23 Mar 2023 · 17 min
In this Founder's Journal episode of The Crazy Ones, host Alex Lieberman reflects on the concept of "scrappiness"—the practice of doing many tasks yourself to save money and stay resource‑conscious—drawing from his early bootstrapped days at Morning Brew and his current work on a new game venture called The Plunge. He recounts a recent SXSW trip, his first hands‑on experience setting up a Facebook ad campaign for The Plunge, and the time it took to create creative assets and copy. From these anecdotes he extracts the pros of scrappiness (tight cost discipline, forced creativity, and learning multiple roles that improve hiring judgment) and the cons (risk of under‑investing in high‑leverage resources, getting stuck in low‑value tasks, and modeling a scarcity mindset for the team). Lieberman proposes a balanced approach: remain scrappy by default but be willing to spend money and delegate when it accelerates product‑market fit. He offers a practical weekly self‑check—two questions about time allocation and money stewardship—to help founders gauge whether their scrappiness is helping or hurting their business. The episode ends with a call for listener feedback via email.
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What's up, everyone? Welcome back to another episode of The Crazy Ones. I am back with a journal-style episode. Those are the shorter, more compact episodes focused on specific topics. For those of you that have been listening to the show for a long time, this is more like the Founder's Journal style. People have been loving these type of episodes. We're going to keep them going. First off, shoot me an email, at minimum just saying hi, at maximum telling me a topic that I should cover in an upcoming Founder's Journal. It could be anything from making your first hire to making your first senior hire to deciding when to sell your company to hiring an engineer. If you don't know anything about engineering, shoot me an email at thecrazyones@morningbrew.com. We would love to hear from you. We've already been talking to hundreds of listeners in the inbox and it's been pretty amazing. Okay, let's talk about this episode. I'm recording this on March 15th, 2023. I just went to South by Southwest for 3 days. I went there for a few events. I had a speaking engagement with one of Morning Brew's sponsors. I got to try out the plunge at a local Austin park. 20 or 25 people showed up. I'd say probably the coolest thing that happened was there are probably like 10 people who live in Austin who I've met on Twitter but never met in real life. And I actually got to meet some of these people in real life, which was awesome. I met Sam Parr, who I've literally known for like 6 or 7 years, and it was awesome to spend time with him. He is way larger in person. The guy could be like a tight end in the NFL. And I got to know some other really amazing people as well. Also, as of right now, I'm in the pre-launch phase of The Plunge. So focusing on short-form content, paid Facebook ads, getting ambassadors in different cities to host Plunge events. And then finally, I am planning out a strategy for my startup studio. My dream over the next 10 years is to incubate many businesses, self-fund those businesses, find CEOs to run those businesses, a lot like what my co-host Jesse is doing with GatewayX. So I've been working on some thoughts around what the strategy is for my startup studio. But let me get into why I'm even doing a Founder's Journal today. Basically, I was working on Plunge stuff for part of yesterday, and one of the things that I was doing is I was setting up a Facebook paid ad campaign. And it's pretty funny because, you know, Morning Brew spends a ton of money on Facebook ads, Instagram ads. You know, at one point in the business, we were spending $500,000 a month like it was a key part of our strategy. But I never actually ran the ads myself because I was focusing on editorial and sales in the early days of the Brew. And my co-founder Austin was focused on growth and tech. And so he was the one who was actually starting to run our first paid ads in the beginning. And then we hired one of our early employees who their sole focus was paid marketing. And so it has been such an interesting experience doing Facebook ads for the first time. It actually feels like the adult version of playing video games. It's oddly addicting. And now all I want to do is go to my ads manager and check what my acquisition cost is of getting people's email addresses to possibly sign up for The Plunge. But anyway, what I found was it was taking forever to set up this campaign. It probably took me 3 or 4 hours to create the images that I wanted to use in the paid campaign of different people playing The Plunge, of a slideshow of many people playing The Plunge, of a video that had music on it playing the game. I was writing the copy, but I felt like in order to get really good at copywriting, I read a copywriting book. And then also you have to create audiences. You have to decide who you want to target with your ads. All of that to say, it took me, let's call it, close to half a day just to run a single Facebook campaign. And so while I really enjoyed the activity, like I've really enjoyed learning the skill associated with paid marketing, it had me thinking, is this the best use of my time? And I would say more broadly, when does scrappiness or the act of doing a lot of things, saving money, rolling your sleeves up, getting your hands dirty, When does that actually get in the way of pushing your business forward? So I'm going to talk about in this episode the pros and cons of scrappiness and how you should be thinking about it as a founder. So let's hop into it. What's up, everyone? I'm Alex Lieberman. Yo, this is Jesse Pujji. And this is The Crazy Ones. I always thought that I was an absolute badass for being this scrappy, bootstrapped entrepreneur. It was just part of my identity from the beginning of building Morning Brew. Because if you think