Show Notes
Transcript
[00:00] Mike: In this episode of “Start-ups For The Rest of Us,” Rob and I are going to be talking about the ten advantages of “start small, stay small.” This is “Start-ups for the Rest of Us,” episode 219.
[00:16] Welcome to “Start-ups For The Rest of Us”, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products. Whether you’ve built you’re first product, or you’re just thinking about it. I’m Mike.
[00:24] Rob: And I’m Rob.
[00:25] Mike: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
[00:28] Rob: Well, I wrapped up my two-day retreat and I came to a whole slew of conclusions. I had a lot of questions this year that I was mulling through. One of the big ones that came to me was that writing a book in 2015 is contingent on a few things, so I would like to write another book, or update my previous book, but there’s several events that need to happen, and I need to get some things off my plate first, and the more I looked into it, the more I realized I have too much going on in 2015, as it stands now, if I want to write a book.
[01:00] So there’s a couple of things I specifically outlined that I need to get done and, you know, like I said, off my plate, but that could take six months. It could take 12 months to do that. So I want to kind of revise my 2015 goals that I mentioned a couple of weeks ago, but overall the retreat was great. It kind of sets my mind off on the right foot for starting the new year, and I came back and already have made some changes to my work schedule.
[01:26] I’m doing a little more working from home than I usually do because I realized that I missed that, after working from home for a decade, and getting an office. I’ve kind of worked in the office all of the time, and now I’ve realized I’m getting a little stagnant in there, after doing it for a year-and-a-half.
[01:38] So just realizing some things that you don’t realize if you’re going into work every day. That’s why I do this, and so I have seven or eight pages of notes, and from there, I transcribed them into kind of this key list of bulleted take-aways, and I’m working to implement those, as I get back to work.
[01:54] Mike: You’re right, and I mean, that retreat is a good idea. I’d like to do another retreat in the very near future. I know I did one, but I feel like I need another one now, just because I feel like I started to recognize that I’ve actually been pretty burned out the past several months, but things have started to occur to me lately, and I really feel like I need to take another step back and just take a look at things, and one of the things that I’ve been looking at that’s been helping me out a little bit more has been taking a hard look at what my goals are for this coming year, and mapping them out, month by month.
[02:23] So instead of just having these broad goals where like this is what I’d ultimately want to achieve, actually laying the framework for all of those, like month by month, and basically chaining everything together as opposed to “shooting from the hip” every other week, where like I don’t necessarily have this – I have a longer term plan in place, but I’m not as deliberate about it, and I think that that’s what has come to mind a little bit more lately. It’s just being much more deliberate about what my path, moving forward, is as opposed to just, you know, this is my conceptual goal and I will get there whenever I get there.
[02:53] Rob: Yes, I really like the idea of mapping it out, month by month, if at all possible. The best kind of retreat mappings that I had were broken to the month. Sometimes, I do it by quarter, and that’s not as helpful, but sometimes I just find that I am not able to put it down, month to month, and so I think that’s really good.
[03:11] In addition, I also think that the ideal retreat schedule is to do it twice a year. After about six months, it’s typically when I feel like I should do another one, but I don’t always do it. Once a year is not quite enough.
[03:23] Mike: Yes, I mean, some of the other things that I’ve been looking at when I’m kind of mapping these things out, month by month, is that it actually helps me kind of focus and point at the things that I shouldn’t be doing. I basically killed Moon River Consulting, and officially closed that done, and everything, but you know I definitely think that I can do more, and by more, I mean doing less, depending on how you look at it.
[03:43] Because, you know, certain things I don’t need to be doing, or I shouldn’t be doing, and I shouldn’t be spending or wasting any of my time on it, and I think that identifying those along the way is going to be helpful for dictating what it is that I choose to do, versus what I don’t.
[03:55] Rob: Right, and you know that comes back to I originally started doing personal retreats because my wife Sherry did them, and she would always ask the question, and it’s this St. Ignatius meditation which ways, “What gave me life in the past,” time-frame, you know, one week, month or year in this case, and what sucked life from me over that same time-frame? And that’s the question she always started with.
[04:19] I didn’t use to, but nowadays, that is what I start with. So my first two pages of notes in my little notebook are, “What gave me life this year? What stole from me?” and that was both personal stuff, and so it was spending time with kids and doing things, and then professionally what really ignited my passions and what am I tired of doing? And what was really a drag on me, what do I need to, as you said, stop doing in 2015?
