Fight, Compromise Or Give In Graciously: How Not To Lose Twice
I got asked to speak at an event, and the topic was ‘Money talk’, I was going to talk all about how to stretch every dollar in business, what to spend it on, how to raise capital, pay staff… all that sort of really practical money stuff that I’ve had a lot of experience in in the ten years since I founded my first business.
And then I found medium and developed a total entrepreneur crush on Mark Suster. One article in particular really resonated with me, called “Fight when its Time to Fight. Be Gracious when its time to give in”
It really got me thinking about this topic of ‘money’ and how all of the sub topics I was going to talk about come about by either fighting, compromising, or giving in all together. And the thing that really struck home for me was that when you do compromise or give in, do it graciously, take the high road, feel zen about it. He brought up this notion of “losing twice”. That whole concept of carrying resentment…. “Resentment is like drinking poison and expecting the other person to die”.
He said if you acquiesce to someone’s demands, for instance an employee, a partner or an investor, do it without any resentment that they’ve won and you’ve lost. Celebrate that the deal has been made, and don’t be mean spirited about it.
Reading this article was perfect timing having just raised capital for my second business, an online talent platform called theright.fit and all the deal making that goes along with that. It also got me thinking about how I’d behaved over the 9yr since I founded my first business, WINK Models and whether I’d viewed compromises with grace or with resentment, especially when it came to financial matters.
I have to admit, by nature I’m a fighter, not a compromiser. But as I get older and, dare I say it, gained a little bit of maturity, I can see a lot more clearly when it’s time to go in for the fight, perhaps meet in the middle, or let other people win.
In the early days, I really needed to ‘fight’.
To give you some background, I started my first business, WINK Models in 2007, at the age of 21, with less than $30,000 to my name. We were bootstrapped from day one, and remain that way to date.
$30,000 may seem like a lot of money for a 21 year old but I can assure you it was hard fought. I’d saved for years, the money came from my modeling & producing careers, because I knew I needed capital in order to create my own company, which had always been my dream. I had worked damn hard from the time I was 15 and I didn’t get my first credit card until I was 29 years old, always taking every job I could get to put money into my savings.
Those early days, they really are a brutal, hand to hand, street fight. I worked every hour god sent. I remember sitting up at midnight googling photographers in Sydney and cold calling them the next day to ask for work for our models. I hustled hard and I reinvested everything I made back into the business.
I was very clear about what I need to invest in: a great website, legal contracts & accounting set ups, business cards. All the rest could wait.
I didn’t draw a salary for the first 2 and half years. I paid the expenses that I could through the business, lived off my savings, and sacrificed a lot of things in those early days to get us going.
It’s not easy. Its not supposed to be easy. If it WAS easy, everyone would do it. You have to give things up. I missed family events, friends’ birthdays, sleep ins, nights out with the girls. All the things a 21 year old would normally be doing. I always kept the bigger picture in mind. I knew where I wanted to be and I knew I could make this business a success.
So my biggest piece of advice to anyone starting out, is to be 100% mentally prepared and committed to the journey. Once you launch, it’s going to take you on an amazing ride, but it’s definitely not for the feint-hearted. You’ve got to be prepared for the fight.
Accept that it means making sacrifices. There are times when it’s hard, really hard, and you’re going to question if it’s all worth it. A lot of the time through a river of tears. Sometimes you could be earning more money working at McDonalds. You have to be that passionate about what you’re doing, that you’d do it anyway.
What made me so passionate and willing to fight was working in the industry as both a model and a producer end experiencing things in the system first hand that really jarred with me. Why were agents always so awful to their talent & clients? Why were there so many inefficiencies and inequalities? Why would models have to wait months to be paid? And why wouldn’t they embrace technology to expedite the process of bookings & castings? Surely it’s not that hard to build an agency that works for everyone within that premise and help everyone to thrive.
And so WINK was founded on the premise that we would always treat our talent with decency and respect, and pay them within 7 days — something that we’ve always done, and always will. The flip side is that it means we often have to bankroll a lot of payments — as our clients are usually on 30, 60 or even 90 day payment terms.
As we grew, I had to become really adept at juggling cash flow. To this day, we’ve never had an overdraft or business loan. I’ve just been scrupulous with what we spend our money on, and always paid myself last. That’s the compromise I chose to make, and one that I gave into wholeheartedly. I didn’t want to be resentful that I wasn’t earning the market wage I could get elsewhere — that’s exactly what Mark was talking about in the article — that would just be ‘losing twice’
In the early days, I thought I had to do it all myself, book keeping, BAS, tax returns etc, because I couldn’t afford someone else. It took time for me to learn that it actually costs you more to do this — not only was I making small but costly mistakes or missing things I could be claiming, I was also taking myself away from where my time was best spent in the business — servicing my clients and our talent. This was another lesson in compromise for me — taking some of that money I could have been earning myself, and paying it to someone else, and celebrating that’s a win for everyone — for me, the business, and for them.
Building a strong team is the most important thing in business. You need to find your tribe, and get them flourishing alongside you. You need to find people you admire, who you are in awe of, that make you want to be a better version of yourself, and inspire you.
But obviously as a start up, you don’t have access to unlimited funds to hire the best in breed. So what do you do?
Well, I’ve learned there are a few things.
Start with your culture and make it awesome. At WINK, it’s probably one of the things I’m most proud of. Our brand and ethos of values make it a really attractive place to work. We’ve worked really hard to get clear on what we stand for, and culture naturally builds around that.
Being in the modelling industry health is important to us. We train together each morning, and the company pays for that. We have a life coach who works with each team member. We sponsor charities and give back, and believe in good karma.
