June 7, 2018 - Episode 1

Gotta Risk it to Get the Biscuit (When Starting a Business)

Taking strategic risks in business are an absolute must. Starting any business is a risky endeavor. Even smart well-capitalized people can fail. Many people told us not to do it, but we did it anyways. Learn how we managed to accept and manage risk as we started our marketing agency, Kapok Marketing.

Episode Transcript

Jake Braun:
Hello everyone, welcome to Kickin' it with Kapok, a podcast about business owners, marketing struggles and solutions and other business-related topics. This is episode one, "Gotta Risk It to Get The Biscuit." This will be our first real episode, if you will, so the pressure is really on. Given that, I'll let Mirela get us started.
Mirela Setkic:
Okay. In this episode Jake and I are going to talk about our own "gotta risk it to get the biscuit" story per se and how we left our jobs at the time and started Kapok and how that journey turned out a year later. Also, how risk in general is good or positive for a business.
Jake Braun:
Yeah, it's just a risky endeavor to start a business. You can be the most famous person, have the most money, have all of the perfect things set up to start your business, but you still might fail. Risk is just an inherent part of business, whether you're starting a business or whether you already have your business started and you're just deciding whether to go into a new area, a new market, a new vertical. Whatever the case maybe, every decision in business is really a strategic decision and it involves risk. In terms of risk, when we started Kapok Marketing obviously that was a huge risk, maybe Mirela can tell us a little bit more about when we first go started, and what some of the risks were there and how we handled that situation.
Mirela Setkic:
Okay. Well in addition to being risky, it was also extremely scary, but just to kind of back up a little bit, I think that any type of change, good or bad is scary for human beings. I think we are adverse to change. We're kind of creatures of habit, so whatever is working at the time we want to keep doing it, but at the end of the day that doesn't mean that it is the best thing for us or that it's the most profitable thing for us.
About a year ago, actually a little bit more than a year ago, Jake and I were working at a local company and we had fairly well paying jobs. Things were going well, but we were on our 10th and 11th year of working for that company and we were kind of plateauing and we kind of knew that it was time to make a change. We decided okay, this is our chance to go out and go hard and risk everything, risk our job and start something on our own. It was scary to go from making really good money to opening a brand new company not knowing what the future was going to bring up. Are we going to make any money? How are we going to eat? It was very scary. In addition to that, we had some people, actually a lot of people who told us that we were crazy, sacrificing or risking a good paying job just for an idea or something that could be great but it could also fail. That didn't seem like a wise decision for a lot of people in our lives.
They told us just to ... I think they said to ride the wave. We decided that there was very little reward in riding the wave. Mentally for me, at least, it was very difficult to be in a position where I wasn't stimulated mentally, and I didn't feel like I was advancing and I was progressing.
We decided to go for it and approach our boss at the time, and kind of proposed this crazy idea to him where we offered to purchase a portion of his business. At that time we really didn't know what he was going to do. He was either going to say he loved the idea, or he was going to fire us. I can definitely say that it was one of the most scariest meetings of my life. At the end of it, he said that he was interested in selling some of his business to us, which was very, very shocking. Then things kind of started moving on from there.
I'm not really sure if I'm getting too deep into the story, so I'm gonna let Jake kind of rescue me from this deep dive that I'm taking now.
Jake Braun:
Okay. Yeah. You've gone in pretty deep to get started here, but I think there was a couple of things that you touched on that are good things and maybe we can talk a little bit more about. The first one being that we did, we loved our jobs. We learned so much there. I should speak for myself, I learned so much there and it was a really great experience, but I think I had been there 10 years, and that's a long time, especially in this current environment. People nowadays are spending three, four, five years at a job and then moving onto to their next one if that, so 10 years is a long time but it was an enjoyable journey that I learned a lot. We just wanted to get involved into something new and learn some more about other things.
