Learning The Lessons of Entrepreneurship
October 11, 2005 | 
20 Comments
As you might know I’ve got a new business in the making. We’re in the very early stages, but I’ve already learned more than I’d ever thought I know about getting a business up and running.
And I don’t know a damn thing yet.
Before we got started I did quite a bit of research. I talked to people who’d done something similar and asked for advice. I read books, articles and blog posts on the topics of small business, entrepreneurship, taxes, LLCs, LLPs, etc.
I tried to prepare myself as best I could. In the main, this stuff helped, but there is so much you just have to experience (and hopefully learn from) on your own.
Stealth Mode
I’ve heard quite a bit about start-ups and “stealth mode.” Most of what I’d read told me that it’s not a good idea. Frankly I think that really depends on what you’re doing, how ready you are to take your company to the public and a whole bunch of other factors.
We wanted to avoid seeming “closed” or “stealthy” about anything. We got our Web site up as quick as we could and tried to be very open in soliciting feedback and such. This worked out ok, but there have been many times in the last week where I’ve wished we launched our Web site with zero fanfare.
“Non-steath mode” is only as good as you are ready for it.
Bootstrapping
After the launch of our Web site last week I got a few inquiries about where we’d acquired funding and how we’d planned on growing, etc. The fact is, we didn’t borrow a cent. We figured that we could do it and we’d be in a good position for the future if we weren’t beholden to anyone.
The jury is still out on this one, but I can see some definite advantages to taking some kind of funding or borrowing money. Let’s just say that we’re all feeling a bit squeezed right now and it takes money to get the foundation of a business laid.
As well, bootstrapping adds added stress to an already stressful situation. I know we’ve had a few problems and issues that would have never come up had we a bit of money.
Community and Feedback
Most of the feedback we’ve been getting has been constructive. We openly solicited it and I’m pretty happy with most of what we got back. However, we did get our fair share of criticism and while most of it was helpful, I’m not sure we were ready to deal with it.
This goes back to the whole “stealth mode” idea. I think you really need to be ready before you let people in. If you’re not, you open yourself to some stress and work you might have been able to avoid.
In an article I had published today I talk about why business should embrace blogging and direct customer feedback. In general I think this is a good thing, but beware—sometimes you’ve got bigger fish to fry, and this kind of feedback loop can destroy your focus.
Virtual Teams
What can I say? I’ve been taught a valuable lesson in the last few weeks. I’ve always thought you could easily get a business up and running being mostly virtual. Turns out, in our case anyway, I was dead wrong. I think some people could do this and it may be worth trying out. But I’ve also found out that 10 minutes of “face time” can be worth hundreds of e-mails.
Small Teams
I wrote about this last week. The gist is that small teams can be hard. Especially when they’ve all got an equal stake in things.
Business Development
We got into this hoping we’d be able to do lots of good work. To do work, though, you’ve got to get work. Biz dev is quite a bit more work and it’s not always something us creative types are good at. For example; one thing I’ve noticed about the Blue Flavor team is that we’re sometimes too excited about potential projects. We want to help everyone that comes through the door.
The enthusiasm is great, but we’ve got to be selective, and when you’ve got passionate clients talking about cool projects, that’s not easy to do.
As well, the volume of RFPs and contacts we’ve had so far has been a bit much to deal with. Especially when we’re also pulling in work. For example, I’m billing over half my time this week, which doesn’t leave a bunch for sales calls, meetings and e-mail follow-ups. It’s a good issue to have, but it’s still something we’re learning how to deal with.
Workload and Growth
We’re a small business who has plans to stay small. As of right now we’ve got no real plans for growth but we’re learning that we might have to put some serious thought into it in order to best service our clients. For example, we can’t spend 20 hours a week on biz dev and expect to get a bunch of work done, and we can’t bill 40 hours a week and expect to keep bringing clients in.
Finding a happy medium will be hard work in of itself and we may have to pull in resources. We want to be smart about that.
