Part 2 - Why Millie Tadewaldt Chose Bootstrapping Over Venture Capital

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Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wyd. Okay, so you start, you bootstrap, which is always fun because you're not accumulating that $180,000 debt like you did get leaving college and university and from your garage. Talk about that.

Yeah, well, I mean, the garage was involved. I feel like that's the, like, gritty glamour shot of. Of the garage. There was also an office, a home office where I had a desk. So I wasn't just, like, sweating it up in the garage the whole time. And I. I also have been thinking a lot about the whole garage storyline. Everyone starting a business from their garage. I always knew it would be bigger. It wasn't like I was, you know, unintentionally starting an enterprise in my garage. It just made sense to start in my garage because I didn't want to spend a bunch of money on a space if we didn't need it yet.

So Bezos, you know, Jeff Bezos started in a garage.

Yeah. And I think he had a big vision from the beginning too, right?

Yeah, he might have.

Yeah.

Steve Jobs and Wozniak started in a garage.

Right. Many famous garage stories. I don't know that I'll be that famous or that rich anytime soon, but I did start in a garage. I bootstrapped. Brilliant. After bcg, I'd gone on to work for a startup incubator in Chicago and got familiar with the venture capital space and ultimately raised a venture round for a company. I started there and kind of got to see those dynamics and witness what was good about that and what I didn't like so much about that firsthand. And then I went on to a startup.

What did you see? What did you learn about that? I mean, what insights do you even retain today from that experience?

Oh, so many. It's not for every business model, and it might not be for you in the time in your career that you consider it, but it's so loud. There's so much noise around. At least when you get into tech, the sort of noise you hear, the signal that comes out of it all is raise venture capital and you're a hero. And I mean, maybe it was naive of me to sort of follow that noise, but those seem like the big success stories you hear. It's like that. And acquisitions, there's no, like, hey, so and so bootstrapped this business and now they are in charge of their own livelihood and get to make their own choices and they don't have a boss. So I think that's the glitz and the glamour to me. Or it was at the time where it was like, this is the path. If you want to start a tech company, you got to raise venture capital. But the flip side of that, I think is typically when, when it makes sense to raise venture capital, it's because your business model can't be profitable out of the gate, so you have to raise money. And the thinking is once you get this thing really big, it's going to be really profitable, but there's going to be this period where it's not. And that's why you need so much money that ends up being a big, a big shot to take. The binary outcome is issue where, you know, whatever percent of, of these companies that raise venture capital money just completely fail and a much smaller percent of them continue to survive and thrive and ultimately get acquired. That ends up being a pretty interesting bargain that I think a lot of founders don't consider because, I don't know, we're optimists. And you go, take that round and you're sure you're going to be on top of the world and you're going to be the next Steve Jobs. And. And most of them aren't. And so you go, you know, relates.

It relates. Maybe you can tell me I'm wrong on this, but to me it relates to when you start out in anything, you don't know what you don't know. And that's why, you know, the, the rationale behind doing this podcast the way I do it, which is kind of bass ackwards and convoluted, is I don't know what people don't know that are listening. You don't know. But I do know that if we talk about a variety of things, maybe we'll stumble across something and they'll hear something, it'll say, oh, yeah, I never thought about that one before.

Yeah.

And it's, it's a way of place of life. Yeah. But you know, the same thing. It started on any business. I used to tell our managers, you know, because, you know, we in financial services and we're opening up offices and training managers like McDonald's, except, you know, they get a financial services office instead of a McDonald's. And I said, I just can't wait for you to accelerate through the system, get a team in place so we can promote you out. You can get your own office and you can begin to find out how stupid you really are. Because then, then when you come back into my full timer meeting, you're going to pay attention, you know, and right now you're sitting in my office and looking at me like what a dummy I am, making all these decisions, but you have no idea, you know, the context. And so I'm looking forward to you getting up to where you can realize what you don't know. But the trouble with raising money that you see time and time again, especially in the software space, is that people spend the money on the wrong things. They, they haven't been in it long enough to know where to spend the money and then the money's gone, you know.

