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Jared Hamilton
From: Jared Hamilton
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JD Rucker

JD Rucker Founder

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7 Lessons From My First Year Building an Automotive Startup

1YearOld.jpg

Most articles like these start off with phrases like, "looking back, it's hard to believe..." or "there have been ups and downs, but we never lost sight of..." - I'm not going to start this article that way. Instead, I'll say this: "It's been pretty easy, so easy in fact that I'm actually a little worried that I did something wrong without knowing it."

One year ago last week, I officially launched our website and started looking for people who wanted to go on an adventure. The official documentation, bank accounts, tax forms, and other such things wouldn't happen for a month, but on this date in 2013, we had a website and were ready to take on clients.

There's something incredibly cool about hitting the one-year mark. We can now say that we've been around for "a little over a year", which I'm hoping will reduce skeptical coughs when prospects talk to us. We have a full year's worth of data to plug into reports. We can get a bigger line of credit. Otherwise, very little has actually changed. Unlike the birthdays of young people that are filled with excitement, ours is more of a sigh of relief. We made it through the period of time when doomed startups are most likely to find failure.

I would be remiss if I didn't offer observations to those who care and advice for those who are considering going down the same path. After thinking about it all day, I came up with seven lessons I've learned that some might find entertaining, others might find infuriating, and hopefully a few will find helpful.

1. Set a Direction with a REAL Goal in Mind

If you're going to do as I did, leaving a lucrative and cozy job to follow a dream, make sure you do so with real goals. "Making more money" or "spending more time with the family" are not real goals, at least not the kind that I'm describing. They are side effects of success that stem from building and running your startup properly. "Build and sell the company for $X billion" is not a real goal, either, because it's a result of your efforts rather than being something that you can realistically achieve.

A real goal should be something that guides the direction of your company, your employees, and yourself. It's okay if it's intangible or subjective as well. Those can actually be the best types. The real goal is something deeper than the obvious financial or lifestyle goals that we have so that achieving it makes all of the other goals come true.

My goal was to build a company that delivered unquestionable results. This translated to building a search product that was so powerful that a stranger could look at analytics and point to the moment that we started. It translated into a social product that makes multiple dealers exclaim, "I never knew you could actually sell cars on social media until now."

Will I make more money than I did before? Yes, 2015 appears to be heading in that direction. Am I spending more time with my family? Absolutely. In fact, my first family vacation in years is next week. These weren't my goals, but they're happening because we're achieving the real goal for the company.

2. Be Fearless without Being Stupid

When we were first getting started, we approached an OEM about their social media. They liked what we had to say and asked us for some examples of their dealers that were on the program. The good news: we had just signed one of their dealers up a couple of weeks earlier. The bad news: it was our first dealer for their brand.

We were fearless. We were also stupid. We had a great product and a great idea of how to apply it at the OEM level but we couldn't get beyond the second meeting because we jumped in before we had anything to back us up.

People often misunderstand the practical meaning of the word, "fearless." It's defined as being without fear, but we are human. We have fears. Those who tell you otherwise are either misguided or trying to sell you something. The practical use of being fearless is to do the right things despite our fears. Fearlessness in business and in life is about not allowing our fears to prevent us from doing what our hearts and minds know is best.

It's not about bungee jumping. That's what we did when we met with an OEM prematurely. It's about believing that the opportunities put in our path are there for a reason and the terrifying obstacles placed in front of us are there for us to conquer and become stronger as a result.

3. Pivot Early

So many startups over the last decade have pivoted. The majority of them did not last very long after the pivot. Unfortunately, unless you have something that is rock-solid with very little chance of needing major adjustments, you need to be ready to pivot.

The earlier you can pivot, the better. Even the best business plans and the most experience in similar situations can prove to be incorrect in the real world.

There's a reason that most pivots fail. They're almost always done too late. MySpace performed a textbook pivot right before they were sold. It was the right direction for the company. It was also about a year and a half too late.

Think about your company's pivot. Expect that it will be necessary. Build your assets with a potential pivot in mind. If it never becomes necessary, then count yourself as one of the enlightened (or lucky) ones. When it does become necessary, don't hesitate.

We've gone through a handful of very minor pivots, but the first major one is coming soon. Thankfully, ours is not one that will waste anything that we've built so far, so it's like having the best of both worlds - a great plan to start and a better plan to grow.

