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.
This is one of my favorite quotes about innovation, by an innovator who is still revered 100 years later; it’s the first thing you’ll see if you go to my personal website http://tomnora.com/ . Matisse was an amazing innovator, and his innovation and originality
Innovation, Originality, Creativity – why are these things so important in the tech startup world? And what do they have to do with art or painting?
I have the opportunity to visit many secondary and tertiary startup markets in my travels, meaning not Silicon Valley or New York, and one of the things that always strikes me is the lack of originality in almost every company pitch I see or hear.
I can see that the entrepreneurs I meet are sincere, have usually put a ton of work and pride ion their invention or product. Often they have put a fair amount of personal or family capital into the venture (these days that’s usually their parents money).
The major flaws in their planning process are denial and ego fortification – they don’t do enough homework to see how many are already doing something similar because they don’t really want to know; and they highly overrate themselves as amazing entrepreneurs. This is a bad combination for success, but I see it daily.
I get it; I know it’s more difficult than ever to build a real career and easier than ever to start a company. But the very core of creating an interesting and new business should be the concept of originality. Some originality, enough to be different, unique, without being too weird.
Real originality comes from within, because it is inspired, comes from adrenaline and emotion, not from a spreadsheet or desire to merely make money. Finding the mid point between originality and capitalism is what I define as business innovation.
There’s nothing new under the sun, so you must critically modify, hack, or turn sideways existing systems with a truly new vision. Instead of just copying or slightly modifying something you see, try to take it a few steps further.
One of the quite innovative methods Matisse and his peers used was finding inspiration from other skills they already knew, leveraging their expertise as craftsmen. Matisse was a draftsman, a printmaker and a sculptor, and you can see these influences in his paintings.
Part of the magic of great business innovations is knowing which rules to break. Matisse broke some of the rules, but kept many intact. The rules about the way business processes flow are too often just accepted, but if you can analyze them, find an achilles heel, then innovate a better answer. Get rid of the obsolete rules without breaking the good ones, and great things will happen. It’s about where to hack and where not to.
I went to a pitch fest in one of those secondary markets the other day. Most of the presentations were weak delivery, boring, been done before and uninspiring. But there was one that was pretty amazing, by an 18 year old who had become deaf at 12. He has developed an exercise system for handicapped people; you tell by his excitement and thought process that he was inspired, and created true innovation. He wasn’t polluted by how corporations work or the rules of business – he was still in high school.
Another Matisse quote is “There are always flowers for those who want to see them.” Look carefully, take the extra time and find the uniqueness in any idea you want to realize – it’s there. Find me on twitter at @tomnora
Anyone who’s been around me for the past 6-12 months has been inundated with my evangelism of eCommerce in general and Drupal + PHP. This is actually a bit strange for me, as a 20+ year software industry professional, I’ve spent most of my time in the world of extremely sophisticated software tools and languages – several of the startups I’ve worked at and/or launched were based on software tools to build software, so I’ve been in the middle earth of software for awhile.
The So Cal engineering gap? I’ve been able to study the Southern Cal software dev scene as an insider for over 2 years now. As a native LA person, I’m gratified to see so much code and code talk flying around my town. But, there is a serious gap in the discipline, number of developers and community around real software development here. Also lot’s of fake, wanna be CTOs here. (So L.A.) This imbalance keeps L.A. from catching up with Silicon Valley and New York as a stronger startup region. In my career I’ve seen many times the positive effect of a rich software development discipline, full life cycle, QE vs. QA, test driven development, all the “other” parts of SW dev.
The strongest impact on improving this situation is Silicon Valley and Seattle companies – Google, Facebook, Amazon, Microsoft and others are making enormous investments in building So Cal as a software town. They bring with them confidence, tools, brilliant people and believe it or not, Drupal and PHP.
Drupal has a worldwide engine of real software discipline. The So Cal Drupal scene is highly regarded and has several free meetings every week to teach advanced software life cycle issues. The Getty, USC, The Grammys, MTV, and many more giant websites built in L.A. are built on Drupal.
What is Drupal? Drupal works at all levels of software development. Drupal and PHP were tools I’ve acknowledged for a decade but never studied much. Then last year I decided to re-educate myself in software development, but this time as a regular ol’ coder. Although I have an EE and CS education, my best contribution to technology businesses has been in strategy/sales/marketing/leadership. I’ve had 7 jobs in Silicon Valley in software development companies, but 6 of the 7 were in business development.