Making Money
I don’t think anyone of us is really doing this to make a bunch of money. For me it was more about control of my time and working on projects I really feel I am contributing to the success of. However, we do have families and mortgages and bills to pay.
Trying to find out what to charge for our services has been a huge challenge. The thing is, we love what we do, so we’ll do that regardless. BUT we also know that our skills and expertise have value and we want to make what’s fair.
The kind of work we do is very hard to valuate. How much, for example, is a Web site worth? Is it $5,000? Is it $37,000? Is it $64,000? I think the answer really depends. For a small restaurant that just needs a few static pages, the answer might be lower than $5,000. But then again, it might be more. How important is a Web site to your business. How important is that customer experience? How quickly do you need it done?
It would be great to have some kind of complicated algorithm that would tell us how much to charge for our services, but we’ve just got to muddle through as best we can. What I can tell you is that we’re trying to be inexpensive enough to be accessible and still make a decent wage.
We’ve tried to create special services that would allow people to engage us quickly and easily with the hope that that will lead to more work. So far those things have been well received, we’ve yet to determine if they’ll pan out and be worth it in the long run.
Business is Hard Work, But Kind of Fun
As a creative I’ve never been to keen on “the business stuff.” But then again, I wasn’t working for myself. Working for yourself, when you’ve got a serious stake in how things pan out, is incredibly exciting and pretty darn scary at the same time. It’s also hard work and a whole new set of lessons and skills you’ve got to learn.
But don’t take it from me. You’ve got to try it yourself to get a real idea what it’s like. ;0)
Filed under: Life
Keyword Tags: business entrepreneurship
Comments
1. Stephen Collins said:
I think that Designer’s Talk went a bit overboard and out of bounds for alot of their criticisms.
if your clients keep coming back and continue to pay what you ask, then your obviously doing good work and not charging too much.
Good Luck!
Posted on October 11, 2005 08:38 AM | #
2. Scrivs said:
Why would funding or stealth mode even be considered if all you are doing is starting a design firm? Just wondering because I feel I am missing something here.
Posted on October 11, 2005 09:09 AM | #
3. Paul Boag said:
About three years ago I did the same as you. We set up our own business, all working remotely and without any external funding. It was tough but we are still going and have grown from 3 founding members to 9 people. We still work remotely and it still works (just about). If you fancy speaking to another business owner in the same boat as you (although admittedly in the uk) then skype me (boagworld.com). Ill even tell you how much we charge :)
Posted on October 11, 2005 09:13 AM | #
4. Lea said:
Regarding the criticism… I think one of the major problems with this general community is that too many like-people hang out and meet. People always smiling and nodding doesn’t help you grow OR help you defend any of your practices if it got to that point.
You don’t have to agree with some people, but understanding goes long way. That way, it’s not so much of a huge shock when people unused to minimal and UX design, start biting. Some people are less professional and super rude. It’s a big, wide world out there and understanding your critics as well as your fans is crucial. That helps you filter out the good criticism from the ridiculous hate-mongering.
Posted on October 11, 2005 09:30 AM | #
5. Rogerio said:
I started my company in June 2000. No Funding, some long distance work (mainly with providers [hosting, domains, etc.]). Since it’s still only me I have grown at my own pace. Sometimes I get swamped with work but mostly I’m able to finish it most by myself without outsourcing. It can be hard and sometimes unsettling, but it definatelly beats working for some big cold company.
Stealth mode or no stealth mode there are some details you have to get worked out about corporate information (values, objectives, mission, vision and politics). This will help you resolve conflicts you’ll have in the future. When in doubt about any decision, go back to your original documents. Try not to modify these often and specially not when resolving a conflict. This has helped me loads at an internal level.
r.
Posted on October 11, 2005 09:59 AM | #
6. beth said:
The Designer’s Talk board is out of control, and I found their comments distressing. It would appear these are people who don’t have much professional experience beyond the occasional freelance project, and have no idea the cost of something mid to large scale. These are the people that perpetuate the idea of cheap, hosted by geocities, bevel and emboss nav, sites.