4. People Build a Business

The most important part of any business is the people behind it. This is commonly known to the point that it has become cliche. It's also the one that seems to evade so many startups.

One of the guiding principles we've used is to hire talent and find the right fit for them rather than to hire to fill a specific need. This is a point that most business people would happily debate me on and in the court of public opinion they would probably win the debate, but I stand by it.

We had our eyes on a person who showed all of the aptitude and seemed to possess the exact vision we wanted. One day, we noticed that she was suddenly available thanks to an honest and serendipitous Facebook update. We couldn't afford her and we didn't have a place for her, but the potential and talent forced us to pursue her. Thankfully, we obeyed lesson #2 (be fearless) and grabbed her while she was available. We scrambled to grab a handful of clients to pay for her and we haven't looked back ever since.

The saying goes that you should put your customers first. I disagree. If you put the members of your team first, the customers will be served properly as a result. Find the right people. Go out on a limb to get them. If they're right for your company, the role isn't really as important. They have to fit the company before they can fit a role.

If you hire the wrong people, even the best plans can go awry. If you hire the right people, there's very little you can do to make a mess that they can't help you correct very quickly.

5. Establish Personal, Unbreakable Covenants

In the movie Top Gun, Maverick learns early in the movie that he should never leave his wingman. In the final fight scene, he takes it to the extreme and puts himself in danger to make absolutely certain he doesn't break that covenant. It works, of course, and he gets to share an awkward hug with Val Kilmer as a result.

If you're going to leave the security of a paycheck and take a chance to build a startup, you should do the things yourself and with your company that you always wished you could do before. Just think back. There were times when you've said to yourself, "If I ever have my own company with my own rules, then I would definitely..."

For us, we set several covenants. We won't make our employees work on weekends, for example. I still regret the time when a client really wanted one of our team members to be at a Saturday event and I let him go. He was fully willing to help and performed his duties exceptionally, but I still regret it. That was a mistake and I don't plan on letting it happen again.

They don't have to be so tangible, either. One covenant we set was that we would never let reporting or customer relations get in the way of results. My partner and I had worked for companies that were great at talking to customers but had a challenge delivering the goods. Every customer service call was laden with excuses. We've unfortunately taken it to the extreme on some occasions, delivering incredible results but forgetting to toot our own horns to our clients. Thankfully, the results usually speak for themselves once we show them.

6. Make Friends AND Enemies

If nobody hates you, then you're not trying hard enough. Part of being a startup in the uber-competitive world of automotive digital marketing means that if we're doing our job, there will be those who view us as a threat.

Of course, there will also be those who can view you as a potential ally. Sometimes, those allies can come at the strangest times and from the strangest places.

We have had our share of both along the way. Even the enemies that we've made have mostly come as a result of doing things that they could not. There are those who can do things that we cannot do, and we've done what we can to become allies with many of them.

In the game of friends and enemies, it's a matter of having sharp eyes. You have to be able to see when there are potential allies to approach while looking towards the horizon (or even behind you) for the enemies that are waiting for you to slip up.

7. Enjoy the Ride

There's a certain level of stress that comes with running a startup. Stress is fine. It's part of life. The tribulations we go through make us stronger and test our mettle. There's another level, though, that is not beneficial. When stress becomes anxiety, it can have the opposite effect. It can be debilitating.

There will be regrets, setbacks, doubts, and trials, but if you're not enjoying the moments as they happen and having fun with the lifestyle that you're building, it may be time to swallow pride and check the job boards.

You must love what you do. There's no way around that. You should never build a startup that you do not thoroughly, passionately love.

I have been thoroughly blessed this whole year. I've found (or been found by) the right people. The good decisions we've made have proven to be fruitful and the bad decisions we've made have not been catastrophic. Year two begins now. It's time to double down and make it better than the first.

Carl Maeda
Congratulations on your one year milestone!
Chad Albertson
Congratulations @JD, best of luck rolling in to 2015! Thanks for sharing the insight, loved the Pivot and People section. Automotive is all about the people, a lesson dealers learn day one and relearn all to often. First word that came to mind for me when you mentioned Pivot, was "Nimble". You have to have the insight and vision to know when your doing something right (or wrong), then have the courage to move the team in a new direction by being nimble.
Celeste Berner
Congrats, JD!
Megan Barto
Congrats, JD & great tips! I can't wait to see what your second year bring! :-)

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