How the Company-Startup Thing Worked Out For Me, Year 9

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 9 of the company: May 2019 to April 2020. As a quick reminder, COVID-19 reared its ugly head late in year 9.

I started year 9 with a new toy.

In year 8, I made tough decisions and worked my ass off to secure the future of the company. I’d laid off the consulting employees, then worked a lot of weekends and late nights to build up a financial safety net. I kept saying, “Once we pay off Jeremiah & Kendra on 12/31/2020, things are going to be different, and we’re going to have more financial flexibility.” (Boy, did that work out well when COVID-19 hit.)

Well, Erika got tired of hearing me say that, so one day I woke up from a nap and found her surfing Porsche.com, looking at dealer inventories around the US. I asked her what she was doing, and she said, “You’ve always wanted a 911 Targa, and it’s time that you go get one.”

That was true: as a little kid, I hung Porsche 911 Targa posters up in my bedroom. I made models of them. I dreamed about having one of my very own. My game plan had always been to custom-order one from the factory in the exact paint-to-sample color that I want (Mexico Blue), but Erika thought we shouldn’t wait anymore – we should just go get one now and start enjoying it while we were still young enough to appreciate it.

Targas are fairly unusual models – most 911 buyers prefer hardtops or true convertibles, but I like the Targa’s iconic design and its amazing robotic top. We searched dealer inventories, only found about half a dozen across the entire US, and luckily there was a wonderfully optioned one in Los Angeles: chalk exterior, most of the trim blacked-out, black lights, and black leather interior:

We named him Helmut.

In the span of a lifetime, I don’t know that there’s ever really a rational time for anyone to buy a $150,000 car, let alone someone who telecommutes. The whole concept just doesn’t make rational sense – it’s an emotional purchase. And when I look at the moment of purchase in life’s rear view mirror, if I’d have known COVID-19 was going to pop up just six months later, I would have said, “No, this isn’t a good time to lock up that much cash in something I won’t be able to drive much in 6 months.”

But that’s how life works, right? You never know what’s coming around the corner, and you gotta have fun while you can. The best time to plant a tree was twenty years ago, and the second best time is now. We could afford to buy Helmut, and thankfully I didn’t need the cash in year 9 for anything else anyway, so it was the perfect time. I’m glad we did it.

We took a lot of time off in year 9.

Regular readers around here will know that I take vacations seriously. I work to live, not live to work, and I want to spend as much time with my loved ones as I can while I’m still healthy & active enough to enjoy it. I wanted to take a ton of trips & time off, and in Year 9, we sure avoided work a lot:

• A month off in August going through Telluride, Sacramento, Napa Valley, and San Francisco
• A couple weeks in Isle of Man and Amsterdam with Dad
• A 2-week Hawaii cruise
• A week in Illinois at Mom’s house
• A week in Mexico with Dad & Caryl
• A week and a half in Puerto Rico with Erika (although I worked for 5 days of that)

And we were scheduled to close out year 9 with a month off in Iceland, then a week in Iceland for the SQLBits conference. That was wrecked by COVID-19, though – more on that in a minute.

2019’s Black Friday kicked ass.

As year 8 wound down, I was making preparations for an epic Black Friday sale (Nov 2019) that would pay off Jeremiah & Kendra and let me focus on a relaxing lifestyle business where I could be gone 2-3 months a year. Over the last several years, Black Friday had become a really big deal at the company. In 2018, we crossed the half-million-dollar sales mark, something that seemed insanely hard to reach just the year before.

When I started planning for the 2019 sale, I put together a big spreadsheet of sales data and tried to figure out how I could raise the average transaction price, get existing buyers to renew, and attract new buyers who’d been sitting on the sidelines. After a lot of number-crunching, I came up with 3 bundles:

Everything else in the store was 50-75% off, but I put the most marketing work into those bundles.

