Bluyah Development Blog

I had the opportunity to talk about Bluyah at last night’s Seattle Tech Startups event.   I have to be honest.  I really hate “public speaking.”  Granted, it gets a bit easier each time I get up and do it, but if I didn’t have to do it, I’d be that much happier.  That said, I love talking with people about our service, our long-term vision and what we’re attempting to accomplish with Bluyah.  It almost makes the “public” part of it all bearable.

At the STS event someone asked me what our biggest challenge to-date had been.  I talked a bit about our troubles with user-generated XML, as well as the more general challenge of reaching the “right” people at the “right” companies who could help us gain “traction” in a market saturated with big players with even bigger pockets.

Later that evening, while talking with @freelock and @justinsaul over a couple of drinks, I realized that what I should have said is this:

1. No one will ever be as excited about your [product, service, business] as you are.

In hindsight, this should seem obvious.  But it wasn’t to me in the beginning.  I saw myself as an evangelist who’s mission was to convert the uninitiated into faithful followers.  In reality, it’s been more like being a shepherd trying to herd a flock of ambivalent geese through an obstacle course.

There are those that will nod approvingly and head in the general direction you’ve pointed, but you know in your gut they’re not fully committed and probably don’t even know themselves why they’re headed in the direction they’re headed.  These are the “yes” folks: Yes we want that feature (even though we didn’t ask for it); Yes we will be a referral customer (even though we haven’t fully adopted the service); Yes we love the service (until our free trial runs out).

Then there are those that will fight you every step of the way, regardless of where you’re headed.  These are the “no” folks: No we will not use your service (even though we’ve repeatedly told you we desperately need a solution eerily similar to what you’re offering);  No we will not lend you money or invest in your idea (even though we find it very intriguing and really want to talk with you when sales reach $500k); No we do not think the market is in need of a shakeup (maybe because we just don’t like change).

Finally, there are those who could care less about what you’re doing.  You’re not Twitter, Facebook, developing iPhone apps, and/or have ever had a write-up in TechCrunch, so you’re …. (yawn) …. just not that interesting.  It doesn’t matter if you’re curing cancer or making data transformation easier for non-techies - you’re just not sexy enough for a second look.

Realize this.  Get over it.  Then move on.

2. Everyone expects something from you.

Employees expect a paycheck.  They don’t care that revenues are in the toilet.  They have rent to pay, food to put on the table, and if you’re not delivering there are plenty of companies in town who will.

Partners expect a boost in revenues.  They only partnered with you in the first place because they expected your service/product to get them more sales and/or customers than what they had before.  They’re not in business to be your friend or mentor or helping-hand.  They’re in business to make money and if you’re not helping them do that, they will move on.

Advisors / Mentors / Consultants expect a return on their “investment”.  Granted, that investment may just be an hour of their time every month or so - but they view their time as having value (which it does) and they expect a dividend for providing that time (which they should).  If you’re lucky, that dividend could be a nice bottle of wine and a thank you card.  If you’re “normal” that dividend is probably going to be something along the lines of an equity stake in your business.  And if it’s something more than that, you’re probably being taken advantage of.

Understand this.  Accept that everyone will put a higher value on their contribution to your vision than you will.  Don’t fight this.  Discuss it openly and honestly.  Haggle for the lowest price you can get.  But at the end of the day, understand that you will always pay more (in many ways) than what you had hoped or planned to pay.

3. Never implement a feature for a “potential” customer

I kick myself for having to even write this one down.  But I speak from experience.  Unless a potential customer is showing up with cash in hand and saying “build this for me and all I have here is yours” you should politely pass.  Or better yet, convince them that all they desire is theirs once they become a customer.  And then delay as long as is humanly possible.

The second part of this is “the customer is not always right.”  Most of the time they are, but not always.   The customer cares about themselves first and your business vision a distant seventy-eighth or so.  They only use your product or service because it makes their life better in some way.  Never lose sight of this.  If you’re not making their life sexier/better/richer/more fulfilling they will move on to someone who can satisfy those need.

All of the feature requests a customer gives you are going to be about them and their needs.  They don’t care if adding this feature will cause 99% of your other customers to be targeted by incoming ICBMs as a result (and why should they?).  They want their feature — and they want it now.

It’s a balancing act, sure.  But at the end of the day you have to ask yourself if satisfying an individual customer’s request is going to make your service/product better for all customers.  If it is, great.  Go for it.  But if it’s not … well, this is where the art of business comes into play.

