Why I Believe In Revenue

I believe in revenue and profits for startups.

Revenue is good.

Revenue clarifies priorities.

Revenue builds momentum.

Revenue is not a vanity metric.

Growth does not equal revenue.

Revenue is good for customers.

Recurring revenue is the best revenue.

Revenue is a signal that can be tested.

Revenue is addictive and that’s a strength.

Real businesses solve customer problems for profit.

A startup without a revenue source is a ponzi scheme.

If a business isn’t taking your money you are being taken.

If you want to control your own destiny, you need revenue.

No revenue = out of business soon with disappointed customers.

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You need to quit living someone else’s dream

It was the year 2000. I graduated college and got a job. My mom was so proud. I worked for Microsoft. If was wasn’t going to be President or play Major League Baseball then the next best thing was to work for greatest software company in the world. And it was an amazing opportunity.

But there was a tangible divide in the workforce as the company shifted from 90’s style hyper growth to blue chip stock. On one side there were people that had been there for 10 years before I started in 2000. These people had the financial freedom to take exotic vacations, own yachts, enjoy 6 months at a time off, and work only when they really wanted to. This was a small group, but it felt like they had absorbed most of the companies wealth. You ran into them all the time.

On the other side were people like me. People were just starting new careers. People who had been told the next 10 years would be just as good. You knew it was a lie. We were the 97% and in some ways it reflected the nation on a higher scale.

The economy had started shifting. The first sign came before I even started working. I knew people whose job offers were revoked after the 2000 bubble hit the tech industry. I’ve had (bad) managers work hard to convince employees they are lucky just to have jobs… so enjoy whatever little we pay you.  The message was that you weren’t going to have it as easy or as good as the generation of workers that came before you… even in the tech industry.

There are some larger trends at play here. Trends that effect every job across all industries.

The rich get richer.

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The message to me is clear to me. You know what side of the curve you want to be on and it’s not the 95% part who’s take home pay is worth less and less every year. If you can’t beat-em… join em. Living someone else’s dream can provide you with an educational opportunity in the short term. But long term it only helps the owners jump up another percentile in the graph. Note: This video does it way more justice than my chart.

College Means Less

Going to college isn’t a good bet. College graduates used to be harder to find for employers. In the last 30 years we’ve made it easier for more people to go to school, but job growth hasn’t kept up. I’m sorry, a degree in Ancient Roman History doesn’t trade as well as it used to.

Organizations are Getting Flatter

Software is making it easier for managers to keep tabs on a larger number of employees. When I started at Microsoft it wasn’t hard to find a lot of “silly leads” with one or two reports. This meant more opportunities for people to “climb the ladder” and earn higher salaries. That’s going away across all industries. This means, for the employed, the average salary growth potential is slowing down.

The World is Getting Flatter

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“Those jobs aren’t coming back to the US.”

That’s what Steve Jobs told President Obama when asked what it would take to manufacture the iPhone in the US. As the worlds population starts to catch up on education and infrastructure they are going to consume a higher percentage of employer spending.

Even Software Is a Factory

Don’t kid yourself if you work in the tech industry. Building software is a manufacturing process that just happens to involve electrons. It can be done successfully anywhere. Not just silicon valley. I worked on software, at Microsoft, that was designed to reduce the barrier required to write complex applications. It gets simpler every year.

The Rest of the World is Hungrier than Ever

I once spent a week in Shanghai working with some amazing Microsoft teams and I was amazed at how dedicated their culture was to success. They were also laser focussed on educating people for the technical skills they were going to need to compete in the next 20 years… not on degrees that mattered in the previous 20 that are being eaten by software. I don’t see that same level of universal desire and focus in the US culture.

9-5 means a lot less than it used to. 

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Putting in your time is just that. Putting in time. Hard work is just that… work. Sadly most companies still believe that “butts in seats from 9-5″ works best. They are wrong. It’s not success anymore. It used to get you somewhere. You’re now required to work smarter. You’ll have to. Like I said, the rest of the world already is.

This doesn’t have to be bad news. You have a choice. 

You think CEO pay is unfair and you’re not being promoted? Promote yourself and try your hand at being CEO. At least start acting like the CEO of your life.

  • Worried that someone overseas can do your job? Hire them to do it.
  • Your education doesn’t cut it? Start learning online.
  • Feeling like you work in a factory? Stop building the solutions and start designing them.
  • Not motivated? Start designing the life you want and get hungry for it.

You get to decide what rich means to you and how you get there. It’s cliche’, but the old rules are more like suggestions now and soon they’ll sound like a strange, twisted, fairy tale.

My choice was (and is) to take advantage of these trends rather than let them take advantage of me. I really had no choice. I had to make a plan, learn new skills, save money, and take a chance. Maybe I could achieve my personal definitions of “rich” as well as move up the curve a bit.

What’s the worst that could happen? I’ll see you right back in the 97% pile… and try again.