[04:41] Mike: I think the first couple of questions on my personal retreat were exactly the same, and so you know what is adding to my personal life and detracting from it? And the same thing for the professional life.
[04:50] For me, at least, that kind of dictated the rest of the mental conversation that I was having with myself during my personal retreat.
[04:55] Rob: Yes, that’s why I do it. I mean, Sherry and I actually outlined and recorded a whole podcast episode on personal retreats and the structure that we use and stuff, and that will be coming out when we get on the stick and get the new podcast launched.
[05:10] Mike: Very cool. Well, we finally have the dates for MicroConf confirmed. So that will be April 13th and 14th. That’s a Monday and Tuesday. That will be at the Tropicana Casino and Hotel in Las Vegas. So looking forward to that. Finally got all the paperwork straightened out, and that’s a huge stress relief to not have to worry about where it’s going to be, or you know whether or not we’re going to be able to have it there, or –
[05:31] Rob: I was concerned that we weren’t going to have a venue and we were going to be hosting it at your house or something.
[05:34] Mike: So what else is going on with you?
[05:36] Rob: Well, so per your suggestion, last week on the podcast, I went ahead and emailed everyone who had cancelled their trials during the last couple weeks of December, and like the very early part of January, because of the holidays. I don’t have any results on that yet. I just emailed them yesterday afternoon, and so it’s been less than 24 hours, but it was kind of fun to do.
[05:55] What was neat was, I could go into Drip and pretty easily just get those people out. You know, because I have “events” and “trial started,” and I have tags that they’ve cancelled, and so it was just kind of a drag and drop, drag and drop, and then draft the email and send it.
[06:09] It was fun. I hope it, you know, gets at least a few people who – it seems like people had written in and just said, “Oh, I just ran out of time during the holidays,” and my hope is to at least get a few of those folks back in and trying the app out.
[06:21] What’s going on with you?
[06:22] Mike: I’m recovering from a hard drive failure, actually.
[06:25] Rob: That’s brutal. Do you have backups?
[06:26] Mike: I do have backups, but what happened was, I had all the data in a RAID mirror, so if a drive went bad, it wouldn’t be a big deal. I could just order a new one, and it’d be there in a couple of days, but the problem is that the drive that failed, it was in a mirror configuration, and for some reason, whatever reason, that had stopped working like 18 months ago, so only the drive that was – that actually had the latest data on it, died.
[06:53] So then when it came back online, because I plugged the other one in, and said, “Well, OK, I’ve got most of my data here,” you know, kind of what’s going on, and that’s when I realized that things were wrong on it, and so Dropbox started synching and deleting all my files because it had old – just basically a snapshot from 18 months ago, and then the same thing with Sugarsync and like it took me like a full day to kind of recover from that, and then I’ve still got backups that are downloading from the cloud. So it’s been kind of a nightmare.
[07:19] Rob: That sucks, uh, yes, even with all the new-fangled backup software. I mean, we’re in better shape now with Dropbox and CrashPlan, or whoever you use, than we used to be, but it still sucks when you lose a hard drive.
[07:32] Mike: Right, there’s no way to overcome the time that it takes to download hundreds of gigs over the internet, and I’ve got a fast internet connection, but it doesn’t seem to matter because it is limited much more by their data centers and how quickly they can serve up the data.
[07:46] Rob: Yes, I know that there are a couple of backup services where, if you do have a bunch, you can pay them and they’ll like overnight you a USB hard drive, but it all depends on if that’s worth it to you, you know?
[07:56] Mike: Yes, that’s an option for me, but I have a lot of the data because of that data hasn’t changed on there, and then plus there was so much stuff on there, that I had it all in Dropbox or Sugarsync. So I touched base with Dropbox and just said, “Hey, I need you to revert this back to his snapshot in time,” and they said, “OK, no problem,” and they did it, and everything’s fine.
[08:13] So all of those things synched up, just – you know, perfectly OK, and all my data and everything is there. Is it really worth having – paying $200 to have them ship me the entire drive? Or do I just download things kind of as I need them? It’s like, “OK, I recognize there’s a few directories here and there that are not on this old drive. I’ll just download them.”
[08:32] Sure, it will take me an extra couple of days, but it’s not critical that I have that data, and even if I lose it, it’s not that big of a deal anyway.
[08:38] Rob: Yes, I would be in the same boat as you.
