Transitioning From A Web Consultancy to a Products Company

May 14, 2012 by · Leave a Comment

Morning Kiss 120/365: Grass
 Jeremy Kunz via Compfight

There are countless web consultancies out there. Major cities may have dozens of high-quality shops and even the smallest of towns will likely have at least one consultancy. A common sentiment that I hear from those in the consulting business is that they wish they were in a product business. They don’t like the endless cycle of finding new clients -> proposals -> contracts -> project management -> finishing up -> starting again. They want to transition from the “find new clients” cycle to building their own web products and working solely for themselves. It’s a noble goal, but not necessarily right for everyone. This article is all about the considerations you have to make when thinking about moving to a products business.

Definition Time

Companies can categorize themselves many different ways, so I want to define what I mean by consultancies and product shops. A consultancy is a company that earns revenue through client work. Client work can be anything from design and development to marketing. The defining factor is that a consultancy needs clients to exist, not customers.

A product company has ideas for web apps, services, or mobile apps and then acts on those ideas. Rovio (the Angry Birds maker), for example, is a product company. The key characteristic of a product company is that it relies on customers for revenue, not clients.

No Guarantees

Successfully building web products and apps for others, even great ones, doesn’t necessarily mean that you’ll be able to have that same success in executing your own ideas. When you’re consulting for another company you don’t have a real stake in how well the end product performs. Sure, you’d like for all of your clients to be successful and come back to you with new business, but that’s not crucial to the success of your consultancy.

When you start relying on a products business to pay the bills the stakes get much higher. Graphic cues, copy, user interactions, and, most importantly, the concept, all have to blend together well for you to have any shot at success. If your consulting background hasn’t prepared you well for those additional responsibilities then you’re gonna have a bad time.

Your Team Might Not Fit

The consultancy-to-products transition will have a tremendous effect on your entire team, and that needs to be seriously considered before making any such decisions. You may have a team of individuals who enjoy working on completely new projects… something that won’t happen as often in a products business. You may also have skills in the consultancy arena that don’t translate to products, or you may have a shortage of skills. Examples:

  • Your consultancy may not have the marketing skills or product development knowledge to get rolling immediately.
  • You may not need a sales team in the products business.

Every situation (and team) is different, but it’s important to understand how your team maps from one business type to the other.

My Advice To You

If having a products business is truly your desired evolution for your consultancy then that’s what I want for you as well. I just want you to be successful. Think through these questions to give yourself a better shot at success.

1. Give an honest evaluation of what your daily life would look like once you’ve started working on products full time. Sure, you’ll spend less time dealing with clients, but you’ll just replace them with customers that need even more attention. Does this still appeal to you?

2. Decide how to fund your products business. Are you still going to do consulting while growing products revenue? If so, how do you staff both ventures without doing a disservice to either? This is where having a larger team makes the transition much easier.

3. Do you want to operate the products business as a completely new entity? If you’ve grown your consultancy to the point that you can afford to split off a product team into a new company then that should be considered. That’s how we do it here. MediaLeaf is the product company, and Deep Field is the consulting company.

4. Start small. This applies to everyone looking to start a products business, not just those moving from consulting. I whole-heartedly recommend starting with a small product first, just to get your feet wet. This will minimize the chances of you spending 6 months building a product that absolutely no one wants. Baby steps.

A Different Approach

I took the opposite approach when growing my companies. MediaLeaf started in 2002-ish and has been a products business from Day 1. I bootstrapped MediaLeaf, did a ton of development work, outsourced design work, and grew revenues to the point I could start hiring team members. After years of growing MediaLeaf I had contacts at other many companies that started asking me for advice, so it was a no-brainer to eventually start a full-fledged consultancy. I haven’t finalized how to grow and operate the consultancy going forward, but I feel strongly that it will be successful because of all the experience we have building products. The bottom line: Starting a consultancy is a easier after running a products business. The opposite isn’t true. 

Finishing Up, Finally…

I didn’t intend for this post to be so long, and I probably could have split it up into 2 separate posts. There are many more items that I could add to this point, but I won’t. The length here just helps reinforce the idea that there’s a lot to consider before making the transition to products from consulting.

What’s your take? I’d love to hear from anyone considering making the transition. What advice do you have for consultancies looking to evolve?

Filed Under: Bootstrapping, CEO, Entrepreneur, Features · Tagged With: , , , , , , , , ,

Do Something Today

May 8, 2012 by · Leave a Comment

Underwater Bubbles
Creative Commons License Photo Credit: Duncan Rawlinson via Compfight

Defining Success

What makes you feel like you’ve had a successful, productive day? For me, it’s finishing something. Not just a to-do item, but something more substantial… like finishing up a client project or launching a new feature. I have a hard time feeling productive if something tangible like that doesn’t get done by the end of the day. I have to DO something to feel good about the day of work I’ve put in.