Selling out your kids for fun and profit

I’m blessed with two amazing kids. My oldest was a big motivation for me to quit my job and start KickoffLabs. I think they’re my bootstrapping secret weapon. They need to eat. Lets not even talk about diapors or college funds. Point being… kids are expensive and can’t live on Ramen Noodles.

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We decided, at KickoffLabs, that we weren’t going to be ashamed of our size. We wanted it to be a strength. We wanted to appear boutique… which is what our service is right now… a niche boutique. The opposite of something like GoDaddy.  We needed to make it personal, so we got our kids involved.

They are featured on our company page and when we ask customers to tell people about us we say:

“Would you like to put a huge smile on the face of two scrappy co-founders with beautiful young children who like to eat three times a day? Do you like saving money?…”

Most companies are in a rush to grow up, look, and act bigger than they are. People expect more out of a big service (even if they shouldn’t). Why raise the bar too early? Embrace your size.

KickoffLabs is just Scott and Josh today, but our families took the plunge with us. We’ll take every advantage we can get. :)

I wish I’d thought of that. Operation Starbucks.

I should have thought of it first. I walked into Starbucks one afternoon. Ok. Ok. I do this every afternoon, but something was different this time. Something really neat was going on.

At a large wooden table sat a man with a laptop. I’m sure you can picture that. But this man had a stack of Starbucks gift cards laid out neatly to form an arrow. The arrow pointed to an iPad that was being used as a sign. The sign read “Test my App and Coffee’s on Jim.”

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I’ve never been shy of giving people feedback. I don’t have a great filter and before KickoffLabs made any money free coffee sounded good to me. Jim saw me coming out of the corner of his eye and stopped what he was doing to introduce himself. He was working on an educational iPad app to teach kids basic math. He asked me to play through a couple of levels and tell him what I thought.

He got an earful. I hope it was useful for him because I enjoyed the free coffee. It was such a great idea. I watched him go through the same process with about 10 people including some parents with kids that afternoon. So, for $50, he got a ton of great feedback and only had to drive to a local Starbucks. Everyone should do it, but if you do…

1. Don’t forget to get email addresses for people that come by. They could become customers and evangelists.

2. He never asked if I’d give him money today for it. He got feedback from someone he didn’t know would be a paying customer or not. He didn’t even ask me if I had kids.

I’ve also heard this works just as well before you write any code. Use the cards to get people to take a survey and validate some of your assumptions before you build anything. I wish I’d thought of it sooner.

Where do you find the best advice?

I work at home alone so it’s not lip service to say that I have to go outside of the office to get the best advice.

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I learned, launching Kickofflabs, that you need to avoid your personal networks at all costs. Those people are too nice to tell you the truth. Even my wife. I could tell Gretchen was skeptical.  She was too nice to tell me what she thought about our business. I think she believed that my silly experiment would just end one day and I’d be back to a normal job.

Even strangers are too polite to tell you what they really think. So… who can you trust for advice?

People voting with their dollars.

Someone can tell you that you have a great idea or they could pay you something for it. Which tells you more? That’s why I’m happy we launched KickoffLabs without a lengthy free beta. Talk to the people voting with their dollars and find out why they did. Then find out why others didn’t.

Investors.

Kickofflabs is not a funded company, but we’ve had a lot of investor meetings. What I love about pitching and taking investors through our pitch is that they don’t hold back the punches. Perhaps I’ve just met good ones… but I wouldn’t describe them as polite. I think they are just understand how to vote with their dollars.

People who’ve been there before.

If someone has done what you’re working towards and is close enough to your stage that they remember what you’re going through and the solutions that worked for them well enough to dispense advice.

Beyond that you should have a hard time trusting what people tell you. They may have good intentions… but you can’t sell good intentions.

Who is your most important customer?

You!

Your first, and most important, customer should be YOURSELF.

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I left my last job because I didn’t like the person it was making me. I blame the customers. Over my four years there they’d had success selling to businesses of all sizes. But over the last year they really wanted to double down on Fortune 500 accounts.

Over that year I got tired of taking direction from 12 member-cross-divisional-virtual-planning committees that couldn’t agree whether a reply button should be on the left or right. These customers didn’t want to just test it and get data either way… they just wanted to debate it and I’d already spent a 7 year career at Microsoft.

Some people probably like the schmoozing and debates in those environments. As for myself… I had recently become a parent. I was talking with Gretchen about one of these pointless debates at home one night and realized that, even though I wasn’t THAT mad about it, the tone of my voice caused my 9 month old son (Gabe) to start crying.

The job was making me an unhappy person and my family deserved better. Work is such a huge part of your life and every business has customers that can dictate your job with their dollars. For me, that realization made it clear I needed to be a founder.

As a founder you get to choose your customers.

  • You choose the challenges you take on
  • You choose how you’ll leverage your strengths.
  • You choose how much growth you need out of your business.

Choose wisely. Be selfish. LOVE the challenges you put in front of yourself. If you aren’t happy you’ll have a hard time making customers love your product.