Yep, yep. And you, and you have to sort of plan on raising that next round and that next round after that. You're not taking that round and using it to get to profitable because you have to. You, you've also made this bargain that you're going to try to get so big when you take these rounds. You're trying to, you know, 5, 10x your investor's money and you're trying to do it in a compressed period of time. So you've got to, you've got to take a big shot. And again, I think, I think that can be great. I just don't think that's for everyone. And it's not for everyone at any particular time in their career. Like maybe you don't want to have a binary outcome after five years in your 30s or whatever point in time you have chosen to make this kind of decision to take venture capital.

Yeah, maybe you haven't been in it long enough to know the cause and effect thing of the decisions you make and the things you're doing, what kind of returns you can expect. And maybe you need to get a little further down the road before you can narrow that in and maybe not run up so much debt before you get that kind of experience and that knowledge and the track record. And so you started your what. Why did you come up with the name Brilliant? That's awfully audacious for a small girl who's a coder from a small town. Brilliant.

You know, I had started a few other companies before Brilliant, and I had spent so much time like trying to come up with the perfect name. And I created a prototype of what Brilliant, the original Brilliant, might look like as a sketch and I just threw the name on there and it stuck. And it's been, I think, a fun name and a fun brand. It conveys Positivity and sparkles and happiness. And this is a positive business to be in. Like you're, you're dealing with fun stuff. You're bringing people's brands to life and you're creating emotional moments, magical moments for your, your clients and their clients. And I, I think spreading happiness to some degree and in a world of work, which I think needs a little habit.

Well, I think it's, I think you made a great choice there because that's the whole idea of the gifting enterprise, is to put the extra sparkle in there. And so I don't know, I don't know that you could have done a better job.

The only time I regret it is when we make a mistake. In the earliest days, it was me who had made mistakes and I would have to call someone up and I would say, hello, this is Millie from Brilliant. We've made a mistake, can you please help me? And the sort of lack of humility there felt always kind of awkward when trying to recover from an error, you.

Know, I'm sure those were few and far between, you know, so. Yeah, well, what, what did you do right from the beginning?

What did I do right? Oh, man.

What did you do right?

It's a great question. I think I, I found a great segment to focus on. I found this segment of the market that was unloved, I would say old and unloved and archaic on a lot of levels. And I came in and I had the blinders on. I had no idea who the good competitors were, so I didn't look at that. But what I did look at were all the bad old experiences. And I believed that I could do better and just sort of went for it.

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Not that much. I had a couple concepts I was looking at one was in the parenting space for young parents. I had a six month old baby at the time and so of course I was in it and was thinking about all the things that had been hard and challenging about that experience. So I had a concept in that space that I was playing with and I had been offered an entrepreneur in residence role at a venture capital firm to go start that startup idea with them. So that was one idea I'd been playing with. But I struggled to see how I could get it to the scale where it could be profitable and be a standalone business. And I'd already had this kind of bad experience raising venture capital where I'd come up with a good company and done everything right, but been unable to raise that next round and sort of had to shut down what felt like a good business due to its lack of profitability or theoretically good business. So I had this one option on the table and I had this other idea for this gifting company and I was working in a job I really wasn't very happy with at the time. And my husband had started a company two years prior and, and his company was finally getting some legs under it and so he had a salary again. So I kind of looked around and I said, well, what's, what's the risk of picking one of these things and doing it versus the risk of not? And the risk was limited to my salary and my lack of misery at this job that I was really unhappy at. So the risk seemed to be pretty minimal. We could go without my salary for a bit and I could, I could shoot this shot. And so I, I tried to do it in as lightweight a way as possible. So I didn't want to spend too much time to get to a place where I could start to assess whether the idea had traction. So after testing that initial kind of gifting robot idea, which is for poor branding, but you get the idea the sort of pick one and three and shifting into the we're going to sell you bulk swag and bulk gifts. I built out that landing page. I had that design and coding background, so I could just do that. I didn't have to go find somebody. It didn't have to take months, it could take days. And so I built that out and I went and shopped it and I started to get orders. And my first month in, when you.