Whenever I need a little extra motivation I always go back to this video. You won’t want to go to bed tonight after watching this.

If you can’t see the video then click here.

Homework

Do whatever it takes to make today productive. Be so eager to get things done that you can’t possibly sit still. Your competitors might be taking the day off or only putting forth a half-hearted effort – don’t make the same mistake.

How do you define success for any given day? What do you do to keep yourself motivated?

Filed Under: Entrepreneur, Misc, Tips and Tools · Tagged With: , ,

7 Tips For Marketing With A $0 Budget

May 1, 2012 by · Leave a Comment

Injured Piggy Bank WIth Crutches
Photo Credit: Ken Teegardin via Compfight

Marketing is hard. It’s hard when you have a large budget – but it’s simply daunting when you have a small budget, or no budget at all. There are things that you can do right now to market your product even if you have no budget.. all it takes is time, commitment, and a willingness to hustle.

1. Blogging

Blogging is still cool. It’s the best way I know of to provide quality content to your customers. Consistently posting high-quality articles to your blog, that are highly targeted to your particular industry, will lead to long-term gains. A blog is playing for long-term success… no overnight miracles here unless you hit a grand slam with an article that happens to go viral.

2. Videos & Screencasts

Videos are similar to blogs in the way that they provide high-value content to users. Again, this is a long-term plan for success. Screencasts are good idea if you have a product that lends itself to that type of instruction.

3. Social Media

Social media is somewhat different from blogging and screencasts in that it connects you directly with your target audience. Blogging mostly requires waiting for your audience to find you (although there are ways to speed up the process). Social media is more proactive and leads to quicker results. The downside to social is that every day the noise increases just a little. More and more companies are using social to push their brand, which means it’s getting easier for your message to get lost in the shuffle.

4. Leverage Your Existing Network

I would imagine that anyone who has been in business for any decent amount of time has a large network of contacts. You should absolutely  leverage your contacts for marketing purposes. Let them know that you would appreciate any referrals or leads that they can give you and they will, usually, gladly keep you in mind. The better your relationship with them the more likely they are to send referrals, so it’s always important to cultivate relationships and build strong bonds.

5. Hustle Relentlessly

It’s all about the hustle. Success in marketing is pretty similar to success in just about any other area of your life. The more you work, the harder you work, and the harder you hustle will bring you more success more quickly. Never pass on an opportunity to market yourself or your product. Relentlessly follow up with new contacts and leads. Constantly strive to get you or your product’s name out there in front of your audience.

6. Utilize Your Biggest Fans

Your fans are your most potent weapon for free marketing. They are already sold on you, so get them to help you spread your message. A true fan’s value can’t be measured. They are willing, and even anxious at times, to promote your products for you. They believe in you so much that they feel compelled to help. Identify your biggest fans and give them the tools that they need to succeed.

7. Forums

I consider forums and message boards to be a different animal than social media. Forums are an older type of community and require a different strategy for success. No matter what industry you’re in there’s going to be a forum that servers your desired audience. Spend some time identifying those forums and start participating in the discussion. Be sure to pay attention to the forum’s rules and make sure that you don’t come across as spammy.

What other strategies for low-budget marketing have you used successfully?

Filed Under: Bootstrapping, CEO, Features, Marketing · Tagged With: , , , , , , ,

Revisiting Your Blog Topics Backlog

March 29, 2012 by · Leave a Comment

Sprint Board

I can’t speak for all bloggers, but if you’re anything like me you have dozens or hundreds of topics ready to go at any time. I’ve written about my blogging workflow before, but any time I have an idea for a post I log into WordPress, create a new post and save it as a Pitch (via the awesome Edit Flow plugin). That way it’s there and waiting for me when I get ready to fill out the post.

I noticed a few days ago that my backlog of topics was getting really long, so I decided to do a little editing. Looking through the list I found that many of the posts I had pitched or stubbed out didn’t make sense any more. Many were related to some then-current event. Needless to say those aren’t going to be of any value going forward, so I deleted them. If the post had some merit then I tried to come up with a way to make the topic more evergreen. (Evergreen is blogger-speak for content that is always timely and helpful).

Today’s a good day to take a few minutes and browse through the unpublished articles and pitches you have and do some paring down. Start doing some writing for the topics that you still really like. Delete the ideas that don’t make sense any more. At the end of the day you’ll have a leaner, tighter blog.

Image credit: roolrool on Flickr

Filed Under: Blogging, Tips and Tools · Tagged With: , , , , ,

The Continuing Evolution of Facebook

March 5, 2012 by · Leave a Comment

Pinterest

The evolution of social continues to march forward, unabated. Facebook is evolving (even though I suggested that Facebook was in decline a while back), but upstart niche networks could start pulling traffic away soon. How is Facebook handling some of the new social media paradigms?