We also have a formalised program of perks. You can have your birthday off. You get a doona day per year — I don’t want my team to feel like they have to lie and call in sick when they really just need a day to clear their heads, deal with a breakup, or battle a hangover.
Self improvement is so important so every staff member has an annual training budget that must be used. They get to choose the courses and it means they are always learning, developing and upskilling.
We also give them time in lieu for any charity work they may do — because we think that makes them awesome people, and that’s the sort of people we want to be around.
The reality is that we can’t afford to pay whopping great salaries at WINK. It’s not the point. A good working environment, feeling cared for, respected and appreciated can make all the difference.
At the end of the day, it IS all about how you treat your team. My team know I would go to war for them, I would fight for them and they for me, and for each member of our team. We’ve got each other’s backs. Everyone’s opinion counts, and every member of the team gets a say in the strategy and execution of the business.
That said, you also cant afford NOT to pay people what they’re worth. If a team member asks for pay rise, and you don’t feel like they’ve earned it, or aren’t ready for one, you have two choices. Firmly but politely decline and explain why. Otherwise, give in completely. If you do decide to compromise, the worst thing you could ever do is be mean spirited about it. Make sure you reinforce the fact that they’re worth it. Lavish them in praise. There’s nothing worse than consenting to the request then still being pissed off about it. You lose twice.
When one of my senior staff came to me asking for a pay rise, it made her the highest paid person in the company (even above me). I decided not to be annoyed about it and lose twice and instead created a situation where we could both win. To achieve her pay rise, we created a list of KPIs together, and I made sure I encouraged her and gave her the tools to achieve what we had agreed to. Instead of losing twice, we won twice, I had a happy employee and a healthier bottom line as she hit all of her targets.
Another quote I love about staff & development:
“What happens if we invest in our people and they leave us?
What happens if we dont, and they stay?”
It’s a huge lesson for me, about how important it is to invest in your team. Fight for the ones you know you need to fight for, and empower them to fight for your business, too.
So what about investing in yourself? The sensitive topic of when you start paying yourself as a founder.
Well, that’s probably a question for your accountant. There are other ways to draw money from the business, such as dividends, that might be more tax efficient for you as an individual. That’s why it’s so important to get your legal entities set up properly from the start, and back to that point about having the right people around you — make sure you have an accountant in your corner giving you the best advice possible.
But back to the question. The simplest answer is ‘when you can afford it’. And not a moment before. But you can’t just prop your company up by living on baked beans and tuna forever. At some point you have to declare failure or success.
Personally, it took me two and half years with WINK to pay myself. For the next 3 years, it certainly wasn’t my full market value. That said, I built a profitable business from day 1, and was able to reap those rewards over the years.
With my new business, theright.fit — it’s the second time around as a startup for me and I’ve been able to build the company in an entirely different way. We were bootstrapped, but we hired a full team of best in breed from day one, and we incentivized them with cash + equity. I had the profits from my first company to fund the business, and a lot of key learning’s from those early, scrappy, street fight days.
I knew we needed an amazing team, and I learned the importance of having the right people around me. We fought damn hard to get those people — its not easy. Being in a sexy industry in the tech field helps — but only so much.
Of course, working in a start up, you’re not going to get the same wage that you would get in an established corporate. And if you want that life, then start up isn’t for you anyway. The risk is high, and so is the payoff if you succeed. Your team needs to understand that and be on the journey with you, and 100% committed to the hustle. They need to love the fight.
Be open, honest, transparent, and reasonable with prospective employees about what you can afford, what your plans are for the company, and what role you want them to play. The right people, who are going to get in the trenches with you every day, will appreciate that. Then compensate them accordingly.
The expenses come at you like a freight train. It was a very very different business to WINK, and a very different funding model. I was lucky to be in a position to use the income from WINK — an established, profitable business with good cash flow — to fund theright.fit. That said, every day was about making tough decisions — do we compromise on the servers we host on to save some cash, do we commit to the best full stack developer or get the cheaper one who might not be as good? What will move the meter and make this business a success? What’s worth fighting for? And how long can we keep fighting before the money runs out?
So, at some point, you have to start looking to raise funds.
What I wanted were great strategic partners, investors who also bought skills connections to the table too, so again it was a time to fight for what we needed.
I knew the skills, experience, and type of advisors I needed to have around me to make theright.fit work. I made a hit list of people who could possibly be our dream team of advisors, who would add value and were much much, smarter & more experienced than me.
And then I started contacting these people, asking them for their advice, support and guidance. Anyone that knows me, will tell you I’m not afraid to cold call or cold email someone I’ve never met, and asked for an hour of their time, to help me solve a problem. That’s part of the fight — know what you don’t know- and then work your ass off to learn it. Fight to be better.
As part of this process, I started meeting some incredibly talented, experience and well-connected people in our field. And unwittingly, started the process of people wanting to invest in us, validating our idea, and encouraging us to take the leap into raising capital and scaling much more quickly than we’d planned.
Some things you will have to compromise on (there’s that word again). I certainly did — both parties in our negotiation had to compromise until we reached a place we were happy with. Once you’ve made that compromise, embrace it. It’s much more productive to accept it completely, understand the reason for it, and then be 100% behind it. Do not carry resentment — like I’ve been saying, you only lose twice.
So now that we’ve raised, what next?
The same sort of philosophy will continue to pervade my businesses. Fight for what you really want, compromise when you have to or when it makes sense to. And when you do, be gracious about it.
And as I’ve learned, never resent any of these compromises because instead of winning in business, you lose both emotionally and financially