Mirela Setkic:
Yes. I don't know if it's just human nature or if it's just me, but I just felt and thought that I needed something bigger. I needed to have a challenge that was bigger than me and that was going to take me to the next level, and staying at that job was just not going to get me there because I was reporting to the owner of the company. I had all this knowledge in my job ... It was kind of easy for me at that time because I had spent 11 years doing those things, so they were kind of second nature to me, and I knew that the owner of the company wasn't going anywhere, so he wasn't going to make me fully in charge of his entire company, so I needed to move on and I needed to do something for myself. Also, I needed an outlet to share this wealth of information and knowledge that I learned at that company so I can take it to the next level.
Jake Braun:
Just to clarify one thing you said there. When you say that the business owner wasn't going anywhere, I'm assuming that you mean that he was happy being the owner of the business, and he wasn't gonna leave the business? The business itself is a successful business.
Mirela Setkic:
Yes. That's exactly what I meant. He's still very young and very much so involved with this company and very much so enjoys running his company. I knew that he would be doing that for many years to come, and so I kind of wanted to do a similar thing that he's doing. I wanted to be my own company. I think he understood that at the time. Yeah, I'm glad you asked me to clarify that.
Jake Braun:
For me, in terms of ... Yeah, I loved my job, but I also wanted to be more involved in the St. Pete community and use some of the things that I learned at my previous job, and both of us at our previous job worked with all online businesses. There was no really local component to it, but we learned a lot about online marketing throughout that process and I thought to myself, and I think Mirela did as well, like we can use these techniques and these strategies to help local businesses use this online stuff, this digital stuff. It's very accessible to them, so I just think someone needs to tell them that it's an option, and it's an affordable option.
Mirela Setkic:
Yes. That's a very, very good point. I think there's a little bit of a misperception in terms of when people think about digital marketing or online marketing because we've all received the phone calls from those SEO companies who call and they want to no, if you give them I don't know $1,000 they will make sure that you are number one in Google search. So people are kind of jaded. They're just receiving these phone calls all the time. People asking them for $1,000, $3,000, and just making the entire I guess, idea of online marketing, digital marketing, seem expensive and also very complicated.
In reality, it doesn't have to be that expensive. It doesn't have to be that complicated. People can learn to do it themselves, or they can hire someone like Kapok Marketing and have that agency execute their online marketing plan for them. Either option is a viable option, it just depends on how much money someone wants to spend or how much time they want to dedicate to learning all of these different platforms and different ideas.
Jake Braun:
Yeah, and what you just said, one of our goals is to get some of that information out there for free on our website through this podcast so that local businesses can see that this stuff is an option, whether they wanna hire us or another marketing firm or just try and do it themselves. Then we should probably go back to one of the things that you said earlier, which was the naysayers. There was a lot of people who said to us, like Mirela said, "Don't risk it. Just stick with what's working for you". I think it was almost, I don't know, nine out of every ten people that we pitched Kapok Marketing to or a variant of Kapok Marketing.
Pitched in the sense that we just told them that we were thinking about doing this, not trying to get them as an investor or anything. They said "No, that's a horrible idea. Why would you wanna start your own business when you have a job that's paying you?"
Mirela Setkic:
I think it was mostly people who were the closest to me at least. Family members, not all family members, and I'm not going to name people, because I don't want them to find me and let me have it. But you know, family, close friends, and I can understand. I think that they were looking out for my well being and they were afraid for me. They probably thought here's this person who has invested a good portion of her life into this other company, which was my employer at the time. She's making good money there. She has a really good position. Everything is going well. Why is she doing this? Why is she kind of killing the flow of the situation and exposing herself to risk?
I think they thought that they were protecting me or doing me a favor, which I can appreciate, but it kind of made it a lot more difficult because here I am by myself. Yes, I had Jake and we're talking about this idea, tossing it back and forth, and then we have people from the outside telling us no, don't do it, don't do it.
Jake Braun:
I would like to second most of what you said there, which was just that I don't think they had any sort of ill intent or anything, they just recognized something true in the endeavor, which is that it's inherently very risky. As a business owner, or anyone involved in business really, it's risky. It's all risky. You don't know what's gonna happen. You can just look at the data, look at ideas you have and say to yourself "Is this something that's worth the risk?"
