Challenges of a small business

Just like I started blogging, I also started using Twitter. I was really hesitant but wanted to really give it a try. I can’t be a consultant in the area without being able to tell what Twitter is about. I signed up years ago, but never started following people, nor did I tweet myself. Why should I? I had zero followers. A bit of a catch 22. It’s kind of silly Tweeting out in cyber space, with no one listening.

I started following some entrepreneurs, some cool people, some Swedish friends and, of course, Britney Spears. After installing Tweetie (iPhone Twitter app) I had a new friend. I log in and I get an update about things. What was really interesting was that after a few weeks it became easier eye glancing today’s tweets and depending on the amount of time I had, I got faster at finding the Tweets that I wanted to read.

At the same time I tested some Tweeting of my own. I tested some tweets referring to my blog. Some funny stuff and some retweeting of others’ Tweets. But the more I Tweet, the less I feel I have anything to Tweet about. Although I am getting increasing value in the Tweets I read, my own just aren’t interesting.

Now I am getting a bit of stage freight. I now have 38 followers. From from my goal of a thousand. But now, someone might actually be reading. Now I have to say some smart stuff so they retweet, or at least don’t unfollow me, god forbid. What started out as an experiment and a game is now turning into a competition. And that’s dangerous. If it’s a competition; I don’t want to lose.

I better find my Twitter rasion d’être soon.

- Do you want to get really really rich?

This was the beginning of a very troubling relationship. I should of course have just cut him off, but being an entrepreneur means you’re often searching these special things that might become the Next Big Thing. So I listened.  His idea was, and actually still is, a great idea. The person who was going to bring it to life, was the problem. As well as our history.

The reason he was, at all, on my Messenger list was that he had been chosen to finish a project I had regarding cleanup of some code. The beauty of freelance sites is that you pay after job is completed which, in theory, means you don’t take any risk. But this guy sweet talked me into making an  advance payment. I was going to get a huge discount and it was all going to get done at once. Three weeks later the project was not even started. The developer was deep into dept and my 700 dollars was not going to help him long term. Another two weeks later he was broke again. At this point, we hardly knew each other. I was sending daily emails wondering what was happening, and I was told that all was progressing well. After the three weeks I was given the truth and there I was. I had paid 700 dollars and had received nothing. 700 dollars is not the end of the world, but I should have left it there. I should never have listened to him again, unless he had finished the first project. But that’s when he sent that little piece of text.

Do you want to get really really rich?

I  answered yes. Anything else would have been a lie, but I said something like “but not with you”, but I said I’d hear him out. Then he started talking about this idea of a new freelancing idea that would combine project posting with listing of scripts. Anyone who’s into the field can see it as a marriage between Rentacoder and Hotscripts. The idea is brilliant. I really think it is. So I decided to invest. I actually decided to invest in a guy who had delivered nothing.

The irony is that the only reason I said yes, is because he actually had delivered nothing. And I had paid. This was my chance to make up for my loss. Stupid stupid me. It’s like standing by the gambling machine after 100 consecutive losses thinking “Now I am one step closer to a win”. Even though it’s true, it’s stupid. More accurately I would say:  If the guy failed you the first time, he is more than likely to fail you again.

I’ll give you the full story. The price I had to pay for a third of the business was just so tempting, that I felt I had to give it a shot. I knew it was like a lottery ticket, but I had to try. He also had tons of ideas how the site was going to reach out to the development community. That’s what he said. It all sounded quite reasonable.

One month later the project was 25% done. Now what? If he had only completed 0% again, I would have bailed out. But now that the project was started I had the choice of losing all, or risking a bit more and get it all done.

Every month I heard the same. “It’s a lot more difficult than expected”. “I had to rewrite a few things but now the system will be really awesome”. Before the site was done I had paid a fortune, or 14.000 dollars to be exact. Sure, my stake was now at 75%, but that doesn’t really matter. 75% of zero is still zero.

Well at least the site was now done. Time to focus on marketing. And that was not going to be a problem. He had written some kind of robot that would auto-post forum entries in Yahoo groups and another places, so that “every single developer” will know about the site in no time. Wow! What a brilliant idea.

The idea was great, but it was nothing but just that – an idea. It didn’t work. The Brilliant-Yahoo-group-auto-posting-robot-application didn’t prove to be that great. It actually didn’t work at all. Well that’s not fair. It worked on the first group, but then apparently someone at Yahoo had experienced this before, so all coming posts were declined. Oops.

Now what?

That’s pretty much the end of the project. Now he was out of ideas. All that talk from the start that he said he would do, he just didn’t do. He was so certain it would all work out by itself.  Nothing works by itself. Nothing. Not that I saw the amazing PR guy in him, but surely did I think that after spending 12 months on an idea, that he would at least try and manually post some information in forums and groups? Or at least come up with an idea of a banner? Or just speak to his friends and ask them to join. But unfortunately not.

The interesting thing is that this is all too common. All focus on the product and no focus on how to get it to market. By the time I initially invested in the project, I had not understood how crucial this is.  Otherwise I would have focused a lot less on product and only checked if he had ideas of how to get users.

Anyone interested in running the above project is more than welcome to get in touch.

An expensive lesson, but my most important one. On the bright side I now know that it costs 14 thousand dollars to learn that it’s all about sales. Perhaps one day I’ll find it worth the cost.

