts, you can get through it!
The Slow Burn
Proof of Talent is a service-based recruiting business. While recruiting firms can sometimes grow rather quickly, they don’t experience the scalability benefits that many SaaS or tech startups enjoy. In recruiting, it’s an internal headcount game, meaning the more recruiters and sales people you hire, the higher revenue you’re typically capable of.
Especially in the beginning of Proof of Talent, it was a bit depressing seeing the rapid growth of some companies while I felt like my feet were stuck in cement blocks.
As a bootstrapped business, you’re only able to grow as fast as the cash coming in the door. And either you pay yourself or you pay the business.
For anyone struggling with similar thoughts around their slow business growth, I’d encourage you to dive into the memoirs of Phil Knight and Sam Walton, former CEOs of Nike and Walmart respectively.
Phil Knight in particularly has been a massive inspiration for me, largely because his journey to success took so long and was filled with so many ups and downs. Notably, Knight started the business in 1964 but didn’t leave his full-time job as an accountant until 5 years later and didn’t IPO for another 11 years after that.
The cowards never started and the weak died along the way. That leaves us, ladies and gentlemen. Us. — Phil Knight
The story behind Nike and Phil Knight taught me that the road to success CAN be a slow burn and you need to stick with it, no matter what.
I took the lesson of patience to heart. Because my first quarter in business (Q3 2019) with Proof of Talent was a slog.
I made approximately $0.00.
It was disheartening. But I just kept working and doing my best, to the point where things started to turn around in Q4, after what felt like an eternity.
After seeing moderate success in Q4 2019, I was able to start thinking about hiring my first employee/partner in the business to join me and in March 2020, made that a reality bringing Colton Kirkpatrick aboard.
Over the course of the last year, I’ve learned that patience is an absolute must to weather the storm of building a business. During my first two quarters in business, I often questioned myself, whether I made the right decision in starting Proof of Talent, whether I could deliver for my clients, whether I could deliver for my candidates, on and on.
Turns out, yes I made the right decision and yes we can deliver top quality results for candidates and clients. I just needed a little time to get there.
Lesson: Don’t doubt yourself when things inevitably start off slow. Have a vision, iterate throughout the process, stay the course and continue to put in the work. The rest will take care of itself.
Cash is King
Even prior to the COVID19 pandemic, I learned quickly that cash is king. He/she who has the cash, can do as they please, those that don’t suffer at the whims of the market.
Revenue is vanity, profit is sanity but cash is king.
As a bootstrapped business, you can’t rely on money in the bank from VCs or that next round of funding if you’re running low on cash. You need to think about revenue, profit and cash in the bank from day one.
While I majored in business in college, they don’t exactly teach you how to make, spend and invest money within a business. Accounting is certainly helpful, but it doesn’t tell you how much money you should be spending, how much you should be paying yourself, etc.
Early on I found the book “Profit First” and it’s been transformational in teaching me the basics of how to save, invest and spend at Proof of Talent.
The book’s emphasis on profitability helped to set the business up for success, before Proof of Talent even started generating revenue.
Lesson: Understand your company financials from day one. Cash is incredibly important, especially for new businesses with limited financing options, so make sure to maximize every dollar at your disposal.
Develop Your Leadership Style
I read quite often on the subject of entrepreneurship and there are many business gurus that dismiss the idea of ever working for someone else. Being an employee is “bad” they say. I couldn’t disagree more.
I’ve had the privilege to work at a number of great companies throughout my career, tech giants like LinkedIn and Oracle, a rapidly scaling staffing firm with The Select Group and a blockchain startup with AirSwap.
At each previous company in my career, I learned something different that I’ve applied during my time running Proof of Talent.
I firmly believe that your past experiences in the professional world will shape you for the better if and when you ever decide to run your own business.
Lesson: Adapt your leadership style to include what you’ve appreciated about former employers/bosses and do your best to avoid what you didn’t enjoy. Your previous professional experience is a gold mine of helpful experiences for the reflective individual.
Trust Your People
Proof of Talent was built with the goal of being a remote-first company, even before COVID19 made that a necessity. One thing I’ve noticed about remote management and collaboration, is you need to trust your employees and co-workers.
I’ve spoken to business leaders who literally require their newly remote employees to check-in on Slack at specific times of the day, inform them when they’re taking their lunch break, etc. Personally, I take the opposite approach.
Don’t tell people how to do things, tell them what to do and let them surprise you with their results. — George Patton
The above quote from George Patton (also from Shoe Dog) illustrates the point for me. Hire people that can DO, tell them what you want them to DO and let them DO it.
Don’t worry about the minutia. Don’t worry about how they do things. Worry about what gets done.
Lesson: Trust is absolutely imperative, especially when managing a remote team. Trust your people and your people will trust you.
I’m absolutely not an expert entrepreneur but I do hope this honest reflection of lessons learned was helpful, or at the very least, an interesting read!
As a business operator, I have a long journey ahead to take Proof of Talent to the next level, but I feel confident that our future vision and ability to execute will take us there.
Stay tuned for the next post on “One Year In”
Proof of Talent is a recruiting firm specializing in the blockchain and cryptocurrency industry.
Follow Proof of Talent on LinkedIn
Follow Proof of Talent on Twitter