Cars are changing. Whether hybrid or electric, they’re becoming more environmentally friendly. But many car enthusiasts lament this change because it’s becoming less enjoyable to drive. People want to return to the time of “analog” cars that make you feel at one with the road. This is the perfect time to capitalize on that nostalgia.
And that’s exactly what Paul Ragsdale did. “I have been passionate about cars all my life, but I did something else entirely for a career. I worked in government science and technology for 18 years. Through it all, I always loved cars and continued to buy and sell them. Then I decided that there was a car I wanted, but it didn’t exist.”
“I wanted to experience what it was like to drive an old-school, early 90s Formula 1 car. These cars revved to 14,500 RPM, made 750 horsepower, and weighed just 1,300 pounds. I conducted an exhaustive search of both road cars and track-only cars for anything that could provide even the remotest semblance of this experience and nothing came up. I determined I would just have to build it myself,” he says.
After consulting engineers and auto industry regulation experts, Paul realized that building the car of his dreams was a real possibility. He also found a lot more people out there who wanted a car like that too. In 2020, Paul started RSC Motors, Inc. to develop this new car.
But there was one big problem. He says, “In the early days of the pandemic, everything shut down. So my grand plan of meeting people at events and selling stock from our C corporation all just came crumbling down.”
How were they going to make money in the meantime? Paul says, “I was brainstorming how we could generate income to support our research and development for the sports car. I came up with the idea to help people buy cars as a service. Since I routinely helped family and friends buy cars, I knew it was something I could do.” That’s how The Starting Line began.
The Starting Line buys and sells specialty cars, including road cars and racing cars, and provides consignment services. They spun that business off as a separate Limited Liability Company. The Starting Line just hit the $1.3 million mark in sales and is aiming to make $1.5 million in their first full year of operation.
It also spun off a new C Corporation, One Less, Inc., solely focused on providing consumers a clear and fair car buying experience. This personal auto shopping service incubated within The Starting Line to find product-market fit and Paul’s now preparing to scale the service nationally.
Off to the Races
“My wife and I co-founded the company, and she’s also a board member of the parent company. The Starting Line consists of a team of three at the moment. We have a General Manager and an Assistant Manager running the day-to-day and I am the Managing Partner,” Paul says.
The Starting Line got started with an angel investor who provided them with a short-term loan. They used that money to buy the first cars and equipment. “We got the influx of cash to start buying our inventory which allowed us to get access to lines of credit. In the automotive industry, you need something called a floor plan credit line,” Paul says.
He explains that most dealerships don’t actually own all the cars they have on the floor. Those cars are funded by a specific type of credit line, where the car itself secures the line. In other words, you buy a car with the line of credit and then the floor plan company holds the title until you sell the car and are able to pay them. The higher the credit line, the more cars they can buy and the more monthly revenue they can generate.
“Right out of the gate, at the beginning of 2021, we found an amazing car. It was a Porsche 911 GT3 Touring model that car enthusiasts were really interested in. That one sale allowed me to leave my government job earlier than we thought was going to be possible. And that one sale paved the way to the company’s profitability. Within six months, we were profitable and we just hit $1.3 million in sales. The Starting Line is not only profitable, but it also pays for itself, its staff, and its infrastructure,” Paul says.
Building a Car-Minded Community
There are two big reasons why Paul started his own company. “Number one, I was looking for more flexibility. I’m a new dad and wanted to be able to spend more time with my family. My previous job was a strict nine to six, and even though I definitely work more hours now, I can choose when to work them. So that means I can do daycare drop-off and things like that. That has been a real blessing.”
“The second reason is that I am a huge extrovert and I love meeting people and building relationships. At The Starting Line, we don’t see any of our individual sales as a transaction. It’s the beginning of what we hope is a relationship, even if the person never buys from us again. We’re creating a network of like-minded car enthusiasts.”
Paul is hoping to do the same thing with their sports car. If everything goes according to plan, they will be launching their new car in the summer of 2023. “The Starting Line is generating income for us and RSC Motors, but we also needed a distribution channel in the future for the car we are developing. Running The Starting Line is giving us the ability to test out things that we are going to need later on, like importing cars because some of our major components are going to be coming from overseas.”
