How soon should your startup focus on profit?

I’ve co-authored a post on the Founders Network Blog, discussing how soon a startup company should focus on profits. Why not take a look!

I’ve co-authored a post on the Founders Network Blog, discussing how soon a startup company should focus on profits, based on my experience in my previous company. In short, in most cases I think you should try and get to profit early, so take a look at the post and see why!

“The Dirty Dozen” Marketing Processes that every internet start-up must master

What I learned from running an internet startup.

Over a year ago, I wrote an article on the blog of my company Publisha, saying that I’d come round to thinking that there are 12 core marketing processes that most internet startups have to focus on.

My original article has had around 20,000 views, and I’ve received a lot of feedback on it. I thought it was time to update my thinking.

The marketing processes

Almost every startup needs to get these things right:

1. Drive targeted traffic to homepage
Aim: Get the right potential customers onto the homepage.

2. Signup
Aim: Get them to sign up for a free account.

3. Induction immediately after signup
Aim: Get the user to set up their account ready to actually use it.

4. Activation: keep them going
Aim: Ensure user is still using the site 30 days later.

5. Push them to Pay
Aim: Encourage payment within 30 days through roadblocks and desirable features.

6. Payment
Aim: A smooth payment process with minimal dropout.

7. Retention
Aim: Ensure user accounts remain active.

8. Referrals
Aim: Get users to refer other potential customers to us.

9. Testimonials
Aim: Get users to tell us why we’re great, in a form we can use in our marketing.

10. Upgrades
Aim: Get users onto higher-paying accounts and deliver more value.

11. Re-activation
Aim: if a publisher stops using their account, we get them going again

12. Build your email list
Aim: Get a list of users that are active, engaged, that you can contact regularly to keep your momentum going.

BONUS PROCESS 13. Continual Improvement
Aim: Continually measure and optimise all the marketing processes.
This is vital: it ties all the other processes together.

Why your start-up needs to think in terms of processes

If you’re looking for coherent direction, improvements in your business every day, and a feeling that you’re not floundering but executing a plan, you need processes. In short, they can shortcut your route to the top.

In my startup, I find that my biggest problem is a lack of time, and that holds us back more than anything else. If you find that you are limited by lack of available time then processes will help you immensely. Setting up a process probably takes about ten minutes extra effort, but the benefits soon stack up. If you’re measuring your effectiveness you can start doing more of the good stuff, and stop doing the pointless stuff that’s currently sucking up your time. Better time management alone makes processes worthwhile.

If you’ve ever worked in a big company you have two things: my profound sympathy, and probably some experience of processes. There’s an old saying, “Education is wasted on the young”, the thinking being that you don’t appreciate it until it’s too late. Well, that’s exactly what I think about processes as they apply to start-ups. They say there’s a lot that big companies can learn from start-ups. Well, here’s something start-ups can learn from the big boys.

All that start-up stuff about “We’re nimble” can often be code for “We don’t really know what we’re doing, so we just flit around from thing to thing without a coherent plan and a solid direction pushing us forward”. So the momentum never gets going. I think processes are a great way to give that momentum.

Bigger companies formalise this into talk of “Quality Management Systems” and accreditations like ISO:9001, but you don’t need to get that heavy with it to get the benefit.

Another benefit: as you get bigger and take on more staff, you can already say “This is how we do things round here”, and hand off an optimized process to them, rather than vague notions of what to try.

How it works in practice

It’s not rocket science. It’s not even new – hurray, that means it’s tried and tested!

The idea comes from an American called W Edwards Deming who’s been dead for nearly 20 years, and he was 93 when he croaked! He invented it in America, everyone there told him he was crazy, so he went to Japan, showed it to them, and they used it to thrash the Americans by making things better and cheaper.

If you want to get all funky and MBA about it, it’s called the Deming Cycle, or Plan Do Check Act (PDCA), which you can check out on Wikipedia, but you can go with a light version of it to make sure it doesn’t take up too much time.

Here’s what you do:

Plan: What are you going to do to get the results you want?
Do: Go and do it!
Check: How did you do? This is where your metrics come in.
Act: What are you going to change in the process to improve it for next time?

