Aspirations (thoughts from a 37signals podcast)
Posted by thatsinthebook on 21st June 2010
Just listened to a David Heinemeier Hansson talk on the 37signals podcast about “A Secret to Making Money” and generally, apart from feeling like I was being shouted at for 20 minutes, I thought it was a great listen.
The podcast was taken from the Start Up School in 2008, which is a school for programmers and software engineers to learn about starting up. Along with 37signals there were a lot of VCs and big businesses there, all giving their 2 cents. The talk by David, in a nutshell, tried to make people realise that it was not compulsory to have the idea, get a million dollars in funding and have a plan to sell within 3 years to have fun, fulfilling and ultimately profitable business.
The point is that one can be successful by selling a product to a modest number of people at a modest price. By waiting for the idea and shooting for the stars we dramatically reduce our chance of success. By scaling down we also reduce the need for outside funding (and subsequent control loss). I personally would rather run a business that I had a say in and that kept me interested over the next 20 years.
Some facts:
- 7 years is the average to sell a business - so starting out with sale in mind puts your goal a long way away.
- 8 out 10 businesses fail within the first 3 years - I hate this stat, but it does make me think about how I might increase my chances.
- 4000 people paying you £20 / month, is £1m per year! 4000 is not a crazy number.
Creating software nowadays can be just like other more traditional businesses - like restaurants. There are hundreds of same-cuisine restaurants, and yet more still spring up and end up being successful. This is true of software - just because there is already a project management system out there, does not mean that you should not create your own. Maybe your product does something better? If you can get a small segment of the market to use your product, you are on the way.
So, rather than waiting for the idea that nobody has ever thought of, why not create a product that just does it better than the other guy. By reducing our aspirations slightly, we may not need millions of pounds in funding, a VC team that takes control and unrealistic targets, and instead end up with a fun and profitable business that we want to be a part of long term. (Hmm, that sounds good to me!).
Now, I have never been one for discouraging anyone from an aspiration, in fact quite the opposite, but having been in business for a few years now, toning down is definitely starting to make more sense.
You can find the full podcast at 37signals.com/podcast.
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Small Business Accounts with FreeAgent
Posted by thatsinthebook on 9th June 2010
Starting in business is never the easiest thing - there are so many more aspects to making it work than simply plying your trade… accounting and finance being one of them.
Being able to accurately and quickly see where the money is coming from and where it is going is essential.
pebble.it started life using Excel! This very quickly got out of control as the number of transactions increased and we started to learn about tax. So we moved on to MYOB - a very powerful, fully-fledged, accounting package (Macs & PCs). MYOB lasted for a couple of years until we became too frustrated with the average interface, sheer number of options that we did not understand and its non distributed nature (even though you can make it work in a distributed fashion, it is clunky).
By this time, there were a number of web-based, software-as-a-service accounting systems cropping up. In the end it came down to deciding between Freshbooks (a US-based company) and FreeAgent (a UK-based company).
Freshbooks was, and still is, a little further developed, but it did not specialise in UK tax and its feature set is enormous - almost too big again. It also does not look as nice!
FreeAgent on the other hand had all the features that we were looking for - it looks great and the questions that we had asked the support team came back with quick, friendly responses.
As an Apple Mac support and web development company that does a lot of invoicing and subsequent chasing every month, the features that we find particularly useful are:
- Quick Views - snap shots of outstanding invoices, overdue bills, P&L, bank balances.
- Recurring Invoicing - retainer client invoices automatically created on a frequency of your choice.
- Permissions - give employees and your accountant varying levels of access.
- Project Profitability - link money in and out to a specific project to assess profitability - a great feature.
- Time Tracking - easily track time spent on projects by the hour, day or week.
- Reminders - set up FreeAgent to automatically send out invoice reminders for overdue invoices - this makes life so much easier when invoicing a lot.
- Payroll and Tax - calculations specifically tailored to UK companies.
- Reconciliation - now so much easier as FreeAgent can recognise recurring bills and assign them to the right account automatically - we no longer need a bookkeeper which easily saves us hundreds of pounds a month.
- Extras - there are other systems that integrate with FreeAgent, and we are sure that the number of apps doing this will continue to grow - check out their goodies page.
FreeAgent has revolutionised our ‘admin’ lives and is well worth investigating - it could help your business too.
Have a look at the tour and signup for their free 30 day trial. Thank you FreeAgent.
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Rework, by 37signals.
Posted by thatsinthebook on 24th May 2010
37signals, creator of online tools such as Basecamp and Highrise (both used by pebble.it), is one of pebble.it’s long term sources of inspiration. Their ethos towards business and obvious success is compelling to say the least. Their new book, Rework, gives a fantastic look at their thoughts on business and why going against convention may be the way to go. It also serves as some great inspiration for people to get off their asses and make a change.
The main themes of the book are very refreshing and make complete sense - especially if there has always been “something” about conventional business that didn’t seem quite right to you. We have been implementing a set of these themes (listed below) and over the coming weeks will be writing a few more posts to share our experiences of them. In terms of progress, so far so good!
- Small Giants - happiness and profit before growth.
- Everything is Marketing - project your brand and culture with everything that you do.
- Say No! - take on the right business, not all business, and stick to what you enjoy and are good at.
- Have an Enemy - in our case, ‘big’ IT companies & PCs (oh, and Blackberries!).
- Leave the Competition - obsession with competitors can stifle your own success.
- Share - we solve and create - bearing all can only serve to help get the word out that your are awesome.
- Build an Audience - who enjoys cold selling anyway?!
One criticism is that Rework does, especially in the middle, mildly comes across as preaching only what has specifically worked for 37signals as a software product provider. Also, towards the end of the book, I did start to recall sections from their last book, “Getting Real”, (although this is hardly surprising).
Overall Rework is an inspirational book for those looking at starting out or small businesses that need some clarity and focus in their operations. Rework could also be a great tool for bigger businesses to tone down some of their more archaic corporate ways and maybe bring in some efficiencies.
Worth a read: Amazon.
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