It all started with a heated discussion I was having with one of my WordPress agency partners. Anyone who knows me knows that I’ve been heavily involved in the WordPress ecosystem for a long time, and it’s a fairly different world than my other world –– the high growth tech startup ecosystem, so I get to see both of them side by side often.
This article is about the latter, the high growth tech startup ecosystem.
Among my WordPress friends and other people on the technical end of my social spectrum, there’s often a negative connotation to the term “scaling a business”. It’s kind of like the word “ambition”, which is a negative when pushed to an excess.
Everyone welcomes growth, right? It means more revenue, more income. Yeah but it also means more problems, bigger staffing, higher risk. So no, many people today are just looking to make a good, steady living, be able to pay their expenses, have study income without having a boss.
That’s why a lot of them turn to the agency or freelance model.
Also, web development agencies aren’t really inherently scalable. They are a linear model –– the more hours you work the more you make. You provide a service, get paid for labor. Many of them do scale to a certain size, but it’s linear, based on more labor, reselling other peoples labor.
“Why do you want to Scale?”
A developer and good friend of mine recently learned that I did a lecture series for several years called THE SCALABLE STARTUP. It is a topic I’ve discussed for almost my entire career and very central to my business philosophies. To some people its magic, to others it is confusing or frustrating. People react one way or the other.
My friend Amit asked me “Why do you want to Scale?” As if it was a bad thing. He equated “scalability” to big corporations, growth at any cost, greed, etc., was very negative on the word and concept.
Amit also felt that it ruined the collegial vibe that a tiny company has. “If you mess with a good thing, you can ruin it.” he said.
Now before I continue, let me state that I have a great amount of respect for this person, we were co-founders in a past company, and I’m part-time developer myself so I understand the comfort of a small team that has jelled and works together well. Simple, clean, manageable.
I get it, the dream life of the digital nomad, laptop on the beach in some exotic country or up in the mountains in a cabin. The lone wolf. I love it. I’ve done it! It’s a very romantic notion, and the right thing for many, for some period of time.
But I also don’t think it’s realistic in the long term for most. Grow or die is my motto for tech companies or even a small agency.
My opinion on this frustrates some people.
I never have been against “engineered’ growth –– the practice of trying to purposely, exponentially scale a business. In fact, I prefer it.
Why? Because no company can make their revenue stay exactly the same month after month, year after year. Also exponential growth usually includes some type of unique technology, which provides higher margins, escape from linearity, and protection of the hundreds of competitors all agencies and freelancers face.
The Magic Ingredient
Scaling is the magic ingredient for startups to actually persevere as a business. Anyone who’s felt the power of stable reliable growth knows what I mean.
Continuous growth, at least a little, and a growth mindset together create a positive pressure on a business, force them to expand and continuously improve. It’s more difficult –– adding people, scaling infrastructure, fighting with bigger competitors, but I believe it’s worth it. For any business.
It’s also an incessant challenge –– “We must keep growing!” To me that’s a good thing.
Often when a growth company stalls, they start looking to sell or merge their company, to prevent the slide back down the revenue curve and all the painful things that come with that. That’s O.K., and often provides some wonderful outcomes that wouldn’t have arisen if they weren’t set up as a scalable business.
Growth, scaling, growth, pizza…
One wonderful model for me is my friend Jace, whom I am helping to create a new food ordering startup. There are hundreds of food ordering startups already, so why would anyone do this in 2019, right?. Most will fail.
But we’re approaching it in a very different way, looking beyond the present. We’re designing the platform and pricing so that growth is very slow at the beginning then increases over time. We’re building proprietary technologies that we will use ourselves then expose to the world. Etc., etc.
We’re building scalability into everything.
Excitement
Growth businesses are also more exciting for a company’s team and friends and family and customers. As you build long term relationships with customers, investors, employees, they thrive on your continuous growth and actually help you to continue to grow.
I understand and respect the linear businesses, and I love the simplicity of the agency model, but they are vulnerable to change and competition in the long run.
So consider the scalable model for anything you do.
“The energy of the mind is the essence of life.” – – Aristotle
Find yourself a partner or two, ASAP. Don’t be too hasty, but having a partner makes an enormous difference. The #1 wish of most business minded founders is to have a technical partner, a “tech cofounder,” but they go about it all wrong. I can’t drive around Silicon Valley without thinking of Hewlett and Packard, one of the best partnerships in history. They were both technical, quite similar in some ways but there were also several lesser known major differences in their personalities and beliefs. They supported each other to the end and made everything around them stronger because of it. A great partnership is about equality in the right places, and if it is maintained, the resulting energy is much more than the sum of its parts. In most great partnerships it’s impossible to discern who the leader is; both partners support the other almost more than themselves.
