Imagine that your little startup actually does what millions of others fail to do, it finds success! Now imagine what happens if you aren’t prepared to deal with it.
Growing too rapidly can kill your business just as quickly as not being successful in the first place. Worst of all, you’re less likely to be prepared for massive success than you are massive failure. You won’t see it coming fast enough.
Here are a few ways your business might grow that could kill it:
- You might try to do everything your customers ask for. After all, you want to please them because they’re paying the bills. The problem is, you need to grow at a pace that’s sustainable for your sanity and your pocketbook. If you don’t you’ll either grow broke trying to invest in the next thing before you have the money, or you’ll go insane working too many hours.
- You might back the wrong audience. Maybe early on both consumers and businesses decide your business is great, and they sign up. Let’s say businesses are more profitable initially because they buy more stuff. So you mould your business around that one audience segment, potentially alienating the other segment. Now the business audience dries up. You’re sunk.
- You might back yourself into a corner. You sign a lease on an office, warehouse, or retail space. It is 3 times bigger than what you need, but you figure you can grow into it. Well if you grow really fast, you could outgrow the space faster than the lease expires. What do you do then? Open a second location? Move out and pay the lease on both spaces?
- Supply lines run thin. Maybe you’re growing so fast that either your suppliers can’t keep pace with you, or you can’t hire enough employees to do all the work. Do you have a plan for that?
These are just a few ways success can kill you. Don’t get me wrong, I’d rather deal with these issues than lack of success any day. But it’s also good to plan for this silent killer in addition to the more obvious dangers ahead of your business.
If you’re creating a company that has to deal with outside vendors, you’re going to run into one terrible inalienable fact: MANY OF THEM WILL SUCK.
Some of them will be stuck in the dark ages and want you to phone or fax an order in to them rather than having a web site you can easily navigate, or a web service you can hook into your own systems. Or if they do have a web site, it won’t be easy to place orders on it, because it will be some terrible free thing that was auto-generated out of their ERP system.
Other vendors will take up to a week to reply to your requests. Some of them will take more than a month to ship out the goods once you’ve ordered them. We work with one vendor who’s standard shipping time is 3 months for replacement parts. Mind you that you can get a new machine next week, but if you need to fix an existing machine it will be 3 months.
Some vendors will make it as hard as possible for you to give them your money. Either their sales people are stretched too thin, or they have too many layers of red tape, but you may have to reach out to them many many times in order to place an order.
These things aren’t going to change. You need to change. If you can, see if you can find a different vendor. Someone who’s easier or faster to work with. Sometimes this might cost you slightly more money, but it’s worth every single penny. If you can’t get a new vendor, then you need to build processes around the fact that the vendor is going to suck. If it’s replacement parts, then keep extra on hand so you can do any repair at a moment’s notice. If it’s consumable supplies, then set a schedule to order them well in advance of running out so that by the time they do get to you, you haven’t yet run out. If it’s a piece of software that needs support, maybe you’ll be better off training your own employees to support it.
Don’t let your business suck just because your vendors suck. Your customers won’t care why something has gone wrong in the back end. It all just look like you are the one failing. So build processes and system in place to mask these problems so that your customers see you firing on all cylinders.
A few years ago I wrote a little video game in Perl called Lacuna Expanse. Tens of thousands of people have played it, and while I wouldn’t call it a raging success, it has paid for itself and continues to make a modest profit. That said, it wouldn’t have if I hadn’t been willing to make drastic changes to the design of it way late in its development.
For the first 3 months of its development, Lacuna was storing it’s data in Amazon’s Simple Storage Service. When I had trouble getting that to scale I switched it over to MySQL. Three months into a 12 month development cycle is far, but not that far, for a major change.
About six months into the development cycle we decided to entirely change how space was configured. It was originally modeled in 3D space and the user would be able to see a slice of it at a time.
For some reason it took us a very long time to realize what a horrible user experience that was going to be. Also, there were separate UI’s for the star map view vs the star system view.
