I don't know who to attribute that quote to. Possibly Plato but it's not clear. Doesn't matter at this point I guess. It's been true for as long as man has walked the earth, and we try to live by it here at Schedulefly.
We try to run our business as inexpensively as possible. When we make decisions that involve spending money, we almost always ask ourselves, "What if we were broke?" Doing so forces us to use creativity to solve problems, and it seems to work pretty well most of the time. Especially when it comes to major expenses that aren't essential to running our business.
So, for example, while we spare no expense in making sure we keep our site up and running and on servers that are in safe, secure environments, we don't exhibit at restaurant conferences. Conferences are expensive and time consuming and require lots of planning and costly collateral and airplane tickets and hotels and meals and booth fees and fees for people to turn a switch to give you electricity and time away from family and time that could have been better used on other projects or on finding balance to keep from burning out.
Rather, we think about how we might better use the same time and money, and we often come up with solutions that are not only much less expensive and mentally taxing, but much more effective and fun and rewarding (such as our book and our videos).
Because we have this mentality, I'm so thankful we never raised any money. It's hard to ask "What would we do if we were broke?" when you have investors who expect you to do the things that other businesses do when they have lots of cash on hand. I can imagine telling a room full of potential investors...
"Yeah, so, we try to do things like we'd do them if we were broke. We don't want to hire any sales people. We don't want to do any traditional marketing. No email campaigns. No conferences. No partnerships. No product road map. No native apps. Etc. Rather, we're just going to keep a really small team of a few people, keep our app really simple and easy to use, focus on providing excellent service any time anybody needs it (which will be rare since we are going to keep our app so simple), and do creative things like a book and videos and articles about our customers, as well as tell our story and philosophies honestly and openly on our blog, to help build our brand as one of the most loved brands of any provider of any product to restaurants. We think that is a great long term strategy that will enable us to build a highly profitable, successful, enduring and fun business."
(blank stares from investors...long awkward silence...laughter breaks out as they assume we were joking about our strategy...more awkward silence as their realize we aren't kidding...then...)
"Sorry guys. If we invest into your business, you can forget the whole 'what if we were broke' b.s. You will pay for advertising. You will hire lots of sales people. You will go to conferences. You will lease large, nice offices to house your team and provide tons of benefits to attract top talent in every area of your business..." And so on and so on.
And you know what's funny about that? If the above scenario had happened and we had taken the investor money, guess where we'd be now? Five years in we'd be sitting around some expensive, open-spaced office filled with ping pong tables and tons of people who we weren't exactly sure what they all did, a complicated business to manage, a complicated software for our users, headaches, sleepless nights, worries, stress, anxiety, and scratching our heads trying to figure out how to make things simple again. We'd wonder, "Can we get back to doing things like we did when we asked ourselves what we'd do if we were broke?"
Nope. It would be too late then. We wouldn't be broke. But we'd be broken...
P.s. By the way, I'm not making the case that no business should exhibit at conferences. In my last business, conferences wound up being very fruitful investments. We sold large enterprise subscriptions where one new customer could pay for the entire thing. Here at Schedulefly we sell subscriptions for around $40/month, so when you factor in the true time and money costs of exhibiting, we'd have to generate a whole heck of a lot of new business to make a conference worth it. In fact we tried it once. Wes and I went to a National Restaurant Association show in 2009. Afterwards we were exhausted and had a lot less money in the bank and realized right away that we'd never exhibit again at that show or any others. We decided to think like we were broke from then on!
If you like this post, you might also like "Because everybody does that..." and 5 great reasons NOT to raise money."