[08:40] Mike: So, just before we get into this, we have a quick listener question from Maurice Knopp , and he says, “Do we …” and I’m paraphrasing this, but he says, “Do we resist the urge to code, or sometimes do we do it for fun?”
[08:52] So he had a somewhat lengthy email, but I wanted to kind of answer that for him. I don’t know about you, but I tend to dig in, but there are certain times where I dig in just to learn something new or where, if I’m waiting for someone to do something, and I know that it’s not going to take very long for me to do, but it’s kind of time-sensitive, I’ll just do it myself.
[09:10] I do enjoy going in there, but there’s also times where I will go in there and I’ll see stuff that I don’t like, and then I have to resist the urge to start going and fixing a bunch of stuff. It’s like I came in here for one very specific reason, do the stuff that I came in here to do, and then get out. It’s not worth my going in there and “correcting a bunch of things” that are really more personal preference than anything else.
[09:30] So I have done those types of things, but I try not to get too heavily involved in the code these days.
[09:37] Rob: Right, and his original question was basically like he started as a developer and now he’s a manager, and he was asking if – he said he gets so much joy out of coding, do we still do it when we have the chance, or – you know, have we really like outsourced all of it?
[09:50] I mean, I’m kind of in your boat, although now my main apps are all in Rails, and I don’t – I’m not good enough in Rails to touch any type of production code. As of six months ago, I was still hacking away, making some fixes here and there. I still do a little bit of PHP. There’s a couple of things that have needed fixing in the past few months on some other sites, but I’ve realized that I can contribute more to my team and my company by doing other things, right?
[10:15] I have these – the marketing skills, the managing skills, and I spend so much time getting obstacles out of my team’s way that, if I’m trying to sit down and code, I need “head’s down” time. I need four-hour blocks, six-hour blocks. I mean, that’s when I work best, and I don’t tend to have a lot of those any more. I’m on that – you know, it’s that manager’s schedule, versus a-maker’s schedule, and unfortunately I’m a little more of a manager’s schedule these days.
[10:37] So, yes, I do – in response to Maurice, I love to code, and any time I get to do it, it totally triggers the endorphins in my brain like it always has, but I’ve realized that in order to do it right, I need more than I can give, and keep the business running. And so I, in general – you know, for all intents, I’ve stepped away. I mean, if I code more than an hour or two, every month or two, and I mean it’s kind of down to that level, although I’ve really enjoyed working – my son’s learning Ruby, and so I’ve enjoyed doing that with him, and that’s where I’m getting a little bit of my technical fix, but it’s certainly not writing production code.
[11:14] Mike: So thanks for that question Maurice.
[11:16] Today’s episode, it comes to us from Bruno Martin, and he also wrote a rather lengthy email to us. I’ll kind of paraphrase and pull out a little bit of it, and he says, “Across your episodes, I get some arguments favoring this start-up style,” and to that he means, you know, the advantages of kind of building a very small company, and “start small, and stay small,” and he says that “but sometimes there are some implicates. It can sound idiotic, but for example, you mentioned that you have a more comfortable lifestyle and that it was really appealing.
[11:42] I’m not sure I understand fully why this is the case. Maybe newcomers like me would like a short-overview of the advantages of this choice. I’d really love to hear your voices on it.”
[11:50] So, today, what we’re going to do is, we’re going to talk about the advantages of “start small, stay small” versus doing something along the lines of like Y Combinator, where you’re getting VC funding or going out and getting Angel investment, really building and bootstrapping your own business, and owning that entire life cycle of that business from beginning to end.
[12:09] And the first one, I think, is that you own your own time. You get to choose what you do and don’t work on. Typically, when you’re going out, and you’re trying to get funding, you’re essentially in one of two modes: either you are building the products, or you’re trying to find people to, you know, help fund the company.
[12:25] And, personally, that’s something that’s appealing to me. And maybe for some people it is, it’s appealing to go out and trying to get people to give you money to help further your product, but the reality is – I mean, for me personally, I’d much rather find customers to pay for the product, because that can fund the development and move it forward as opposed to trying to go out and find investors that believe in you and your skill set in order to move it forward.
[12:48] And a lot of times, what I’ve also seen is that – you know, some of the funded companies will tend to go after like a B2C market where there’s a huge play, but you’re not actually getting anybody to pay for it. So the value of what you’re providing is a little bit unclear. I mean, is it – you know, is something like Facebook really valuable?