So for each of the first 11 processes I’ve listed above, this is what we do. Process number 12 is really this Plan-Do-Check-Act cycle, where you break out the metrics, the Google Analytics, and all that good stuff.

An example process

Not to go into too much detail, but to take Process 1 as an example, here’s the basic sorts of things I cover in the plan for my own business. No great surprises here:

1. Drive targeted traffic to homepage

Search Engine Optimisation
Search Engine Pay-Per-Click
Facebook Advertising
Joining in on Discussion Forums
Blogging
Commenting on Articles on other blogs
Twitter
Affiliates
PR and press coverage
Each of these items then breaks down into further detail on what we’re going to do. So for the item on commenting on articles on other blogs, we have lists of the blogs that we comment on.

We then have regular review meetings of the processes where we discuss results and decide how to change our processes. Over time, we think this will let us get better and better at what we do.

Why not try it and see how it works for you?

Time management secrets for successful entrepreneurs

A few simple things that could give you an extra two or three hours a day, every single day.

As an entrepreneur, I find that the biggest obstacle to getting things done is lack of time. You probably feel the same. What if I could show you a few simple things that could give you an extra two or three hours a day, every single day? You’d take it, right? Well, here we go!

Essential: Value your time

You must value your time, and make sure everyone else values it too. Time is the only thing that you and Bill Gates have exactly the same amount of, and don’t let anyone waste it! It’s an attitude thing.

Plan your day with time slots

When you were at college, or university, did you pretty much wait until the deadline to get motivated and get anything done? That’s what most people do. Why? Because deadlines work! So give yourself some deadlines—a bit of pressure—and watch your productivity soar!

There’s a common saying: work expands to fill the time available. So don’t give it time to expand!

Here’s how. Try planning your day, hour by hour, making a series of appointments with yourself. For example, “Reply to emails” might be 9 a.m. to 10 a.m. “Write new FAQ” might be 10 a.m. until 11.30 a.m. I usually work in 15 minute slots, because hardly anything takes less than 15 minutes by the time you’ve got ready to start, actually done the task, and finished up.

I’m generous with my time slots, and plan for things to take a bit longer that they perhaps will, which gives me time for breaks and for doing menial tasks. If a task runs over, I decide whether to abandon it and move on, or to reschedule my day, or just to remove the task whose time I’m eating into and get it done tomorrow.

When I plan my day, I use the standard iCal calendar application on my Mac, and created a new calendar called “Plan”. This shows up in another color, in my case red, so I don’t confuse my own planning with my external appointments.

You can either do your daily plan at the end of the previous day, or as the first thing you do in the morning. Try experimenting with both.

Pick some must-do items each day

I have a few major things I want to accomplish each day, and then fill in the rest with the grunt work. Then, if time slips away, at least I’ve achieved something worthwhile each day. So start your time plan by planning in the major things, to make sure they get done first.

Task switching wastes time: you cannot multitask

If you do only one thing at once, you can fully concentrate on that thing, and you only have to prepare for it once. If you do several things at once, you waste too much time switching between tasks. To start a task, you have to get prepared, then you have to get your brain in gear and hold all the relevant information in your head. That takes time. Every time you switch tasks, you are wasting time getting back up to speed with where you left off. You are also probably not fully concentrating.

So if you have several things to do, do them one after the other, not all at the same time. You’ll be quicker, and you’ll make a better job of it.

No interruptions: shut down email and chat

I am often at my most productive when I’m sitting on the train, travelling to my office. Why? I have no interruptions. There’s no wi-fi, so there’s no email, no chat, no distractions. If you need a big boost of productivity, cut yourself off from the outside world! You’ll be surprised at how little you actually miss.

Use online chat properly

Online chat, via MSN or whatever messenger you use, can be a huge drain on your time. A conversation that would take a minute by phone probably takes about five minutes by chat, because people can’t type as fast as they can talk. You can’t really do anything else while you’re chatting, because you only get 20 second chunks of time while the other person types. So for anything non-trivial, arrange a voice call at a pre-arranged time, or encourage people to get in touch by email, so you can reply at your convenience.

Of course, sometimes chat can be a very quick way to get something sorted without having to make a voice call. The best advice is just to think before you get into communication with someone as to what will be the fastest way to get the information you need.

