What makes a startup grow? What allows a startup go from pre-revenue, break-even, cash flow positive to hitting $1M in revenue? I had a conversation with Rebecca Lovell, Executive Director at NWEN (Northwest Entrepreneur Network) and we briefly discussed how startups hit an “inflection point” and since that conversation its been in my head all day. An inflection point (according to Wikipedia), is a point on a curve at which the curvature changes sign. The curve changes from being concave upwards (positive curvature) to concave downwards (negative curvature), or vice versa.

Inflection Points

In my MIT Entrepreneurial Masters Program, I recall Patrick Thean presenting to my class about how companies move through very predictable stages (inflection points) as they climb from $1M in revenue to $10M. He also stated that there are roughly 28 million firms in the US, of which only 4 percent get above $1M in revenue. Of those firms, only about 1 out of 10, or 0.4 percent of all companies, ever make it to $10 million in revenue and only 17,000 companies surpass $50 million. Patrick says that the barriers to growth are tied to:

  1. Leadership: Being able predict outcomes, hiring the right people and into the right seats and the wrong people off the bus (Jim Collins – Good to Great).
  2. Systems, Process, and Structure.
  3. Market Dynamics.


I have to say that thinkspace has and is going through these inflection points. My leadership skills certainly have been tested and I’ve made more than my fair share of mistakes. Predicting outcomes has certainly been a focus for me over the last nine months. The thing that keeps resonating in my mind is that if you want to have a great year, you have to have a great quarter. In order to have a great quarter you have to have 13 great weeks. My team has been working hard over the last two quarters to hit our goals and I have to say that we certainly would not be where we are today or have tasted success without first having these goals in place. The other barrier that I have experienced growth is in hiring the right people. Being able to hire the right people, get them in the right seats, or set people’s future free is one of the most difficult and challenging aspects of a startup. Being able to attract talent to a fledgling startup can be quite a challenge.

Hiring the Best

When Rebecca Lovell and I were talking about this, she recognizes that hiring the best people and retaining them means you have to be able to provide a person a great working environment because they are going to be working in that space for a lot of hours each day. During the NWEN Scrappy Startup Breakfast, one of the speakers on the panel talked about housing his employees in really poor space, where the walls might even be falling a part. I have to totally disagree with this approach. While I’m 100% scrappy, I do not believe that having a crappy work place is going attract the best talent. Having a work place that inspires, has energy, is where I believe that people want to work. I’ve had a number of conversations with startups inside thinkspace and they all believe that in order for them to attract the top talent out of world class tech companies in the region, they do need to have a space that has a great feel to it. They also want to build their business in a place where they look forward to coming to. A place that isn’t old, dirty, smelly, and dirt cheap. The vibe and culture that my team and I have been creating for thinkspace permeates throughout and that’s a feeling that a startup is either going to resonate with or not. A startup hits an inflection point when they recognize that in order to build a great company culture they can’t do it isolated while inside their garage or at a coffee shop. They recognize that the culture they want for their employees needs to be special. They recognize that the culture they want to convey to their customers is professional and doesn’t smell like French roast.

Other Inflection Points

  1. Getting your first paying customer.
  2. Being able to have a phone conversation with your best customer without a baby crying in the background.
  3. Having enough cash flow to start paying yourself.
  4. Hiring your first employee.
  5. Coming close to not being able to make payroll.
  6. Hiring people that are not directly generating revenue but are there to just manage other people.
  7. The people that helped get you to where you are are not the people to take you to the next level.
  8. Being able to take a vacation and not have your business collapse.
  9. When your recurring revenue equals your monthly fixed expenses.
  10. When you realize that the biggest bottleneck is you.

What are some of the other inflection points that you have gone through to get your startup to grow into a small company? What are your pain points and how do you get past them?

Thank you Michelle Hollomon, of Eastside Counseling and Coaching for bringing us today’s blog post! If you would like to meet Michelle, she is a member of the thinkspace community, and the Featured Entrepreneur for our October 13th Wine Wednesday event! Register Here.

Conflict at work: is it them or is it you? ~By Michelle Hollomon

Nothing can rev the engine like a hearty disagreement in the office. Whether sparks are flying or it is stone cold silent, conflict is a part of normal office life. You may not be able to resolve all conflict, but you can learn to manage it in a way that keeps you from losing yourself (and your shirt too).

Zack was a partner in charge of sales of a midsize company. His strengths included building relationships, product knowledge, and taking the attitude that, behind each sale was a real person. His team liked him and he liked his job. But he felt at odds with his business partner, Pete. When Pete offered a suggestion or ask about progress, Zack got defensive. The more this happened, the less he and his partner talked. This lack of communication affected everyone in the company, and it felt like the company was going in two different directions. Zack came into my office asking, “How can I talk to my partner without getting negative and combative?”

