I have worked with loads of starts ups over the years, and even had quite a few myself.
Something that always astonishes me is the cash burn these companies have. The money sack is literally being shovelled into the proverbial furnace at an amazing rate. It seems that the costs just creep up and without cash flow, the result can turn ugly very quickly.
Bootstrapping everything is generally the way to go, unfortunately most people who head down the start-up path have never even heard of it. They want everything just right. Everything perfect.
Unfortunately that is a recipe for failure, or has been in every start-up I have worked with, and all the numerous case studies I have read about successful and not so successful start-ups.
Bootstrapping is critical, but over time certain other factors seem to be critical as well. Culture is one.
The following is a list I have compiled from experience, other blogs, white papers and just chewing the fat with people who have been there, done that. It is focused on technology start-ups on a New Zealand scale, but can be applied to many others.
1. Supply snacks, soft drink and fruit. Saving one trip a day across five staff is an hour per day of extra productive time. It also makes the staff feel appreciated. Happy staff are productive staff.
2. Build a culture of teamwork by bringing in lunch at least once a week. Make it a meeting. Even better, do it four days a week and have a no meeting policy. Saving two hours per staff member per week if you have regular meetings. All other meetings should be short and done standing up with no more than three to five agenda items. Use an alarm clock.
3. Got extra space? Sublease it month by month. It can slow the cash burn substantially.
4. All developers should have two monitors. No ifs, no buts. It will save at least 30 minutes a day. That’s an extra two and a half hours from every developer per week. You do the sums!
5. Comfortable ergonomic chairs are a must. Cheap desks will suffice, but a developer who is uncomfortable is unproductive.
6. Payroll (contract or permanent) and all professional services like Accounting should be outsourced. Keep it simple and streamlined. Let contractors invoice rather than use expense claim processes.
7. Use OpenOffice – why give Microsoft your money when you can get the tools for free.
8. Put contractors on daily rates so they can be treated more like salaried staff. Provide bonus incentives for on target delivery, not penalties for being late and they will deliver.
9. Ensure good coffee is available in-house. See (1) above. It will save another hour per day easily.
10. Allow people to work off hours. Commuting is a waste of time for everyone. Let folks start at 6am or 11am and you’ll cut their commute in half. It can save one to two hours a day by having very flexible time.
11. Don’t waste money on strategic PR companies or web design companies, set up WordPress, turn it into a CMS and save yourself tens of thousands of dollars a month. Pay a student to do market research and undertake any advertising work.
12. Pay for a good time and billing tool. The habits started now will see the company through to success. Accuracy of time allocation is critical, and all decision makers need to have it readily visible, not just the CEO.
13. Downtime through video games, a quiet area or a stereo with headphones is essential for the well being of the staff. Make the space. It will improve productivity and that’s always a good thing.
That’s my list. Most of it just takes a little bit of cash each week and can reap the benefits very quickly. You save at least two hours a day per developer by applying the above. That’s like having another developer if you have a team of four or five.
If you are running a start-up and want to chat directly about how to organize some of the above, feel free to drop me a note. I am happy to help.