How the Company-Startup Thing Worked Out For Me, Year 8

It’s time for my annual update on the wild ride. If you want to catch up, check out past posts in the Brent Ozar Unlimited tag. This post covers year 8 of the company: May 2018 to April 2019.

Erika and I moved to San Diego.

We’d lived in Chicago for years, but I was tired of the winters. Ever since my first trip to California, I’d felt like I belonged there. It took years to make the financial numbers and personal timeline make sense, but we finally pulled it off in August 2018.

I loved my new home office – north-facing so plenty of light without the heat of direct sun, floor to ceiling windows, view of the flight path into the airport so I watched the jets go by all day.

I loved our neighborhood, right next to Petco Park and the Gaslamp District, with plenty of restaurants, coffee shops, and even a marina. We walked 2 miles on the waterfront a few times a week, year round.

At least once a week, I turned to Erika and said, “I can’t believe it – we’re finally Californians.”

I found out I had adult-onset asthma.

I teach classes for hours on end, several days at a time. It’s not uncommon for me to stand in front of a few dozen people and talk for 8 hours, 4-5 days in a row. Client offices often aren’t ideal in terms of audio: I have to project my voice loudly and clearly, and I rarely have the benefit of a microphone.

During 2017, I’d started to notice some discomfort near the end of an engagement like that. Not pain, and not coughing, but just a vague awareness that something was off. I also had a short bout of the flu – nothing big, just a couple of days – and afterwards, I had a mild cough that wouldn’t go away. I would just cough out of nowhere, just a time or two.

I saw a couple of doctors in Chicago and California, and in Year 8, they narrowed it down to adult onset asthma. I had no idea there was such a thing! I started using an inhaler, and presto, things were way better. One doctor suspected it was the hours I’d spent outside every day walking Ernie in Chicago, where the air quality isn’t as good as you might suspect. The American Lung Association ranks Chicago among the 20 worst US cities for all 3 kinds of air pollution. (San Diego is #6 for the worst ozone pollution, but hey, at least it’s not on the particle pollution lists, heh.)

This health issue wasn’t a midlife crisis or anything. I feel pretty at peace with my life – if I died now, I’d be okay with that, as morbid as it sounds. I’ve been way luckier than I deserve, and I’m happy, and Erika would be taken care of. It’s not like the doctor visits made me aware of my own mortality – I’ve been aware of that for years. I just feel like I should mention it here as part of the annual recap because it happened during year 8, and if I were on the opposite side of this electronic screen, I might infer that some of my year 8 decisions were made as a result of health issues. That wasn’t the case.

Side note: we asthmatics have a tougher time with COVID-19. We’re not more susceptible to getting it, but we have a tougher time recovering from it.

Black Friday was a success,
but it made me rethink everything.

Our annual Black Friday sales broke the $500K mark, but the product mix – heavily biased towards my training classes – made me stop and think. I wrote about this in my post on refocusing my 2019 plans, and here’s how my conversation with myself went during one of my retreats:

• “Wow, I bet if most people sold $500K of online training in one month, they’d take the rest of the year off and just focus on building new training material so they could sell even more the following year.”
• “Wait, why am I not doing that? What’s stopping me from doing that?”
• “If I *did* do that, what would it look like? I’ve always wanted to work completely remotely from Mexico for a month or two, writing in the mornings and then vegging out with Erika the rest of the day. Why can’t I do that?”
• “Because I have consultants. I need to make sure they have enough incoming work lined up, and that they have the logistical support they need to succeed, and that I have enough in the bank to take care of them if there was some kind of industry-wide emergency and work dried up.”
• “Well, I could fix that. I don’t have any secret sauce. I could just train Erik and Tara to take over the sales calls so they could line up work while I’m disconnected.”
• “But…what’s the point of that? I already learned that we couldn’t grow the emergency room business to 10-15 employees. Why put Erik and Tara under the stress of trying to feed themselves through our blog, without them being able to set their own rules? If I’m not going to be around to help, and they’re going to have to build something under my brand…how is that letting them become successful? Why don’t I just give them a couple months’ severance and give them whatever logistical support I can, and then reset?”

