Tagged: Technology

Mar 30

Bootstrapping and Start-Up Culture

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.

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Posted in Entrepreneurship, Start Ups

Jan 19

Legal Downloads Increase By 25%

EARLIER this month I wrote a piece on the music industry (Is The Music Industry Dead?)

Today, I heard a soundbite on the radio that last year, 95% of all music downloaded was done so illegally. This was a scarey number!

Then a few more “minor” details were added, which shows the industry and the consumer are finally starting to find a balance.

Legal downloads had increased by a wopping 25% over 2007 figures and legal downloads account for 20% of revenue.

However, the music industry are still pressuring for legislation to disconnect habitual individuals who download music illegally.

On one hand, I can see their point, but as my original post tried to highlight, they need to explore better options than punitive punishment.  The pressure it puts on individuals and ISPs plus the policing is just too great a task.

The model they need to move for is “all-you-can-eat” subscriptions.  Make it relatively cost effective for the consumer, easy to monitor and so easy people will move away from piracy.  If they can get 50% of all downloads to be legitimate, the problem becomes much easier to manage.

I know of several people who will download tracks illegally, see if they like them (takes them days or weeks) then they will buy either the CD or buy the track, and sometimes others once they like the artist etc.  These people are good for the industry but technically break the law and would be caught up in the new legislation some countries like France and New Zealand have put in place.

It would be great if they could do something without alienating people. I for one would be happy to pay $20-30 a month and be able to download music as often as I like. It’s a great model for an ailing industry, and I hope they finally realize the old approaches won’t work.

What about you, have you downloaded illegally?  What’s your price point that it becomes easier just to download it legally?

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Posted in Internet, Law and Order, Piracy

Jan 06

Is the music industry dead?

I read some article ages ago (still trying to find it again, but that issue is  for another time) about the state of the music industry.

They were, and are, in deep shit.  This is bad for the artists, and largely the executives of the various music industry corporates dropped the ball.  This holds true for the film industry to a degree as well.

Many, many years ago now, when I developed my very first internet application (we are talking around 1995), I showed it to a few of my colleagues.  They were amazed that a file over on that server could be accessed via the telephone like a fax machine is used for sending the image of a piece of paper. (best analogy I could come up with back then).

I had immediately thought about the possibilities and implications.  Even then copying games and the like was prolific.

Years later internet based piracy had gained traction, and the music industry was in damage control.  They were losing revenue through piracy with sites like Napster and they didn’t like it. What is worse is the executives and their legal advisers did not understand the technology or the way the internet would change society forever.

This was where the music industry reached a crossroad, embrace the internet, crush the internet or ignore the internet.

We all know what happened.  The law suits started, DRM (Digital Rights Management) was introduced.  But the music industry is still losing it’s fight. And it will disappear unless it changes.

Hindsight is a wonderful thing, but the reality is they should have gone to Napster and made a deal. A friend of mine created an online music store called Digirama, it does OK.  iTunes does OK, as did Coke’s venture.

But at the end of the day, the music industry as we know it is dead.  $0.99 for a track?  It’s still too much when you can grab it for free.  DRM?  Damn it, I made hundreds of cassette copies from my record collection, why should I be limited to 3 computers/devices?  Why can’t I play it in the car? One in three CDs with DRM or similar protection DON’T WORK in car stereos!

They also have the problem that there are the equivalent of  “self publishing” companies popping up targeting new artists.  For example tuneflow.com (I’m affiliate, so sue me ;) ) pay up to 80% of the sales price to the artist, that certainly beats the 15% the music industry pays it’s artists!

So what does the music industry need to do?

Simple.  Ditch the “hard” copy of the media, go electronic.  Work with companies like Napster to get electronic distribution going.  Cut costs and “dead weight” in the industry.  Use the internet to their advantage.

Does it really need to cost $250,000 for the producer to help produce the album?  What do they bring to the table in the modern age?

You can buy pretty good recording gear for less than US$5,000 – you can set up a basic sound room for about the same.  Your dad, sister, brother whoever can help produce it.

The music industry needs to realize they are no longer needed for the production of a quality album.  And with sites like Bebo, Facebook and the like, marketing “new artists” is no longer the huge expense it used to be. Hell, look at some of the new artists only being release on iTunes and so on.

They need to embrace the internet, or they are gone in the next 5-10 years.

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Posted in Internet, Law and Order, Music, Piracy

Dec 03

Email Management

I get a lot of emails.  Loads and loads of them.

But I seldom misplace or fail to action an email.  And at the end of each day my inbox is usually empty.  Other people I have worked with over the years have often misplaced important emails, or overlooked responding/actioning emails.

I came up with a simple method (which works even better if you use Gmail) but can be implemented easily using any email system.

Firstly, you need two folders, one called follow-up, and one called archive.

When an email comes in, you read it then and there. If it needs a response, but you are not ready to respond, leave it there for now.  If it’s informational, and requires no follow-up move it to archive as soon as you have read it.  If you can respond immediately, do so, then move it to archive.

Over the course of the day, action any emails that you have previously left, then move them to archive.

When you are finished for the day, move all remaining emails to follow-up.  This is very important.

At the start of your next day, anything in your inbox will be new from the end of the previous day.  Do not touch them until you have dealt with the follow-up folder emails first.

This simple approach takes a little bit of getting used to, but remember, emails should be treated as a task orientated tool.  Don’t get bogged down with 1000s of emails in your inbox.

Follow-up (2009-01-02): I found this little gem which I thought was very relevant.

Revisiting The 80/20 Rule and Why It Is Even More Critical To Your Business In 2009

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Posted in Internet, Time Management

Jun 10

VoIP – The Revolution Has Started

Today, my own private revolution has started.

Well, not really. I just ordered my WAG54GP2 Wireless ADSL2 VoIP Gateway.

It’s a little expensive, without much change from $200.

But, with the WorldXChange Xnet Fusion plan, we will be saving about $50 a month on telecommunications.

In addition, I will be bringing the office phone for DocScan onto the second “virtual line”. How much for this? $7.95 a month!!!

That’s going to be a saving of a further $180 a month!

Even with the penalties for closing down the TelstraClear phones before their contract ends, we will be saving close to $230 a month on current telecommunications so it makes it worth the termination fee.

The only issue I have with the service is that they consider any household that has “2 virtual lines” to be a business, so all calls will be charged at 5 cents a minute.

But as we live in Orewa, all calls are already charged as toll calls to Auckland! So we will save money there as well.

Good bye Telecom and TelstraClear. I wish I could say I will miss you, but you have both been overcharging me for years, and I have had enough!

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Posted in Internet, New Zealand, Telecommunications