For the car fanatics reading this: The sports car will rev up to 13,000 RPM, the highest-revving production engine in history, and output more than 400 horsepower. Paul says, “The car itself is an all-carbon-fiber monocoque with a mid-engine and rear drive that is going to weigh about 2000 pounds, wet – compared to the 3000-plus pounds of the Porsche we sold.”
“It’s going to be one of the lightest and most visceral cars that you can drive. It will have one of the best power-to-weight ratios on the market at about 5:1, but it’s hard to describe the impact of weight reduction on vehicle dynamics and handling. It will be like piloting the old-school Formula 1 cars.”
The ultra-sophisticated F1 (and other motorsport-derived) engine design and electronic management means this extraordinarily high revver will also have sufficient torque lower in the rev range for tractability when driving around town. This means the car isn’t just for driving around the race track once, it can be used on public roads as well.
Uncovering the Best Marketing Channels
The Starting Line relies on event-based marketing as the core of its outreach strategy. Paul says, “We specifically wanted to reach a different demographic than many enthusiast car companies with our family-friendly events. One of the things I want to promote is a family environment and a fun place for education. That’s how we came up with Cars and Canines. People bring their cool cars and cool dogs.”
“We use these events as a way to connect with individuals and build brand awareness. We’re a woman-owned small business and given my academic training, STEM access is a personal passion. So we want women and girls especially to feel welcome to engage in what has historically been such a male-dominated industry.”
They explored several advertising channels and discovered that a lot of them didn’t work. Paul says, “One thing that absolutely does work is websites like CarGurus and AutoTrader. Consumers don’t usually go to a particular dealership, instead they are looking for a particular car. They’re going to try to find the best vehicle for them, and the best value for their money, and we can offer that.”
The Starting Line has also put a lot of effort into generating interesting and educational content, like blogs, photos, and videos, that speak to car enthusiasts. “We have an expert car guest blogger who writes weekly articles and takes fantastic photos of our cars and events,” he says.
“We also give every buyer a VIP Track Experience at the VIRginia International Raceway, hosted by RSC Motors. We started doing it because it seemed fun and a good way to connect with people, but it’s also proven to be a great marketing channel to promote RSC’s track car services and driver coaching.”
The Obstacles of a Capital-Intensive Business
While they are inching closer to their future goals, Paul shares that the day-to-day can be tough at The Starting Line. He says, “I didn’t even know the term bootstrapping at the time. I come from an entirely different community and never had plans to be a founder. I absolutely love it, but it is every bit as hard as everybody says.”
The challenge in the car industry is that it’s capital intensive, meaning you need to spend more money to make more money. “Right now, we are dealing with a $60,000 deficit because of a couple of funky things having to do with the way the payments get made at car auctions. Having a capital reserve is critically important for our business, so it’s something we’re working to rebuild. But when you look at it by industry standards, we’re excelling,” Paul says.
The Starting Line is working on smoothing out the peaks and valleys of buying and selling cars. Paul says, “We don’t want to have a quarter-of-a-million-dollar car sitting there for three months before it gets sold. The solution is to acquire new customers, get previous customers to come back, and drive leads for track support and driver coaching.”
So what makes The Starting Line more attractive than other dealerships? “The car business in general is rampant with deception and fraud. Even the best dealerships make most of their money in the back office when they sell you extended warranties, added features, loans at higher interest rates, and so on. We don’t do any of that,” Paul says. “No one wants to go to a car dealership where you get ripped off by a smooth-talking salesperson.”
“At The Starting Line, we’re fully transparent about pricing and don’t try to upsell you on things you don’t need. We have worked very hard to build a level of trust with our customers. One of the key milestones towards building that reputation was getting accredited by the Better Business Bureau. Our core value as a company is transparency and this was the most effective way we could demonstrate the ethical practices that we follow,” he says.
Paul Ragsdale adapted his business plan during the height of the pandemic and identified different paths to success, ensuring that his dreams would still be on track to becoming a reality. Now, this founder is running multiple businesses that are all working towards the same goal: changing the car buying – and car driving – experience for the better.
Want to share your bootstrapping story with the world? Enter your details in this Typeform and we’ll be in touch.