This just meant a lot of clicking for the user. So we decided to simplify the star system. Instead of 3D space we would go to a flat 2D version of space and we would display the planets in orbit around the stars.
From a user perspective this worked much better. It was easier to see where things were in relation to each other. There was only one space UI. Everything just worked better.
Even though everything was working better, it really bothered me that we lost the system view, because I liked the effect of the light coming from the star, and I liked that we could show the relative size of a planet in that view. It bothered me so much that 9 months in I changed the map yet again. This time it was mostly an aesthetic change which resulted in the modern version that players are familiar with.
As you can see the planets are rendered showing the light source of their star. The planets are also tiny in comparison with their star, and they show their relative size to each other. In addition, they have a much more natural looking orbit.
No matter whether you’re designing a game, a program, or a business, never be afraid to change it. If something is bugging you about how its working, it will bug other people too. You’ll be far more successful if you keep evolving it.
Whatever kind of business you start, getting people involved is going to be a huge part of it. This is where meet ups can give you an edge. If you’re a starting a technology firm, then start or join meet ups in your area related to the technologies you’re involved with. Same thing goes for any business whether it be cosmetics, education, games, or event planning. No matter what you’re doing, there will likely be people doing or interested in doing things related your topic areas.
Being involved in these meet ups will help you with several things:
1) It’s a great place to find potential employees and contractors.
2) It’s a great place to find potential customers.
3) It’s one more way to establish yourself as an expert in your field.
So what are you waiting for. Seek out users groups, high-tech happy hours, business breakfasts, or any other kind of engagement you can be a part of. If you don’t know how to start, check in with your local chamber of commerce and meetup.com.
Growing up, I always thought of money as a scarce resource. My parents taught me that, perhaps because their parents were from the Great Depression and they taught their children that. However, it couldn’t be further from the truth. Money isn’t scarce, it’s abundant. Economists believe that there is about $75 trillion floating around in the world. That is a lot of money!
Instead of thinking about how money is a scarce resource, instead spend your time realizing that it’s abundant, and try to figure out how to get more of it! Sometimes that will mean you need to spend some money to get some more money.
Please bear with me. You need to hear a little bit of a story, before we can talk about success and failure.
When I was 19 years old, I started writing my first game, called deadEarth. It was an adventure role-playing game set in a post-apocalyptic wasteland filled with crazy mutants and tons of violence. Exactly the kind of thing a 19 year old college sophomore would be in to. It was cheesy, and I took myself way too seriously, but it was so much fun! The original manuscript was only 9 pages. Over the next several years, with the help of a bunch of friends, it became a 174 page book that I self-published.
I didn’t even bother looking for a publisher. I borrowed some money from my father, found a printer, and away we went. I printed 2,000 copies, simply because it was the minimum I could print. I did no research on how much you should print or how much it should cost, or how many I could sell. I set the price at $20. Why? Because, reasons. =)
While I was working on the book, I had attracted an online following for it, and built the community up to more than 2,000 registered users. When the book went on sale, over the first year and a half it sold about 1,000 copies. I couldn’t have been more pleased. Unfortunately, sales died off shortly thereafter. I think a lot of it had to do with me no longer being active in the community. I had moved on to other things and wasn’t actively creating content for the game. Still, I made enough to pay back my father (with no profit to spare) and felt its was a huge success, despite having hundreds of copies left over.
It was about that time that I was getting more serious about programming. Instead of just using Perl for basic web sites and system administration tasks I wanted to build big apps. The first challenge I took on was writing an online game called Survival of the Fittest. It was a simple web game, with almost no graphics. It was set in the deadEarth universe, using a tiny subset of the deadEarth rules. The game was online for about a year. It attracted a couple hundred people total, and made a few hundred dollars. However, the education I got from writing it was worth every hour spent on it. I open sourced the code, and people continued hosting and developing it for years after that.