I really feel I am getting a hang of the tricky challenge of hiring outsourced developers. And it really is tricky. There are a bunch of tools to make the choice easier like ratings, what they’ve done, testimonials and stuff, but the truth is when you start working with a person you don’t have a clue of what it will be to work together.

Back in 2004 I was so thrilled when I first got a guy in India to solve a problem that had puzzled me a week. He solved it in 1 day, and I paid 24 dollars. It’s easy to understand what an eye-opener this was. A week later I had a guy working full time for $ 1.200 a month. Amazing. Yeah, the price. Not the coding. I don’t work with Indian developers any more.

That’ not entirely true.  The problem is they are so many. And so many are bad. (Puneet and Raise Solutions;  you guys are exceptions.) But more than anything they can’t say no. Can you do this? Yes we can. And then they can’t. Why do they say yes?

- Don’t you understand it is impossible for me to know if you are capable if you just answer yes?

- Yes

(Sigh)

Now I don’t want to say that the country they come from determines their skills, but I gotta say that Eastern European developers are fantastic coders. My main goal is that they outsmart me, and the guys I am working with now do it all the time (Emre, Lubo & Denis, I hope you guys are listening)

If I had only had a team in Sweden the office would have been busy between 9am-5pm. But as I now have developers from Xian, China to Indiana, USA there is always someone awake that can help me out with urgent issues. That in itself is a reason to get good people from all around the world. But the coolest thing is the feeling of finding a guy in Istanbul, who becomes a core asset of your business. And we’ve never even met. Not in person. So cool.

My main team is now located in Bulgaria, Turkey, China, India, Pakistan and USA. So how did I meet up with these brilliant people. Mostly it’s a matter of trial and error. I have tested so many developers in different projects. And the ones that do great work, I stick with. But the trick is to find out at an early stage if they are worth spending time one.

Here’s my little guide for all of you looking to hire outsourced developers.

1. Always start with a small project. If you have a big project, break it down into pieces. Never involve an unknown developer/team that you haven’t tested. Sure “They have built tons of similar sites” and show all these mockups of sites they made. But was it him? You don’t have a clue.

2. If they want payment up front – forget about them. The main problem is that you want to prove you didn’t make a mistake so you keep trying to make up for lost money. It’s impossible.

3. Trust your very first impression. If something feels wrong – it probably is.

4. If you are using a freelancing site. Don’t just look at the rating. Look for returning clients. I often rate 10 just because I don’t want to hear their wining about it. I know it’s “wrong”, but is that really my problem?

5. And finally of course. Contact us. We’ll help you find the perfect guy at a reasonable markup.

Good luck.

9am: Perfect. I don’t have anything planned for today. This is the perfect. The desk is full. I’ll just organize all the stuff and get all invoices paid. I’ll get to all those old emails, and then I promised to update my friends web page. That shouldn’t take long. I’ll probably take the afternoon off. Maybe call my wife and have a long lunch.

9.15am: [phone rings] Really, you can’t log in? That’s strange. Let me check. You’re right. I’ll call you back.

9.30am: [email] Yesterday our restaurant got over booked. How can that happen?

Hmm, beats me, I’ll have to take a look.

10am: Site’s up again. Apparently some router in south of Sweden crashed. No clue about the over booked restaurant.

11am: No clue

12am: [call client] I see something strange here. One booking goes from 8 people to 20 people suddenly. Was this done manually? … Oh it was… Well, that is probably the issue. ok bye.

Lunch

1pm: Now time to take care of the desk. Or not? You said Gumblar? That nasty little virus just corrupted all our files and added a little script. You say I have to go in and edit each and every file on the ftp? But there are hundreds of them.

2pm: editing

3pm: editing

4pm: editing

5pm: done. I’ll do the desk tomorrow.

I really wish there was something like Entrepreneurs Anonymous. Somewhere we could turn when we come up with these new brilliant ideas that I can’t work on, because I have to put all efforts into one single idea.

You have this ground breaking idea and that’s what it will remain- an idea.

On the bright side, I am finally seeing the good side of this. After seven years of practice, I am finally focusing on one – WaiterAid (www.waiteraid.com). What initially started out as a guest management tool, is now an advanced online booking facility. But even better – by placing all development efforts and all thoughts in one product, it was really easy to see some significant improvements. And the more effort I put in, the more new ideas came about.  Three months ago I would have said that WaiterAid was close to perfection. Now after 8 weeks of constant improvements we know the road ahead will involve tons of new features and functions.

But most importantly we actively started marketing and selling WaiterAid. I was naive and thought that the online registration would bring in tons of clients. Well maybe when I am Google, but not yet, that’s for sure. The first seven years generated seven clients. One per year. Brilliant, we’ll be break-even by the time I’m dead. Better now, the last 4 weeks we signed up 11 more restaurants. And this is just the beginning.

Now comes the challenging part – keeping these clients satisfied. Oh, how easy it is to bring them in and forget about them. Can’t tell that I will succeed here, but we’ll do our best.

We have the goal of 100 restaurants by the end of February 2011. If we make it I’ll write all these blog posts about how to create an online business. And we will. I hope.

But back to my disease – being an entrepreneur. Unfortunately I am not yet cured. I am quite ill right now. I know when I am sick, because that’s when ideas start popping into my head. And right now, they just won’t go away. But you gotta understand. I have the solution to how media shall charge for content. And I also have this embrio of a pan-European second-hand fashion destination. How can I just let that go?