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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: , , , , , , , , ,

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: , , , , , , ,

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: , , , ,

Discussion: What Metrics Do You Track?

October 21, 2011 by · Leave a Comment

I was recently looking at the tracking charts that I have setup for one of my sites. I looked at charts regarding membership counts, revenue, etc. That got me to thinking about all sorts of things related to metrics and charting. Let’s have a discussion about what you track, what you get the most value from, and what advice you have for others.

  • What metrics do you track and review?
  • Do you have a dashboard collection of charts that you review daily?
  • Do your charts update daily, hourly, or in real-time?
  •  Do you still have charts in spreadsheet software like Excel or Google Docs?
Leave your comments below and let’s talk about it.
Filed Under: CEO, Tips and Tools · Tagged With: , , , , , ,

Web Apps That We Currently Pay For

September 21, 2011 by · Leave a Comment

monopoly-outsource

I use a lot of different web apps to manage things at MediaLeaf. We try to use 3rd-party apps whenever we can to avoid reinventing the wheel. We don’t have the manpower to be spending time duplicating the functionality of others, so I typically don’t have a problem paying monthly for tools that are useful to us.

I love promoting the great work of others, so I’m going to give you a rundown of all the great apps that we use regularly. The list only includes the apps that I currently have paid accounts to. I have free accounts for many other apps. I’m probably also gonna forget a couple of apps. Here goes (in no particular order):

  • Mailchimp – The best marketing email platform around
  • Followup.cc – I’ve written about Followup.cc before.
  • Tout – Simplifies the process of sending repetitive emails. I use this for finding leads.
  • Basecamp and Highrise from 37signals – All of the 37s products are exceptional and need no introduction.
  • Endicia – Handles all of my mailing needs
  • ThinkVitamin Membership – Great set of training resources. I haven’t used TVM anywhere near as much as I need to.
  • Zendesk – I should get a volume discount at Zendesk due to the number of helpdesks I have setup with them.
  • SEOmoz.org and DIYSEO – I have 2 different apps for tracking/optimizing SEO. One day I’ll condense these down into just 1 app.
  • Beanstalk – Hosted SVN solution that works really well for us.
  • Postmark – Great system for handling all of our transactional emails.
  • Hootsuite – The best social media management console.

If you have an app that you’d like me to consider then feel free to email me.

Image credit: Scott Ingram Photography on Flickr

Filed Under: CEO, Reviews, Tips and Tools · Tagged With: , , , , , , , , ,

Time is Your Most Precious Asset

September 19, 2011 by · Leave a Comment

Couldn't resist it!

Never has the title of this post bene more true than in the last few weeks. I’m juggling a lot of MediaLeaf projects and I’ve recently purchased a new home, so time has definitely been a diminishing resource lately.

Times like this are a good opportunity to take a step back and look at everything you’re doing. Is everything that you’re working on directly related to your bottom line? When you’re pressed for time, as all of us are, it’s hard to justify spending your work time on anything that isn’t directly related to your bottom line or charitable pursuits. Here are a few ways to make sure that you’re focusing your energy and time most effectively.

Record Everything

For a few days, or even a whole week, keep a notepad with you and record all of the tasks that you spend your time on. You don’t have to keep diligent records of how long you’re actually spending on a task, just record what the task is. At the end of your experiment look through the list and see what unnecessary items you’re doing. There’s bound to be a few things that can either be delegated or ignored altogether.

Delegate More

Many founder and CEO types have problems delegating, especially in smaller companies. You’re used to doing all of the work yourself and feel most comfortable that way. I used to have that same problem, but over the years I’ve realized that there just isn’t enough of my time to go around and that I have to delegate low level tasks.

Delegating also means not spinning your wheels trying to figure something out. If you’re working on a project and run into a problem then it’s OK to get someone else to help you. You don’t have to waste time just so that you can figure it out yourself.

Focus

This one goes without saying, but it’s particularly hard for me. I have a tremendously short attention span, so it’s hard for me to concentrate on one task for more than 3-4 minutes at a time. I’m constantly playing with new methods and tricks to lengthen my attention span. If you have focus and attention problems then keep trying to make improvements. I’d love to hear your suggestions in the comments.

Image credit: blinkingidiot on Flickr

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

All-Time Great Books on Sales

August 31, 2011 by · Leave a Comment

als het me nu nog niet lukt!

I know nothing about sales, at least not the formal sales methods used by the pro’s; I readily admit that. I am, however, very good at selling things. So it makes perfect sense to me that reading some of the best sales books ever written should have some positive impact on my sales abilities.

I had no idea what books to try to read, so I did an experiment. I went to Quora, posed the question, and waited a few months to get a decent amount of responses. The Quora community was even nice enough to summarize the answers and choose the top recommendations. Here are the results.

Top 5 Sales Books (as recommended by Quora users)

 Next Up

Now I want to read each these books and see what I can learn from each and put into practice. I don’t do a lot of direct selling, but I’m hoping the principles will be generic enough to apply to the online startup world.

