Stubbleblog

Here are my notes from the small business hacks session at Web2Open. Don MacAskill, Jen Bekman, and Bryan Mason were the major guests.

Don’t discount until completion.
Bryan says that when they do pro-bono or non-profit work they don’t discount their work until the client has implemented their advice. I can relate to that. CrowdVine’s second customer got a nice discount because we were looking for reference clients and then the customer changed direction mid-project, leaving us without a public reference implementation.

Don’t ever discount.
Jen’s advice is to offer something that’s got a lot of value and don’t ever deviate from your message about how valuable it is. There’s a low priced option for her art, but there’s never going to be a discount on that option. It’s too valuable to discount.

Don’t do direct sales or marketing.
All three were relying on word of mouth and felt that gave them focus: have an amazing product. Brian said that the only cold call sale they ever made was cornering someone from Flickr at a party and begging them to let Adaptive Path do a rev on the product.

Give each employee two 30″ monitors.
Nothing says you’ll have the tools to do your job than showing up on day one and finding two 30″ monitors. That’s one of many tricks responsible for a 100% retention rate at SmugMug. Way to go Don!

Hire Customers.
Don’s other trick for retention (and also for finding kickass employees) is to hire customers. They take less training, have higher loyalty, and you can observe them before you talk to them.

There’s so much good advice that’s hard to get online but easy to get through word of mouth. It’d be nice to do a monthly small business dinner or something where we could get at these tricks.

In college I had a wonderful Humanities professor who insisted on making us write short essays so we could practice writing succinctly. After each essay she would personally sit down with us and critique our logic (and our grammar!). Her feedback to me was almost always the same, “your argument is logical and supports your conclusion but you need to take the next logical step. What does your argument imply?”

I was never able to take the next step, even when pressured. And she never took it for me. It would be fair to say that I hated her during these meetings.

Today I ended up quoting her while reading Paul Graham’s “You Weren’t Meant to Have a Boss.”

Paul’s thesis is that typical big business drains the life out of its employees because we weren’t meant to work in such large groups. It’s unnatural. To truly live, we need to be in groups small enough that we have room for creativity and freedom of action. That’s the way nature intended.

I agree. Jay and I talk all the time about how much more fun we’re having at CrowdVine than any of our other programming jobs. We’re free to build product. Programming isn’t just a job for us, it’s our hobby and passion. Being in a small group for the first time really is bliss. We’re not the only ones saying that either. Talk to people who’ve been much more successful than us like 37Signals or SmugMug. They’re not just successful, they’re happy.

So while I agree with everything Paul wrote, I found myself screaming, “take the next step, Paul!”

He’s a venture capitalist. He’s promoting programmers joining startups. Venture backed startups start as everything he describes–small companies that are great places to work and learn. But they only stay that way for a few years.

By definition the startups are either going to grow into an awful company with bosses or be acquired by an awful company with bosses (or fail). The startup founders are either going to turn into bosses (which Paul correctly points out isn’t very rewarding either) or they’re going to turn into employees with bosses.

The logical step that Paul couldn’t take is that he’s wrong for being in the venture business. The venture business depends on an ecosystem of bosses. Even if his founders feel like they’re getting a fair trade for a few unhappy years at a big company, they wouldn’t have the option of either growth or acquisition if other programmers couldn’t be pursuaded to work “unnaturally.”

The difference with companies like 37Signals and SmugMug (and CrowdVine) is that while they have the same natural working conditions, they’re structured so that those conditions don’t have to end. If Paul really wants to create good jobs he should turn YCombinator into a small business incubator.

Great discussion of this on Hacker News including responses from Paul. One commenter there made a big fuss that I was technically incorrect to call Paul a venture capitalist. True he’s a new un-labeled form of investor who’s using his own money and experience, and not using money from a venture fund. However I stand by my argument, which is based on the exit pressures which are very VC.