This session at SXSW Interactive on Sunday 12th March 2006 attracted a broad audience of start-ups, SMEs and freelancers with a variety of experiences, plus some bigger media players.
The line-up of web entrepreneurs was equally varied, and while the discussion ranged over business models, recruitment and retention, working relationships and funding, the “people” thread dominated the discussion.
CHAIR:
Bryan Mason – Adaptive Path (user experience design, they sold MeasureMap to Google the week before he gave this talk)
PANEL:
Erika Hall – Mule Design (6 people)
Jennifer Robbins – Little Chair, also writes for O’Reilly on web design, blogs at Jenville and Cooking With Rock Stars (1 person company)
Jeff Robbins – Lullabot; also at O’Reilly 93/94, then started a web design company, then his band got signed and he played full-time for 6 years. Lullabot do mainly Drupal consulting.
Evan Williams – CEO & Founder, Odeo; formerly founder of Pyra Labs who sold Blogspot to Google, he also worked at O’Reilly in 1997. Ev added that he always started his own companies – the first couple (pre-Pyra Labs) “were terrible but good learning experiences”.
Growth, success and failure squared
Bryan posed a number of questions to kick off the discussion: How do you know it’s time to grow? What does success look like? Can you fail and what is the cost of failing?
Erika Hall said it’s a continuous process of making mistakes and getting over them fast.
Where does the money come from? Bootstrap or take someone else’s? How much should you take?
Evan Williams explained that VC money had enabled Odeo to grow a lot faster. However, it’s difficult to get a lot people at the table early on and it’s harder because it limits your manoeuvrability and makes getting everyone on the same page more cumbersome.
Odeo now (March 2006) has 12 people (but in October 2006 he bought Odeo back from the investors). However, growth means there’s an added communication tax on everything you do. In terms of funding, at the start they were just looking for an angel round.
Adaptive Path’s algorithm for hiring staff
(1) Billable (core team)
(2) Support admin
(3) Contractor vs staff
Start-ups – lifestyle careerists beware!
In terms of hiring, Odeo have used blog posting (that approach keyed into the Rails community); referrals (50%); and used 2 executive recruiters (2 of whom charge $75k per hire!).
Who do you hire? Contractors vs staff. Where do you find them? How do you pay them? How do you structure your company? A legal entity that’s structured for retention? Should you be traditional or inventive?
Erika replied that her company is more fun to work for than any other, and fosters the culture whereby staff have a real say in what goes on. Mule Design is also open to learning from people.
Evan observed that O’Reilly was / is basically a lifestyle company. It’s harder to do that with a start-up, he reckoned. If you’re a start-up there’s an assumed model that you go with and that drives you.
Transparent expectations
Jen Robbins said that she works with people that she knows and that she gets a along with. Adaptive Path’s Bryan Mason wondered is that structure and management where we want to put our energies?
Odeo aren’t a billable company as there’s no revenue and no revenue is predicted for a while, Evan explained. Erika stressed that because they are often working with contractors who are also friends – you have to be absolutely clear about expectations regarding what you want to get out of it, how they see it working and what they want to get out of it.
Jeff Robbins concurred – if you keep expectations really clear then the contractor will know when they’re screwing it up and you won’t even have to say anything about it.
Business essentials
With MeasureMap, Jeff recounted, they had unbelievable discipline and they paid around a 25% communications tax, but that worked because the people were in disparate places. They had a daily 10.30 conference call.
Evan noted that there’s a great blog on this called Founders Frustrations and he recommended trying Adminstaff for covering all your employee benefits.
How important is the written business plan for getting VC funding, someone asked. With time running out Evan said Pyra didn’t have anything like a plan and they were okay. Odeo had a PowerPoint presentation and just creating that was a good exercise for him to think the business plan through.
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