The Frugality of the Entrepreneur Mind

My father, Chichi, was a champion of Yugoslavia in weightlifting. Pound for pound, he was the strongest man I've ever met — and he never did any illegal drugs. Because I was a soccer player, I never did any weightlifting in my youth because I believed it would alter my playing style. Despite not being a weightlifter, genetics played a part when it comes to “moving stuff.” For whatever reason, I have the ability to move extremely heavy furniture — even my father, when he was alive, would get amused watching me move things. 

I was never as strong as my father, but I'm telling you, I can move heavy furniture. There is a drawback to this type of supernatural moving strength. Unfortunately for me, in my family, I'm the guy everyone calls when they need to move furniture around the house — or move their entire house.

So after my dad died, my mom called me to move some furniture out of the house. Our family used to live on a farm, and they don’t call movers. They do it themselves or ask family members to help.

"Sinko (son in Serbian), can you come over and take some of the furniture out?” Baba[1] (grandmother in Serbian) asked.

“Baba, I’m busy. Can’t you get my brother to do it?”

“Oh, he can’t move it. It’s too heavy. But I can have him help you,” she offered.

“I don’t have time to coordinate his schedule with mine, so I’ll just come by and do it myself,” I said.

“Are you sure? It’s heavy."

“Baba, it’s me. I will do it myself,” I said, somewhat insulted because she knows I can do it myself.

I hung up the phone and went back to work on the launch of one the startups. Baba can afford to have professional movers come and move it, but why should she when I can come and do it for free? She is a frugal Baba for sure.

When it comes to moving, my name has become legendary. As good as I am with my parking magic, I may be even better when it comes to moving everything in your house from one location to another quickly.

When it comes to moving, at one point it got pretty ridiculous. My brother would call me often to help his friends move. I did it because my brother asked me to do it but, after doing it a few times, I retired from the moving business when it comes to anyone outside our family.

So I found the time a few days later to help my 80-year old mother move the furniture. I borrowed her truck and loaded it up with furniture galore. It was some heavy stuff. The truck tires were getting low. And while driving the furniture to another location, I noticed it was low on gas. I can’t stand driving with gas close to empty, so I patiently waited to find the right gas station — a gas station with the lowest price.

As legendary as I am in being a parking magic aficionado and supernatural furniture mover, I am just as good or even better at remembering the location of a gas station with the lowest price in town.

Finding gas at the absolutely lowest price is a pet peeve of mine. I have always been like that. I learned it from my uncle and my father — but especially from my uncle. I’ll never forget the time, a few months after we moved to the U.S. from Yugoslavia, my uncle got into an argument with a gas station owner about the price of gas. My uncle figured out that the owner had priced the gas inappropriately and demanded his quarter back. After a little bit of arguing, the shady gas station owner happily paid him his quarter because he knew my uncle was in the right. We never went back to that gas station again. 

Today I can literally tell you where the cheapest gas stations are in Dallas. I have a habit of taking mental pictures of gas prices and recording them for future gas purchases. I think by now, I have about 50 gas stations compartmentalized in my entrepreneur brain with the various price points. 

I pulled into a gas station that I know as one of the cheaper ones, because the cheapest gas station was out of my way. Just as I was filling up the gas tank, I looked right across the street and noticed that Shell’s price was at $3.15 9/10 per gallon. I was filling mine up at $3.10 9/10 per gallon. There were cars at both of the stations. I just shook my head in disbelief and disgust. It never ceases to amaze me why people fill up gas at higher priced stations. In fact, on my way to this gas station, I found another one selling gas at $3.29 9/10 per gallon — which I thought was criminal. I thought about calling the cops on them.

I'm not going to get into the retail theory of how important location, location and location is to any gas station or retail store. Or how it a makes a difference in the price differential — and why one gas station can gauge the customer while another can’t. Nor will I discuss my theory that “gas is gas” when it is sold by any major oil company. What I will talk about is the frugality of the entrepreneur mind. You might think it is silly for me to save a nickel per gallon of gas but I don’t think it’s silly at all. I think it’s frugal and smart.

Nothing irritated me more as a venture capitalist than seeing one of my portfolio companies spend unnecessary money because they didn’t have a frugal mind. It’s a pet peeve of mine. Why spend more money on something that you can get right around the corner at a lower price?

I put in 18 gallons and saved ($0.05) X (18) = $0.90 just by going across the street. When you have this type of frugality in your personal life, it translates to your entrepreneur life too. When you are frugal at work, your employees become more frugal too. Why count pennies when you can count dollars instead? (Well, almost a dollar in this particular case.)

If you’re starting or growing your business, every penny, every dollar and every thousand dollars counts. The less you spend, the more you make down the road. The less you spend, the less investment dollars you'll need to take. The less investment dollars you take, the less diluted you get. Do you see my simple entrepreneur math? I like it. Do you?

When I see startups raise millions of dollars and start blowing the money on unnecessary things, it irritates the hell out of me. Especially when I know spending more is not necessary to the success of the startup or growing company. 

The simplest thing you can train your entrepreneur mind and your employees’ minds to do is to ask these simple frugal questions:

(Q1) Do I really need to buy this?

(Q2) Do I really need to spend money on this ____________, to further improve the quality of __________? (Fill in the blanks.)

(Q3) Do I really need to get on a plane and see this person? Can I do it over Skype or phone? 

(Q4) Do I really need to spend a thousand dollars on this dinner to close this deal?

(Q5) Do I need to spend money to buy time in my development cycle? 

Look — it’s not just about being frugal. Sometimes spending extra money to buy development time is worth it, if it will help you penetrate the markets quicker. But even when you’re buying time by spending more money, you can still approach it from a frugal-minded perspective. There is nothing wrong in being a frugal entrepreneur. But make sure that you’re not counting pennies and losing dollars, Benjamins or thousands. 

Henry Ford, even after he became a billionaire, would walk the halls after work and turn of the lights to save money and save energy for his company. If Henry Ford, a billionaire did it, why can’t you and I do it too? 

How’s your frugal entrepreneur mind doing today? Let me know by commenting below.

© 2013 entrepreneurdex 

Tweetable Quotes:

When you are frugal at work, your employees become more frugal too. [tweet this quote]

As a VC, I hate seeing seeing entrepreneur spend unnecessary money and not being frugal. [tweet this quote]

Think: Do I really need to spend money on X to further improve the quality of X? Be frugal. [tweet this quote]

How’s your frugal entrepreneur mind doing today? [tweet this quote]