[13:05] I mean, yes, you can look on the numbers. And, yes, after it’s gone IPO, sure, it’s valuable. For the longest time, Facebook was not making any money whatsoever, and it’s very hard to look at something like that, objectively, and say – you know, “Is this really worth something?’
[13:19] You kind of have to be in the right situation for it to eventually become worth something.
[13:23] Rob: Owning your own time is one of the biggest benefits of this approach versus taking funding. And, you know, we’ve talked about taking funding, initially in the past. Just a couple of episodes ago, we talked about when you should consider doing it. So I am not anti-funding. I’m just anti-everyone thinking that it’s the only way to start a software company, or the only way to start a start-up, right? So I just kind of want to make that clear, up front.
[13:45] We’re going to name a bunch of reasons, here, why self-funding is better than taking funding, but I don’t think that it’s like a clear dichotomy. I just think it’s what you value the most, and owning your own time is probably the one that I value the most. It’s being able to own your thoughts and own your head space.
[14:02] During your workday, being able to pick and choose what you work on, is a huge, huge win, and it’s something that I think, having been independent now for so many years, without consulting clients, because even when you’re consulting, you don’t own your time during the day.
[14:15] I know that you can prioritize, and you can pick which clients you want to work with, but when you’re working on something that someone else owns, there’s still this feeling of dollars for hours, and truly having like a product business where you own your own time, and can guide – you know, what you want to do, you can work on what you want, it’s a real benefit.
[14:31] Mike: And that leads us directly into the second one which is that you can set your own hours. You do get to work when you want, not when you don’t, and it is very flexible, within reason. I’m mean, obviously, you’ve got deadlines that you’re going to have to meet, internally, to be able to build products – you know, and do marketing plans, and get the products that you’re building out there in front of people, but you don’t necessarily need to work 16- or 18-hour days to make sure that investors are happy with your progress, or that you’re landing enough customers.
[14:57] I mean, there’s a lot of ways to build a business where you’re building it kind of in parallel with whatever you currently have going on, so that at some point in the future, you can make a transition between being an employee, a consultant or a freelancer, into doing a products-based business, or a services-based business where you’ve got, you know, some sort of recurring revenue that’s coming in from your customers, where you’re performing those services on a regular basis.
[15:21] I mean, people look at software as a service as like the Holy Grail of products, but at the same time, they don’t necessarily realize that the crux of that argument is recurring revenue, and if you have a bunch of customers that you are continually performing services for, that is also a recurring revenue model and, sure, you may still have to do work for it, but that’s what you’re looking for. It’s really that recurring revenue, so that you don’t always have to hunt around and charge people extra in order to make up for the time that you are finding customers.
[15:49] Rob: Having the flexibility to set your own hours, especially if you have a family, or you have some unique needs where working 9-to-5 at a fixed location, under someone else’s roof, is constricting. This is a really big deal.
[16:03] I think, early on, when I was still kind of working the 9-to-5, and I had to be at a certain place at a certain time, every day, I thought that being able to – you know, work at night, or work shorter days if I wanted to, work four or six hours a day, exactly when I’m most productive, I thought that it would be really cool, and I kind of romanticized it. And when I got out, I found that it was every bit as cool as I thought it was.
[16:28] Now, after doing it for – again, for you know, seven or eight years now, although since I was consulting even before that, I mean, it’s been a decade that I’ve kind of worked from home. So I’ve always been able to set my own hours, but I take it a little bit for granted, but this is absolutely like a game-changer, the first time that you literally wake up and you realize that you can do whatever you want, at whatever time you want.
[16:49] And this is where it then calls upon your own discipline to – you know, to actually get stuff done, and to work and to move forward, but I find that when the motivation is to work on your own products, and your own projects and things you choose to do, it becomes really easy, that you don’t need someone there kind of “cracking the whip,” so to speak, because you’re just fired up to get started every Monday morning. I actually remember looking forward to Monday mornings, and not looking forward to the weekends because I wasn’t going to be able to move forward on the cool projects I’m working on.
[17:20] Mike: Yes, I was going to mention that it can be dangerous, kind of, when you first get into that, where you are coming in and you wake up in the morning, and you can do whatever you want. You can also just stay in bed until noon, if you really want to, but at the same time, you know, you’ve got to move the business forward, and if you’re moving it forward for yourself, then that’s obviously a lot more helpful. But it can be dangerous, especially early on, when you’re first making that transition.