The Growth of Asymmetrical Following

Google+ was hot for about 10 minutes last year. Now it’s largely faded away. If it wasn’t baked into Gmail I don’t think we’d ever see anything from G+. However, the one feature that Google+ really got right was the concept of Circles, which is Google’s implementation of asymmetrical following.

Asymmetrical following, made popular by Twitter, is a key feature in Facebook’s evolution too. Last year Facebook introduced subscriptions, which has allowed mainstream users access to celebrities and high-profile users. Subscriptions allows a user to see all of the public posts by an individual and have added a new twist to the stream.

Pinterest and the Rise of Sharing

Pinterest has quickly become the hottest startup in the social media world. The concept is quite simple… just share the things that interest you. I’ve heard from a few sources that Pinterest itself has a user-base of about 98% women, which means that male counterparts will be coming soon. GentleMint is the first male-oriented pinboard to hit the market and is currently in invite mode.

It appears that sharing is the next wave of social media. First, we had personal status updates. Now we’re moving toward users sharing their hobbies and creations a little more. Less personal, more useful.

Facebook and Sharing

It will be interesting to see how Facebook responds to the sharing phenomenon. Will they allow networks like Pinterest and GentleMint to continue to grow without reacting, or will they try to replicate some of the most popular features as they did with Google+?

What’s your take? What does the future look like 1 year from now in regards to Facebook and Pinterest? More importantly, what’s the next evolution of social?

Filed Under: Features, Social · Tagged With: , , , , , , ,

Scheduling SM Content Is Perfectly Fine

March 2, 2012 by · Leave a Comment

Someone's Lost Schedule Book

Many social media marketing (SMM) pro’s consider it bad form to schedule content in advance. The theory is something like this: if you schedule content then you’re not necessarily going to be around to have conversations about it, making you less authentic. Or maybe it will make you look like a spammy scumbag. I completely disagree.

Scheduling content in advance is fine. In fact, I think that it’s almost a necessity as we marketers get busier, have more networks to update, have more followers to communicate with, etc. It’s only logical and practical.

I would say that putting out content at times that it’s most likely to be impactful for your audience is more important than putting it out only when you’re at the keyboard. If you need to promote something in the afternoon today, but you know that you’re going to be away from the keyboard until this evening then you should absolutely schedule it.

My mission for you today is to go out and schedule something today. If you’re looking for a way to schedule something then take a look at Hootsuite. If you want to promote an event or something with a specific date then you should check out a neat little project that we’ve been working on called ItStarts. It’s a great way to promote your events.

Image credit: ASurroca on Flickr

Filed Under: Social, Tips and Tools, Uncategorized · Tagged With: , , , , , , , ,

BS50 Part 7: Do You Need A Cofounder? – The Cons

February 10, 2012 by · Leave a Comment

Bootstrapped Startup 50This post is part of the Bootstrapped Startup 50 series. The goal for the BS50 series is to cover everything that matters when bootstrapping a new startup. The posts are sequential, so it wouldn’t hurt to read from the beginning if you’re just joining in. 

In the last installment of the BS50 we talked about why having a cofounder could be a good idea. This time we’re going to take the alternate side and point out a few things that could be detrimental to your startup.

Personality Conflicts

Startups and small companies truly are like families. Everyone has to spend a great deal of time around each other and everyone has to rely on each other for success. There are no inconsequential team members when a team has only 2 or even 5 employees. Everyone has to work well together or the quality of product shipped will suffer. Personal conflicts between team members can upset the delicate balance in small teams.

This risk is heightened significantly when you’re considering a cofounder. A cofounder is going to bear a significant portion of the decision making responsibility, so trust and understanding are absolute requirements. To be successful you’re going to have to implicitly trust your cofounder, letting them handle their area of expertise without your input. If you don’t get along with your cofounder then the startup will necessarily feel that discord.

Financial Considerations

A cofounder, depending on your specific stock and financial agreements, will necessitate a large portion of income generated. This is somewhat less important if the company gets off the ground quickly and starts earning enough revenue to cover expenses. But what happens if the fledgling company struggles along for a year or so and there isn’t enough revenue coming in to pay either cofounder enough to keep them around?

Long-Term Stability

The long-term goals of your cofounder should matter when making decisions. Are they in the company for the long-term or are they just going to dabble in your startup for 2 years? A committed, long-term cofounder is significantly more valuable to your company than someone who’s just looking to help you out for a while or wanting to get out of their current job.

Your Take

What are your thoughts on bringing in cofounders? Have you had any experiences with a cofounder before? Please share in the comments.

