Since I was an engineer I have always wanted to build great product. We started Divante 8 years ago, having aspirations to built top-notch knowledge management software (called BusinessWiki). Then, we started providing eCommerce services for living – while still searching and pivoting our products – like video streaming software and an eCommerce platform. Then we understood: our best product is our company.
Building a company is a long process; it evolves with you – or maybe you evolve with the company? It can be a life-changing process. Especially when you’re an engineer! :)
Starting company as an IT specialist is quite hard. You’re focused on projects – because you’re good at making them happen. You work for your clients all day long. You employ new people only to help you rather than creating processes. it’s extremely hard to delegate responsibilities. It works 100% like described in the great book “E-myth”.
What was my thinking back then? At the beginning it was like:
- HR? What is HR all about – it’s about coding – so, coding will solve all our problems! Everybody would like to work with such great, top-notch technologies.
- Sales? What is Sales all about – you’ve guessed it, it’s about coding – it will solve all our problems and clients will bang at our doors because of our great quality …
- … whatever – we have to focus on projects, we’re IT guys!
It’s hard to work in a startup, particularly when your boss is learning how to manage the company :-) The reason we survived to this day is: we were really determined, persistent team and were business-focused. We were trying not only to provide value for clients but also sell it and create some brand around it.
It taught us a lot; It taught me a lot. About people, business and priorities.
To sum up: everything is important building company. There’s no difference in value between sales, marketing or IT.However, their value may be of different proportion at various moments at the beginning.
How it works?
We’re in services business; after a few years I see this business as somewhat linear equation:
- to do more projects you need more people,
- you employ more people and earn more money – because you’re billing their time spent on projects,
- with more people onboard you need more projects … and the wheel goes on.
Based on that, you have three priorities you must consider making each decision, each day in your company: people, projects, money.
They are linearly connected, but their order changes during any company’s lifetime.
At the beginning, you focus on projects because you have no brand, nothing to show. You work almost for free with the worst projects you can even imagine – having no money and exploiting your people, working overtime and so on. If you don’t cross this chasm and start earning money, you will fail and your employees will find a better place to work.
When you grow, maybe have investors, you must focus more on money. Create budget, start calculating sold/not sold hours and revenues. Optimize the business. At Divante, we went on fast-growth track 3 years ago with our investor. It was one of the most crucial changes in our company.
Then, you realize that focusing only on money maybe shouldn’t be the one and only goal. Focusing solely on it – on bad months you mayhave to fire your best people to minimize costs. Maybe you should accept any project your company can get to maintain growth? Or maybe you go poor on quality and do more and more projects? It’s not worth it.
Everyone’s unhappy – your employees because they are in daunting, low quality projects; your clients, for having to work with your demotivated teams and having to deal with poor quality. The only happy group in such a case may be your investors :) But only in short term.
Focus on people. Clients and employees.
We put our priorities in this order: people; projects; money.
When you have 150 employees, investors and about 30 medium-to-large scale projects at once – it requires quite a lot of bravery to follow those priorities.
Why? Maybe you’ll have to tolerate some short-term loses or cancel project which are burning out your team or have to accept high staff turnover? Maybe you’ll have to bring some bad news to your investors, etc. The company isn’t meant to exist for the next 12 months only but for years to come.
I observed that each time we violated this order in making decisions, something bad happened: great employee went away, morale went down or some prospecting project started to be troublesome.
Why are they with you?
I’ve read a great book recently – “Only the paranoid survive” by the former Intel CEO – Andrew S. Grove. It’s about finding company inflection point and transform business not to fell off the industry edge.
Let me put it another way: you have to be paranoid about your company employees and clients.
You can ask a simple question to meet your client or employee expectations: why are they with us? Asking this your every employee you’re focusing on people; asking your clients – you’re focusing on projects. Money is only the result of this two priorities going along.
They started a project or were employed because of the invisible contract you’d signed starting your relations. You met their expectations or fulfilled their needs and it’s not about salary or working-hour price! It’s about shared values – like quality, safety, interesting projects and so on.
To better understand the expectations in particular cases I’ve tend to ask: “What will he/she tell his significant other about this situation”. It suits to both clients and employees.
Imagine you disagreed on your employee’s raise or bargained too much – it can change their perspective from “Wow! They appreciate my work” to “OK, I’ve got 100USD less I wanted ..”. People won’t remember WHAT you told them but rather HOW THEY FELT. I always challenge our directors to think this way about our employees; “How will she or he describe this situation at the dinner with their spouse? Should we feel ashamed or proud of it?”.
Building a company is about constantly “not knowing” what to do. And it’s OK. Each day you must make decisions having not enough data. Make educated guesses. For me, it’s been great to use these priorities as a compass.