about our story, it was one of raising very little money for Morning Brew, for starting this media business, not going the venture capital route and doing anything and everything to push the business forward. And so what that meant was whether it was putting flyers in Michigan's business school for weeks straight until we got literally yelled at by a venture capital club on campus, or pitching hundreds of classes and clubs on campus, or inputting every single handwritten email address manually into our website or LinkedIn stalking for thousands of hours to secure our first advertisers. No task was beneath my co-founder Austin or myself to build our business. And candidly, I was proud of that fact. But as I've started working on The Plunge and I'm less resource constrained today than I was as a college student, I've started to notice very real tradeoffs that come with this idea of scrappiness. And so let me walk you through how I think about the pros and cons of being scrappy and what I believe to be the ideal in between. So here are the positives of scrappiness. The first is you treat your money like a scarce resource, which it is. And I think that's a positive that, you know, when it comes to The Plunge, I am trying to keep my investment in this game as low as possible before having a sense of if we'll have enough demand to produce One container, one container of the game. It's 40 feet. I believe I can fit 800 games in it. And so I've spent $27,000 on this project so far, and I'm trying to keep that number as low as possible before getting to product market fit. I generally think this belief and this idea of keeping my costs as low as possible before hitting product market fit—it is a strong behavior, and it is a benefit of being scrappy. The second positive of being scrappy is, and it's one of my favorites, probably it's you're forced to be creative because you can't just throw money at things to fix them or make them happen. How I think about that is when money is a scarce resource, when you don't have a lot of it as a bootstrap company. So like in the early days of Morning Brew, we didn't have any money. We probably could only spend a couple hundred bucks a month. You find other forms of currency to barter with beyond just dollars and cents. And so using the example of The Plunge right now, because I don't want to produce an entire container of this game if I don't know that I can sell it, what I've done is I've gotten ambassadors for The Plunge who live in different cities. We have one in Chicago, we have one in San Francisco, we have one in Miami, we have one down in Austin. And these ambassadors are going to host weekly events to spread awareness of the game, to get people to put deposits down for Kickstarter. They're going to capture content videos and images of people playing so we can use it for social. And my form of payment is just them getting a set of the game. In the world of Morning Brew, what that looks like is one of the best ways we grew our newsletter was through cross-promotion. So we would plug, let's say, CB Insights in our newsletter and CB Insights would plug us in their newsletter. And cross-promotions were such a great growth strategy that we only thought about in kind of this world of scarcity. Because our payment was our audience, right? We were paying with Morning Brew's audience to another media company, and that other media company was paying with audience as well. The 3rd big benefit of being scrappy is you learn how to do a bunch of different jobs, which makes you better at hiring for or for managing those jobs because you know what to look out for and you know what good versus bad work is. So the example of Morning Brew for me was I learned how to sell media very well because I literally was our only salesperson up until 2018 when I decided to go out and hire our first seller at the company. I knew what it looked like to be able to tell our story well, to actually be a hard worker, and what a reasonable amount of outreach to companies per day or per week looked like versus if I never had sold or done outreach by myself, it would have been very hard to set a standard of If I hired a salesperson, let's just say they were like, I think I can send out 50 emails per week to to brands to potentially advertise a morning brew. I would have had no idea if 50 was a lot or a little because I wouldn't have done the job myself. So those are all the great parts of scrappiness. Now I want to talk about some of the negatives or the trade-offs that I've only become aware of. I would say in the last. Couple months building this second project. The first tradeoff is sometimes you avoid spending money on things that really could move the needle for what you're building. It's, you know, the way I visualize it is like when you build a product, you have this like this ember that just has this light flicker. It's not burning high enough to burn the rope yet, but it's starting to get going. And by not spending money on certain things, Basically, you're choosing not to pour gasoline on this ember to turn it into a blazing fire. And so just an example of that is something I have been thinking about as it relates to The Plunge. My backyard game is, should I be spending more on brand and marketing right now? Our board design was literally made in week 1 of the business. Our logo was made in 30 minutes in Adobe Illustrator. And right now, like I said, I'm running our Facebook ads. I'm creating all of our creative. I'm coming up with our headlines. I'm wondering, should I pay someone to create content? Should I pay someone to run our social accounts? Should I pay someone to run our Facebook ads so that I don't have to do this? And, you know, there's a dual benefit here, right? There's the benefit of giving me back my time to work on other high-leverage tasks, because once you become really scrappy, you realize very quickly you get a full-time job very quickly. Your entire day is taken up by doing many different things. But the other