That said, be prepared to do backflips on-demand for those customers who are your bread and butter.  If they say jump you should be asking “Is this high enough?” before they’ve finished speaking.

4. Keep your eye on the prize

It’s very easy to get distracted.  We do a lot of consulting work and other  ”necessary” duties in order to keep the lights on, the paychecks coming, and the servers (as virtual as they are) up and running.

Be prepared for this.

But don’t let it distract you from your ultimate goal.  And if it does starts distracting you, find a way (and quickly) to  get back on track.  Maybe that means you rethink your marketing strategy (or restructure your initial product, like we did).  Maybe for you it means forgoing the hip downtown office in exchange for a founder’s dark basement.  Or maybe it means letting an employee or two go.  Or maybe it simply means staying cognizant of the distractions as they appear and bluntly saying  ”NO”.

5. You will be forced to choose between work and family - and there’s only one right answer.

The cliche goes: “A happy wife is a happy life.”  It may be cliche, but there is a mountain of truth to it.  If your significant other absentmindedly mentions that he/she never  sees you for dinner anymore, you had better resolve the situation quickly.  If your kids start to refer to you as “that guy” as you’re headed out the door in the morning, then you had better take stock of your priorities.

No matter what you believe, or what other’s have told you, your business is rarely so fragile that  it can not suffer some minor neglect now and again.  There are probably a half-dozen other companies out there trying to do something similar to what you’re doing.  And if you’re any good at it, the competition will only increase.  Being first to market is not going to change this.  Time to market is not your enemy in these situations.  The first person out the gate doesn’t necessarily win.

As Howard Aiken once said: “Don’t worry about people stealing your ideas. If it’s original, you’ll have to ram it down their throats.”  In other words, if what you’re doing is worth anything, it’s worth doing right.  And that means taking the time to do things sanely, without burning yourself (and your family/co-worker/friends) out in the process.  Take the time to enjoy the process because it’s going to take time to get it right.

Alyssa Royse wrote a fantastic post concerning the arbitrary (and oftentimes insane) deadlines we place on ourselves in the course of running our businesses.  It’s recommended for anyone at the helm of a company.  And it should be mandatory reading for any IT person who still believes releases must go out every Thursday come hell or high-water.

Hope this helps.

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Hindsight is always 20/20.

Before we started making the rounds with our hat in-hand, we received the advice: “Acquiring customers is a hell of a lot easier than securing funding.”

Great advice, I remember thinking - from someone who hasn’t raised any money.  If only I’d listened.

For the past 4 months we’ve met with anyone who would grant us a sit-down, pitched our company at several events, and have generally done everything we could think of to make ourselves desirable to anyone with a buck to invest.   “Great technology,” we’ve heard.  ”Interesting space to operate,” we’ve been told.   “Come talk to us when you have more traction.”

And maybe they will.   But I have a sneaking suspicion that this may, instead, be a not-so-subtle way of saying: “When your customers are paying your bills and you no longer need our money, we’d love to talk with you.”

Fair enough.  Sometimes business is game where you learn the rules as you play.  But, man, what I’d give now to have had that message sink in 4 months ago.

Instead of having spent hundreds of hours putting spit an polish on yet another targeted slide deck illustrating how our business is going to break through the SMB firewall and actually land those coveted customers, I could have spent the same time and energy working one-on-one with the customers we actually do have to make our product even better for them.  I’ll take an evangelist over a promotion any day.

To have all of that time spent sitting in consultation with countless angels, attorneys and VC’s (oh my!) back —  to instead have invested that time in heads-down development of our top-five feature list — I can’t begin to imagine how much further ahead our application could be.

I don’t deny the networking benefits that we’ve accrued as a result of our efforts.  We’ve met a great number of people whom I’m sure we will be able to call on in the future.  Getting your name out there is sometimes the hardest part, and this time spent has certainly done that.

But in the end, we’ve invested a lot of time in talking — rather than doing — and that is time we will never be able to get back.

There’s no need for you to head down the same path.  Listen to those sage words:  ”Acquiring customers is a hell of a lot easier than securing funding.”

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This morning started pretty much like every other morning:  my two youngest boys began chasing each other up and down the hallway promptly at 5 am.  As if it were not enough of a wake up call for them to be up and running around at this hour, they’ve recently decided to introduce props into their routine.   Tinker Toys used as “swords”.  Squishy balls they throw at each other’s heads.  My oh-so-favorite invention, the Fisher-Price Corn Popper, run up and down the hallway at near lightspeed.  Or — even more shocking — the sudden and complete total silence that is the immediate precursor to either (a) a blood curdling scream, or (b) a compulsive artistic expression perpetrated against the unwilling walls of  their bedroom with a crayon or pencil or (God-forbid) a Sharpie I forgot to put under lock and key the last time I used it.