• Level 1 at $295 was designed to attract people who would normally spend $100-$200 on a Recorded Class Season Pass alone, but not necessarily buy SQL ConstantCare or the Consultant Toolkit
• Level 2 at $995 was designed to attract people who already bought the Recorded Class Season Pass in the past
• Level 3 at $1995 was designed to attract cost-no-object buyers who would normally buy a Live Class Season Pass, and figured the extra $1K wasn’t that big of a deal to get their own VM and not hassle with building it themselves

I crunched a lot of numbers, and based on past sales, I thought this product mix could bring in $700K revenue. I mentioned it to Erika only kinda in passing because I wasn’t that convinced it could actually work. The number just seemed bananas. I’d been so excited to cross the $500K mark just one year before – how could I possibly grow sales by 40% in one year? Especially without adding a whole bunch of new products?

Erika heard that $700K number and my hesitance around it, and she promptly went off to Etsy to buy a banner for my office. She hung it when I was out on a trip, so I came back in October to it. It motivated me all throughout my preparations.

Hot diggety, did it work: on Friday, November 1, 2019, our first day of sales was $87,147: higher than the highest day of sales during Black Friday 2018. So by the end of day 1, I knew we had a winner.

Through the month, we used a couple of new techniques to get visitors (who left without buying) to return to the site to check out. We used abandoned cart emails from Jilt.com, and Facebook & Google ads for folks who visited the site but didn’t check out. We got over 500% return on those ads, which I was very happy with as a first-year experiment.

The final number came in at $734,109:

Black Friday 2019 gave me more flexibility.

12/31/2020 basically came early at the end of 2019 instead: we were able to pay off Jeremiah & Kendra a year ahead of time. The business was back to debt-free. (We’d always bootstrapped the company and never taken on debt outside of Jeremiah & Kendra’s buyout.)

This was big because it reduced the business’s monthly overhead, giving me the flexibility to take a month or two off without worrying about meeting expenses (payroll, debt payments, insurance, etc.) Our online services (SQL ConstantCare®, The Consultant Toolkit, the Recorded Class Season Pass, etc) brought in enough to keep the lights on, so if I didn’t want to work for a month, or if I wanted to focus on writing training material for a while, I could.

In fact, the online services & training revenue, combined with Black Friday, meant that if I wanted to stop doing consulting altogether, I could. I didn’t want to – I don’t think you can be a good trainer if you’re not putting your hands on production problems on a regular basis. I was able to raise my consulting rates by about 50%, though, and start being pickier about what clients I took on. I still wanted to do consulting, but I wanted to concentrate on higher-value engagements, ones where folks really wanted me and where my work could result in huge value for them.

As 2019 came to a close, I obviously didn’t know COVID-19 was coming, but we were about as prepared as we could have been:

• We had zero debt (both me personally, and the business)
• We didn’t have a large dependency on consulting revenue
• We were mostly remote: Richie was 100% remote, and I had a few in-person gigs & conferences booked for 2020, but we could survive without it
• We sold online training, something that would be hugely in demand
• We only offered annual subscriptions, not monthly, so we were less vulnerable to cancellations due to temporary business cutbacks

None of this was planned for COVID-19 by any means – it was just that I’d been really careful to craft the company that I wanted to run, and those hard decisions along the way meant that we could weather a storm pretty well.

I actually wanted to take downtime after the 2019 Black Friday sales for two reasons: one, if I was going to sell this much training material, then I needed to keep upping my game. I wanted to be the best SQL Server trainer in the world, which meant the best training material, and the best delivery methods. Building good material takes time – easily 15-30 hours of work goes into each 1 hour of training class material – so I knew I was going to need free, focused time on my calendar to work on that. Plus, I wanted to be able to offer new material to encourage Black Friday renewals & new buyers. I knew I was going to have to bring out another round of cool new stuff for the next sale – it was time to take the Mastering classes up yet another level. I wanted a lot of empty space on my calendar to be able to do that, so when COVID-19 hit, it gave me the empty calendar time that I wanted, but hadn’t had the guts to set aside.

So long before COVID-19, we’d already planned to ease up in the calendar and take a month off.

And then COVID-19 hit.