Then, I spent a lot of time brainstorming what life might be like if I totally let go of the idea of having consulting employees. I realized I could:

• Sell The Consultant Toolkit – the tool we’d built to facilitate faster server analysis.
• Sell sponsorship on the blog – which we also could have done while selling consulting, but it didn’t feel right to me. I’d wanted our consulting services to be the product. We ended up selling most of the sponsorship spots to monitoring tool vendors, which was kinda funny because we were still kinda-sorta competing with them in the form of SQL ConstantCare®, but not really.
• Start being more selective about client work – and ideally, still booking further out in advance, while still maintaining the same rates.
• Sell more emergency work myself – with employees, I’d given them first dibs on most of the weekend work, and split the revenue with ’em. Without employees, I could do the work myself and pocket all of the revenue directly. I know, it’s greedy, but I work to live, not live to work. The sooner I can stop working, financially, the better.
• Take way longer vacations – like be gone for weeks at a time, completely disconnected if necessary, without worrying about contracts, banking, consultant staff emergencies, or client emergencies.
• Sleep better if some kind of industry emergency hit – and I felt really dumb for being so paranoid back then, but today with the whole COVID-19 thing, whew.

Wow. That sounded really, really good to me.

I decided to let go of the consultants.

I was going to do it gradually, but in early January, we had a string of unrelated client cancelations and a wide open calendar, so I accelerated it. I took the remaining Black Friday 2018 profits (not the $500K revenue, just what was left over after paying down taxes, Jeremiah & Kendra, and business expenses), used that money to give the consultants a good severance package, let them go, and set about making those changes to the business.

It was totally a gut check moment: I’d busted my hump to make that Black Friday successful, and I didn’t pocket any of the money. Easy come, easy go, I guess. (At the time, looking forward to 2019, I saw the same thing coming for Black Friday 2019: I would work really hard to build another successful event, but I wouldn’t get paid. More on that in a sec.)

I sucked it up, buckled in, and went to work IN my business rather than ON my business. Normally, for founders, that’s a bad thing, but I made the conscious decision to build a lifestyle business rather than build something I could sell and walk away from.

I always wanna be honest with you, Dear Reader, about not just my successes, but my failures, and at the time, letting go of the consultants felt like a big personal failure. In my blog post announcing the layoffs, I shared about how it felt like a failure in some ways – admitting that I didn’t have what it took to grow the company up to a 10-15 consultant business. I didn’t have what it took to do that safely, without a level of stress that I could personally tolerate. I didn’t have it in me. I still don’t.

I was paranoid, so I worked really hard for a while.

When you run a business, there are two dials you can tweak: revenue and expenses.

I’d just turned down the expense dial by a lot, but that also meant that I’d limited how far I could turn the revenue dial up. I just couldn’t sell Erik & Tara’s time anymore, and that was tough because they had been really dialed in, really good at what they were doing, super efficient. I was worried that the new revenue limit might mean I could have problems paying expenses down the road – not too worried, but worried enough that I started taking all kinds of consulting work to crank up the revenue dial as far as it could go temporarily.

To give you a rough idea:

• January-April 2018, with Erik & Tara consulting: $212K consulting revenue
• January-April 2019, with just me consulting: $134K (down 37%, $78K)

Down 37% sounds bad, but really it should have been down 66%, because we lost 2 out of 3 consultants – and realistically, down even higher than that, because I had been spending less time consulting when I had them on staff. However, when I let go of them, I worked my tail off trying to build the war chest back up.

The other business changes really paid off, though.

A $78K drop in consulting income is bad, but remember how I said not having consultants would change other things about the business? In Jan-April, we had new revenue opportunites:

• Selling sponsorships on BrentOzar.com: $41K
• Selling the Consultant Toolkit: $51K

So our revenue was actually up while expenses were down – although I didn’t want to sustain that consulting workload for an extended period of time.

That was fantastic! Jan-April 2019’s profit was within about 15% of Jan-April 2018. It wasn’t that the consultants were losing money – it’s just that not having consultants enabled me to make different decisions, and those decisions were more profitable than having consultants.

