Advice for Startups from Founders of ArcStone

19 years after launching ArcStone as a digital marketing agency, co-founders David and Lisa sat down with me to reflect on how it all began and the lessons they've learned since. Through the course of our interview, they point to the evolution of their ideas, advice for present-day entrepreneurs, and their ultimate goal in founding their company.

As a recent college grad, I've been curious about the difference between startups vs. more experienced businesses. My fascination with ArcStone's transition from one to the other, as well as with David and Lisa's lifestyle has only increased since my start here in July. I've admired how ArcStone balances innovation with experience, and moreover, appreciated Lisa and David's work-life balance (which, as you'll read in our interview, they refute). They began brewing their ideas when they were recent grads like myself, diverging from their initial career paths to tackle and cultivate their ideas for ArcStone.  

 1 ) How did the idea to launch a digital agency (in a time when computers were still a rarity) come about?

The first of many stories I took in was from David, as he recollected a fishing trip with his grandfather. Both his grandpa and his dad were entrepreneurs themselves, so it was "something that was modeled" as David grew up. On this specific trip, his grandpa encouraged him to "figure out a way to make money while you're fishing."

David actually graduated from college as a pre-med student. He was at a crossroads: was he to continue on to medical school or should he seek out a business venture? He knew the latter would provide a "fair amount of flexibility" in a way that medicine would not. Plus he had numerous startup ideas he had been working with.

Evidently, he left medicine behind, first pursuing a couple ideas that didn't turn into ArcStone, until he and Lisa found their niche. 

Meanwhile, Lisa was starting her career as a marketing manager at a company that later became their first client. She had graduated with a degree in Anthropology, and quickly became interested in applying her interest in human nature to marketing. At this company, she was the "young one" so they had her take on "the website stuff" since it was unfamiliar to them. David and Lisa both dug into the fairly unknown website world with a couple of design and developer friends, and came to the conclusion that this could turn into something. 

A major moment of realization hit Lisa as she asked herself why she was bothering working on website development as part of her first job, when she really wanted to work on it full-time with David and team.

Once they both decided to drop what they were doing and pursue a startup, I suspected there might have been some huge hesitations and self-doubt. However, the only fear came from Lisa's parents as they wanted a stable career and income for her, while both David and Lisa felt secure. 

David took on the application and software side of things, while Lisa has primarily focused on marketing strategy. 

2) What did the first few projects look like? How did you gain the trust of clients when you had limited experience? 

The way that they were able to instill first clients' confidence came about naturally. Companies were really curious about what websites could do, and since David and Lisa were willing to dive in to some of the unknown, people wanted their help. They had a handful of clients with which SEO and e-commerce really took off, helping them gain more traction.

Of course there were a few times where they mapped out their budget and there was definitely some pressure. They had to keep making sales in order to stay afloat, but in retrospect, they concluded it was a manageable level of stress. 

3) Do you feel like you've been able to maintain that startup energy, even over the course of 19 years of experience? How do you manage that?

One of the first points they both make is that the excitement comes naturally in this industry with so constant updates. They maintain the mentality of "what's coming next" in order to avoid complacency. They not only adapt to each change but constantly seek methods of innovation and growth - all with a clients' needs in mind. 

"We want to do good work and we want to grow something" David reflects. They "bak[e] in evolution to ArcStone." Which inherently keeps the energetic atmosphere in their office. 

4) How did you establish the work-life balance you have now? With the pressure of starting a business, did work take over your life?

This is a big question for me, as I start my career and ponder how to establish this balance myself. 

To David and Lisa - who as business owners taking care of their employees and clients, hold a lot of weight on their shoulders - this term doesn't resonate with them. Lisa started by explaining that "balance" makes it seem like there are two distinct pieces, whereas for them, work and life is all kind of integrated.

In their experience, work-life balance is "not something to hold out as an ideal," David asserts. "I think that you want to be integrating stuff that you like to do, and people that you like to do it with. That should just be part of your life so that you don't have to go and punch in the hours." They still find that on a Sunday night, they don't feel a dread that others talk about. 

David recognizes that this isn't always possible, but that it is part of what they sought out to do with ArcStone. They also account for those moments that work is not easy, but it's temporary, like Lisa reflects, it's "just like anything." 

This might have you assuming that they must then be workaholics, since they don't see work as having a distinct end. However, seeing as they have their own band, two kids, and are active members of their community, that just isn't the case. 

5) How would you advise current-day startups? Where should they even start?

To my surprise, David was upfront about how a major priority is money. His main point of advice: it's vital to get started with some financial backing or your ideas become very limited. His analogy is that without money, you "have no oxygen." Fortunately for them, David had equity in another startup that made a good sale. This allowed for some capital to get started with, which they paired with a solid credit line. 

Lisa paired this with a warning to be wary of investors. She points to the numerous entrepreneurs that have focused so much on the financial backing, that seeking investors became all they could do. If 80% of their time they are seeking out more money to work with, their original ideas and energy fall to the wayside. 

David noted that they made a choice to not take on many investors, even if that meant they sacrificed funds. They wanted their energy focused on serving their customers, rather than the numbers. 

Beyond their financial advice, they both urge startups to constantly go back and question their intention: "what do you want?" 

They encourage entrepreneurs to question their goals. Success? Prospering financially? Selling the company? Or maybe aligning with ArcStone's main intent: serving their customers. 

David went on to enlighten me with a parable: the "Story of the Mexican Fisherman". This character was the best fisherman in the land. One day a businessman comes by and advises this fisherman to launch a project, investing in more boats and a larger team so he could make more money. He describes how the fisherman could eventually sell the company and retire. But then the fisherman asks, "what do I do when I retire?" The man pauses and suggest the fisherman could relax and maybe fish...

6) How do you see the current state of startups? 

Much has changed since '97, when Google first established its domain name. David and Lisa are right in saying that the current state of startups is quite fruitful...

According to Time magazine,

"the numbers show we’re living through the biggest upswing in new companies, products, business deals, and jobs in the past twenty years." 

Highlighting Silicon Valley as one of a few examples, David and Lisa see our current economy as full of Italian Renaissance-like potential. With baby-boomers readily investing, funding seems easier to come by compared to back in '97. Lisa reflects that there are also so many more avenues (namely online) for the funds to be matched with the right startup idea.

They warn startups again, "be careful." With all this financing, David stated startups need to "knuckle down and actually make money" by serving customers, rather than pitching ideas to investors. entrepreneurs need to lead their team and drive their ideas forward if they want to find true success. 

7) What are your final thoughts regarding new and old businesses?

When I asked for final thoughts, they agreed upon a few main points. 

1) Know when an idea is working and when big changes need to be made: If the goal is to serve customers David advises, "don't kind of do something... Beware of 'kind of' successful." Lisa says to my surprise, "if you're going to fail, fail quickly and let it go." And then start over.

2) "Be clear about your intentions" stated David: And Lisa reiterated, constantly "reflect" on what your intentions are. Seek to "work with people who are doing great things." If not that, then "work with people who are working with people that are doing great things" because it's a "contagious effect."

3) Create a positive atmosphere: They each noted a few cases where they realized that their mood and outlook affected their employees' feelings. If you're an entrepreneur yourself, be aware of the impact you have on your people. 

There you have it. What was once just an idea grew into a company working with well-respected and influential companies (see examples here) as well as with talented, innovative and happy employees. 

For more on the current state of startups, take a look at Time's "Here's How Startups Actually Start Up," the Entrepreneur's "How to Start a Business" series, and Business Insider's "Top 25 Hottest Under-the-Radar Startups in America."