[17:42] Rob: Yes, and I mean, the contrast this with a funded start-up, you don’t really own your own time. You don’t set your own work hours, because your own work hours are basically as many as you can possibly work, and that’s 12 hours a day, 7 days a week, then so be it.
[17:55] And while launching, you know, a self-funded software company or start-up takes a lot of work, you can move at your own pace, as long as you don’t get too impatient with it. There are very few people that I know who own their own software company who aren’t like racing for some big green field event, that work a lot of hours. Most of us work less than full-time, and I’ve worked less than full-time for several years, and I consider that a luxury of not taking funding.
[18:21] Mike: So the third advantage is that you’re somewhat location independent, and you do get location independence from somewhat doing consulting, or freelancing. I mean, there’s certain ways of doing freelancing and consulting work where you’re not able to be location independent. But, for the most part, if you’re running a software company, you can run it from just about anywhere. I mean, if you’re running – and not even just a software company. If you’re running a technology company, you can run it from just about anywhere, especially if you’re using contractors to kind of fill in the blanks and supply you with things that you don’t necessarily have locally.
[18:52] I mean, you could run it out of Boston – the Boston area where I am, or you could run it from the middle of Nebraska. It doesn’t really matter. As long as you have an internet connection, you can generally get the work done that you need to get done. I think that – you know, you said that you were kind of getting work done while you were traveling between Thailand and Prague.
[19:09] Rob: Yes, that’s the beauty of it. I don’t want to over-romanticize this one, but it has allowed me to essentially take a full month off, both of the last two years. And then, in addition to that, I take another several weeks off, let’s say, typically in like four-day weekends, or in the form of a – you know, I went to Scotland for a week last year.
[19:27] So that allows me to take time off, but also to do – to get enough work done while I am on the road that I don’t come back to that mountain of emails that we always dread. And so there’s that kind of location independence, you know, being able to just be on the move, and there’s also the location independence of being able to live wherever you want. So, if you want to move to Portland, Oregon, and live there for a year, or you want to move to France, or you just want to move to a town out in the middle of nowhere. You know, you can do that. And as someone who is self-funded, it’s interesting because you can choose to live somewhere where the quality of life is high, the pace of life – you know, maybe you might like a slower pace of life, where you can get “more house for your money,” and that kind of thing.
[20:05] You don’t have to live in city center. I love urban centers. I love San Francisco and Boston, and big cities, but living there would be very expensive. And so I can choose to live outside of those towns and then go in on weekends. You know, take a four- or five-day weekend and go into San Francisco, just a couple of hours from me, or I – you know, we go to the coast all of the time because we really enjoy that. So there’s like a lot of different dimensions to this location independence, of where you actually physically live and have an address, and then being able to kind of go on the road and still get enough done that you could kind of be a perpetual traveler, you know, in the sense of the “digital nomad” term, you know, that the Tropical MBA podcast talks about.
[20:44] Mike: The fourth advantage is that your income is decoupled from the hours worked. If you do the right work, that work can pay off for a very long time. There’s also the other side of that which is, if you do the wrong work, then it’s never going to pay off, and you’ve just essentially wasted all that time working on something that just doesn’t pan out. But, at the same time, there’s always situations where you’re going to have to try things and experiment with certain techniques, or marketing channels, or advertising, that just is not going to work out. It’s either going to be a time sink, or a money sink, or possibly both, and – you know, it’s going to be a lot of experimentation. Your income is not directly tied to the hours worked. There’s going to be times where you put in a couple of hours’ work and that’s going to pay dividends for years. And then there’s going to be other times where you, you know, sink 20, 30, 80 hours into something, and it never pans out.
[21:30] So there is that balance that you have to strike, and hopefully you can do more of the things that pay off, and less of the things that don’t. The point of the matter is that you’re income is not directly tied to the hours, the actual number of hours that you’re working.
[21:42] Rob: Yes, and I think this is the case, both with self-funded or a funded start-up, but this is maybe more of a dichotomy between a product business and consulting. It’s actually been a bummer. There have been a few points where like my cash has gone low, and I’ve wanted the dollars-for-hours thing back, temporarily, because I’m willing to work a bunch of hours in order to make a good hourly rate, but now that I have products, you can’t just kick that into high gear.
[22:08] Everything takes longer, and I like to think that I use that illustration of a flywheel, where it’s like getting these marketing approaches going takes a ton of effort up front, but once you invest that time, they can pay dividends for a long, long time, and that is, of course, the beauty of having a product. It’s that you don’t have to work an hour for every dollar that it generates for you.