PS: It doesn’t matter if your a founder, marketer, developer, or member of the support team… it’s your job to make sure custoemrs love your product. So make sure you’re going to love the customers you serve. Start with yourself.

Try before you buy life changes

A few years back I didn’t cycle, but had friends getting into it. They all had pretty expensive roadbikes and I felt encouraged to dive right in. But I needed to know if cycling would stick for me.

I had a crappy old mountain bike. You know, one with a rusty chain from before they all had fancy rear suspension. I bought cheap road bike tires and mounted them on my jalopy. I set a goal and told myself that if I made it 500 miles cycled in the summer then I must really enjoy it and could afford by buy a better road bike.

The rides were hard. I had to work more than my friends to keep up and it looked ridiculous pulling up next to these modern carbon fiber aerodynamic masterpieces. My bike was often used as a theft deterrent by being placed on the outside of the nicer bikes.

Five hundred miles later I was still at it. It was time to make a bigger investment in the sport. The next year we completed the Seattle to Portland 200-mile ride. Something I never thought I’d do, but was happy to do so on top of carbon fiber.

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Trust me… I’m happy. :)

 

Daddy, can I cook breakfast with you?

I get lots of reminders why I work on KickoffLabs. Today I was about to head into my office when Gabe came down the stairs and said “Daddy, can I cook breakfast with you?”.

“Heck yes Gabe! Lets cook your breakfast together. Daddy can work later.”

Now, I did manage to fling hot pancake batter into his eye, and he may never ask again. But it’s these little moments that provide me with the motivation to turn KickoffLabs into a huge success.

It’s a shame that investors typically skip over founders with families. A founder without kids can’t possibly have motivation like this.

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Learning in 2013

I already talked about my goal of learning to delegate and outsource more in 2013, but I have three other specific goals.

1. Become a better writer.

My goal is to publish something I’ve created (I’ll get to that) every day in 2013. That could be on this personal blog or it could be for KickoffLabs in the form of a blog post, marketing copy, newsletters, automated emails, etc.

So much of selling a SaaS product, writing instructions for outsourced labor, or even working with your co-founder comes down to clear, simple, communication. I need to get better by doing.

2. Take one photography class in 2013.

It could be a one hour lesson. I just want to know how to use our fancy-pants camera better. As a way to simplify my writing goal I’m going to allow a picture posted in a day to represent the requisite “thousand words” and count. Taking good product screenshots is also an art. :)

3. Finish Rocksmith (Guitar learning game)

I could have put learn guitar here, but I’ll settle for this game where you use a real guitar as tabs flow down the screen. I’m under no illusion that this will teach me to be a good guitar player… I simply think it may be fun.

That’s all for my posts on 2013 personal goals. I’ll be working with Scott on goals for year 3 of KickoffLabs soon. Perhaps some of those will be posted as well.

Josh

Outsource your life in 2013

Last week I realized that we had to take down the Christmas lights. I actually like decorating for Christmas, but I loath dismantling it all and boxing it up again. I had two choices.

  1. Leave them up all year.
  2. Get someone else to do it.

Ok, I had one choice. I posted the job on TaskRabbit and within a couple of hours I had multiple bids. I reviewed the bidders and the winner was at my house the next day tearing down the Christmas lights for $60.

I think he did a better job than I would have boxing them and he was a very nice retired Microsoftie that just liked taking odd jobs “to meet interesting people and enjoy the outdoors”.

I even consider this a financial gain because of what I did during that time. While my “rabbit” was working I updated our admin stats page on KickoffLabs to give us more insight who our best customers are and how they are doing. I enjoyed the work and I’m sure this knowledge will earn me more than $60 in the next year.

I’d tried this more a few years ago using Craigslist… but never got that far. Managing the “flakes” on Craigslist was too much of a job. Services like TaskRabbit make this smoother by adding reputation and a bidding process.

More outsourcing in 2013

I’m determined to make this work personally and professionally. We already outsource cleaning with a regular maid service, enjoy Amazon grocery delivery, farm delivered produce each week, and have a modern milk man for eggs and dairy.

I’m sure this has benefited our marriage way more than we’ve spent on it in the last few years. And to be honest, most of the delivery prices for food, milk, and local veggies are very reasonable… especially when you factor in trying to take two kids to the store.

Randomly here are some of the next things I’m working to outsource.

  • I need to make having virtual assistant(s) work. I think I’m mostly intimidated by the process of finding and training a good one.
  • Do less around the house. Every husbands dream right? I’m going to change “honey do” to “honey done” more regularly. Gretchen doesn’t need to know how. :)
  • Researching our big trip to Ireland to narrow down our options.
  • Business research and content generation for KickoffLabs.
  • Design or development work that takes me too long, is not the best use of my skills, or something I care to learn.

I have a natural fear that the work won’t be as good as I could do it. That might be true in some cases, but I think I’ll find for that for any job there is someone out there more qualified than I am. I know getting the Christmas lights out next year will be easier than the tangled mess I usually leave.