Running Lean: Dos And Don'ts For Running The Agile Software Company Of Your Dreams
By Jeff Kupietzky, CEO, PowerInbox
Agility has become one of the year’s biggest business buzzwords with companies focusing substantial effort on becoming an “agile organization.” It’s certainly no secret there is tremendous strategic value in optimizing operations to make smarter, faster decisions, adapt quickly to change, and work to continuously improve.
I would argue, however, that had these organizations gotten off on the right foot to begin with, this transformation wouldn’t be necessary.
During the first dot-com boom and bust I saw first-hand how so many startups grew fast and failed fast: Instead of investing in building an outstanding product they hired big, built big, and overspent on layers of management that failed to compensate for their product’s shortcomings. Many also fell into the real estate trap, caught up in the drive to keep up with the Googles of the world.
But none of this is necessary. At PowerInbox we took a different approach — one driven by the belief great products sell themselves. By leveraging technology to work everywhere our customers need us, we’ve been able to forego the overpriced office lease and instead spend that money where it matters most: on R&D. While others were investing in building a heavy infrastructure, we invested in building a product that’s unmatched when it comes to serving our customers’ needs.
In hindsight, we were agile before it was the thing to be. Following are a few of the lessons we learned along the way.
Do build the product your customers need; don’t over-spend on features nobody wants.
Delivering and scaling a minimum viable product has become much easier with a small team thanks to cloud computing, agile development, and collaboration tools. Focus on doing one thing and do it extremely well. Rather than going to market with a dozen features, start simple, gather customer feedback, and iterate quickly to build functionality that truly adds value for the customer. This reduces upfront costs and gets your product in the market sooner, where it can start bringing in revenue.
Do leverage your product team for GTM (go-to-market); don’t spend big on a sales and marketing team.
It’s common for startups to spend a large part of their first big capital raise on GTM teams. Instead of investing in R&D, they expect these hired guns to compensate for their mediocre product. But, the truth is no one knows your product better than the team who built it. And because you’ve worked hard to make it beyond reproach, who better to showcase its undeniable value to the customer? When you’ve won them over, ask for references and referrals to keep the momentum going.
Do scale staff when it’s justified; don’t scale up based on some forecast formula.
Especially when it comes to sales, many companies hire help based on conjecture: If one rep can bring in X revenue and we need 3X revenue, then let’s hire three more reps with supporting staff. This strategy is based on a huge assumption and introduces a large amount of overhead costs. Instead, add new staff only when it’s clearly justified — when the demand for your product outpaces your ability to respond. Ensure your existing team is working to their fullest potential and hire only after you’ve optimized all current resources. This will enable a much higher revenue run rate with a much smaller staff.
Do use technology to work remotely; don’t waste money on a glitzy headquarters.
Let’s be honest: How much do your customers really care about your fancy office, spectacular view or swanky conference room? Answer: They don’t. They care that your product does its job to make theirs easier and that your team is responsive to their needs. In today’s business climate, more employees want to work how they choose — from home (primarily), the local coffee shop, or the neighborhood park. Use this to your advantage and, instead of wasting money on a lavish HQ, invest in your product (starting to see a pattern?). Plenty of tools exist that enable real-time collaboration and communication — even some specifically for development work. At PowerInbox, our teams are dispersed where they need to be. We save on commute time, office leasing, furnishings, utilities, and amenities. And, it makes all the difference for our customers.
Do hire the right talent; don’t expect everyone to handle this arrangement.
While most workers say they want this kind of flexible arrangement, the reality is it isn’t for everyone. It takes discipline, time-management, and self-motivation, and even the most talented employee may not have what it takes to be self-sufficient and work independently. Others may just need the social and community atmosphere of an office environment. When hiring, select candidates who not only meet your skills requirements but also fit your culture. To maintain the connection and rapport among remote teams, encourage team-building outside of the office. Instead of forcing everyone into a routine status meeting, get them together for dinner, an adventure course activity or a bowling night. It’s been our experience this does more to build relationships and accountability than huddling around a conference table.
As you’ve probably noticed, I believe the secret to running a lean, agile company is to focus your money and efforts on setting yourself apart with a superior product at an attractive price point. No one makes a buying decision based on the view from your HQ — they just want a product that delivers the value they seek. By leveraging your own team for sales and positioning them in the field where your customers are, you’ll save a tremendous amount in overhead, maximize profitability, and become the nimble organizations you should have been in the first place.
About The Author
Jeff Kupietzky is CEO of PowerInbox.