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Encouraging Growth in a Software Company?
entrepreneurial asks: "I'm putting together a business plan with a few partners to start producing software for fun & profit. We have a decent early product, several interested clients and enough talent to get things started. The problem gnawing on my mind, however, is how to grow it? I can see us reaching a point in the not so distant future where four or five guys just aren't enough and we have to start bringing in more people. I've worked in massive, faceless bureaucracy and a couple of smaller, mature companies that had already reached the top of the growth curve, so I've never been there. Can anyone out there share some advice, war stories or resources to help?"
The best way to motivate people is with money. Hire more people. Maybe it isn't an option for you, but it is the best way to go. The "faceless" companies you talk of do get things done. Besides, there are ways to run a company that don't resemble Mr. Anderson's job in the Matrix. Take Google's headquarters for example. Massive company and one of the best work enviornments there is.
Trust me, I have experience working on volunteer projects that stymied. If people were getting paid to work on it, the projects wouldn't have stymied. We live in a money driven society. It shouldn't be that way, but it is.
You're right, I wouldn't steal a car. But if it were possible, I sure as hell would download one!
...worry about the stability of the team you currently have. Any friction or personality conflicts will be exascerbated by both success and failure, potentially tearing apart your core group before you really reach growth phase.
Make sure you have clear roles (who really is in charge?), ramifications for non-performance, and -- I can't stress this enough -- written agreements on company ownership and compensation, vetted by an attorney and signed by all parties.
If your core group includes personal friends, these issues get even tougher because of the emotional baggage and existing interpersonal dynamics.
Beyond those points, my advice towards successful growth would be to think in terms of roles and responsibilities. Fill the roles with people that can perform the jobs the best. Management by concensus does not work in a fast-moving industry.
And still it's going to be unpredictable. Let's face it, if you could build a business from a cookie cutter approach, somebody else would have done it. This why people buy franchises.
If I had to limit myself to three pieces of advice it would be this:
(1) Learn how to make use of your business plan. The demands of survival will often compete with your vision for the business. Your business plan needs to be kept up to date and realistic; and while you must be opportunistic, you have to be aware when pursuing stopgap opportunities the potential cost to your long term vision. You're going to find that three or four years seems like a long time now but I guarantee that at the end of that period you're going to wonder where all the time went. Time goes by incredibly quickly, and with it your chance to make your vision come true.
(2) Be ultra-careful about who you bring on, either as an investor or as an employee. Get as many references as possible and grill them in minute detail. It's not like you are some huge company with massive inertia: you are half a dozen guys, a single star can lift you all up, and a single dog can bring you all down.
(3) Learn to maintain a positive and cheerful attitude through chaos, fear and disappointment, because they all come in some measure to every new company. Remember that nobody forced you to do this, and be determined to have fun. It will also keep your creative juices flowing and keep you from becoming preocuppied with regrets and blame.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Statistically your company, like hundreds of others, is doomed to fail.
You need to work out how you are going to survive before you work out how to grow.
Technical skill is not enough, you need people for support, sales, accounting and other admin.
Try not to borrow money, surviving without debt is a great lesson.
If you are the leader, be ready to give up the reigns when necessary, you won't need to micro-manage everything and one day even your presence might be a liability.
There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
Managing growth is where the PHBs come into play. Smaller companies are usually made up of just a core group of people who already work well together and understand the strategies of the company. Not a whole lot of real managment is required at that point.
When you start adding talent, above a dozen people or so, it becomes paramount to streamline all the communication in the company. The person(s) at the top, who today participates in product development will now become more of a project manager / operations officer directing information and keeping the pulse of the company.
Encouraging this growth is difficult to do sometimes since your core team will likely be overachievers - thinking they can do it all. This leads to re-active growth, which can be a bad thing. So make sure everyone has a clear growth strategy, including when and what new resources to bring in. This will allow you to be careful and take your time - this is critical.
As far as managment structures go, get the founders together and develop a structure that everyone is comfortable with. Titles are relativly meaningless in a small company - only 3rd parties will care if you're the CEO or not. So make sure that your title reflects what you actually do.
Get your stars in a list right now - and give them high-end titles. These are the people who your company could not function without and, if yuo trust them - and you should, will be deciding who to place in roles similar to theirs.. under themselves. So their title should reflect that authority.
You have MANY more things to worry about first. And remember the saying, "Growth for the sake of growth is the ideology of a cancer cell."
Make sure your business is going to WORK first. Make sure the people are happy, and you know how to keep them that way. Same thing for clients! Concentrate on _stability_. It's critical in the current climate. Make sure your products are of the highest quality. Promite little, deliver more. That kind of thing. Keep control of your company! The more control you dole out to investors to grow, the more likely it is you'll lose control over your company. Once that happens, it'll almost certainly turn into a place you DON'T want to work at. Learn the lesson of Phil Greenspun, okay? (look it up - I'm too lazy right now)
There's _nothing_ wrong with being a small profitable company. And there's a LOT to be said for being a privately-held company. I've been through *many* startups here in Seattle over the last several years, and I've seen all the mistakes. Trust me, you do *not* want to lose control over the company; that's the worst possible thing that can happen. _Everything_ is downhill from there.
Also, get yourself a real CPA. If you're in the Puget Sound area, I recommend "Cook & Company" in Lynnwood. Excellent people. And get yourself legal counsel. You may be able to get away with PrePaid Legal for the cheap & easy stuff.
Good luck, and Stay On Target!