When I dove into development with a focus on the future and e-commerce I quickly saw that Drupal and thereby PHP are taking over the scene. Sure you have Ruby, Python, many others, but PHP is winning because it’s so accessible to newbies, and it manipulates the server side continuously, allowing e-commerce, social, geolocation and other apps. Big boy applications.
The world has changed – software development, app dev, and software engineering are taking over the center of the conversation, and Drupal/PHP is taking over the lead. You can actually have a successful startup now with just developers, with just one (although I don’t recommend this), if they’re savvy and humble enough.
What is Drupal? Drupal is prevalent in the Silicon Valley ecosystem? In the birthplace of Java, BSD, SQL and many other critical software technologies, Drupal and PHP are spreading like a California wildfire.Drupal has recently permeated places like Stanford; there are over 1,000 sites on campus now. Ther are 20+ major Drupal dev shops up there, they have BAD Camp every year, one of the top Drupal camps in the world.
What is Drupal? Drupal can make a non-developer earn $60-100,000 per year within a year of study. A Drupal or PHP developer here can make from $50 to $200 per hour; I see it all the time. The problem in So Cal is that the discipline part is weak; we’re just not steeped in the cmplete range of what full cycle development, test, etc. are as a region. PHP and Drupal are partly at fault for this – people who never attended Engineering school can learn these tools in less than year without learning formal computer sciense discipline.
What is Drupal? Drupal is an overly friendly community of helpful people and ample free training and coaching. Drupal is also free open source software with functionality for every possible web application. When I moved back to L.A. in 2010, I gradually saw that among our weaknesses we were very strong in E-Commerce, Fashion Commerce, Mobile Commerce, Content Communities, dynamic sexy websites and it was all based on varieties of PHP/LAMP. Drupal’s weaknesses as a software language tool (push button programming, configuring, too easy, more IT than software dev) are actually its strengths. Even the best software hackers should hack less and use that time to build more functionality and usability.
What next?
1. Go to drupal.org, join up for free, find me there I’m tomn
And contact me if you want my help on anything Drupal or PHP…
In 2008 I was working on a post-merger integration project for a small company being acquired by a Fortune 100 behemoth. We looked at several SaaS based systems for accounting, sales automation, calendaring, product management, scheduling our company airplane, travel, etc. At the time SaaS just wasn’t mature enough and people at the company weren’t comfortable enough to make the change; too many old habits of installing software.
Because of this reluctance, almost every business process we depended on required the manual intervention of humans. The difference in efficiency between then and now is pretty amazing.
Today, only 5 years later, almost every task we performed then is gone, a complete turn over of an industry. These are now done either transparently in the background, in the cloud, or done using minimally invasive mobile apps. Spell-guesser, auto-fill, travel, accounting, calculating company valuations, facebook, pinterest, dropbox, codecademy, me writing this blog are all managed by a SaaS platform.
PaaS, IaaS and other derivatives of SaaS are proliferating but are just that, derivatives. Today SaaS is pretty much the norm; many, many human processes have been displaced more rapidly than ever in our history. We wouldn’t be able to imagine our lives without it, auto-save, no software loads, freemuim, mobile, access anywhere. I can even build server based websites with Drupal and MySQL now on an iPad in a coffee shop.
But more importantly, the labor of moving software around by humans and physical media and even the Internet has been taken down to almost zero. The software just doesn’t leave it’s cloud hosts anymore. This saves energy, mistakes, cost, time, client computer memory and bandwidth. It vastly reduces computer waste.
SaaS is the culmination of over 20 years of changes from ASPs, client-server, the web, higher speeds, always on, mobile 2.0, cloud computing, laptops HTML5 and many more innovations to finally reach the moment we’re in now. This speed of innovation has never been seen in history – not in automobiles, education or any industry.
The way we do things today is very different because of SaaS and the Internet. 80 year olds can build a Facebook page of their family’s photos or create a new business using a cellphone because of SaaS, without ever knowing anything about the guts underneath. I wonder where it will go next, what the next big change will be to make todays capabilities obsolete. You know it will happen.