[22:26] Mike: The fifth advantage is that you get to choose who you work with, and I think that, as a company founder, and I think in general, you tend to get to choose who you work with because you can decide who you hire and who you don’t, but I think if you have investors, you’re essentially “married” to them in some way, and I think that this goes along with having co-founders, as well. It becomes much more difficult to break those ties. If you’re working with a contractor, and they’re not working out, for whatever reason, it’s a lot easier to walk away from them than it is to somebody who handed you a check for $250,000.
[22:56] Now, there’s certain customers that you’re probably going to have that give you a fairly hefty check, that are going to be difficult to walk away from, as well, but they don’t own your company, and there are ways to work through things with them to the point that they are no longer an issue, or they are no longer a customer of yours, but when somebody owns a piece of your company, it’s a lot more difficult to do that.
[23:15] Rob: Yes, getting to choose who you work with is a big deal, right? If you’re a salaried gig, the odds that you’ve been able to choose your coworkers, or choose the people that you manage every single one of them, is very, very low, unless you’ve built a team from scratch. It’s a big difference, and it’s such a difference to be able to work with people that you enjoy working with. And, certainly, if you’ve taken funding, and it depends on how much and to what level, but oftentimes you will have investors and you don’t have much of a choice, you know, who you work with, unless you had a lot of investor interest, and if they’re forcing you to grow, which if you’ve taken a million or two million bucks, then they will be, and then you have to hire quick, and you need to get to ten or twenty people within a year, and you can have much less choice. You will have some choice, but you’re going to have to be much less picky about who you hire in order to hit the growth numbers that your investors are going to want to have. So there are definitely pluses and minuses to that approach.
[24:10] Mike: The sixth advantage is that staying small means a lot less overhead, and that’s both financial and management overhead. If you have a small team, then the number of active connections you need to keep open with people is much lower, but if you have a larger team, or if you’re getting funding for a start-up, and you’re growing quickly, the investors want to see large growth in the companies that they invest in. So, if you have a team of 20, 30, 50 or 80 people, that becomes a lot more difficult. So you end up with a lot more management overhead in the company and the company is going to have to essentially absorb that cost. Now, if you own the entire company, you want that overhead to be as low as possible. So that’s why staying as small as possible, while supporting as many customers as possible, is advantageous because it’s advantageous from both a financial and a management perspective.
[24:58] But, it also keeps your stress levels down by not having to worry about the people that you’re reporting to above you, and then also having to worry about the people who are reporting to you. With funded start-up, I would say, I would liken it to middle management where you’ve got to report to the investors and then you’ve got all of the people underneath you who are reporting to you. That’s not for me. I’m not a big middle management type of person.
[25:18] Rob: I’ve talked about this quite a bit because, since the title of my book was Start Small Stay Small, I’ve had people ask me what that means, and the “stay small” part means stay small in terms of employee headcount, not in terms of revenue. So I’ve always wanted to grow my businesses as large as I can, in terms of revenue and net profit, but I’ve never wanted to manage 10, 20 or more people.
[25:39] And that’s really what this one comes down to. It’s that, if you raise funding, you will have to hire a lot of people. You will have management overhead. You will step away from the code, from the marketing, from the day-to-day nuts and bolts, and you’ll become a financial and a people manager. And if that’s what you want to do, then go do that, but if not, then the idea of trying to raise funding and climb that scale, it’s not in line with your goals.
[26:05] Mike: Yes, and there was a time where I used to want to do that. I used to want to build a large company and have dozens of people working for me, and I’ve kind of reversed my position on that, and that kind of leads into number seven, which is, you’re close to the customers. If you’re a small company, you’re really only a phone call or an email away from the customers. And that’s not to say that you can’t do that as a larger company, but when you are a much smaller company, of only one to five people, it’s a lot easier to be involved with the customers on a very regular basis because – you know, there’s not very many people doing the work.
[26:35] So you have to be doing the work. So you have to be interacting with those customers regularly. And I’ve found that I actually enjoy that aspect of it. I feel like if I were to grow a large company that I would lose that. It would be very difficult to grow a large company and still kind of maintain myself on the front lines, and interacting with people.
