Mason James of WP Valet shares what he learned in the first year of getting his self-funded startup off the ground.
By Mason James | July 24, 2013
What a difference a year makes. For some, 2012 was supposed to be the end of the world. And yet, a partner and I set out with all the wide-eyed enthusiasm, lofty goals, and scrumptious naïveté that I imagine most first-time entrepreneurs share. On June 1 we celebrated our first anniversary. Reflecting on our first year, I can say, man, we made a lot of mistakes. We also changed course more times than I care to keep track, but we learned a lot too. Our team has gone from the two of us to a team of 12, if you include the eight regulars and four frequent independent contractors. In June we also celebrated bringing in more revenue in that one month than we did in the whole of 2012. So slowly, we’re making progress.
By way of backstory, our company came about to address one of my biggest frustrations. That is, after helping a client launch a WordPress site, I’d frequently here that the customer had need for some kind of ongoing service. Maybe they wanted to add some new cool function. Perhaps the site was gaining traction and there was an issue with the site going down due to server strain. Or maybe they decided to install three SEO plugins (three is better than one. always.) and the site went down. When these issues came up, I found myself worried about the health of those previous clients, but with no where to send them. My own schedule was always full with new sites and new development. WP Valet was launched with the goal of providing an ongoing relationship with customers, meeting their needs, requests, and providing best practices so that site owners could focus on their business rather than the tech. What follows are the 5 most crucial lessons I learned from one year of owning my own company.
Listen and learn what the client values
A challenge faced by all startups is presenting the offering in a clear and relatable way to the target audience. This seems simple enough as you enter into the process, but in fact the task can be incredibly difficult. We’ve learned that what can seem so simple and exciting to us may not translate into sales as easily as we expected. It’s important to take time understanding your customers, how they speak, the terms they use and how they describe their problems and needs and then make sure you address their concerns by adjusting the content of your sales call. Although we deal with technical issues for our clients, our greatest success involves connecting with and assisting another person. For us, we build that connection with language that describes the real-world benefit of using our services and addressing customer needs.
To grow in size, productize and standardize
Starting out it seemed so freeing to not be tied to any inventory, but we quickly realized that the downside was that our possibilities were almost limitless. This lesson may be related more to service companies like ours, but for us we initially wanted to grab every customer we could find and meet every need that was out there. The fact that we could do whatever we wanted led to incredibly customized services that would never be repeated and thus could not scale. Taking the time to get more specific about what an ideal customer looked like for us and creating replicable processes that applied to a majority of clients allowed us to provide value to the customer as well as prepare new employees to perform these actions in our stead.
Understand profit vs. revenue
A good accountant is worth the price, especially one that is sympathetic to the plight of the startup. For some, it takes longer than others to realize that until you are making a profit, you really aren’t in business. Money exchanging hands is a fool’s errand, if there isn’t a little bit left over for the one that performed the service. Some of our “biggest ticket” deals actually generated less profit for us than our smaller services. Don’t get caught up in how much revenue you’re bringing in – hire an accountant and look at the data. Use this to focus and fine-tune your sales offering. This took us a long time to figure out (and we’re still figuring it out).
If it hurts, don’t do it
Don’t compete against yourself. For about 2 months our company was under an incredible amount of stress because we promised a 24-hr expedite for one of our services. We really struggled to deliver (and weren’t delivering about 70% of the time). It was incredibly frustrating for me and the entire team. I was mentioning the stress of this to a business mentor and he asked why we promised a 24 hour return. Was any competitor promising something similar? How were they doing it? Remarkably, no other competitor offered anything of the sort. The frustration and constraint were self-inflicted as the result of our own policy. We simply changed the amount of time for expedited services to 3 days and the pain was immediately alleviated. Don’t bid against yourself. Create policies that allow your company to over-deliver. Your customers will love you for it.
Don’t sweat the small stuff
Don’t stress the logos, business cards, and beautiful websites. I go back and forth all the time on our logo – sure branding recognition is important, but honestly, if you’re providing something that customers want they’ll forgive less-than-stellar glitz – and I still don’t have business cards. When at events I encourage folks to follow me on twitter or get their email address or business cards and then I’m sure to follow up with them. I’m not saying you shouldn’t have an amazing website, logo, and business card, but these things should not be a primary place where you spend time/money as a self-funded startup.
If you are keeping score at home, you may have noticed that this is the sixth lesson that I am sharing with you, but I guess I’ve become accustomed to over-delivering. As a perfectionist, I sometimes think I know what’s best for the company, but I’ve come to see that even when we’ve encountered situations that seem really troublesome, a ray of inspiration or innovation pops up. Remaining open to new ways, alternate solutions, and/or the wisdom of others has led to some wondrous resolutions.