Not only were they more profitable, but they also took up less of my time, especially face-to-face time on the computer, which meant that I could take more & longer vacations, even at times of risk. In Year 8, Erika and I spent a couple of weeks in Iceland, a place that became our new favorite place on Earth. We immediately planned to return to Iceland for a full month in 2020 – something we simply wouldn’t have been able to do easily in the business’s old form.

These changes also meant less risk. Today in year 9, even with a world-changing virus causing massive layoffs and consulting panic, Erika and I were still able to move forward with a month-long Iceland vacation. The only reason we came early wasn’t financial: it was logistical. We were financially prepared to stay in Iceland for several months without doing any consulting, something I never could have been able to pull off had we still had consulting employees. We were just worried that in 3-4 months, if we had some kind of family emergency that required us to be in the US, there might not be any airlines left in business. I’m glad we did that, too – on any given day, the huge Reykjavik international airport only has 2-3 flights now. It used to have dozens.

I started kinda-sorta counting down to 12/31/2020.

When the business bought out Jeremiah & Kendra’s shares, we made a 5-year payment agreement with the last payment scheduled for December 31, 2020. In year 8, there was never a time where I was nervous about making those payments – the business was doing fine – but I was acutely aware of the size of those checks and my US income tax checks.

I didn’t dare put a countdown timer or calendar anywhere because I didn’t want to be THAT aware, but at least once or twice a week during year 8, while looking longingly at a Porsche or a vacation condo, I’d say, “Things are going to be different on 12/31/2020.” (I know, I know, it’s not the “right” date format, but I just started saying it that way, and it stuck.)

Erika and I usually started planning our vacations about 12-18 months in advance – at least picking the parts of the world we wanted to visit, and the time that we wanted to go – so by the end of year 8, I was already thinking about how I wanted to celebrate fully owning BrentOzar.com myself. We thought about sitting on a beach in Mexico on New Year’s Eve, wiring that final payment, and drinking champagne. That vision of the company’s Year 9 was really compelling and motivating for me as we wound down Year 8. (I focused on that goal so much that we ended up pulling it off a year early, during 2019, but it happened after this Year 8’s post, so I’ll hold the details on that for next year.)

I know, it sounds funny – I came full circle from building the blog, to sharing the ownership & responsibilities with others, and then owning it myself again. There’s no way I could have built this up to what it is today by myself – not a snowball’s chance in hell. I don’t regret taking on partners. The whole adventure made the company a better, stronger thing, and it made me a better person too.

Would I do it all over again?

The nice thing about writing these blog posts later, over time, is the ability to look waaaay back in the rear view mirror and think about what worked and what didn’t.

Looking back at my career, when I left Quest Software in 2010, I first joined Paul & Kim at SQLskills. We had a great time, but I realized I was better off doing something on my own (rather than joining an existing, well-established company with its own vision), so I started Brent Ozar PLF with Jeremiah, Kendra, and Tim.

Would I have joined Paul & Kim again? Absolutely – that was an opportunity of a lifetime, and I cherished that dearly. It didn’t cost any of us anything, and we all learned a lot about ourselves and what we wanted with our businesses. That was a total win for everybody. It was a bit of an awkward dance as I backed out of it, but who cares? If you’re gonna be a well-known figure in your industry, your moves are gonna be done in public. It’s just the price you pay, and I’m fine with that price.

Would I have started Brent Ozar as my own company independently after that, or would I have joined Jeremiah, Kendra, and Tim in building a company together? Again, hell yeah, I’d have done the group thing. I respect and admire people who can build a company on their own – it’s very profitable when done right – but it’s a hard, lonely journey. I’m 46 as I write this, and I don’t think I’d go start a company independently today, either.

I can totally do hard, lonely journeys, but … why bother if there’s an easier route? From reading these posts, dear reader, you already know I’m not the person who’s gonna go build the new Instagram or whatever. I’ve made life choices that result in me having a comfortable lifestyle business that lets me take a lot of time off with the ones I love. I’m totally happy with that.

The older I get, the better I know myself.

I think I put more work into knowing myself than the average person, doing stuff like career-planning retreats, but still nowhere near as much as people on the top end. Year 8 was about me fully letting go of trying to build an empire, and just being really happy with making a comfortable living, spending a hell of a lot of time exploring the world and having fun experiences with the people I love.