What is a C.E.O.? If you founded and are running a start-up, when should you really take C.E.O. as a title?
These are questions I?ve struggled with over the last year. It?s easy to look at Silicon Valley unicorns ? companies with at least $1 billion in valuation ? or public companies and see their C.E.O.s as ?true C.E.O.s.? But what about bootstrapped start-ups? It seems like every person who has an idea is suddenly a C.E.O. ? at least on his business card.
I founded FringeSport out of my garage in 2010. With my co-founder and team, we bootstrapped the business to $5 million in revenue by 2015. In that time, we pleased tens of thousands of customers and weathered ups and downs in our market. It?s been an interesting journey.
My co-founder departed last year. We closed our first investment round, and we?ve remade the business as we pivot from a ?lifestyle? business to a real business. In many ways, restructuring the business in 2015 to make a run at building something amazing for our customers, employees, tribe, community, and shareholders (including me) was harder than founding it.
These are the experiences that have led me to ponder the nature of leadership, and work on developing my style. We?ve got something special going at Fringe. The opportunity to help hundreds of thousands of people make meaningful, positive changes in their lives.
The founding of FringeSport
I?ve always wanted to be an entrepreneur. And I always wanted to sell things ? physical things. When I was a kid, I read Boys’ Life magazine and I ordered pocketknives and other camping trinkets from the classified ads. I resold these items to my friends.
In high school, I noticed that all the clubs raised funds by selling candy. I joined seven organizations, bought a bunch of candy at Sam?s Club, and raised some funds for myself. I was in so many clubs that everyone assumed I just moved from organization to organization helping them raise funds for trips.
This also helped me get into college, by the way. One of my high school counselors told me she?d never seen someone so active in extracurriculars.
In college, the dot com bubble was inflating, and Austin, Texas, where I attended college, was booming. I landed an internship at a web design firm and taught myself HTML ? plus some Flash, CSS, and PHP. I parlayed that experience into a position that was my dream job: working for an ecommerce start-up, LivingDirect.com, the best place to get small appliances online.
I worked there for 10 years as I helped the company grow from $3 million in annual revenue to $50 million. While at Living Direct, I knew I wanted to start my own business. In fact, I told this to the C.E.O. when I was interviewing for the job. This was a fertile time for me to grow. I was definitely not the best employee by standard metrics. But I worked long enough to get good, then I would get bored, and move on to focus on the next challenge within the company. But I always moved into areas that we didn?t clearly understand. Then I would figure out the process and move on, always teaching those that came after.
Doing this, I learned:
- Pay-per-click advertising (back when Overture was the big gorilla);
- Web design;
- Product photography;
- Logistics ? domestic and international;
- Chinese sourcing (this kept my interest the longest and has been gold for my career);
- All aspects of digital marketing ? before social media.
I also returned to school, earning my M.B.A. from The University of Texas via its evening ?executive? program. Shortly after graduating, I was promoted to V.P. There was?talk about a path to C.E.O.
But I knew I needed a change. My career was going well. But I had a mentor who knew I wanted my own business. He told me, ?Peter, you have to start your own business now. You are about to start making ‘real money’ as an employee. It?s a drug, and once you are hooked on it, you?ll never be able to eat ramen again.”
I had just started to make in excess of $100,000 per year. I could see he was right. I drove a luxury car, wrote with a Montblanc pen, checked time on my Omega watch, vacationed with my wife in luxury resorts, and I wanted a Porsche 911 almost as much as I wanted freedom, and my own business.
But my mentor was right.
Around the same time, I took a vacation to Kuwait. My father had recently moved there and I wanted to spend some time with him. On the advice of another friend, I grabbed a copy of Tim Ferriss?s book, The 4-Hour Workweek.
I read the book as we bounced around the desert in my dad?s car. It was an epiphany. It was like Ferriss was speaking directly to me. So much of that book was similar to thoughts I had.
I ran through a few niche ideas over the next few weeks, and narrowed my business down to starting a strength and conditioning equipment company, where I would design equipment, have it custom manufactured, and sell it online.
At the time, I mainly wanted freedom. I wanted to help people, sure. But I was very internally focused.
To go to market, I used my own understanding of the lean startup methodology, that the best way to prove a market is to sell someone your minimally-viable product.
I was heavily involved and emotionally investing in the CrossFit movement. I judged there was a lack of good options for gymnastics rings. The few existing providers were expensive, and often had very poor service.
I used my network ? from working for Living Direct ? to find a good factory.?I ordered 200 pairs of injection-molded gymnastics rings.
I started parking my car outside of the garage (in the driveway), build a small warehouse and shipping station in my garage, and quickly launched a Shopify site.
On a side note, if you thinking of starting an ecommerce store and can?t decide on a platform, I suggest building out your Amazon sales first. After that, open a Shopify store. Don?t worry about any platform other than Shopify until you?ve hit $1 million in annual sales. Then you can worry about a platform. Shopify does everything you need it to, inexpensively and easily. Plus, it?s easy to make your store look good.
We drove traffic through pay-per-click ads (unprofitably), by selling on Ebay, through forum marketing, and by reaching out to bloggers with free products. Plus, we hustled ? hitting up CrossFit gyms and throw-down competitions.
Once we got up to a few orders a day, we broadened the product assortment by recruiting companies that our competitors were selling to.
In 2010, we did a few thousand dollars in sales; but we started late in the year. In 2011, Fringe did roughly $100,000 in revenue, with no employees other than me. In 2012, I quit my job, rented warehouse and office space, and hired employees. We did roughly $1 million in revenue.
Fast forward to 2014 and 2015. Fringe had much promise, but was in danger of stagnating as a ?lifestyle? business for my co-founder and me. I have nothing against lifestyle businesses; that is initially what I wanted for Fringe. But I?ve seen the huge positive impact we have in our customers? lives. I want more. I want to build something exceptional, that impacts hundreds of thousands of people ? helping, inspiring, enabling.
And Fringe will do that.
This is why I find myself back in the zone of discomfort, learning what it means to be a great leader. Learning that at a certain point ? now? a year ago? ? being a founder doesn?t matter. Being a C.E.O. and leading-guiding-building-managing is what Fringe needs.
This is what I have to be now.