Gordie Spater, CEO of Kurgo, a leading pet products designer based in Salisbury, MA
1. Always build in a “Fudge Factor”
I am by nature an optimistic person so I am always certain it can be done tomorrow for free. I have found even after careful planning for all eventualities something always crops up. For example, our products are triple-quoted with our factories and we have efficient logistics to deliver the product to our customers, but before calculating our pricing we always add a small “Factor” to the cost. This factor has saved our margins, and therefore our business, year after year because inevitably costs go up, or the retailer discounts are more than we expected. This same idea applies to adding time to a schedule; stuff happens, and it’s important to give yourself some flexibility so you don’t get crushed by unforeseen events. You may not know exactly what will happen, but when it does, it will cost you time and/or money. As an added upside, in the 20% of times that things go perfectly you get the benefit too!
2. It’s a marathon
After 15 years in this business I have been tempted many times to “go big or go home.” I have been drawn in by that idea, but in the end, I think being here next month and next year creates a higher likelihood of success. Your customers want to work with a business they can depend on year after year like a good friend. Especially as your business enters years 3 to 5, I think you will find several early prospects pick up their heads and say “Oh, these guys are still here, let me give them a try." We all see the rocket ship stories of Allbirds, Airbnb, and all the other rock star startups in Inc. Magazine. Those are awesome, but they are also rare. In no way is this an excuse to sit back and wait for time to help you out. In the marathon analogy you must put the work in the early miles to be able to finish the race. At the same time, pace yourself to be careful the early enthusiasm does not cause you to sprint and burn yourself out. Being there at the finish is the goal and it requires you to put one foot in front of the other mile after mile, all the way to the end.
3. A steel gut is a valuable asset
My wife and other co-workers joke frequently I am willing to eat some questionable items in the fridge. That may be true, but this “skill” also came in handy in the early days of Kurgo. The highs and lows are severe in those first few years. You can go from getting a big order to finding out your packages are coming unglued in a matter of minutes, and each of these peaks and valleys are important at that point. As the company grows there are more of these and each one matters less because they tend to balance out, but in the beginning each up and down is critical; and you feel all of them. The best advice is be calm and aware of what is happening to you, then move onto solving the problem.
4. Minimize money stress by picking the right source of funds
There is enough stress at the start of the business just getting it going. Finding sources of funds that do not add to that stress is very helpful. Kurgo was funded by four long-term friends and family who were patient. I told them upfront only put in what you are willing to lose. They believed me, but also trusted Kitter and I, so over the 15 years they were invested they let us run the business without interrupting except when asked. I have heard many stories of investors driving lots of extra work for the management teams. In the end it comes down to trust: if the investor is not going to trust you it will likely create a lot of unnecessary stress for both of you.
Likewise, about 5 years in we finally found a commercial banker who trusted us and could deliver on what he promised. Finding him gave me back a few hours of sleep each night just to know we could depend on our bank to support our business as it went through significant growth.
5. Make a plan, stick with it, then pivot
These pivots happen more frequently in the beginning and less often as the company grows. The analogy of a boat is great: at the start you are in a small boat, maybe a waterski boat, you need a destination, but that boat can turn on a dime because it is just you. As the company grows you still need the destination and you also need time and planning to adjust your path, this is more like a cruise ship. In both situations you need to have your plan, but you need to be vigilant about what the market is telling you and adjust your course or your destination if necessary.
When Kitter and I started Kurgo we thought we were going to develop and then license products however, we quickly realized it was not a sustainable path to success. About a year later we adjusted from doing mostly automotive accessories into pet accessories, and then a focus on only branded pet accessories. That all happened in rapid succession in the first 3 years of our business when there were just a few of us in the company. Thereafter the adjustments were slight course corrections which could be planned and executed against by the growing company.
What I’m still learning…
Make quick and final decisions
This is something I am still working on. There are a lot of decisions to be made every day and it is hard to see all the implications of those decisions. I believe the most important thing for the business and the people who work in it is a clear direction. The longer you wait to set that direction or make that decision the less productive your team is. Furthermore, after doing this for 15 years the initial data we get and gut feeling we have is typically 80% correct, moving forward quickly is more important than getting that final 20% right.
Editor’s note: Gordie and his brother Kitter founded Kurgo in 2003 to help dogs and their owners get out and enjoy the world together. Kurgo products can be found at pet specialty retailers nationwide. The company was acquired by Radio Systems Corporation in October of 2018 and continues to be run by the team from their Salisbury, MA headquarters.