The Tao of the Redwood

What would happen if you planted a giant redwood tree but kept it in a 4-inch pot? What would happen if you planted it in the perfect environment, the Pacific Northwest?

Redwoods are truly remarkable. Reaching towering heights of almost 400 feet, they’re also among the longest living organisms on Earth. Some redwoods alive today were born centuries before Christ.

And yet, if you planted one of these majesties in a 4-inch pot, you would condemn it to a brief and difficult life.

Its root system would search out for nutrients, but the severe lack of space would force the roots into a circular pattern, coiling them endlessly upon themselves. As a consequence, instead of growing 2 or 3 feet per year, as is normal for them under ideal conditions, your redwood might grow just a few inches. Nutrient deficiencies, dehydration, and stress are all likely, leaving it weak and susceptible to pests and disease. In the end, instead of living for thousands of years, your redwood could die in less than ten.

I mention this because I often talk to entrepreneurs with million, or multi-million dollar visions—redwood size ambitions— who insist on planting and growing them in a metaphorical 4-inch pot. They design their own websites, say. Or choose to play all the roles in the business, most of which they’re ill-suited to perform: CEO, CFO, CMO, COO; oh, and they’re the bookkeeper, accountant, and janitor too!

Why?

To conserve resources (i.e. cash), of course, which is understandable. But being penny wise often makes us pound foolish. Starving the business of the cash it needs to grow is just like planting a giant sequoia in a tiny pot.

Sad.

To reach $1M in online sales, for example, your amazing new product may well require up to $200K in marketing investments, not including your start-up costs and your Cost Of Goods Sold (COGS). What’s the plan to procure that capital? How do we solve that puzzle?

Because, as it turns out, the old cliche isn’t too far-off: It takes money to make money. No real way around it; no alchemy or magic about it. It’s extremely hard to make a dollar out of 15 cents, at least at the jump.

Sure, it may take more or less money depending on the industry you’re in, your ambition, your business model, the in-house knowledge or expertise you bring to the project, or many other factors, but having a good understanding of the capital needs of your business is a crucial part of getting it off to a propitious start.

A best practice to grow redwoods is not to skimp on marketing.

Budget at least 10% of the revenue you hope to generate and allocate it towards executing your marketing plan. If you’re a new firm, new to the crowded market, you’ll need to make it 20%.

And consider firing yourself as a web developer. Your time is better spent on doing the things only you can do: making content, building partnerships, closing deals, or securing access to the capital you need to hire a proper web design firm. Interview several companies. Be explicit about the results you want your site to produce (e.g. close $1M in sales in the next 12 months). Have they done that before for other brands? Can they get the job done for you? Think it through. Listen to your gut. Hire the firm that makes the most sense. Then, hold them accountable.

But whatever you do, please don’t starve your little redwood of the things it needs to thrive and grow.