Said you went and you shopped it, explain that process.

Yeah, well, so I had my own network in San Francisco from my, you know, previous four years working in, in, in the city in the tech industry.

Network meaning network meaning friends who had.

Businesses, people I had encountered who had businesses or were business adjacent or worked in companies. So basically I sent emails to them all and described what I was working on. And you know the old saying, if you, if you want advice, ask for money and if you want money, ask for advice. Yeah, I asked for advice. Cause I wanted money, but also advice. I would have taken advice. And I got, I got both. So in my first month in business I did about $50,000 in revenue. I got enough orders to kind of blow my mind.

What was your first orders?

Like that was, my first order was I had an angel investor named Cyan Banister. Cyan shout out if you ever hear this, who did a big order of holiday gifts for her network of founders. And she, I, I think she spent about $30,000 on something like, I want to say 300 gift boxes of really cool bespoke stuff. There was like a roll up leather tech cord organizer and a water bottle and a treat from like a custom maker, like a San Francisco chocolatier. And I packaged them all up myself in my garage with crinkle paper. And my hands were all cut up, I probably should have worn gloves, I didn't know. And made them beautiful. And I have all these pictures of it. And it was, you know, the very beginning where I began to believe that this was an idea that didn't totally exist. And the way I was presenting it was compelling to people who knew things. And I don't think, I mean, I think she was doing me a favor perhaps by taking a chance on me. But also I think I did a good job. And so it went from there and I expanded out beyond my network pretty fast because as you know, your friends will do nice things and do favors for you, but strangers are a lot less likely. So I started cold emailing and I just went on LinkedIn and I came up with the job titles of the types of people who I thought would be good clients for us. And I wrote them emails describing what I did and definitely overstating our capabilities, which has been a theme in my entire career. Always try to, always try to get a job that's just slightly out of reach and grow your way into it as quickly as possible with your feet to the fire. And you know, I got responses from CMOs and VPs of marketing and VPs of people. And honestly my mind was blown. And because here I was just this person with a landing page and a garage, which is actually a pretty good thing to have if you're in San Francisco, a landing page and a garage and an idea in an email. And I'm getting these meetings in San Francisco with tech companies who think what I'm selling sounds pretty good. It just went from there. And I think one thing I did right was probably not realizing what a. What a big space I was playing in at first, until I got enough traction to begin to feel like I had some confidence. Cause I think it would be very easy to. To talk yourself out of shooting your shot if you realized what you were up against.

Now explain that.

I mean, now I look around at our competitors in the space, and I see a ton that I admire. And I see some where I'm like, oh, we should do that. Or they have this great feature, or they do this amazing thing, or, damn, what a good campaign. I wish that had been ours. And at the time, I think I was able to somehow see the world such that there was a very obvious place for me, nobody in it to come, and just try to do things a little bit better. And my idea was to reduce decision fatigue by making it easier for buyers of gifts and promo products to make their choices. So I don't know if you've ever shopped for a promotional pen for your business, but a lot of times the experience is, I'm going to look at nine web pages of 100 pens each, and I that I'm going to start to see stars because they all look kind of equally bad. And which one of these pens is actually going to be awesome? But actually, there is, like, one really awesome pen. Well, there's, you know, five to 10, I think. And so for most clients, we can point them to the best pen and we can reduce that decision fatigue. And that was always the heart and soul of the business, which was a trusted sidekick, we call them, our creative partner, who will know your brand, know your goals, and really just make your life as easy as possible when you're ordering gifts and dealing with all the logistics. And then that we would have the tech platform and the fulfillment capabilities to.