Yes.  This morning started off in typical fashion.

And it is probably because of this that I didn’t really pay attention when, later that morning as I was driving my oldest son to school, a car passed us heading in the opposite direction, flashing his lights wildly.

In hindsight, I remember seeing the car.  And I remember seeing the headlights flickering on and off.  And I vaguely remember thinking : “Hmmmmm…”  But not much more.

But then a second oncoming car came at us, the driver flashing the headlights.  Then a third.  By the time the fourth car approached I had run through all of the possible scenarios I could think of.  Did I have my brights on?  No.  Was something wrong with the front of my vehicle?  Didn’t seem to be.  Was there a speed trap up ahead?  I didn’t know — but of all the options presented this was the only one that made sense.

I immediately slowed to 5 under the speed limit and almost as quickly the driver behind me began expressing his frustration with my choice.  A quick honk of the horn was not enough.  He gave us several — just in case we missed the point.  And at the first opportunity he sped past us, flashing us the “You’re #1″ sign as he went by.

I’ll admit it.  At times like these I really wish vehicular assault was an acceptable response.  Not that I wanted to do the guy any bodily harm — but I really would have loved to see the expression on his face as that tinny little horn of his was wrapped around a tree.

It was almost as sweet as actually seeing him flagged over to the side of the road by a cop with radar gun in hand as we came around a sharp corner a little further up the road.

So what does any of this have to do with running a company?

A lot, I think.   Or at least more than I had previously thought.

The experience I’ve garnered so far has shown me that it’s very easy to get drawn into the “routine” of running the business.   Bills get paid on the 5th of the month.  Payroll gets run every other Monday with checks going out on Friday.  Standing status meetings every Monday at 9:30.   Advisory Board meetings.  Invoice runs.   Feature releases every third week.  The list goes on and on —  ad nauseam.   I can get so caught up in running the business that it becomes easy to forget to actually manage the business.

What do I mean by manage?

For me, this is simply heeding the warnings of the flashing lights as they cruise by.  This is taking the time to sit with Sales and actually hear to what is being said about the deficiencies in the marketing message — and then trying to get them resolved.   This is keeping an eagle eye on the checkbook and ensuring that we delay until the last possible moment every expense we can — if only so we have “just a little more” working capital.  This is ultimately having the stomach to admit that we may have embarked upon a mission that no one —  and I mean no one —  but our own small team seems to really “get”, and making the decision to stay the course and stick with our guns, staying true to our mission, our values and our future, when everyone else is trying like hell to convince us that we should become something we know in our hearts we are not.

This means giving the team every possible thing they need to succeed while removing (or circumnavigating) every possible roadblock to that success.  We’re going to take our lumps along the way, I know that.  There will be critics we encounter along the way with their own version of the “You’re #1″ salute.  And there will be competitors we’ll vehemently pursue (Crystal Reports — we’re coming after you).  But in doing so we won’t veer from our objective.  In the end we’ll simply stay the course.  We’ll do what we believe to be right.  And we’ll get to where we’re headed.

Of this I am certain.

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I spent last Friday, and the better part of this evening fine-tuning the financial model for Bluyah.  I’ve been over the sales projections provided by Adam (our Director of Sales) three times now, have added new expenditures that we had previously not budgeted, and have tweaked the spreadsheet model six ways from Sunday trying to find it’s breaking point(s). 

We have a few — and by Monday evening they will all have been addressed.  They will have to be.  Our future depends upon it.

I can’t tell you the number of entrepreneurs I’ve spoken with who are “winging it.”  They have (admittedly) a great idea.  They have the skills to transform that idea into tangible form.  But they lack any type of dedication to the business of managing their business.   I don’t know if it’s due to the 5 years I’ve spent running DiMax, or if I’m just ultra-paranoid about having to go out and find a real job if this venture tanks, but I obsess over what I call the “5 C’s” of our business:

