Is It the Chicken or the Egg? Who Cares?
Is It the Chicken or the Egg? Who Cares?
All the time I hear businesses and startups say things like “once we have users, we can do ___” and “once we have X we can do Y.” Everybody’s always trying to balance the chicken and the egg, right? Which one comes first? It’s really the ultimate startup business dilemma. “If we get one more client we can hire two more employees… but we need to hire two more employees in order to get that client.”
What you need to understand about this situation is that it’s not about which one you choose. It’s about staying on the offense, picking one, and going all in on it. Always be investing in your business. Always be pushing ahead. Take some risks, take some chances. What’s the absolute worst thing that could happen? (As long as you don't go out of business, not making any profit is fine early on.)
Over-communicate. If you’re hiring more people than you can support because you’re anticipating the business they can help you get, then be transparent with them. Tell them that you should be able to afford them, but there’s a chance that if you don’t get this new business, you won’t.
The only way to solve the chicken and egg dilemma is with pure honesty. Telling the truth and over-communicating with your team, your clients, and even potential team members.
Here are a
couple examples, one from Wine Library and one from VaynerMedia, both of which were
communicated through a shared entrepreneurial spirit. Back in 1999 at Wine
Library, the eight employees we had at the time didn’t necessarily know that I
had spent more money on a year-long Wine Spectator ad campaign than we’d
made in profit the year before, but what we
all knew, and what I communicated every day was that I was going to do
everything to be on the offense for the business. So when they saw those ads pop
up, it might have been scary at first, but there was a confidence in the way
that we were growing that made it clear that that chicken (or egg) was certain
to result in an egg (or chicken).A decade later, when I joined the business at VaynerMedia (which my brother AJ had been running very successfully for two years at that point), all of a sudden I hired more employees in 100 days than we’d had at the entire company up until that point. At that point, my history of entrepreneurship, along with the fact that I was constantly communicating that we were going to be on the offense, made actions like that become religion. We were always going to be on the offense, so taking on those people allowed us to take on new clients without having to hire new staff against them. That understanding of the “Vayner Way” and the knowledge of our IP was what allowed us to grow from 25 to 280 people in two years. That is totally unheard of since most agencies need to follow a P&L and run on X% margin, but for me if I break even but I grow and grow and grow, I’m excited.
There’s plenty of time to cash out and eat those eggs.
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I’m an entrepreneur. You can find out more at garyvaynerchuk.com
Wanna do something with me? Check out http://www.garyvaynerchuk.com/jjjrh/ I am bartering and doing bonuses around my new book
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