Back that up right from the beginning. How big did you want this to be? I mean, you like winning, and as we know in life, you know, you grow or you die. You know, you can't. That's the trouble, you know, it is.

The trouble, isn't it?

Yeah, you start this thing and then you can't, like, okay, I'm going to get it. You hear people say, I'm going to get it up to a certain point, and then I'll be happy. Yeah, yeah, like that. Yeah.

No, that's true. That is so true. I had a friend at the time who was a partner at Google Ventures in San Francisco, and she was super smart, Yale grad, won't hold it against her. And we were talking about what we wanted to do next. This was before I started Brilliant and she wanted to go raise venture capital and start a tech startup. And I was telling her all about how I didn't want that. And I remember at the time saying, you know, as big as I'd want it to be would be about 100 people. She said, you know, I'd like to have a thousand person company. We were sort of talking about scale. And so we're at 100 people. We're a bit over 100 now. We're about 110 people at Brilliant eight years in. And you're totally right. I definitely want to keep growing. And that is a huge part of winning.

And this is the sickness that you have.

That's right. That is the sickness. And I.

The thing is, is a good sickness. It's the sickness that drives the world.

I don't know why. I like, if you get too contemplative, you sort of are like, why do I feel this way? This makes no sense.

But yet, no, it's because of your intelligence. You know that. Here's what you know. You know that if you keep doing the same thing, you're going to get bored.

Yeah.

Your mind is going to want to start something else and then you're going to get sidetracked. And then things, you know, the first thing's going to go down, then you'll have to fix it.

I think you're like describing ADD also, but.

Yes, but you're smart enough to realize that growth is the answer. It doesn't have to be astronomical growth every year.

That's right.

Growth is fun. That's the other thing.

That's the challenge. I also want to keep growing because I think our team wants that. We've hired this incredible bunch of people and if we don't keep growing, they're not going to have opportunities to grow themselves.

How can you give them pay raises? How can you let them have more staffing? How can you give them promotions of the company's not growing, you know?

Yep. You know, that's a. It's kind of a tricky situation to be in because regardless of whether I'm happy at 100 people, no, no one else is going to be happy.

All right, so I'm going to give you advice. I'm going to give you advice because I advise million dollar earners.

Okay, great.

What you've got to do is work on your core and offload. What you do is you progress. It's a fun way to do it because what you do is you progressively offload the least favorite things that you don't, you know, the things you don't like doing and you just. And you keep the things that you enjoy doing and you're the best doing for yourself. And that's just your way of life. You know, you're looking.

I'm doing it wrong, Larry. I keep picking things in this company that need an expert, and I go hire someone great to run that thing. And I'm just so jealous that they get to focus on, hey, you get to be the VP of sales here. That's all you have to focus on. How incredible that must be. So I've actually, starting in 2020, I hired an old colleague and kind of then and still very close friend to be my COO and over the next three years, hired out a management team of about 10. So I actually have a ton of great people around me. And that's an important part of growth too, is having smart people who want to box with you and pound the table and have a fight about it and get to a better answer and grow together.

What you want to do is work yourself out of the position where you have any one thing you've got to do.

Yeah.

You know that you got people to do it, and that way you can keep your eye on the people that are doing those things. You can be like Walt Disney. And that's what Walt Disney do. He had all these departments and he would go in and visit and take ideas from one department to the other. And then if there was one thing or another, he, like, you know, he got into the theme parks, well, he'd spend a lot more energy over there because that's where his excitement was. But that keeps. That keeps you fresh.

Well, this intensity has to go somewhere. So.

Yeah. And your intensity and your enjoyment of the business is what really fuels everything, you know, because there's a funny thing about people who work for you. If you show up in, if you're not feeling great, they think you don't like them. You know, that you, you know, you do your best in the world to hide it from them, but they're going to pick up something's not right. She's mad at me.

It's true. They all take what I say way too seriously.

