Lessons from turning a $10,000 investment into $20 million in revenue
Greg van den Dries is the founder of Rocktape, a maker of brightly colored kinesiology tape you might have seen wrapped around the body parts of athletes during the Olympics. He's turned a $10,000 initial investment into a company with annual sales of more than $20 million. Here are the 7 lessons he learned along the way:
- Financially model your business with assumptions, and assume half of them will be wrong. But at least you'll understand how the math of the business works. You'll save yourself a lot of pain in the future if you find out it's not scalable.
- The number one reason people go out of business is cash flow. "The first year I had significant doubts, but all problems are easily solved when a customer places orders."
- CEOs shouldn't have to worry about quality control at the beginning. Their talents are better suited for marketing and sales. For this reason, van den Dries paid more to have his products manufactured in South Korea over China.
- Defy history to stand out. Typically, marketing to medical professionals was done in a dry, buttoned up, conservative manner. Rocktape marketed to doctors as if they were consumers.
- Buffoons run successful multi-million dollar businesses. "I'm constantly amazed," said van den Dries. "A lot of people with little talent are very successful." Don't underestimate yourself.
- The number one reason why people don't act on their dreams is the fear of failure. Taking the first step is the hardest step. Even with Rocktape as his 7th startup, he said he wakes up thinking the business will crash tomorrow. "It keeps you on your toes."
- How they choose their next product offering: Infatuation. The team must absolutely love it themselves.