1.  Cost: I can’t stress this one enough.  If we don’t know this we will never make money at our business.  Sure, we may earn revenues, but we will never make money.  There’s a huge difference between the two — and if you are like I was five years ago and don’t understand that subtle but very important difference I’d suggest turning off the computer immediately and reading any one of the countless books on the subject.  We absolutely must know our costs: per unit, incidental, recurring vs. non-recurring, etc.  It is fundamental to making money and therefore has to be fundamental to our business.  As was famously pointed out via the dot.com meltdown nearly 10 years ago, you can not turn a per-unit loss into a profit through volume no matter how hard you try.
2. Capitalize:  This is the other size of the cost coin.  Actually, it is the coin.  We have to be able to capitalize on our vision.  Which, put bluntly, means we have to have a product and we have to sell it.  Which means we have to offer that product at a price-point that our customers will be willing to pay (what the business books call “value for value”).  David Hansson made a great speech about charging for your product.  I’ll paraphrase:  If you don’t have a price for your product, making money is difficult.  And if you can’t make money, staying in business is even harder.  
3. Consistent:  This really means nothing more than “we’ll do what we say we will, when we say we will do it.”  We’re like Mutual of Omaha:  we’ll be there when you need us, we won’t change direction on you mid-stream, and if you need someone to lasso that grizzly bear, we can accommodate. 
4. Containment:  This really could be called “Scope” — but I wanted to use a “C” word.  And “containment” is more precise.  What it means is that we need to have a deep understanding of our product and be willing to fight each and every day preserve it’s nature.  We must resist the urge to be “everything to everyone” because if we do in the end we will be “nothing to no one.”
5. Cushion: Finally, we need to give ourselves enough leeway to learn from our mistakes.  We have to provide enough cushion in the sales projections so that we’re not completely out of cash if we miss one month’s goals.  We need enough cushion in the test cycle so that if we discover that the app behaves differently on the cloud than it did on the dev box we have time to identify and correct the issue.  When we don’t use the cushion we’ve alloted, we’re that much further ahead.  And if we do use it …. well, we’re in-step with our goals, not behind them.

This may seem like a lot to obsess over, but like I said: our future depends upon it.  

The more precise we are with our written financial goals, the less room we have for ambiguity.   And the less room for ambiguity there is, the greater the chance we’ll hit our targets.  Because we actually know what we’re aiming for.

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It’s really strange.  It seems like every start-up CEO I meet lately is sitting on a nice little war-chest of cash.  Flush from a recent A-round, or having just cashed in their freshly-vested Amazon stock options (at a strike-price that would make a grown man cry, no less), all seem extremely enthusiastic about their latest venture (as they should) and — oddly —  seemingly unconcerned with how they’re actually going to make money as a company.  Sure - I know making money is in each of their business plans.  But it’s not currently a necessity.  They have cash to operate.  They  have freedom.

Don’t get me wrong —  I don’t begrudge any of them one iota.  I wish them the best of luck.  And I fully believe that within the next two to three months (or four), we’ll be sitting pretty right beside them, having attracted the right investor(s) who believe as much in our vision for Bluyah as we do.  But all of that good will and optimism about our own future doesn’t change the fact that recently I’ve been feeling …. well ….  a bit “stuck.”

Watching my boys play outside this evening, it finally dawned on me exactly what I’ve been feeling “stuck” about.  

You can play after your chores are done

From the first through the third grade, we lived next-door to a family with 8 children.  Their 4-bedroom house sat on about 2 acres of property right in the middle of a subdivision of smaller houses on quarter-acre plots.  The family grew all of their own food in a massive garden, had chickens for their eggs, a cow for milk, and a pig —  I’m not making this up —  named “Bacon.”  Needless to say, the family was a bit of an oddity in the community.  And the middle son, Alan —  who happened to be my age —  was my best friend.

Every day after school a gang of us would tear home on our bikes, check in with our mother’s, then disappear into the nooks and crannies of the neighborhood, exploring every square inch of that desert town before the sun began to set and a gaggle of moms would begin calling us in, one-by-one, for dinner from the front porches.

And nearly every day after school, Alan would check in with his mother only to hear: “You can go out and play when your chores are done.”  In all of my recollections, I can’t seem to ever remember him being outside with us on any day except Saturday (the younger boys of the family were excused from chores on Saturday afternoons).

Seeing my boys playing outside this evening it finally hit me:  I think I now know what Alan must have felt all those years ago, watching the other boys tear off on their bikes while he went off to the chicken coop to gather up eggs.

The Uncertainty of Support

I’ve mentioned it before.  Currently, we pay our bills by doing custom development work for local companies. It’s a great way to fund development of our Bluyah application.  And it introduces us to facets of IT and all that that entails in a way that under other circumstances we would not have the opportunity to witness.  In short — it reinforces on a near-daily basis the need there is for an application like Bluyah.

