Startup Lessons: EMC's Path to $1M in Revenue
Tom Lagerhausen, CFO and COO of Energy Conservation Management (ECM), a startup company providing a commercialized alternative to reduce greenhouse emissions and fuel bills, shares his five “lessons learned” from ECM’s journey to a million dollars in revenue.
1. Team over individual
Lagerhausen says you have to find the right team; partners, not employees. “The three of us, we went through roller-coasters, up and down. One day it worked, one day it didn’t work, until we could fine-tune it. And basically we were having board meetings everyday because we own all of it. We don’t have any outside investors; it’s just us three. We work well together, we finish each others sentences and we compliment each other.”
2. Run lean
“We were in a man cave, an ex-conference room with ratty carpets and tables pushed up against the wall. We learned how to make our own website, create our first logo ourselves, and so you don’t hire outside people, that’s a mistake a lot of companies and early start-ups make."
“You just got to get it done. You’ve got to do those things, empty your own wastebasket,” Lagerhausen laughs saying that’s when it’s clear you’re an entrepreneur- when you have to do your own cleaning.
“We are constantly on each other to get things done, to make sure nothing falls through the cracks,” Lagerhausen described.
4. Validation over commercialization
Lagerhausen urges entrepreneurs to validate their product. Although throwing beta projects out for people to try might be okay in certain segments, in ECM’s case, it would not have been a positive move.
“If you just throw it out there, it’s not going to work,” according to Lagerhausen. “That’s why we spent that first year just making sure it really worked before we attempted to put it into a real project situation.”
5. Managing strategic partnerships
Lagerhausen believes managing partnerships, if done properly, helps companies grow.
“We had partnerships that we went into, and after about a month we knew that’s not the right thing,” Lagerhausen said the ECM owners were not afraid to leave partnerships not enabling growth.
Bonus Lagerhausen advice: “Nobody wants to be first in something new, they want to be ninth. So you have to find the first eight and you've got to work hard to get it, but once you do, all the sudden the ninth one says ‘Wait a minute- I want in.’"