Mirela Setkic:
I think sometimes you don't even have the data, and even when you have the data, a lot of the analysis, and it can also be your perception or your subjective reading of the data. At the end of the day, you are not going to know what is going to happen unless you do it. It's kind of 50-50. We spent I would say a year before we made the move and approached our boss at the time about going on our own. At the end of it, we realized it's never going to feel like it's the right time, like it's the perfect time. You just have to go for it and you have to do it. Otherwise, you are never going to find out.
Jake Braun:
Yeah. I think you're right. I'm kind of a data and information systems person, so maybe I like to think that all the data is out there and that you can use that to make the perfect decision. I do think it's very important still. I mean, you get a lot of information and you can weed out a lot of bad ideas, but ultimately there still is risk and you can never be 100% sure that it's gonna work. I like to think and I hope that you can get better than 50-50, but you certainly can't get to 100.
One other thing we could talk about right now is we also have a lot of people who come in for interviews, and some of them like to ask what's one thing we would recommend they do or one piece of advice, and I like to kind of interweave what we've been talking about here a little bit into my answer, which is that do things that might seem impossible. We didn't necessarily think that if we went into our boss's office and ask to buy part of his business that he would say yes, but if you don't try, you don't know if it's gonna work.
Mirela Setkic:
That's true. I definitely remember that meeting like it was yesterday. I think I was floating, or I felt like I was floating. Here I was, going in to make this crazy proposal to my boss and I am not some super wealthy person who has like this big check for him and I have all of these connections and things are just going to be peaches and cream after that. No, I was just a regular person going in with this crazy idea, and hoping that it's going to work out, but also knowing in the back of my mind that I could lose my job right there on the spot and things might not go well after that.
Jake Braun:
One other thing I just thought of, I don't know if maybe we've buried part of the lead here, have we talked about the "gotta risk it to get the biscuit" mentality? I know that's something you like to say.
Mirela Setkic:
Mentality of "gotta risk it to get the biscuit" or going hard I guess. I don't know what is the other cliché line that all of the exciting stuff happens in like danger zone or some area like at the edge of your comfort zone. Oh, I think that's it. At the edge of the comfort zone is where all the stuff happens. I think that's really true. Comfort lulls you into just sitting back and letting things happen, and while that feels easy and comfortable, it also, for me at least, doesn't bring a lot of satisfaction if I'm just kind of breezing through life.
Risking things and putting everything on the table and going hard, it's scary, but it's also very energizing. It's kind of being reborn or like starting a new chapter of your life. I think there's a book that I read. I don't remember the name of it. It talks about how human beings are programmed, or we are somehow genetically constructed or made to have like peaks and valleys in our life. It's not natural for us to always have a peaches and cream life where everything is easy going. I think it's good for us to kind of go up and down. Once things are easy, we should mix things up just to kind of give ourselves a challenge so we can regenerate and be excited about something again and like solve a problem and then come out of it on the positive side and then move on to the next thing.
Jake Braun:
I think you definitely learn the most when you're outside your comfort zone. I think that's definitely something we did here. Do you think there are any other risks that we might wanna talk about in terms of small businesses or local businesses? What are some of the maybe day to day or year to year risks that you think that businesses run into?
Mirela Setkic:
Oh my gosh. There are a lot of them. Just going back thinking about our first month in business, just signing the office lease, that's scary. Most buildings want you to sign a five year lease and if you're lucky they'll settle for two years, which I think is what we did, but just signing that lease agreement and you know being on month one or day one and thinking "Oh man, I hope I make a lot of money to pay this rent and I hope I make enough money to keep paying this rent for the next 24 months".
Also, bringing on new team members or employees and not knowing what the future's going to bring. Are you going to be able to make enough money to pay those people for their time and their hard work? If you don't, then you have to let them go. How is that going to affect their life? Going out and soliciting business, and if you are brand new, starting right out of the gate and you don't have a well known name, you have to go out, hit the pavement and sell yourself and sell your services or your product.