But having an on-going service contract, or an on-demand support agreement with a set of customers has a way of skewing your priorities.  In short, your customers’ priorities become, as they should, your priorities.  And their emergencies become your emergencies.  And your development cycle — when push comes to shove — takes a back seat to your client’s development cycle.

Jon, one of our rock-star developers, often jokes about having to “do the chores” whenever I assign him a client development task.  And he’s right.  They are chores.  The work needs to be done — and be done well — but they are chores nonetheless.  In essence, we’re stuck inside doing all of the necessary work for our clients so we can keep the lights on and the Bluyah development cycle moving forward while, it seems, all of the other Seattle start-ups are outside playing in the sun.  If I were eight again I’d probably scream “It’s just not fair!”  

But I’m not.  

I’m 41.  I’m about a decade older than most of the other CEOs making pitches to the VCs.  I’m reinventing our company (and, I would suspect, myself to a certain extent) at an age when most people are settling in.  I’m doing my damned best to run a company that I think has a serious shot at making a meaningful impact.  And at this stage of our young start-up life, as far as I can tell,  that means that we have to do everything in our power to ensure we get to keep playing the game.  

And that means: until an investor aligns with our vision for Bluyah, we’ll keep doing our chores.

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There is a never-ending stream of information on the Net about how to start your new company, or things to watch out for when talking with investors, or even how to properly shake hands if you’re an entrepreneur.  But there doesn’t seem to be a lot of day-to-day insight from the trenches.   With that in mind, I thought I’d start sharing some of the more mundane things we’ve been doing.  Maybe it will resonate with an entrepreneur out there.  At the very least, it will help me keep better track of our new company’s history and day-to-day operations.

Monday Morning Huddle

We do it every Morning at 9:30.  Don’t bother calling at this time - we won’t answer the phones.  It’s an “All Hands” meeting and the agenda is dead-simple.  Each person in the company talks about what they did last week, what they are planning on doing this week, and any roadblocks to success they may face.  We order it by Department as follows:

1. Sales and Marketing.
2. Development and Production Support.
3. Financial and Executive

The goal is to keep the meeting to under 30 minutes.  With only 5 people currently, we’re usually able to keep it under fifteen.

Running the meeting this way accomplishes several key goals:

1. Every member of the company knows at a high-level what is going on with every other group in the company. 
2. There is no ambiguity about what we as a company are working on, or what our priorities are for the coming week.
3. Everyone is aware of any roadblocks other individuals may be encountering and can provide insight or assistance.

Like I said, we do this every Monday.  So, the obvious question becomes: what did you all discuss today?  Here are the highlights.  Just a warning: I won’t name companies we’re talking with here for all of the obvious reasons.

Today’s Meeting Notes:

Sales Stats: Adam had several meetings last week with potential clients, one with a potential strategic partner.  DEV needs to provide an estimate on integrating with potential partner’s product before we can move forward on licensing negotiations.  3 sit-down meetings planned this week.  Needs to make more phone calls and emails to “fill the hopper.”   Sees a trend emerging in discussions: companies want to see more analytical capabilities in the tool.

Development Stats:  Dev just finished up code for client release (we do custom development for various companies to fund our product development).  Currently prioritizing development activities for Bluyah.  It was to be: Sharing, Online Invoices and XML Post processing - but given feedback from Sales, release 1.1.1 will now be:

1. Connector and View/Spreadsheet Sharing
2. Online Invoices
3. Pre and Post Filtering, sorting, basic analytics (to include much improved charting capabilities)

Financial Stats: It looks like an SBA loan is out of the question - we have no tangible assets to put up as collateral, and even if I put my house up, the loan amount we could get is well below the financing we need to execute on Phase I of our business plan.  CFO has a talk with a major local bank this week to talk about other loan options.   Additionally, we’re assembling a list of Angel Investors to whom we have referrals.  We need to finalize the Go-To-Market plan before we can call this group, however.  Which means we need to know a whole hell of a lot more about our pricing model margins and associated costs when under stress.  Follow-up meeting scheduled later in the week to work through break-points in the revenue model.  Lastly - as much as we hate to do so - we simply can not financially afford to execute on the excellent marketing plan that was presented to us by a colleague last week.  It’s up to me to figure out how we can get them to deliver the Marketing materials in “phases” that can coincide with when we hope to see the first round of financing.   I always get the fun jobs.

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