We experimented with OLark live chat for our users, but recently turned it off because it was simply eating up too much time. We replaced it with Assistly, which helps people to answer their own questions, with fall-back to email.

Plan calls in advance, at a fixed time

People always call me when I’m busy. If I’ve got a quiet moment, nothing will happen, but as soon as I get into full concentration mode then either the phone will ring, or Skype will ring, and I get interrupted. *When it comes to getting things done, interruptions are the devil.* Wherever possible, plan phone calls in advance. I often do this by chat, eg “Hey Richard, will you be free for a call at 2 p.m.?” Then you can slot this into your plan for the day, and continue uninterrupted.

Two tests to determine whether something is worth doing

My business partner and I have developed a couple of simple tests that we find ourselves using often when we are trying to work out what to do next:

1. Will this task move the business forward?
2. Is this really the best use of our time right now?

If you can’t come up with good answers to those questions, chances are you’re not using your time properly, and should move on to something else.

So there you are, a few simple and straightforward things to get you more time in your day. It’s not rocket science, so pick one of these techniques and try it out.


Book on Time Management

There’s only book I recommend on time management—who’s got time to read any more, anyway! It’s No B.S. Time Management for Entrepreneurs by Dan Kennedy. Dan is pretty much the best business author I know of—he’s old school, he cares about actually making money! I recommend all his books, and the Time Management one is a great place to start!

(If you want to go a bit bizarre, his book “Making them believe” gives marketing lessons based on the case study of a rogue doctor who implanted goats’ testicles into his patients, but that’s probably a story for another day!)

How to get the best out of Seedcamp

Since my company Publisha was a 2010 finalist and winner of Seedcamp, I thought it would be helpful for future teams taking part if I gave my thoughts on how to get the most out of Seedcamp.

Since my company Publisha was a 2010 finalist and winner of Seedcamp, I thought it would be helpful for future teams taking part if I gave my thoughts on how to get the most out of Seedcamp.

The short answer: be prepared

First and foremost, go in prepared! If I’d been properly prepared I would have got 10 times the value out of Seedcamp. (I didn’t really know what I was preparing for though, so read this post!)

It’s not just being prepared with a great presentation, but being prepared for the Question and Answer sessions. (Get a good night’s sleep, the Q&A session is really tiring!). Here’s what to prepare:

Presentations

For the presentation, try and get hold of a few previous Seedcamp presentations and see which format you like most. Whatever you do though, get to the meat quickly! Sitting through about 20 presentations can be pretty heavy going, so grab the audience quick! Don’t mumble on about background detail, come straight out and say this is what we do and this is why we’re amazing!

By the way, everyone else will appear amazing and you will feel like your business is a big old sack o’ the brown stuff. Believe me, appearances can be very deceptive here, so don’t worry about that!

Many of the teams from the Seedcamp 2010 heats and finals seemed to have some trouble describing their business and what they actually did! Quite a few resorted to a pitch of the form “We’re like (Company X) for Y”, eg “We’re like FourSquare for Gardening”. Given that this was quite a few months ago, quite a lot of people in the room didn’t know what FourSquare was, so that description fell flat! (For the record, FourSquare is a service for you to tell burglars you’re not in your house, so they can come round and steal your TV.)

Some people did those presentations where they don’t really put any words on the Powerpoint slides, just pictures. Personally I absolutely hate that style of presentation – you may as well just turn the damned projector off if you’re going to do that! Then again, other people will worship you as a God for doing it. It’s a funny old game!

One random tip while I think of it: don’t look like a famous person when you’re giving your speech. One bloke last year looked exactly like Jarvis Cocker out of Pulp, and I spent the whole time he was on stage thinking “Let’s all meet up in the year 2000”!

Your presentation will be recorded on video, but don’t let that freak you out. I practiced my presentation about ten times (literally), to get a good feel for the timing and what I wanted to say. This will also make you get your slides in the right order – I usually find that when I practice a talk I realise that my argument is all over the place and makes about as much sense as the sudden rise to fame of “comedian” Michael McIntyre, ie none whatsoever! So practice, practice, practice. I personally don’t like to practice in front of people, because you always think you’re rubbish and get embarrassed. Incidentally, if you are rubbish, lots of practice on your own will give you confidence. But heck, I was still shaking like a leaf when I grabbed the mic, and nobody seemed to mind!

