No Money & Late Start: Go for It!
By Shlomo Maital
The International New York Times’ Dealbook section today (June 3) tells about Ron Rudzin, who worked in the furniture business from the age of 16, becoming VP of national sales for a sofa company. When he left Jennifer Furniture, he decided to start his own business. His vision: Sell American-made high-quality coil-based mattresses online, for a fraction of the cost of the price retailers charged for store-based brands.
Saatva means “truth” in Sanskrit. It became profitable after its first three months, in 2010. Sales were $2 m. in 2011, and $76 million in 2015. In 2018 Rudzin projects sales of $275 million.
What do we learn? First, becoming an entrepreneur can be done as a second career, after a long first career. That way, you start a business with substantial domain knowledge and contacts, which very young entrepreneurs often lack.
Second – bootstrap. Rudzin took $350,000 of his own money, wrote a business plan in 2007 and began to form his online mattress company.
“People who raise money, rather than be self-funded, tend to spend wildly because it’s other people’s money and they throw a bunch of stuff on the wall and see what sticks. I don’t do it that way,” Rudzin said. “I might go a little slower but in the end I believe I win.” It took him from 2007 and a business plan to 2010 to launch. Slow and steady wins the race.
Bootstrap, and start late. It’s possible, because chances are, when you retire, you can scrape together a not-insignificant sum of savings. Start late, because when you do, you will know a lot more about the industry in which you want to be an entrepreneur. You can spend 20-30 years just identifying a need and an opportunity and validating it.
Rudzin’s company provides full service – experts install the mattress, a service that buyers love. He knew this was key, because of his industry experience. Not everyone would have that insight.
Boostrapping enables you to retain control of your destiny. When you use VC funding, after initial, A and B rounds, the founder often has his shares so diluted that the VC controls the Board – and can fire the founder and boot him out. This has happened a lot. It even happened to Steve Jobs.
People in the future are going to live a lot longer. So we seniors should consider entrepreneurship as a possibility for a 2nd or 3rd career. Gray-haired entrepreneurs can change the world, even if they use canes and hearing aids.