Jake Braun:
Yeah, those sound like some good examples of risk that businesses have to take. I'd like to go back to I think the first one that you mentioned which was leases. Leases, I don't think, new business owners especially, realize how complicated it can be to get a commercial lease. It's not like renting an apartment. The landlord may want you to have all kinds of insurances that you have never heard of. They may want you to sign personal guarantees where if your business fails, you'll still be responsibility for that. They may need you to get insurance guaranteeing that you'll maintain a certain amount of revenue so that you can pay the lease in a timely fashion. That can be a huge, risky endeavor all unto itself.
One of the other points you made was employees. Employees can be a risky and rewarding proposition and that seems like it could be a whole episode onto itself. Circling back to risk, what do you think is the best risk that we have taken?
Mirela Setkic:
I think that I have to pick two. The first one is definitely getting our office space because that's when everything started to feel real. I don't know if it's because I personally did not like working from home or working remotely and just having a home base and having somewhere to talk about ideas and actually be a company made a world of difference for me and we could actually bring people to our office and have a home base.
The second one is hiring more people to be on our team. That just kind of took us to the next level of being an actual company or an agency. It wasn't just you and me here at the office sitting around and talking about ideas and trying to run a company. We actually had a team of people who could contribute their ideas and also hold us accountable because now that we have people who work with us, we can't just sit here all day and not produce. We have to actually do things to make sure that they have an enjoyable company that they work at and that their job is actually something that they enjoy.
Jake Braun:
Will you take more risk? I know we've already taken a lot of risk by starting this company, but I guess there's levels and there's like ... Where do you think your level is there and how much risk would you be willing to take?
Mirela Setkic:
Well, you know, I'm a very safe person, but no really, kidding aside, I don't know. I guess, as they say, hindsight is 20-20, so looking back I can say "Oh yeah, I would've gotten a way bigger office" or "I would've suggested that we bring more people on earlier on" or that we spent more money on this and that. So maybe I am a little bit less afraid of taking chances and risking things now that I have a little bit more than a year under my belt of doing things.
I think that yes, I think I probably would be a little bit more aggressive in terms of going out there and doing things and not worrying about "oh man, what's going to happen if this doesn't work out?"
Jake Braun:
Yeah, I mean we haven't taken always the most risky route, and you can lose money not taking the risky route if it doesn't play out exactly how you expect. I mean, silly example, when we first started we bought a small refrigerator. Then you get more employees, and you needed a big refrigerator. We just basically wasted money on the small refrigerator. Now that's useless. The same thing applies with other things. The office, as a bigger example, we're not necessarily losing money, but we wish we had a bigger office now, but we still need to stick with this lease.
That's the flip side on risk. You might think that oh, I'm avoiding all of the danger by not taking a risk, but that's not how it works. You're really picking which side you think or which of many options you think is gonna be the most successful. It could be the most risky one, and even though you think oh, it's just super risky. There's no potential there, but the other things have negatives too.
Mirela Setkic:
Yes. I agree with that, and I think one of the other things that we have learned is not to look for new employees or team members when we are swamped with work. Maybe start looking for more people to bring onto your team a little bit before you get so busy and you have so much work, so everyone has a little bit more wiggle room to actually do things that they might not be thinking about right now. If everyone is operating at extremely full capacity, then there is no room for people to actually go beyond their job or beyond their list of responsibilities at the moment to try different things.
Even the office space, if you get an office space that's just big enough to accommodate your needs at the time and you can't do anything else, well you might be locking yourself in and preventing yourself from being able to grow in the future. Those are some things just to kind of keep in mind.
Jake Braun:
Is there anything else you think we would do different if we had it to do all over again in terms of risk or risky choices?