As you’re talking, try to look everyone in the eye at least once. It helps to make a connection with them.

One last thing about the presentation: DON’T USE NOTES! A few people came up with notes written on a piece of paper and they got totally crucified! Thanks to the folks at www.crucifyr.com for helping with that (they’re like FourSquare for death.) As long as you’re not reading word-for-word off your slides you can just use the headlines and bullet points on your slides to jog your memory.

Preparing for Q&A

Let’s get back to talking about how to prepare for the Q&A sessions that follow the presentations. I didn’t make a particularly good job of prepping for this, because I didn’t know what to expect, so hopefully you can avoid falling into the same trap.

The thing you’re going to really need to prove, as a start-up, is that you’ve got a market. And you’ve got to prove it fast. Yesterday a 12 year old kid came to me asking for business advice(!) about starting a business selling X-Box controllers that he’d modified with custom graphic designs. I told him to buy one, modify it, then put it on eBay. Figure out if anyone wants to buy that stuff as quick as you can, before you put much time or money into it. (If I’d been really hardcore I’d have told him to put it on eBay first, and don’t actually bother making it until someone had bought it!)

It’s the same for your business. You’ve got to find a set of customers who love the product and will pay for it in some form.

So the sort of questions you should prepare if you want to get the most out of the Q&A are about testing and proving your market (unless you’re already raking in cash hand over fist). To give an example, our business, Publisha, targets four key segments: bloggers, digital magazines, print magazines and corporate communications. You need to know what your segments are. Then you need to think about which segment to address. Before the day, think of the sorts of criteria you could use to help you decide on the issues you’re undecided on. Make sure you know what questions you need mentor help with. Then you can spend the time getting down to brass tacks, not skirting around the issue.

A final thought for the mentor sessions: get the mentors to introduce themselves. I didn’t really find a good form of words to ask for these introductions without sounding like a game show host, but you might have more luck.

The key question

Don’t lose sight of one key thing: in a sense, all you’ve got to do to succeed in business is keep selling lots of things to lots of people. That’s it, really. No “paradigm leveraging” required.

So the one key question is “How are you going to make money?”. Make sure you can answer this one. If you can’t, just spend the day talking about that. I was on a panel discussion at Oxford University and I told some wannabe hotshot that if your business doesn’t make money “It’s not a business, it’s a hobby!” Well, he didn’t like that much! Make sure your mentors don’t say that to you! I know Twitter started without a plan to make money, and so did Google, but they’re the exceptions. You need to have a really silly name if you’re going to pull that one off! (Surely that’s how Evan and Biz did it at Twitter 🙂 )

If your business can’t easily make money, I’d recommend doing what in Seedcamp world they call a “pivot”. Everywhere else they call it “Give up and try something else.” You’ll hear a lot about pivots.

In terms of the main way of making money, there’s two main ways. One is monthly subscriptions, the buzzword being “SaaS revenues” (pronounced “Sass”, to rhyme with mass). The other way is “Everything else” (pronounced “ads”). You’ll find passionate mentor advocates for both positions. I had one person tell me that if I did SaaS I’d be crazy, and another that if I didn’t do SaaS I’d be crazy. With some simple mathematics I soon cancelled this down to “You’re crazy”, and went to lunch. You need to either develop a firm view on which of these types of revenues is good for you, or you need to develop a set of questions and criteria that the mentors can help you to work through in order to decide.

“The Dirty Dozen” marketing processes to master

Continuing the topic of really focussing in on what’s important, to get the most out of your time with the mentors, it helps if you map out in advance what you actually do, and what you plan to do.

At Publisha I identified 12 key marketing processes that we needed to master. I think they’re the same for pretty much every business. You’d do yourself a favour to read my blog post on the dirty dozen marketing processes, and see how they apply to your business. You can then spend time with the mentors figuring out which of these processes you need to work on, and how best to go about it.

Final thought: don’t panic

So that’s what you need to do to have a good day. I’m sure you will have a good day: everyone I’ve met through Seedcamp has been really nice, and very helpful. So above all, have fun, because if you’re not having fun you may as well be called Nigel and work as a corporate salary man in Milton Keynes. And that’s not you!

Good luck!