The news started filtering out of China in January, and as it grew and grew, I kept watching the news nervously and saying, “Just please let us get out of the US and into Iceland before travel shuts down.”

We were scheduled to fly to Iceland on March 2, and leading up to that, I knew it was just a matter of time before the borders closed. I know it’s gonna sound odd to think about traveling during a time of a viral outbreak, but all of our Iceland plans involved isolation in the countryside, far away from other folks, and I was more confident there than at home. Plus March isn’t exactly peak tourism season in Iceland: folks tend to advise against driving through the frozen countryside during Iceland’s notorious winters, but that meant we’d be even more isolated – which we wanted.

We made it into Iceland, thank goodness. Here were some of my favorite photos from the trip:

We had a wonderful time touring the countryside, but as the weeks went on, as I expected, borders closed up, conferences shut down, and airlines went offline. We’d been scheduled to finish the trip with SQL Saturday Iceland and then SQL Bits in London, but both of those were canceled as the EU closed its borders to non-citizens.

Erika and I thought really, really seriously about staying in Iceland and riding out the virus. Financially, we were in a position to do it: we could have rented a house in Iceland with gigabit Internet while still paying our San Diego rent, and stayed afloat. I could have kept working remotely Mon-Fri (or maybe Mon-Weds), and done road trips on the weekends, touring around the country that we loved so much. Plus, we’d have avoided airports and international flights, which struck me as pretty dangerous & contagious places.

For the rest of my life, I’m going to wonder what would have happened if we’d have stayed in Iceland. It stayed in the front of my mind for months of year 10 because Iceland handled the virus really well. (Later on near the end of Year 10, we came back to Iceland on teleworker visas.)

In year 9 though, we came home early to San Diego because it seemed like the more prudent thing to do. <sigh> However, we resolved that the next time we were presented with a decision like that, we were not going to do the prudent thing. We were going to do the impulsive thing, like buying Helmut, because those decisions are what create amazing memories.

We came back to the US right at the end of year 9.

And it seems like the perfect place to end this post, too. At the end of year 9, the virus was flipping the table on everything: conferences, client engagements, vacations, you name it. It was a really bad time for the world economy and everyone’s psychology.

We were just in a great place because the business was safe, our loved ones were safe, and strangely, the bad things in the world were good things for my business – specifically, selling online training.

In April 2020, as I looked forward at Year 10, I envisioned:

• Running sales on online training – because the COVID-19 outbreak meant folks were much less likely to travel to in-person conferences, and I wanted to capture their training budgets while helping ’em get ahead without leaving home
• Raising my training content game – writing new material on new topics, adding more to my product inventory
• Raising my training delivery game – adopting the techniques that made Twitch streamers so compelling to watch
• Writing more recommendations for SQL ConstantCare® – I was the bottleneck here, not writing queries quickly enough. I was keeping Richie busy, but I knew I needed to spend more time here.

But I knew year 10 wouldn’t include much travel – either for business or pleasure. I was sure the PASS Summit, SQL Bits, and SQL Intersection in-person conferences would be canceled, and delivered online instead. I was open to personal travel for vacations if we could go somewhere isolated, like Iceland again, but popular destinations (and certainly cruise ships) were off the table for 2020, and probably early 2021.

I was lucky to be prepared.

When disaster strikes:

• The people who weren’t ready say, “Well you couldn’t have possibly prepared for that.”
• The people who WERE ready say, “Well, we got really lucky on that one.”

Sure, I can claim credit for making a lot of tough decisions to prepare for a financial disaster, but…I was purely lucky that the disaster hit when it did.

If COVID19 would have struck just 3-4 years earlier, I would have been a wreck. We still had full time consulting employees, we were teaching in-person training classes, we didn’t have really significant online training income, and we didn’t have 6-12 months of cash on hand. I would have been forced to make really hard decisions on a challenging timeline.

There are other stories, from other folks, about other situations, and they have unhappier endings. I’m proud of how my year 9 went, but I look at their stories and say to myself, “There but for the grace of God go I.”