When the founders of the Gadget Flow website found investment hard to come by, they took an alternative route to boosting cashflow.
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We often hear that to grow a new business rapidly you should raise venture capital. That can be a time consuming endeavour. No guarantees you will raise the money you need either. Perhaps you aren’t that well connected and wonder how can I get my business to the next level?
Evan Varsamis and his co-founders achieved exponential growth without raising a penny.
In the middle of the economic crisis and by using no capital, the founders managed to develop their company and generate more than 200,000,000 visits, hire 22 people, get 3,000+ customers, and promote products for the likes of Creative Labs, Polaroid, and Sony.
Evan Varsamis, Mike Chliounakis and Cassie Ousta - pictured above - met in college in 2009. Everything started in an apartment in 2012, not in a garage like many startups stories do. Three friends, all aged 21, were working on a design inspiration blog and curating content for designers and artists.
They were publishing new content almost every day and the blog was generating a few thousand dollars every month just from sponsored posts and banner advertising. It was a way for them to stay creative and it also brought in some revenue.
The idea of Gadget Flow was, and still is, to simplify online product exploration by introducing fresh, new content daily.
The culture for startups and new business has moved more towards raising capital and fueling growth this way. In times of uncertainty capital becomes scarce. Which was the case in 2012 and could prove to be the case for sometime here in Britain. Evan and the team faced the same issue. They didn’t let this top them.
They were spending a couple hours every day generating content for the Gadget Flow site and Evan and Cassie were also working part-time in a shipping company.
Winning investment money is hard, even when the economy is bouyant
In early 2013, the team opened a media agency to help companies with their digital advertising goals, web development needs, and social media strategies. The other key reason for launching the agency was to fund further development of Gadget Flow.
The capital earned in the agency was used to bootstrap the progression of the key business they wanted to launch.
Growth is key and something many entrepreneurs struggle with. It must be managed carefully. When you can raise outside capital it is a little simpler. It is tough when you can’t. When you are bootstrapping cash flow is king.
Come early 2014, the team at Gadget Flow had been trying to cope with the website’s demanding tasks. In order to keep up with their growth, they spent weeks looking for the right people and hired their editor as well as a couple blog authors to help them generate content faster.
Next, they added an iOS developer and an Android developer to the team. According to Evan, “with a startup, cash is king and therefore you have to be careful about who you hire and why you are hiring them."
He goes on to say that they always hired a new team member when they were "at the edge of a burn-out; we wanted to be sure that we really need one more member and weren't just wasting our money.”
They applied this method to every single one of their hires and today their team consists of 22 people from United States, India, United Kingdom, Ukraine, Greece and the Philippines.
The key takeaways here are how careful you need to be about hiring. As a small business you can’t afford to make errors here. It can be very costly. Secondly you have to be at your absolute limit and about to burst before you invest in hiring that next team member.
The Gadget Flow website as it appears today
Communication with your staff and customer is key for sustaining and augmenting growth. Evan says "the key strategy to keep your team close is weekly meetings with every single team member to talk about their tasks, resolve issues, enhance their workflow, and keep them posted about company goals and achievements." This engagement with the team extended to the end user and it certainly paid off.
The Gadget Flow team accomplished this at a time when the odds were against them - in the middle of the economic crisis. According to Mike, “seeing hundreds of local businesses closing and people protesting for their jobs and rights is quite challenging.
"We were scared with what was happening in Greece but were also determined to build our brand." After putting in 18-19 hours a day to get things perfect, "[we] managed to build something that we are passionate about, something we believe in.”
This is how a lot of business owners are currently feeling. Don’t let the negativity surrounding Brexit distract you from building a great business.