People say that falling in love and being addicted to drugs activate the same part of your brain. And while I don’t have the science to prove it, I wouldn’t be shocked if entrepreneurship triggered that same area. All three make you hyper focused on one thing — that thing that you care about the most. Anyway, this article isn’t about love, and it’s definitely not about drugs, but it is about entrepreneurship. It’s about the crazy things we do for our companies. Like that time last month when I sold my house and all my worldly belongings.
I’m told people like details, so here’s the nitty gritty. The full story from the financials, to the rationale, to the what’s next and lessons learned…
For starters, my name’s Jody Porowski. I’m a 27-year-old woman, the founder and CEO of a startup called Avelist, a platform that crowd sources other people’s experiences to save you time and give you guidance. I was 25 when I bought my first house, working in the analytics department of a large software company at the time. And I have to say, it was a pretty sweet house. Four bedrooms, three bathrooms, walking distance to shops, restaurants and parks. It had been on the market for about a year and I saw so much potential. I paid $245,000 for the place and immediately renovated the “sore spots”. I finished the laundry room, knocked down a wall in the kitchen, installed some hardwood floors, and added french doors to the screened in porch. The renovations cost a little north of $10,000.
And then I made the house a home, filling it with people and memories.
There were dinner parties, movie marathons, and holiday gatherings. We roasted marshmallows over the fire pit and enjoyed plenty of late-night conversations on the screened in porch, surrounded by twinkle lights and candles. And, of course, I decorated. My style was an eclectic mix of Pottery-Barn-meets-Modern. Fresh flowers, cool photography, and unique finds from antique stores and flea markets. No, my startup is not an interior decorating service. I just really like pretty things.
Don’t get me wrong. It wasn’t all perfect. I learned that if something can break, it probably will; that a new HVAC costs over $5,000; and that tree removers charge more if you want them to take the stump (I’ll keep it, thanks). My green grass turned out to be a yard full of (insanely fast-growing) weeds; burst pipes made me cry; and I was literally thrilled to receive new toilets for my birthday (thanks, Mom and Dad). Truth be told, my home and I had a love-hate relationship. But despite the inconvenience and burden it caused me, you only buy one first house, and mine was a good one.
People ask me why. Why did I sell my house only two years after I bought it? Or better yet, why did I even buy a house when I was 25? Especially if I was the kind of person who was going to start a company? These are good questions.
To understand why I sold my house, we have to backtrack a little bit. We have to talk about the reason I decided to buy it in the first place.
I was working two jobs at the time. Corporate by day, startup by night. You know the drill. I knew that if I wanted Avelist to be a success, I needed to be working on it full-time, but I also knew that starting a company would be hard and that finances would be tight. So I came up with what I refer to as The Master Plan. It was simple. In order to leave my stable, corporate job and fund my company, I would buy a house.
Go ahead and laugh. Buy a house when you need cash and flexibility? I realize it sounds counter-intuitive, but hear me out and give it a chance. Sometimes the crazy plans are actually the best.
The Master Plan was as follows:
Step 1: Buy the Location. I would make sure the house was in a great location where I could easily find a new buyer at a moment’s notice. I chose a trendy area of the city that had a lot of new shops, restaurants and music venues popping up around it. And I also chose a house that had been on the market for almost a year (giving me the upper hand in price negotiation).
Step 2: Add Value. I would do basic renovations as soon as I bought the house, instantly increasing the value while I still had cash in my pocket. Similar to the location, the home improvement would give me the flexibility of a quick sale if I needed cash or if we decided to relocate the company.
Step 3: Secure Renters. As soon as I moved in, I would rent out the three upstairs bedrooms for $500-$600 apiece and I would live in the fourth downstairs bedroom. The renters would cover my mortgage of $1550 per month, drastically reducing my expenses and enabling me to live on a much smaller salary. Once again, the location would be key for attracting renters.
Step 4: Furnish with Craigslist. I would buy most of my furniture off of Craigslist. The catch? Name brand. You can usually re-sell name brand furniture on Craigslist for more than you bought it. Cha-ching! Secret’s out.
Step 5: Create a Home Office. Finally, I would turn the living room into an office, providing space for my new company in the most cost-effective way possible. Whiteboard covered walls, conference tables, the whole nine yards.
I’m an “activator” (for all of you Strengths Finder fans out there), so the Master Plan was put into effect immediately. That first year was insane. I continued to work two jobs, bought and furnished a house, managed renovations, became a landlord, and raised a Friends and Family round of funding. The next year was equally busy and equally exciting. That’s when I convinced three talented people to leave their cushy jobs and we took the startup plunge together.
Which brings us back to present day…
We’ve been working on our company full-time for a year now. We have an awesome product, a dedicated team, a growing user base, and we’ve moved from my home office to a cool office downtown. At the beginning of the year my cofounder and I (hey, Josh!) were discussing our growth strategy and we were faced with a question that many entrepreneurs have faced before us: would it be better to focus on marketing or to split our time between marketing and raising another round of funding? We decided it was in the company’s best interest to focus on marketing, but we knew that we would need more seed money to keep things up and running. If only we could get some quick cash, just enough to keep the company operational while we focused on growth.
Quick cash. The decision was clear. I cleaned my house, put it on the market, and sold it in six days for $276,000.
Was it sad? Maybe a little. Every once in a while, for about 30 seconds a month, I wonder what my life would be like if I wasn’t an entrepreneur. It’s not hard to imagine. I’d have more money. I’d have a house. I’d have more time, go on more vacations. Maybe I’d have a dog. But I wouldn’t have my company, and that’s what I want more than anything, so I feel lucky.
The week of the closing, I posted an ad on Craigslist and people walked through my home, pointing to the furniture that they wanted, paying in cash, and lugging it out piece by piece. I said goodbye to my house of potential. All because I fell in love with a company called Avelist.
The way I see it, many people work hard to buy their dream house. I sold a house so I could have my dream job.
Selling my house was fulfilling. It was exciting. It was my Master Plan working out. And while I certainly don’t claim to be a successful entrepreneur (yet), I’ve learned a lot over the past two years. Three big truths:
- Entrepreneurship is a lifestyle. It’s a journey. Not a quick one and done. Everything takes longer and costs more than you anticipate. It’s a path that requires a lot of flexibilty and a lot of sacrifice. You’ll have to give up things you really want, which means that you have to want your company more than those things. You have to love what you’re building and you have to believe in it.
- Actions speak louder than words. I believe in my company. I believe in my team. I think our mission is worth fighting for. But actions speak louder than words. As the leader of my company, I need to be willing to take the biggest risks. I wouldn’t have asked my friends and family for their backing if I wasn’t willing to put my own money into the deal. I wouldn’t have asked my cofounder and employees to leave their jobs if I wasn’t willing to jump first. The things I do will show people who I am and what I believe. Character and reputation are built day by day, decision by decision, and act by act.
- All that glitters is not gold. Live intentionally. What are your priorities? Figure out your goals and decide what matters most to you. If you live your life according to your priorities, your regrets will be minimal, your risks will be worthwhile, and your happiness will be genuine. When you believe in your mission, persevering is easier and your chance of success is higher. All that glitters is not gold. My house was glittery but it wasn’t my treasure. I’d give up glitter for gold any day. Go for the gold.