I consider Zack a superstar exec for two reasons; 1) he valued his business relationship more than saving face, and 2) instead of blaming his partner, he sought to resolve the conflict by owning his part.

It turns out, that Zack was acting more like an employee than a partner. Zack respected Pete’s expertise and sense of command so much, too much in fact, that he felt inferior. Zack was a partner in writing, and a subordinate in action. Pete’s self-confidence triggered Zack’s self-doubt. His insecurities resulted in passive anger, defensiveness and un-aligned vision for the company. This hurts the bottom line.

Zack and I talked about the value of the strengths he brought to the business. Zack developed a new script for himself that included “being an equal” and “having valuable input”. Zack was able to accept Pete’s strong style of leadership without taking offense to it, and was able to validate his own contributions to the business without considering them to be “less than”. This didn’t happen over night, but it did happen, and the partnership started to thrive again.


Consider the value: there is great value in the synergy, effectiveness and creativity of working relationships. Sometimes, however, you will do better to cut an unhealthy relationship loose in order to build a healthier one. How important is it for your success to make this particular relationship work?

Own your part of the conflict: it is easy to blame the other person. However, a good leader takes ownership of his contribution to the conflict and seeks resolution.

Ask for Help: often two people need a mediator to help resolve an issue. The working relationship between the two may be important enough to seek outside help.

Take a Break: if you are committed to finding a solution, take a break to think things over with a time and place to reconvene.

Some Places That Michelle Can Be Found:

web site: www.hollomoncoaching.com blog: www.lifesolutionsblog.blogspot.com

Last week, as I was leaving the dog park, a child approached me and asked if my dog was a “good boy today”. I chuckled and told him “of course”! He then asked if I would like to purchase one of his home made dog cookies to reward him. After watching my dog gobble up the carefully made, bone shaped “cookie”, he turned to me, and with overt eye contact, a smile on his face and a glint of charm in his eye, he shook my hand, and said “it was nice doing business with you”.

I bought 10 more cookies.

This 9-year-old kid was no ordinary dime-a-dozen lemonade stand entrepreneur. His vegan peanut butter dog treats were wrapped in a beautifully designed paper wrapper, displaying a company name, logo, and phone number “where you could order more”. I give it 3 years before this young whipper-snapper is the richest 12 year old in the world…. I hope he will be.

My encounter with this child has left me delightfully dumbfounded. The way he interacted with me shows that his business is not a product of parental pressure. He was clearly innovative, a great marketer, and possessed a natural ability to close a sale. Way to go lil’ dude! After a little research, I have learned of many other micro-mega-noggins. One thing that has really struck me, however, is the lack of emphasis put on child entrepreneurs. While some may argue that kids should stay kids, I believe in supporting a child who has a a leaning towards business. A woman called me today here at thinkspace to tell me about a new young business owner here in Seattle. After getting his information (I will contact him this week), we had a discussion about they way our school system prepares children to become good employees, rather than nurturing entrepreneurial minds. She had a lot of great points.

I would love to hear your opinion on this, and get feedback on this topic in general. Also, we are seeking child entrepreneurs to interview, please use the comment forum below for commentary, and email me at Barbara@thinkspace.com to nominate the lil’ business brain that you know of!

Here is the story of a fella that has been featured all over the country as one of the best new brains- Jason O’Neil, the creator of Pencil Bugs. He is truly inspirational!

A Note from Jason O’Neill, Age 12 Pencil Bugs

When I was 9 years old, I had an idea to make a product that I could sell at a craft fair.  I’ve always liked school.  I get good grades but I know school is hard for many kids.  I started thinking about ways to make homework just a little more fun. That’s when I came up with the idea for Pencil Bugs.

With the help of my parents, we bought the supplies and made my first Pencil Bug.
I wanted to make them unique so decided to give them each a name and birth date. To keep them healthy for a long time, care and training instructions were also important.  I decided that a Certificate of Authenticity was the right touch to include with each Pencil Bug.

I hand paint each head in one of the eight colors.  I use twisted black wire for tiny antennas, glue on small googley eyes, and attach black fuzzy pipe cleaners for their bodies that wrap around the pencil. They are removable so you can still use the pencil eraser.   In fact, if you leave them a little higher than the eraser, they’re quite fun and boingy .

After a few months, I came up with the idea of making t-shirts to match and then started making laminated bookmarks in all 8 colors of Pencil Bugs .

* Text taken from http://www.pencilbugs.com

About one month ago I got back from the Entrepreneurial Masters Program (EMP) at MIT.  It’s a join run program with the Entrepreneur Organization and MIT.  It has been an amazing experience and every day I think about what I’ve learned.  I’m amazed by the other 64 entrepreneurs in my class and humbled to be a part of this group.  When my class graduates in 2012, we’ll be the 20th group to have completed this program.  There have been some very impressive individuals that have gone through this program, like Michael Dell (just to name one).

