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Why ‘Be Passionate’ is Awesome Advice

November 10, 2010 9 comments

Inc has a article entitled Why ‘Be Passionate’ is Awful Advice where they baldly state that companies built on passion are fairy tales.

They’re wrong.

SmugMug is living proof. Here’s what it was like when we started, in response to their list of questions:

Is your idea really a business or just a hobby from which you’d enjoy creating a business?

SmugMug was an accident. The real business was a social network around video games. We started SmugMug as a side project (aka hobby) since we couldn’t find a good place to host our own personal photos online.

Can you actually realize your vision with your available time, capital, and resources?

We honestly had no idea, but it didn’t seem likely. The video game thing seemed like the real money maker, but it was going to take a lot more effort.

Is there a real, palpable, and evident demand for your offering among consumers? How big is the market?

No way. Every other photo sharing site was free. The bubble had burst and the Internet was a wasteland (this was 2002). The idea of charging for every single account seemed ludicrous to everyone but the two of us.

Does it have a real business model that will allow you to generate income immediately or a “maybe” model that might take years to (maybe) make a dime?

Real model? Sure, we were going to ask people to get their credit cards out and pay us real money. Was it going to actually generate income? We had no idea – asking people to get their credit cards out for a tiny, unknown, premium-only place to store your priceless memories wasn’t exactly a recipe that had investors foaming at the mouth.

Can you fully defend to your harshest critic the reasons why your business is capable of generating a dollar? How about $1,000? $100,000? More?

Nope. Our closest friends, include VC on Sand Hill Road and successful Internet entrepreneurs, all told us we were insane and we’d never make money. After we got a single signup our first week, and only 5 the entire first month, we started to believe them.

Approximately how long do you believe it will it to generate income? Can you survive that long? How about two or three times longer than what you anticipate (which is more realistic, if not generous)?

We hoped we’d generate income immediately. We did – about $30. We bought more ramen and corn flakes. We had no idea when meaningful income would arrive – ‘never’ seemed the most likely timeline.

Why have other similar businesses failed and how is your iteration of an idea different?

We had no idea. We didn’t bother to do any competitive research deeper than “Is there a good place online to host my photos? No? Guess we’ll build one.”

Is your idea a money pit or a cash cow? Will it need constant reinvestment or can you scale organically?

Neither? We didn’t have any money (our idea was so crazy that no-one would invest in us), so we knew it couldn’t be a money pit. But cash cow seemed unlikely, too.

Can you survive a total failure or are you “all-in” if you want to get started?

We could survive a total failure for no reason other than we didn’t put anything into the business other than blood, sweat, and tears. Zero dollars of investment, either by the founders or outsiders, meant we could easily walk away. Painful, but possible. (We bummed free rack space from a friend, used three ancient free servers from a failed dot com, and threw some code on it)

Today, we’re profitable, growing fast, and work with the greatest people on earth. We host billions of photos and videos, we have millions of passionate paying customers. Our offices are possibly the most fun in Silicon Valley, complete with gourmet food, giant gigapixel prints, dogs, go karts, dueling quadricopters, more 30″ displays than you’ve ever seen, and more:

Best of all? We work on the things we love because we own our own destiny. No outside investors meant we got to keep being passionate, day in and day out.

My advice to entrepreneurs? I’m absolutely positive that if you take your favorite hobby, mix in the Internet and a ton of hard work, you can build a great business. Whether you will or not is entirely up to you.

SmugMug is always hiring. Come do what you love, every day.

Now is the time to build

October 30, 2008 12 comments
Big Cats

Big Cats by micalngelo

“Every startup CEO is at least thinking about the need to cut back right now” – Michael Arrington

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” – Warren Buffet

I’ll give you one guess as to which man I’m listening to. So no, not every startup CEO is cutting back. Apple spent their time innovating during the last downturn and look where it got them. I’m thrilled to have just passed out big, healthy profit-sharing bonuses to all of our employees this week for the 5th consecutive year. We think and hope they’ll be even bigger next year.

SmugMug was founded in the middle of the last “nuclear winter” in Silicon Valley. Everyone told us we were crazy, and we knew there was no chance at raising venture capital at a decent valuation, even with our impressive backgrounds. So we did what any good entrepreneur would do: We did it anyway, with both eyes firmly on our business model.

So if you’re running a startup, or thinking of creating one, take heart – downturns are a fabulous time to build and grow businesses. Focus on your revenues and your margins, not your growth rate or # of unique visitors. Find some stable income streams and a customer need. Listen to your customers and give them what they want – and what they’re willing to pay for. And take care of your employees – they’re your most valuable asset.

SmugMug is still hiring Sorcerers, Heroes, and all manner of other mythical beings capable of impossible feats. We filled our last position (quickly, I might add) with a *great* hire (and I’m still sorting through the avalanche of resumes we got to see if we can add a few more), but the job door is never closed at SmugMug for true superstars. Our philosophy is to not let anyone amazing get away, even if we don’t technically have an open position for you.

So if you can make magic and want to work for a company that takes crazy-good care of its employees, let us know.

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