[26:52] Rob: I really like that that I know the names of a lot of my Drip, my HitTail customers. A lot of folks that come to Microconf are listeners. You know, that’s exciting to me, and I feel like you can pretty – it’s pretty easy to get removed from that, that if when you do have 10 or 12 employees, and you’re basically managing those folks, that they are then the front lines, and you can peek in now and again, but you’re not going to be connected to the customers the way that you used to be. So I think, and that may be a plus for you, or it may be a minus, but for me, I enjoy it, and I enjoy seeing, you know, the same name using multiple products that I’ve built, and I enjoy just kind of starting to build longer-term relationships with these folks.
[27:35] Mike: The eighth advantage is that you can be very agile. If an opportunity arises that, as a small business, you want to be able to take advantage of it, you typically can. You know, obviously, there’s – you know, time and money constraints that you have to deal with, like any other company, any larger company, but with a larger company there tends to be a lot more red tape. There’s a lot more people to talk to, to get things moving, and especially if you are in a larger company and you’re kind of higher up in the ranks. You can point at something and say, “This has got to get done,” but that doesn’t mean that it’s going to get done any time soon, and there’s usually a lot of other priorities that are vying for people’s attention and time.
[28:09] So it can be very difficult to get the ball rolling in a larger company whereas, if you’re – you know, a small team of one to five people, you can usually accomplish things in a fraction of the time that it would take a larger company to be able to do those things. Now, that said, you do have to have less resources to be able to perform those things, but when it comes to being able to turn on a dime, you’re going to rule over those larger companies.
[28:31] Rob: Yes, this is one of the fun parts of being small, it’s just that you can move so quickly and assuming that you’ve built a profitable business, you can take some time and kind of do some pet projects. You know, even within the scope of that same business. You can go off and build a feature that maybe no one has requested that you think would be cool, and you could spend a month of your time, or a month of a developer’s time working on it, and it’s just a – you know, an opportunity, or a whim that kind of strikes you, and you can go build something that’s cool, and this comes back to kind of choosing what you work on, right?
[29:01] You can’t do this all the time. If you did it all the time, your business would eventually start to go down, but being this agile, and being able to respond to things so quickly, as much as it is a competitive advantage, it’s just plain fun, as well.
[29:15] Mike: Another advantage of a small company that I like is that you have a larger scope of responsibility. I remember working at Wegmans and, at the time, the company was about 25,000 employees, but you know the IT department was only probably 200 or 300 people, or something like that, and it really felt like I didn’t have very much responsibility. There were – obviously, there were things that I had to pay attention to and work on, where – you know, like I had to carry around a pager because that’s what people did back in those days, and if a server went down, I had to deal with it, but at the same time, I didn’t feel like I had very much responsibility outside of my job, and it was more or less people coming to me and saying, “Here, this needs to be worked on,” versus, you know, me being able to kind of independently figure out what it is that I was going to be working on, or wanted to work on, and the responsibility, like the scope of my responsibility was kind of set by people outside of my control.
[30:04] It wasn’t as if I had the ability to go out and take responsibility for something. It was more or less that I sat in my chair and when somebody decided that there was something that I could handle, then they would hand it to me. Part of that, I think, is the direct result of – you know, where I was in my career at the time, but at the same time, you know, I just didn’t feel like I had any control over what I did have responsibility of.
[30:25] Rob: I think that leads pretty nicely into our tenth and final advantage of starting small and staying small, and it’s that you have such a large impact on your business, that there’s not that layer of employees between you and the end result, that while you are responsible for more things, directly, like everything will always fall back on you, if it’s just you, or if it’s you and a couple of employees, but you and all of your employees can have a major, major impact on your customers, on your revenue, on new features. You can make a huge difference, both in your business and in your employees, and in your customers’ lives when you do stay small.
[31:05] Mike: So, Bruno, hopefully that helps answer your question about what are some of the advantages of starting small and staying small. If any of the listeners have any questions, or thoughts about any advantages that they think we missed, feel free to come into the website at startupsfortherestofus.com and leave some comments on this episode.
[31:22] Rob: And if you have a question for us, you can call our voicemail number at (888) 801-9690, or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Out Of Control” by MoOt. It’s used under Creative Commons. Subscribe to us in iTunes by searching for “Startups” and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Rob,
I would love to know when your new podcast launches. I was going to ask if you had a “template” for your 2 day retreats, but it seems like you’re already putting that together. Can’t wait!
Cool, will do. I’ll announce it on this podcast, and email my list as well (http://www.softwarebyrob.com/email).