Sometime around 2007 I got the bug for deadEarth again, and decided I was going to remake it. This time it would be less cheesy, I would take myself less seriously, and it would all start with a novel called deadEarth: 365. This would be the origin story that would set the tone for everything that would follow. Unfortunately, without knowing it I had become an adult with responsibilities and a business to run. I just didn’t have the time or energy to take on a project that large. I wrote somewhere around 11 chapters and stopped. I did, however, make a couple of promo videos for it:
Recently, I noticed an article on io9 entitled The Most Controversial Pen and Paper RPGs Ever Made. In the comments, someone called deadEarth the worst RPG ever made, and pointed to a thread in a forum with over 670 posts. Sure enough, my little game from almost two decades ago was cited by lots of people as the worst RPG ever made.
I began reading the comments and noticed something. Despite most of them absolutely hating the game, they were having a ton of fun creating characters for the game and building plans to run a campaign. Several of them found ideas in deadEarth that they thought were worth porting over to other games. So despite all these people thinking it’s a horrible game, they spent hours digging into it, talking about it, and even playing it! Many of them even went out to Amazon and bought used copies of it. Don’t get me wrong, they still hated it, but they also found much joy in it.
After reading all of this, I was inspired to publish the game as a digital download on The Game Crafter. You can buy it and all of it’s supplements for just $4.99 in searchable PDF format.
So what does this tell us about success and failure? Is deadEarth a success or a failure? I think it’s all a matter of perspective. Success is where you find it. Success is determined not just by reaching goals, but in discovering things you didn’t even want to know.
Yes, deadEarth is a silly, albeit fun, game. Yes I took myself too seriously when I created it. Yes, it didn’t make a profit. And yes, a lot of people think it’s the worst RPG ever made. So I suppose if you looked at those criteria alone it is a dismal failure. But from this failure, I’ve gained so much.
I had a magnificent time writing the game with my friends. I learned how much I love making games. I took my first steps into becoming an entrepreneur, which utterly changed the path my life would take as a result. I learned to become a real Perl programmer, a skill that has brought me wealth, influence, and friends. And last, but not least, I created a game that has had a life of two decades and is still going, even though I’ve done almost nothing with it.
So I ask you, when you measure success, how will you measure it? Will you find scorn and bitterness in your harshest critics, or will you find inspiration? Will you look only at the ways you failed, or will you discover all the ways you succeeded?
Many of you are probably familiar with the halo effect, but for those that aren’t, it is an enlightening thing to think about. In a nutshell, things that share a relationship can benefit each other via reputation. Synergy is in this same vein, but a bit different. In a nutshell synergistic effects allow the relationship of two or more things to be greater than the sum of the individual parts.
When you are designing the products and services your business will offer, consider whether or not one product will feed into another product. For example, at The Game Crafter, we manufacture both playing cards and tuck boxes. They share a relationship in that one can be placed inside the other.
This relationship can help in many ways. First is that by offering both we have a better chance of increasing the size of our sale, because people are likely to buy both a box and cards together. Second is that by offering two related things, our customers can come to one place and get both things that they’re interested in. That gives us a competitive advantage over someone that offers only one or the other. Third, if a customer already knows the quality of one of our products, they’re more likely to buy other products, due to the halo effect that The Game Crafter’s reputation has on its products.
Obviously the card and box thing is a really simple example, so let’s look at one that’s more complex. At Plain Black we make a Content Management System called WebGUI. We also built a web site called CMS Matrix, which is a site where you can go compare the features of over 1,000 content management systems. Not only do we make money selling services around WebGUI and selling advertising on CMS Matrix, but CMS Matrix gives us intelligence on our competitors, and it is yet another way for folks to find out about WebGUI. So WebGUI has a synergistic relationship with CMS Matrix; but the ratings WebGUI gains on CMS Matrix allow CMS Matrix to add to have a halo effect on WebGUI.