A few of the thinkspace members suggested that I share what I’ve learned and discuss what I’m implementing in my business from the EMP program.  So next week, on Thursday, July 8th at noon, I’m going to give you guys a quick overview and give you a few takeaways that can help you grow your business.  For thinkspace, my goal is to build a company that will last.  This program is certainly shining a light on what I don’t know.  I’m also seeing that it doesn’t matter what size your company is whether you’re a fairly new startup or a $500M company, we’re all going through similar types of problems and without having a peer group it can be kind of scary and lonely.  I’m putting together my presentation deck and plan to cover:

Building for Smart and Sustainable Growth
•    Strategy
•    People
•    Outcomes

If this sounds interesting to you and you think it might help your business grow, please RSVP by emailing events@thinkspace.com by Tuesday, July 6th.  I’ll have my team order up some pizza for lunch too!

When: July 8th
Time: Noon to 1pm
Where: First floor conference room

I really can’t wait to hear Nancy speak at our upcoming “Bye Bye Boring Bio” workshop on Wednesday, April 14th from 3-4pm! She always has such great insight and terrific takeaways that you can use immediately to spice up your bio. Her information is priceless and there is so much to learn that it’s often hard to write fast enough! This event is free of charge at our thinkspace location in Redmond, WA. All you have to do is sign up by emailing events(at)thinkspace(dot)com. Hope to see you there! To check out more about Nancy and what she will be speaking on, please visit http://mainstreetmediasavvy.com!

Would you like Nancy to Workshop Your Bio Live at This Event?

Rules: You must email nancy(at)nsjmktg(dot)com your “best effort” bio draft and a link to your website no later than Friday, April 9 at noon in order to be put in the “hot seat” for this Extreme Bio Makeover.   Just send it her way with “thinkSpace” in the subject line so she knows what its for.  And you have to be present at the session to benefit!

People rave about their Extreme Bio Makeovers, and you will too.   You just have to be bold enough to put your hat in the ring.   Can’t wait to hear from you!

Please RSVP to this event by emailing us at events(at)thinkspace(dot)com! We’d love to have you!

There are two areas that I personally want to strengthen: 1) Communication and 2) Leadership. Over the last few years, I’ve come to recognize that in order for thinkspace to be a place where amazing things happen it requires people and a team that are highly motivated to do remarkable things. A team that understands and embraces the vision for the company which is to create a community that fosters inspiration and passion. This last week, I’ve read two articles that touch on both communication and leadership. The first article is from Art Petty’s blog where he talks about “Leadership Caffeine: 7 Odd Ideas to Help You Get Unstuck“.

“Take comfort in being uncomfortable about being comfortable” – Art Petty

That pretty much sums up what I’ve been expressing to my team. In order for the business to grow and be remarkable, it’s about getting out our comfort zone and thinking about ways to do the same thing better or come up with some crazy new ideas that haven’t been done before inside of thinkspace. It’s about taking existing processes and challenging the status quo.  It’s about asking questions like why do we do things this way and what are ways where it can be done more efficiently and save us money.  Ultimately the goal is to do these things that impact the customer experience, to make that experience remarkable.

The second article that I read was by Scott Berkun (@berkun) who gave a speech on Innovation at The Economist. Scott brings up that in order for their to be innovation you have to have a couple things:

Culture of Trust:

“First, most teams don’t work. They don’t trust each other. They are not led in a way that creates a culture where people feel trust…Without trust, there is no collaboration. Without trust, ideas do not go anywhere even if someone finds the courage to mention them at all.” – Scott Berkun

Leaders that take risks:

“Second, most managers/leaders are risk averse. This isn’t their fault, as most people are risk averse. We have evolved to survive and that typically means being conservative and protecting the status quo.” – Scott Berkun

“But without the ability to take risks, innovation and progress can not happen. Even if you have a good idea, to bring it into the world is risky.” – Scott Berkun

These two things resonate with me. In order for there to be trust there needs to be good communication. Understanding each other on the team is a big part of that. Understanding each others communication styles is also very important. I recently took a Leadership DISC survey to better understand myself. It was a bit of an eye opener when I read the words used to describe me when I’m under pressure are: “abrasive, demanding, and aggressive” not exactly flattering. Some other things that the DISC report said that I am a “Change agent–looks for faster and better ways”; “People oriented”; and “Forward-looking and future-oriented”. I’d like to share the entire report with my team and find ways to improve my communication and grow as a leader. It’s through these things that I feel will help build a great company.