Your List?

What are your top sales books? What advice have you learned from the book(s) or do you have about sales in general? Comments welcome!

Image credit: Frans & all on Flickr

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Don’t Be Like Weather Reporters

August 27, 2011 by · Leave a Comment

Every year during hurricane season we’re given an opportunity to learn a little bit about authenticity. TV weather reporters dream of the day they can cover a hurricane from some wind-ravaged location. Unfortunately, it appears that much of the time during their broadcasts they are intentionally exaggerating storm effects. The reporter will appear to be barely able to stand, having to lean into the wind to keep their footing… and then you see an 80-year old strolling by.

Inauthenticity Can Kill Your Reputation

Just ask the weather industry… They are hearing it from all angles since the end of the Irene’s threat.. Viewers feel inauthenticity. Media outside of the weather industry feel it too.

Similarly, your readers and customers can spot a fake from a mile away, so you have to continually strive for authenticity and trust.

Your Thoughts?

Have you ever learned a lesson the hard way related to authenticity?

Filed Under: Blogging, CEO, Misc · Tagged With: , , , , ,

The Case Against the MBA

August 23, 2011 by · Leave a Comment

Nuffield College

MBA programs have been much maligned recently, especially in tech circles. The prevailing thought is that business schools push you through a cookie cutter program that doesn’t prepare you especially well for the types of challenges that you’ll find in modern businesses.

Peter Thiel famously became the face of the anti-MBA movement recently when he unveiled his “20 Under 20” program, which aims to radically advance the tech industry by enticing great, young thinkers away from college. Thiel says “The Thiel Fellows will change the world and call it a senior thesis.” Brilliant.

Startups Care About Skills, Not Degrees

The startup industry is focused solely on results and growth. For this reason alone whatever degrees and letters attached to someone’s name on a resume don’t matter much. If you have the skills necessary to do the job then there’s a great likelihood that you’ll get hired. Even in a “hire slow” company skills should be the single biggest factor in hiring decisions.

Business Schools Need to Evolve

An undeniably large transformation has taken place in the business world in the last 10 years, thanks in large part to the lowest barriers to entry for new businesses ever. Companies are so ridiculously easy and cheap to start now than everyone is thinking about it. Business schools have to embrace this changing business landscape and start producing a larger proportion of entrepreneurs.

Harvard (and I’m sure a few others) is starting to take notice and focus more heavily on entrepreneurship. They’ve recently created an Innovation Lab program and promote their entrepreneurship program more prominently. They say that by 2008 50% of graduates had become entrepreneurs by their 15th reunion, but that timeframe should be much faster. 10 years from now 50% of graduates should be on their way to entrepreneurship as soon as 5 years after graduation.

Your Take?

What do you think? Do business schools, as they are currently constituted, provide enough value for students that they make sense? How do you think business schools should evolve?

Image credit: SBA73 on Flickr

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Hire Slow, Fire Fast

August 17, 2011 by · 1 Comment

Portfolio Mailer

One mantra for quickly growing startups is “hire fast, fire fast”. Is that really the best approach to staffing a growing startup? Hiring with abandon may sound cool, but it’s counterproductive to team building and likely means that you’re missing out on some great candidates.

Don’t Skimp on Interviews

All companies should strive to only hire the best of the best, the A+ employees. It’s hard to do that if you hire someone just for the sake of hiring quickly. How much more time does it really take to interview five candidates for a position instead of two or three? Interviewing fewer candidates practically guarantees that you’re going to make some major misses in your hiring, which also gives time for the A+ talent that you didn’t interview to find another company.

Hire Fast Is Simply An Extended Job Interview

Hiring quickly means that either you’re desperate for the manpower or that you’re not doing a thorough job in your evaluations. “Hire fast, fire fast” is just a less efficient way to evaluate candidates. Here’s how I see the job interview going for a company that’s rapidly scaling…

Company: You’re super awesome at Rails/NoSQL/node.js/other cool tech, right?
Candidate: Yes
Company: You’re hired!

Then comes the real interview, a few days or weeks actually performing the job. If the new hire doesn’t mesh well with the team or doesn’t live up to expectations quickly then they’re fired.

Hire Fast is Inefficient

It’s a tremendous waste or resources to hire someone, train them, and then fire them after just a few weeks. Not to mention that it wastes the candidate’s time, makes them start the job hunt again, and possibly puts a negative experience on their resume.

Fire Fast

Every company should implement a fire fast policy. Regardless of how an employee was hired the relationship can go unexpected ways. If an employee’s work quality isn’t up to your expectations, and coaching hasn’t helped, then it’s time to cut your losses and move on to someone else. There are plenty of people out there in the tech world looking for jobs, so companies have the luxury of being picky.

Thoughts?

What hiring approach does your company take? Are you hire fast – fire fast, hire slow – fire fast, or something more traditional?

Image credit: scottkellum on Flickr

Filed Under: CEO · Tagged With: , , , , , ,
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