Monthly Archives: March 2010
The toughest competition I’ve ever had to deal with was The Joneses. I had never met them, but I always knew that they had the newer car, bigger house, and even their dog could do more tricks than my dog. No matter what I did, they were always getting ahead of me.
During a recession, it’s necessary, if not fashionable, to be frugal. Eventually, the boom will be back, and those Joneses will be flaunting their new found wealth at your doorstep again. Often, I get questions about how I managed to get out of $40,000 in debt after the first dot com bust. The getting out of debt part had not much to do with the bust, but more to do with the bubble.
This is how I dealt with the temptation to spend at the height of the bubble.
1) I hung out at the mall for fun.
I know that sounds crazy counter-intuitive, but I went straight to the lion’s den. I walked, walked and walked, and bought virtually nothing. Sure, the temptation was crazy strong, but after a while, I got used to it and a sort of numbness came over the desire to buy. Even now, more than 5 years later, the mall seems filled with overpriced things I don’t really need.
2) Used is a beautiful four-letter word.
I do have a weakness for cars — those beautiful, shiny, fun beasts of consumerism. Solution: I became good friends with Craigslist. There are remarkable treasures to be found in the For Sale By Owner Used car market. But then again, there are plenty of overpriced and oversized and overly loaded cars there as well. In 2004, I swallowed my own objections and purchased a sedan with 80,000 miles for $8,000. It was outdated, had scratch marks on the bumper and in a color we never imagined owning. But it was safe, reliable and actually quite comfortable. I was always a “new car” guy, but that used car showed me the virtues of buying less than I “needed”. I haven’t bought a new car since — or paid more than $15,000 for a car (while the average new car now costs $28,400). We still buy used whenever we can and sell our stuff on the used market whenever we can.
3) I ignored raises.
Sure, I got them, but I didn’t let it change my life. In other words, I didn’t grow into my salary. Of all of the things that I did, this little tactic was absolutely the most powerful force. When I was making $35,000 a year, I used to be able to save (or pay down the debt) to the tune of about $2,500 a year. I felt fortunate enough to be able to do that. It meant not buying the new car or that new gadget, while everyone else seemed to do so. But when my income grew to $40,000, that meant I almost tripled the amount of money I saved. In other words, I could get out of debt in 1/3 the time (or grow my savings 3 times faster). As I paid off my debts, we felt our spending power increase even though we were not actually spending any more money — purely because we had less credit card or car payments to make.
The alternative is pretty typical of the pains associated with the boom and bust. As people’s income grows, we end up spending it. That means we establish new spending patterns and establish a “new normal”. When the hard times come, we must cut back, resulting in painful changes to behavior and lifestyle.
To this day, my wife and I firmly believe in Living Small. Living Small (capital L, capital S) means not just spending less than you earn, but resisting the urge to spend more just as your income grows. Instead, find a sustainable spending level and stick with it. This is what allowed us to handle sizable drops in our income.
I know during a recession, it seems like you’ll never be able to save money, but when the day comes when you can start to do so, remember how to Live Small. It’ll help you to Live Large later.
As soon as I took on the job of CEO for the world’s weirdest cat site in 2007, the focus hasn’t been about growth — in fact, I’d go as far as saying focusing on growth can have the opposite effect of what’s desired. The focus of my job has been on reinvention.
Let’s take a look at my “career” at the Cheezburger Network:
- Sep. 2007: That idiot who quit his job to run a cat picture site. (Staff count: Approx. 1)
- Jan. 2008: That idiot who quit his job to run some photo sites. (Staff count: Approx. 3)
- Jan. 2009: That idiot who quit his job to run a time-waster network. (Staff count: Approx. 15)
- Jan. 2010: That idiot who quit his job to run a… what the hell are they trying to do over there? (Staff count: Approx. 35)
Every quarter, we embark on a project or come across an opportunity that would fundamentally alter who we are. If you would have told me in 2008 that we’d be running 40+ sites and be one of the largest networks on the Web, I would have not believed you. In fact, I am on the record saying that we could never really see ourselves beyond the 25-sites mark at Gnomedex 2008.
Yet, here we are. WTF?
I believe our ability to grow has to do with two things:
1) Having no false expectations about who we are (we’re here to make you happy for a few minutes, nothing more) and,
2) Having no holy 3-year plan. (Few thought we’d be anything, so it was easy to be something).
That meant we could relentlessly chase what our users wanted each and every month — our own visions be damned. Every year, we look back on the last, and we’ve reinvented ourselves as a different company. Perhaps to the outside world, we haven’t changed much (which I see as a huge positive), after all, we still post the same number of lolcats to I Can Has Cheezburger? each day, but the dramatic internal change is easy to recognize in the office.
That constant drive to reinvent means it starts with me. Every quarter, I look back at the last and my “job” has totally changed. Last quarter, I was hell-bent on finding the Cheezburger way to do recruiting and hiring. This quarter, I want to create a lasting Cheezburger culture within the company. The only thing that’s common from quarter to quarter, from “job” to “job” is that I’ve never done it before. It’s scary as hell. But I really don’t have anything to lose. I can always get a new job.