Mirela Setkic:
I think so. I think personally, I would be a little bit more confident or a little bit more aggressive in a positive way in terms of telling people around me about my business and not being so afraid that they're going to judge me and they're going to be just looking to see if I'm going to fail or not. Maybe I would've done more to get the word out about Kapok Marketing and my plans. I most definitely did not do that in the beginning. I was very afraid. I mean, I'm still a little bit afraid. You know, every time I have told people and we have told people, everyone has been excited. Definitely, I would be more confident in myself and our ability as a team and as a company to actually make it.
Jake Braun:
So does that mean that you'll be aggressively sharing the podcast on personal social media and other outlets?
Mirela Setkic:
Oh, man I fell into that trap.
Jake Braun:
Yes you did.
Mirela Setkic:
Like hard, you know, I mean, why not. What do I have to lose? I guess I'm gonna risk it to get the biscuit and I will share it, but what do you think? Would you do anything differently? Would you risk more things or would you go out on a limb and things like that?
Jake Braun:
Yes. I think I'm a very risk seeking person by nature and risk seeking is not necessarily a bad thing. There's risk averse people who just don't like risk for the sake of risk, and I kind of like risk just for the sake of risk. I have no risk aversion. I like looking at things from a numbers perspective and seeing there is a 10% chance that this is worth a million dollars, therefore, $100,000, 10% of a million dollars is $100,000. So I'm the kind of person that maybe looks at the math.
Mirela Setkic:
And I am kind of a I go by my gut, and my gut is not always the most rational creature. It's sometimes too woke and too paranoid and too scared. I think I'm getting it in check. I just realized that at the beginning of the podcast I used the wrong word when I was talking about risk aversion. I think I said adverse, so I have to apologize and correct myself. I do know the difference. I think I was just nervous. See, this whole podcast is a risk. I'm pretty much risking my reputation on this podcast and just risking the chance of sounding not the most intelligent sometimes. I hope that people will learn that I do know better, but I definitely used the wrong word.
Jake Braun:
Well, I don't remember, and maybe the listeners didn't hear it either, but the podcast definitely is a risk. A risk that I see when I was thinking about doing the podcast is I'm not necessarily the best at speaking or public speaking, so am I gonna fall flat on the podcast and not be able to deliver with insight, as we're recording it. It's not live, but it's still a conversation you're having that you're recording with someone, so you have to be ready on the spot to have that conversation with whoever you're talking with.
Mirela Setkic:
Well I think that you're winning so far because you knew not to say risk adverse, which I said, so you're definitely winning. I wish I had to tell Jake that I'm super shy inside, and I actually don't even like the sound of my voice sometimes, so hopefully this is going to be well received. If not, then it will be a lesson in some type of I guess risk that we can look back and talk about what went well, what didn't, and so on and so forth.
Jake Braun:
That's another thing that you just mentioned there, which is even if it's a risk, you take a risk and it doesn't work out, there still is a lesson you learn from taking that risk and it failing. You would never learn that lesson, and that lesson could be so important to you in other decisions in the future. You might lose $1,000 now, but if another similar comes down the road that is a million dollar deal, you'll have that experience from the other risk that you took and the lesson that you learned there.
So I would almost not even call it a failure if you take a risk and it doesn't work out how you expect it. You learn the lesson of taking that risk.
Mirela Setkic:
Oh yeah. What does Big Sean say in one of his songs, "lessons on lessons on lessons"? So, good or bad, you learn something from it. One of the risks that we took earlier this year is a sponsorship with the Tampa Bay Rowdies. We're not a super rich marketing agency and we had to kind of decide if we wanted to spend a decent chunk of money for us, we had to think about well, you know, what is going to happen? Are we going to get X number of clients? Are we going to get this and that from this? You know, at the end of the day, no one really knew. So the only way for us to find that out was to actually go for it and spend the money, and we actually still don't know. That campaign is ongoing right now.
At the end of the soccer season, we're going to find out what came out of it, but really just thus far in the season it's been a good experience. We met all kinds of people. People who actually come in and mention to us that they've seen our sponsorship and our ads and commercials at the Rowdies' games, so you just never know. You just gotta do it and see what happens.