There’s nothing unfair about your pricing, and there’s nothing wrong with telling your clients you get what you pay for. Anyhow, don’t let people who can’t offer the constructive side of criticism discourage you.
Posted on October 11, 2005 10:03 AM | #
7. Keith said:
Scrivs – Well, it wouldn’t in some case I suppose. But a design company has some of the same issues. Maybe not as far as keeping ideas under wraps, but I’m relating things to my own situation.
There are differences for sure…
For us, we were deluged with much more feedback than we expected and it might have made sense to keep things under wraps for a bit longer. Not exactly “stealth” in the sense you’re thinking of it, but you know what I mean? As far as funding (or borrowing money) it could have really helped in lots of ways. It’s what most businesses do after all.
Paul – It’s good to hear that the virtual office is working. As soon as I’ve got time I’d love to talk to you about that.
Lea – I don’t mind criticism. I actually think it’s helpful. The problem with the community is they tend to get personal at times, which is frankly a bunch of bullshit. If someone wants to be constructive, please chime in.
But, here’s the deal. Between this site, Lifehacker, to-done and my business I’ve been privvy to some pretty hard core feedback from the “community”. I’m not a fighting man, but some of what I’ve seen come across my e-mail would get someone punched if it was said to my face. It’s pretty easy to blow it off – that Designer’s talk stuff gave me a good laugh, but there are times when people take it a bit too far.
Rogerio – Good advice.
Beth – Oh, I know. I posted that link mostly because I thought y’all would get a laugh out of it. I don’t care what any of those people think.
Posted on October 11, 2005 10:23 AM | #
8. Lea said:
Keith – I agree. That’s why I mentioned That filtering out the good criticism from the ridiculous hate-mongering. I still can’t believe how unnecessarily rude some people can get online. But that’s how the chips fall sometimes when your business falls on the web. It’s amazing that we haven’t gone ape-shit on some people.. ;-)
Posted on October 11, 2005 11:03 AM | #
9. Matt May said:
I’m a little depressed that faceless designers in the UK think I’m ugly and weak. But I’m relying in my overconfidence in my design abilities to get me through it.
;)
Posted on October 11, 2005 11:20 AM | #
10. Keith said:
Lea – It’s been a long time since I heard “ape-shit” used in an appropriate manner. Thanks for that.
Matt – LOL. Yeah, I loved the “never kissed a girl” thing too. Had to show the wife that one.
Posted on October 11, 2005 11:32 AM | #
11. DaveMo said:
Back in the early mid-Eighties a friend and I started a graphic design and screen printing shop working out of his basement. We decided to take the leap and he cashed in his retirement funds and I used some money from an inheritance to buy everything we needed up front – equipment, a store front, etc. Our reasoning – If we owned it we didn’t owe anyone else, and all the more for us, eh Gromit?
This served us pretty well until the first time we needed funds beyond what the company brought in to try to expand or modernize a few years down the road. Then it was a whole other situation with lenders: “I’m sorry, you don’t have a credit history”. And this in spite of the fact that we were pretty well know in the community and had done lots of recognized work for local businesses and organizations and were fairly successful. (I don’t think it helped that the local banks considered us a printing company and didn’t have a clue what graphic design was.)
We floundered around for a few years borrowing money from relatives and such trying to get ahead until we burned out and sold the company so we could just get on with our lives.
But initially, it was a great leap of faith at the time and quite fun and exhilarating. Other than the fact that I was the 2nd worst boss I’ve ever had, those first several years were some of the most rewarding and productive in my entire life and I will never regret taking that self-employed plunge. However, if I were to do it again now I would try to get some sort of funding to avoid the “No Credit History” roadblock hassles, and keep the bootstrapping to a minimum.
Good luck to you all at Blue Flavor!
Posted on October 11, 2005 12:04 PM | #
12. joshua strebel said:
You know it never ends. We are entering into our 3rd year and the lessons learned are only getting better. Each day brings new challenges. At times I hate our clients, for keeping us busy with their seemingly nonsensical requests (the tyranny of client work), other times I love them for the same reasons. And I depend on them. They offer the opportunity to salve new problems and push our creative mindset.