benefit is when you hire someone to do something, their full-time job is being an expert in the thing that you can't possibly spend all of your time on. There's a reasonable argument to be made that if I hired a great social media agency right now, especially one that did performance marketing, it was paid on performance. There's a world in which they could drive so much better performance on Facebook ads than I can that even if they take a percentage of the campaign, like a percentage of how much they spend, that I still would spend less with them because they're way more efficient. And so another way to say this is, am I depriving The Plunge of getting to product-market fit in general or getting to product-market fit faster because I'm not willing to spend enough on it? And it's such a slippery slope, though, right? Because you always justify spending more and more money on something because you feel like you're depriving the business. And all of a sudden you've spent an inordinate amount of money on something that hasn't reached product-market fit and you're taking on way more risk than you would have liked. So I do prefer to be kind of on the end of the spectrum that I am. But I do think there's an argument to be said that I'm actually hamstringing the business a little bit right now by not spending money on experts who are going to inevitably be better at certain tasks than I am. The second big tradeoff of scrappiness is sometimes you work on low-leverage tasks for too long, and these are low-leverage tasks that could be delegated so that you could go and spend time within your zone of genius. And your zone of genius is basically the one or two things that you're exceptional at that you will never fire yourself from doing. When I think about this tradeoff now, as I reflect on my journey with Morning Brew, I do think that scrappiness and busyness got in the way of me being an exceptional CEO, which I think I have the capability of doing. I think for far too long at Morning Brew, I was in the weeds selling advertisements versus growing as the CEO of the business. And I think that's because I didn't take my brain off autopilot to ask myself, is me going through LinkedIn all day long, sending cold emails all day long, is this the highest use of my time right now? And I just continued to create the justification that I am the best in the world at telling Morning Brew's story and selling our products. Even if that was true, I didn't consider the opportunity cost of not effectively running the business. Basically what I didn't think about is, okay, let's just say I'm an A+ seller of Morning Brew as a business. How much less money will we bring in if I brought in a B+ seller? And how much more effective would the business be running if I spent my time actually running the business? And so the third and final tradeoff related to scrappiness is this notion that however you behave as a leader in a company is how your organization is going to behave. If you are someone who doesn't end up delegating anything, is spending all of your time in the weeds, is acting with a scarcity mentality where you're not spending a lot of money, you can expect that that is the way people in your business are going to behave because that's the example that you're setting. My view is the example you want to set is you want to teach people to spend their time wisely. You want people to spend money like it's their own, but when it makes sense. So when it makes sense not to spend versus when it makes sense to double down because you're seeing opportunity within the business. And you want to teach people to delegate low-leverage tasks to others because you want your people to spend their time in the highest value ways. Here's how I think about me being scrappy the right way moving forward. First, I do believe that default scrappiness is good. I would choose that every day of the week over, let's call it like default abundance mentality, where I think there's an endless amount of resources from a money or time perspective. I do think scrappiness forces a healthy amount of paranoia and a ton of creativity that is so incredibly valuable, especially in the early stages of business. The second part to this is it is not a perfect science, but basically what you want to look out for is not being scrappy to the point of depriving your business of resources that it needs to be successful. And those resources could be your most high-value skills that you're not giving if you're doing everything in your business. Or it could be money that you should be using to put fuel on the fire where there are opportunities within the business. And it's this constant healthy tension. So what I suggest for you, and as I'm saying this, I'm suggesting it to myself as well on a weekly basis, ideally on Sunday before you start the week, you should answer 2 questions for yourself. The first question is, am I spending time on the things I want to spend time on and the things that give the business the highest probability of success? And second, am I spending my money responsibly in a way that appropriately accounts for the business's risk and appropriately supports the business's opportunity? These questions will force you to decide if your scrappiness is helping or hurting you on a daily basis. So in summary, I believe the best way you can be scrappy is to be scrappy without a scarcity mindset, meaning you believe that there is a time and place to put resources, meaning your time and money, into high-value things. And scrappiness is a helpful tool to drive creativity and progress. But scrappiness for scrappiness' sake becomes more about your own ego and less about how it helps you and your business. With that, thank you for listening to this episode of The Crazy Ones, one of these Founders Journal style videos. I'll catch you next episode. And remember to shoot me an email at thecrazyones@morningbrew.com, either saying hi or giving us ideas for a future Founders Journal episode. Talk to you all soon.