O.K., now we’re at the end of January. What have you done so far? How is the year going? Good pace or need to speed it up?
11 months left in 2020.
Venture…
Update 12-30-2019:
O.K., now it’s the beginning of another week of limited productivity. That’s a unique opportunity for all of us. Use this week to get ready for a stronger 2020. Write down your goals, be very specific, make deadlines. Vague, unwritten goals are meant to be broken.
Go stand on a mountain or go to the beach and look out at the vista. Now is the time.
Happy 2020!
From 12-21-2019: From about a few days ago until about January 6th, things will be pretty quiet in your professional life, as they should be. It’s a time to reflect, be with family, eat too much, watch old movies –– whatever you do during these two weeks. You’re probably at home this week, or rushing around for last minute prep for the holiday.
But it’s also a time when your mind is still working, in fact working better because you don’t have the the Urgent stuff to work on, the responsibilities, the little things, and most people have their minds switched off of work this week.
I’ve had some of my best business thoughts, ideas and transactions during this 2 week period. One time I recovered a major piece of business from a competitor because they weren’t willing to meet their “new’ major customer on December 27. We took the meeting and took $15 million away from them.
I now love December 27th, it’s one of my favorite days of the year.
But you don’t have to have any transactions; you can think about next year, plan it out. Think bigger thoughts. Or meet up with people you’ve met this year if they have time. I do that a lot, too.
I once started a new sales job on December 21st for a software company. My new employer told me that I could take the first 2 weeks off (with pay!) because they were on vacation. I decided to ahead and show up on the 23rd. As I sat there alone in our office in Los Angeles, the phone rang, so I answered it. It was our VP of Sales calling to welcome me to the company. He had decided to work that week also.
We talked for awhile on the phone, then he invited me to fly up to San Jose the next day and have lunch with him. I did, and that lunch changed my entire trajectory at that company.
So, put the business task list away, enjoy your family and friends, but allow your mind to think, brainstorm, build your momentum for 2020.
And if a major prospect wants to talk on December 27th, take the call.
Yes, freelancing is hard. it’s much more difficult and less steady than the good old paycheck.
The Traveling Web Developer
Every week I meet a new web developer or content developer or social media freelancer online who tries to make traveling their number one priority in life, using their freelance work to support it. That’s pretty hard to argue with, kind of a dream come true for many of us, a reordering of your priorities to being able to see the world while having an income at the same time.
I’m sure not all of them are as successful as they claim, but many are thriving. WordPress development seems to be a popular choice here. You can get $1,000 to $10,000 to build a site that takes 1-4 weeks if all the stars align correctly.
And there are a lot of WordPress sites to be built. That could all change, but for now a laptop, lots of free software, and a Mai Tai is all you need. And instead of a boss, you have clients. People get very creative in mixing travel with freelancing – Winnebagos, third world countries, cabins in the mountains. This could also possibly be done when creating a startup and being a real entrepreneur, but it’s much more difficult. I wouldn’t recommend it.
The Traveling Travel Blog Blogger
This growing sub-genre of freelancing seems to be growing quite quickly, a lone person or often a couple will start a blog about their travel experiences, logging each day with words and pictures. They try to use the revenue they make from selling ads and their travel photos to finance the journeys.
It sounds like another dream come true. It’s difficult to see how you could make enough to live on just blogging, unless you were really good at it, but I’ve seen hundreds of these lately. Most admit on their websites that they supplement their blog income with money from travel-related sponsors, building websites, and even taking jobs on the road (like teaching English or working as SCUBA instructors).
Whether they make much money or not, power to them for the choice they made.
WHAT WOULD SETH DO?
Seth Godin is another one of my favorite pundits on several topics but definitely a bold leader in talking about differentiation, hacking the core and freelancers. He has a great way of explaining the problem with positioning yourself as a freelancer. Basically, Seth’s theory is that if you’re performing any job for someone else that is not extremely unique, your employer or client is incentivized to replace you with someone cheaper.
Why? Because they can. Why shouldn’t they?
It’s just smart business. He covers it in his book We Are All Weird. Another way to drive the point home is to look at offshore freelancers. Almost any replaceable skill can now be found in India or the Philippines for $5-10 per hour. So it boils down to offering a service or product that is either in higher demand than supply, or that you yourself are able to offer cheaper.
We have a giant contingent of freelancers in the workforce marketplace now, due to large companies drastically decreasing the amount of people that they are willing to hire as full-fledged employees with benefits and longevity. This makes it even harder to differentiate yourself.
The lesson here is that even in the field of software development, which thousands are flocking to currently, you must differentiate yourself. Avoid being seen as a commodity.