Products aren’t the only thing that benefit from a halo effect. Many things can including businesses and blogs. If you own two or more companies, the fact that they are owned by you gives them a relationship. You may be able to exploit that relationship from time to time either in marketing or in one using the other’s services. If you have more than one blog, you can cross promote ideas, products, services, and announcements on all of them, thus giving the ideas, products, services, and announcements a halo effect. Your notoriety on one blog may get you followers on another. And when you launch a third business, the customers you have acquired through the other two will be more likely to be interested because they like the products and services the first two offered.
So as you start your business, think about other products and services you could offer that would share a halo effect with your existing ones. And as you create blogs and social media presences consider creating others on related, but separate, topics so you can exploit the halo effects there as well.
When you are starting up a business, automate as much as you can. You’ll have enough headaches along the way even if you automate everything, so save yourself some trouble up front and automate as much as you can figure out how to automate. Here are some examples:
Set up your payroll to be automatically sent out every two weeks. There are some online services for this, or you can simply outsource it to your accountant.
Use a software based calendaring system to remind you about everything you have going on. Not just the usual stuff such as meetings and dentist appointments, but also about writing blog posts, changing the oil in your car, and to check in on new employees once in a while.
If you can write code, then write code to automate as many tasks as you can. For example, I write Perl programs that automatically bill my customers, automatically cross post this blog post to other feeds, to automatically collect and analyze hundreds of data points from my various businesses so I can make better decisions, and to automatically remind my employees when they go to order some supplies that there are other supplies from that same vendor that are getting low (which saves time and shipping fees).
If you can’t write code, there are a ton of coders out there who will write some for you; and in many cases you can even find prepackaged systems that will do all kinds of stuff for you. Check sites like appstorm.net for ideas.
You can also often negotiate things with your suppliers in advance (if you have suppliers). For example, to get better pricing on some things that I have manufactured for my businesses I’ll buy 10,000 units instead of the 1,000 that I actually need each month. Then I pay the manufacturer a tiny warehousing fee to hold on to and ship 1,000 units to me every month. The cost of getting a small amount manufactured each month is far more than getting a larger bulk manufactured in advance plus paying the warehousing fee. And because this arrangement is set up and recurring, the new shipment shows up at my loading dock each month without me doing anything.
Learn to automate everything, and you’ll have more time to deal with the things that really need your attention.
If you have a customer who complains about something, don’t ignore it, no matter how crazy you think the complaint may be. If it can happen once, it can happen again; and more importantly, how many times has it already happened and nobody brought it up?
Of course not all criticism is valid, but you don’t know if it’s valid if you don’t take it seriously. Investigate every claim. Find the root cause of the complaint just as you would find the cause of a software defect. And once you’ve found it, see changes you could make, or what systems you could put in place to either stop it from happening, or mitigate the damage it could do.
If you treat every complaint as a defect, you’ll have fewer and fewer complaints over time. In addition, there’s simply nothing better than good customer service to promote word of mouth marketing.
I own a successful software consulting company called Plain Black, but I also do a fair bit of business consulting through Plain Black as well. Whether my team is writing software for a client, or I’m evaluating the performance of your technology business, I like to offer options, and you should too. Whether you’re doing consulting work, helping out another department in your company, or just talking about a project with your boss, be the person that presents options.
That said, know when to present options. Here are some simple rules:
1) Only present options when there’s an important decision to be made. Don’t waste anyone’s time with trivial options you could have easily decided upon yourself.
2) When you present options, narrow the scope to just 2 or 3 options. Eliminate variations on a theme, as the details can be worked out later. By providing 2 or 3 choices, you’re giving the customer/department/boss interesting and important decisions to make, and they’ll appreciate you for it.
3) Hold the outliers. If you have some options that are crazy, hold them close to your vest. You can pull them out later when the customer has either ruled out your initial options, or if while discussing the options the customer triggers an opening to present the crazy idea. This way you’re not burdening the customer with an idea that is way off base until you know they’re interested in such a thing.