The Adam Savage Rule For Startups

Image: Gage Skidmore

Money is a tricky issue for new businesses.
You don’t want to be wasteful, especially when funds are limited and you are the one who will be adding extra cash in a crisis.
You also don’t want to be unhelpfully tight-assed, cutting corners at the expense of the customer’s experience.
So how do you find the right pattern for your spending?

Mythbusters host and loveable engineer Adam Savage has some great advice, which is perfect for new entrepreneurs:
“Buy cheap tools until you know what you really need from that tool, then buy the best one you can afford.”

This is a great rule of thumb.
It delays the bigger purchases until you know more about how you’ll use each tool, at which point you’ll have a more sophisticated understanding of what “best” means.

I see this advice apply to several facets of your startup:

Sales Channels
You can run a pop-up before making decisions on long term leases in high profile areas.
You can build a simple website with Squarespace or Wix, without the need for custom code or professional developers, until it can’t handle the needs of your customers.
You can use a web app instead of custom building mobile apps, until you see significant traffic that you can learn from.

Tech Tools
I used my own laptop for the first few months of us starting The Difference Incubator, lugging a heavy Asus around in my briefcase (no I do not still carry a briefcase).
You don’t need to buy the latest iPhone as your office phone, especially when you’re taking fewer than 10 calls a day.
You can use Freemium versions of SaaS platforms, like Customer Relationship Management tools, social media schedulers, event booking sites, etc.

Team Members
It’s worth meeting with prospective hires on multiple occasions, to better understand their character and cultural fit; hiring the wrong person is incredibly expensive.
You can bring someone on as a contractor for a short project to see how they work in your team and to gauge the quality of their output.
You can hire people as casuals or associates until you know how much work is in your sales pipeline, avoiding ugly layoffs.

There are a few valuable principles behind this concept.
Firstly, an entrepreneur is wise to be a tight-ass by default.
Funds are scarce in the beginning, and there will be a hundred “good uses” for that cash.
Every “Yes” has to be guarded by a hundred “No’s”, which makes “No” a good default position.

Secondly, an entrepreneur is wise to delay investment until they can see how things work in the real world – begging, borrowing or stealing their setup for a prototype.

Image: Natalia Klishina + 99 Percent Invisible

A great example of this is the “Desire Path”, the dirt tracks caused by pedestrians who naturally find shortcuts in parks and public spaces.
Colleges like Ohio State decided to wait and see where students walked for a year, then paved those accidentally efficient paths.

You can do the same – see what naturally happens and then formalise a process around what feels right.

Thirdly, an entrepreneur is wise to spend big on the proven necessities.
Once you know something will be heavily utilised, you may as well go for quality to save headaches in the future.
It could be your shopfront, your back end systems, sales team, video production equipment, facilitators, salaries of top performers, anything that becomes a linchpin.

My suggestion is to save your money at first, then whenever you find yourself frustrated at something breaking or not being able to handle your traffic, treat it as an invitation to buy something great.
This gives you the most value for your money, taking the guilt and guesswork out of your startup costs.