Next up we’ll talk about the potential pitfalls of adding cofounders.

Filed Under: Boostrapped Startup 50, Features · Tagged With: , , , ,

Why Relationships > Followers

January 31, 2012 by · Leave a Comment

Coffee break

I know that it’s been said many times before, but you shouldn’t worry about the number of followers you have on Twitter, fans on Facebook, or whatever other social metric you’re tracking. Relationships matter more. It’s quality over quantity in a certain sense.

I think that most everyone tends to increase the number of Twitter users that they follow over time, which necessarily increases the number of posts in their stream. The perpetual stream growth means that your posts are getting squeezed out, or they will be soon. Relationships, however, will survive the stream squeeze. Taking the time to create genuine relationships with your Twitter friends will get you added to lists of favorite users or get your posts noticed more. Personally, I pay much more attention to tweets from users that I recognize and have had conversations with.

Take a few minutes today to start creating some true relationships. Pick a few of the Twitter users that you follow and strike up a convo with them and see what results you get. I’m sure you’ll be pleasantly surprised at the number of people looking to interact with you. Then you should take the users that care enough about you to respond and put them in their own list so that you can always give them extra attention… they’ve earned it. That’s why relationships trump followers.

Image credit: marianNYC on Flickr

Filed Under: Social, Tips and Tools · Tagged With: , , , , , ,

BS50 Part 6: Do You Need A Cofounder? – The Pros

October 26, 2011 by · 1 Comment

Bootstrapped Startup 50This post is part of the Bootstrapped Startup 50 series. The goal for the BS50 series is to cover everything that matters when bootstrapping a new startup. The posts are sequential, so it wouldn’t hurt to read from the beginning if you’re just joining in. 

The decision whether or not to have a cofounder for your new venture is one of the most critical that you’ll make. It will affect everything from how the company is operated to how much money you personally make once you’ve built a successful business. There are many things to consider, and it’s not a decision that should be taken lightly.

I’m going to split this discussion into two parts because it may get a little lengthy. In this post I’ll hit on the advantages of bringing a cofounder in.

Cofounders Vs Employees

First, a quick note about when you should choose a cofounder instead of an employee. Early on you’re most likely not going to have any revenue, so hiring an employee immediately creates an expense that has to be paid. If you’re considering hiring someone who is extremely talented and that you trust implicitly then you should consider making them a cofounder (co-owner of the company) instead. If they’re passionate enough about your idea then they may forego some salary now for ownership considerations and deferred income a little further down the line. Cofounders are inherently more invested in the company’s success.

Complementing Your Skillset

Bringing in a cofounder whose skills complement yours, not mimics them, is a great way to round out your newly formed organization… they can be the yin to your yang. If your startup is a web company and you’re a designer then you’ll probably need to bring in a developer. Bizdev types will probably need someone technical, depending on the industry. Having founders with a combined skillset that covers the majority of the work needed to get a company off the ground is a luxury and probably gives you a better chance at success than going it alone or having to rely on contractors and new-hire employees.

Cofounders Are A Force Multiplier

The initial work required to get your product to an MVP state or an early alpha stage is daunting. Being able to split that workload will help you get your product out the door sooner and let you start the even longer process of building a profitable product earlier. This force multiplier allows you to more aggressively tackle opportunities and challenges, go after bigger clients, think bigger, etc.

Your Take

What are your thoughts on bringing in cofounders? Have you had any experiences with a cofounder before? Please share in the comments.

Next up we’ll talk about the potential pitfalls of adding cofounders.

Filed Under: Boostrapped Startup 50, Features · Tagged With: , , , ,

How To Stop Worrying About Building An Audience And Just Get Started

October 24, 2011 by · Leave a Comment

Descending the summit ridge

Have you ever thought about starting some sort of venture and found yourself wishing that you had done it five years earlier? I certainly have, and I’m willing to bet that you have too. That’s what I  was thinking when I was in the process of starting this blog. I knew that growth would be slow and that it would be discouraging at times. I thought that if I had just started this blog five years ago when I first entertained the idea then I could potentially have a huge following by now and have surefire international fame and notoriety.

The best motivation I’ve found to combat the five year remorse is to just get started. If you don’t get started now then you could regret it five years from now, wishing that you had finally acted upon your idea. Just do it. If it’s going to take years to get where you want to go then there’s never a better time to start than the present.

Your Homework

What have you been putting off doing because it seems daunting or because you know that success is years away? Go ahead and put that idea into motion. Get started by doing something concrete that will help push the idea to fruition. Start that blog, contact that lead, just do something. Let me know what you’ve done in the comments.

Image credit: mikep on Flickr

Filed Under: Blogging, CEO, Entrepreneur, Features, Tips and Tools · Tagged With: , , , ,
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