Yeah. Even if you're trying to Joke with them or something. It's like, oh, what did that mean? You know?

Also found that people think I know the answer. Like I'll ask a question. Like, so, like, where should we go do this marketing campaign? And they'll have a look on their face and they'll think and they'll say, okay, well, where I'm like, no, I don't know. I'm asking, like, let's figure it out. Like, it's almost like they think I'm being Socratic or something.

Well, you actually put your finger on one of the most fun things about getting big and having a great team around you. You move, transition. What I found anyway, you transition from the point where you had to come up with all the great ideas to, to where all your, your main job is to come up with the right questions. What are we going to do about this? You know, if we keep doing what we're doing, we're going to get down here, we're going to stall out. What can we do so we don't stall out on that area or something? Like, what do you think?

It's an ever evolving role. From the first day when I was writing code and packing boxes and making sales calls, like that was one crazy job that I bet not many people have had, though Jeff Bezos could, could probably appreciate that. And then, you know, at about 20 people kind of figuring out how do we scale this thing and having some management structure in place and 50 people hiring HR, developing like a real R and D structure for our tech team and you know, now 100 people, we've got middle management, we've got functional leaders. How do we, how do we scale all that? How do we make sure the right people are in place? How do we make sure they're talking to each other? That's all really challenging too. And like you said, asking the right questions and sort of putting the right people in those conversations to get to the, to get to the truth or the best version of the truth we can find. Yeah.

And you find out if you don't offload, you don't have time to think about those things. Like those thoughts don't have. Like I had something happen in our office in the last, last week. I woke up at like 3:30 in the morning, like, wait a minute, what are we doing about such. And so I haven't heard anybody mention anything about that for five weeks. And we're like two weeks past the deadline that we were supposed to have that done. And I found out they'd forgotten about it too.

But, you know, the big problem, though, is all these people have job descriptions. So when I get some fun new idea that I want to try, there's no one whose job it is to do that. So those are the tasks I still end up taking on. I have little skunk work side projects that often, often turn into something big. One of our biggest tech products was. Was one of those. Originally, in fall 2019, I made a little marketing stunt form where gift recipients could, you know, select their T shirt size and provide their address in order to get their T shirt delivered directly to them, instead of us having to send it to some address and not knowing if that's right and of course, not knowing their T shirt size. And so what do you know? When Covid rolled around, all of a sudden everyone in the world wanted to figure out how to send a T shirt to somebody or whatever the gift was, because we were starved for physical connection, and sending a gift was a really great way to connect physically. So that was a weird side project that I had sort of cooked up in my free time and turned into a huge leg of our technology stool here. So I. I don't want to. I don't want to lose that stuff. But you're totally right. Having. Having tasks like that end up being kind of the wrong thing to be doing.

Not necessarily, because a growing company is always going to have new beachheads. You're always going to have new things, and who better to think of something? You know, you got more experience than the rest of them in what works and what doesn't work in this space with this company.

The 30,000 foot view of what's going on here.

Yeah. And you've got your finger on the pulse, you know what I'm saying? It's like nobody. Nobody's got the finger in the pulse like the top person. And so you're more. You're more like you probably. You know, you could be wrong. But I mean, the thing is, you're more likely to be right. Your instincts.

That's fair.

And you should. That's how you make money off your instincts. You know, you think of stuff as like, what if we did this? And. And so I think that's a great use of your time because once you figure it, figure it out, you can find somebody to do it.

Yeah, that's true. The gut feeling is definitely underrated in business.

Thank you for listening to part two of this episode of the Million Dollar Mastermind podcast. Timing is everything. You may feel that now is the time to get moving forward. So you can do something even greater with your life. Now, if that sounds like you, I've got a free training video to show you how that transformation can take place. Getting introduced to how the cycle of success works has been a major transforming event for so many current million dollar earners. And that's exactly what this video is all about. And yes, it's completely free. Join us at the video@wydellonwinning.com and thanks for being part of our community.