"I just hired someone to take care of my house for $50,000 a year: A house manager. This is in addition to the full-time nanny I have. And the cleaning service. And the assistant I have at work."
Trouble making payroll? Get rid of your full-time nanny, and assistant, and cleaning service and house manager. Sounds like the investors are getting fleeced.
With the proviso that this is more applicable to us knowledge workers than to a business which needs massive capital investments: there is another option to being a slave to investors. Bootstrap.
I started my business with a budget of $60, and spent $56 of that. Every. Single. Penny. of expenses since then has come from a paying customer. I have never worried about not being able to make payroll. OK, technically, there is no payroll (I'm not the world's biggest fan of the employer/employee relationship, for many reasons), but when I tell my freelancers "Hey, Bob, I will pay you a thousand dollars if you can do X up to your usual level of quality, how's about it?", I have never once thought "Oh, effity, now I have to convince someone to give me a thousand dollars so I can pay for Bob's time". (One reason Bob, and the rest of my freelancers, are typically happy to work for me is that I pay my invoices in Net 30 -- minutes, that is.)
This means that instead of being tied to the telephone, I think I have made two calls in 3 years. The first was to give someone their credentials because their email inbox was full and they had indicated it was an emergency for them. The second was when Google asked me for a favor, because when Google asks for a favor I can damn well make time for a phone call.
Your points are valid. However, although I'm not certain HER startup qualifies, there are businesses that cannot be started without at least some cash investment.
Your model really only works in software, consulting, or services. And it doesnt always work in software. Sometimes you need to buy/lease computers. Or cars. Or Steel. Or Whatever. And that takes money.
Plus, a business may be generating revenue, but have cashflow issues. This again depends on the business, model, industry, etc.
Simply saying "Bootstrap" is not always good enough. Granted, from the looks of her company, it should be in this situation, but shes already dug 60 feet into a hole, and its nearly impossible to 'bootstrap' yourself out of a situation like that.
You've said elsewhere you earned $1000 USD your first year. At that rate of income I doubt your expenses are factoring in your time.
Not being critical or aggressive here. I'm in the online content business myself, but we have costs associated with content production and would be out of business fast if we only earned 1k a year. I don't think your experience generalizes to a lot of other cases, that's all
Ms. Trunk is a professional blogger. I wish I had known this before reading the article. I would rather not waste my time reading anything these people write.
Seriously... Although I feel for her personally (I've been in that financing situation), her startup is in a bad place, getting worse, in an even worse industry.
From her startup's "about" page.
---
We’re a community of top Gen Y thought leaders, forward-thinking organizations and everyone else who realizes that the way we define ourselves in both work and in life needs to change.
---
Professional Blogging and Weird Niche Social Networks are no longer valid business models.
A piece on 20/20 about transparent salaries impressive. Good to see that she is following through on that story through this post. Doing so make it's an even better story; publicity.
Id never heard of this svc & site until this post.
I find that whole concept pretty fuzzy. They build a blog portal that lots of people go to. Then they sell a spot on that blog to corporate bloggers that try to make their company sound like an attractive place to work. Really?
How about selling ads on the blog? Try to monetize the feed, too. She's missing out on lots of revenue. Shouldn't she try to drive more revenue with her blog? I read it in Google Reader and really had no idea how she was pulling in any revenue at all.
It's a very personal situation, so chances are the cofounders are all stressing and working to resolve it, but there is nothing more demoralizing than not hitting payroll. It's forces you to confront so many well hidden issues, especially from your employees. Issues that, if sales pick up and things start rolling, are best swept aside. The amount of guilt one feels is directly proportional to how much you are to blame.
The fact that she was able to even write about such an experience is mind boggling to me. All I know is when I've run out of money, about the last thing in the world I wanted to do was to share either the lack of funds nor my downward spiral dealing with it.
The investor called her. He offered the pre-bridge loan to her. Sounds like she is running the ship.
I feel for the employees. It's a "company" - a collection of people - and other than pointing out that she hasnt met payroll at the beginning, I don't see any evidence of consideration for her staff.
It really bugs me that virtually all of the top-rated comments here are petty attacks on the author. This was better written and more interesting than 90% of the puff pieces I read about startups, here or elsewhere. I don't see why it merits such a mean-spirited response.
I think the comments here are a great example of why women don't want to be in this industry.
It was interesting in a "Watch a car crash" type way. If you're short on cash, you don't have a "House manager".
It doesn't sound like she makes a good CEO to me at all. Not because she's a woman, but because firstly, she is spending more money than she should be, and secondly, because she sounds like an emotional wreck.
Most people in that situation would be emotional wrecks.
I agree with you that her business seems very unsound, but she should get massive points for being honest and sharing this with people so others can learn from those mistakes.
Most people are not good CEOs. Her story is just written from a much more human angle than the other "not good CEO" stories that show up on HN.
You're right dude, it's the patriarchy, it isn't that she:
*makes a living blogging (and is part of that circle)
*wastes money
*essentially has no other skills
*writes like a pierced emotion
*embellishes everything (how can you be truthful about your life when all you do is blog?)
*is not level-headed (wish she was my CEO!)
*is running a goofy business
*contributes nothing to this business beyond her money and her celebrity
If Fred Wilson or Mark Zuckerberg wrote this blog post how would people react? The only reason you're defending her is because she is a woman, and, in fact, you've been sucked into her 'read my blog' trap. You need to check yourself man, because it sounds like you have some mushy ideas in your head.
This is about a FAILING BUSINESS, not about which extracurricular gets equal time down by the quad.
She could be the melodramatic manager of a nail salon, for all I care. The point is, she wrote a good article about the emotional toll of not being able to make payroll.
Her chosen profession, spending habits, personal life -- nothing else is relevant to the discussion.
From what I can tell, the attacks have very little to do with her being a woman and everything to do with her personal spending habits, chasing hype for a living & embrace of cliches, fluff words & low brow writing. Coachology? Thought leaders? Gen Y? The "I will Teach You to be Rich Scholarship"?
That's my point -- the attacks have nothing to do with the content of the post, and everything to do with judgments that people here are making about her personality and habits.
Trouble making payroll? Get rid of your full-time nanny, and assistant, and cleaning service and house manager. Sounds like the investors are getting fleeced.