Jake Braun:
Yeah, and I think the thing that we liked about the Rowdies deal was, it's local. We wanted to be a local marketing agency, so I think it's a good fit for us, and it's a great opportunity to test out. I have to circle back to one thing you said earlier when you were talking about how you're shy as it relates to this podcast. I'm not sure that I can 100% believe you on that either after I believe it was the end of the last episode where you said "I could do these all day".
Mirela Setkic:
Oh my gosh. You know, I say a lot of things, and a lot of them are not like smart things. So, yeah, I don't know I must have been feeling really good about that episode. You know what, I was probably feeling really good up until I said risk adverse and then I wanted to kick myself in the face for saying that, and here I was sitting and thinking "Wow, I went to college. I went to grad school, and I have definitely written risk aversion and all of that stuff like many, many times and then it comes this podcast and I said risk adverse".
Jake Braun:
You have twice as many degrees as I do.
Mirela Setkic:
I know. I don't even know what to say. Yeah, I think I'm shy, but ...
Jake Braun:
But not really.
Mirela Setkic:
It's kind of like peaks and valleys. Sometimes I'm shy, sometimes I'm not and I think I have learned how to control my shy and kind of keep it inside of me and not let other people know how nervous I am inside of me.
Jake Braun:
I guess maybe we should see if there's anything about risk or strategic risk or our story that we wanna get out there before we wrap up the episode. We ended up purchasing part of the business that we worked at before we left and we never thought that that would be possible. I don't know who else thinks oh, it might be possible for me to buy part of the company that I work for.
Mirela Setkic:
Maybe I should just kind of reflect a little bit and kind of speak to the person who is out there thinking about making a change in his or her life or speaking to myself before I made the change in my life and kind of say that we are all given, what, they say 100 years of life. If we're lucky we're going to live the entire 100 years, so I just kind of tell people like take yourself to your 99th birthday and then look back and what do you want those years before that to look like? If you want to have a really cool and interesting life story, then go for it. Make that next move. Even if you fail, I think you're still going to have a better story than if you just never did anything to risk failure or things like that. Failure or success, it's a good story, and life is about making stories and going on that journey.
I say go for it. If I could do it. Someone who moved to this country in the late '90's with nothing, just a bag. I didn't speak the language, is not a wealthy person, doesn't know any people in high places and things like that, and somehow I have managed to make it here and make it this far, I think that anyone really should feel confident in themselves and think that they're able to do that.
Jake Braun:
Yeah. I mean, things that seem impossible might not happen that often, but they'll never happen if you don't try, so you have to keep on trying things even if they seem difficult or impossible, especially if it's something that you really want. If it's something that you are thinking about and it seems important to you, give it a shot. Eventually you'll succeed. It's really all a numbers game.
Mirela Setkic:
I agree. If you don't try, nothing's gonna happen.
Jake Braun:
Anything else you'd like to share with the listeners before we wrap up this episode?
Mirela Setkic:
I don't know if I have anything. I'm nervous about this risk, so I just hope that they find a little something tiny or big in this that spoke to them and kind of made them think about something differently and gave them a positive outlook on whatever their situation is at the time. Also, if they would be so kind to share this with their friends and ask people to listen and I will be doing the same thing. I think that's all. Do you have anything?
Jake Braun:
Just to steal a line that you would say, since you didn't use it there, tell a friend to tell a friend to tell a friend.
Mirela Setkic:
That's right. Tell all your friends to tell all their friends to tell all their friends. We need help because we are brand new and so hopefully this is something that you guys want to you know, continue to listen to and that's all I have.
Jake Braun:
Well, I think that's a good place to wrap it up with then. This was our first real episode. Feel free to reach out to us if you have any questions or comments about anything we talked about today, or marketing in general. You can visit us on our website, KickinItWithKapok.com, or on social media. We're on Facebook, Instagram and Twitter as Kapok Marketing.
This has been Kickin' it with Kapok, brought to you by Kapok Marketing. Thanks for listening. We'll have something just as great for you next time.