To me as to many who have done it, Entrepreneurship is a no brainer. I only wish I did not waste all that time in college. It taught me to only be a good employee. We all need employee’s and a great employee is an asset. But an employee mentality in the ceo’s office is like letting the insane run the asylum. It takes a special person to risk it all and take the plunge.
As for managing, I remember everything I hated about working for people, and do the opposite. I would like to think those that work for me, work with me, and feel they matter. Moral is high and productions is great. By making those that work with you feel part of the bigger picture; they treat it as their own business.
Here is to everyone’s success!
Posted on October 11, 2005 12:26 PM | #
13. Kevin O'Keefe said:
Good post Keith, one of which all of us can identify.
I know people are coming to you with read this or read that but having been through a couple start ups know I can vouch for Guy Kawasaki’s new (last year) book ‘The Art of the Start.’
Not sure what others will glean, but having gone through a dotcom era start up, Guy’s book is full of what seems like common sense today. His principals and rules are perfect for businesses that understand it is all about getting people to take money out of their pockets and put it into yours as soon as possible - not for junk but worthwhile work that you and your customers believe in.
– Kevin
Posted on October 11, 2005 02:20 PM | #
14. Andrew said:
Yeah I had to wonder about that “stealth mode” point, too. If you’re not developing a product or idea that your competitors might steal, “stealth mode” is a bad mistake. For a service company, you want the absolute opposite of stealth mode from day one forever afterwards.
If you feel like you need more time before the calls start coming in, then you’re not ready to launch the business yet.
Posted on October 11, 2005 03:53 PM | #
15. Tommy said:
For the past two plus years I’ve worked for a virtual company. In that time we’ve grown from 9 to 27 employees. Some days it is wonderful, other days not so much. But I guess that isn’t that much different then going to a central office everyday.
I could write for hours about the issues we face, w/ communications being #1. Drop me a note if you want to chat about it. I would love to hear what you are thinking.
Posted on October 13, 2005 08:26 AM | #
16. pat said:
So Designer’s Talk perpetuates a “geocities bevel & emboss” culture does it Beth?
Some sites our amaturish and ill-talented members are involved in:
http://www.sumodesign.co.uk/
http://www.onetwosan.com/
http://csszengarden.com/?cssfile=/139/139.css
http://www.adamdras.com/
Posted on October 13, 2005 10:05 AM | #
17. PJ Hyett said:
If I could make a quick observation on your site? The ads separating the initial text with the body of your post, combined with the fact that your headers are the same color as the name of the comments, I’ve twice now thought that the body of your post were comments.
Posted on October 13, 2005 10:14 AM | #
18. Robyn said:
Thanks for sharing the tips and lessons of Entrepreneurship. This is really great.
Posted on October 15, 2005 02:16 AM | #
19. pgo said:
As a member of DesignersTalk, I’d simply like to say that there’s no reason to bundle people in and insult their talents because you (a few commenters in particular) might not like what they have to say.
I and other members of DT defended the folks at BlueFlavor and now I feel the need to defend those who criticized them and those who are more moderate.
It’s completely unfair to suggest that the members of the forum “perpetuate the idea of cheap, hosted by geocities, bevel and emboss nav, sites” simply because you might not like what they have to say. There are a lot of very professional people on DesignersTalk and that statement is insulting to everyone.
And, yes, I know some people on DT said some nasty things, but that’s no reason to fuel the fire with nastiness in return.
Pot calling the kettle black.
It’s like Lea said, “I still can’t believe how unnecessarily rude some people can get online.”
@Keith - Best of luck with the new business - even if you don’t care what I think. ;-)
Posted on October 15, 2005 08:15 PM | #
20. beth said:
Wow, the Designer’s Talk board has decided to flame me now as well. Very very professional.
Posted on October 23, 2005 08:51 AM | #
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