Crowd sourcing human capital to a for-profit business

I had great fun talking at SSES Start-up day. The video below is a little presentation of how we have rolled out our project SkrivaPå since the inception in Feb 2010. The talk includes some general tips and tricks such as how we have managed to crowd source human capital to contribute to our for-profit business even though we haven´t had anything to pay and some useful tools for manageing distributed teams.

Further down is also a related blogpost that I wrote in November 2010 (6 months ago) but haven´t dared to post until now.

The blogpost

Original title: "The Help Me Toolkit: Essential bootstrapping techniques to help people help you in your start-up venture (in other ways than by paying)"

Background

At my current start-up SkrivaPå we now have a strong team of 12 [has grown to 18 since this background was written 3 months ago] and about another 8 senior business people in our Board of Advisors. Even though the size of the team and helpers is quite large for a start-up that started for real no more than half year ago [9 months currently] we have managed to keep the burn rate down to almost zero, spending a total of 12kEUR up until we launched this week [that was our beta-launch we will launch a stable version next week]. When I tell people about our story they are often amazed of how I have got so many highly talented people to work in a dedicated way (50-100%) without being payed. So of cause they ask: how do you do it?

To answer the question I wrote a blog post about it in November 2010. When I was done I sent it for review to some friends and other people that had asked for it. Even though I got great feedback I didn´t dare to publish it because I was afraid how people, and maybe mainly, how my employees would interpret it. That people would think that I´m a rotten bastard that make people work for free to make me money. I now picked up the text and read it again and realized that it wasn’t that bad at all, it is actually really useful, especially if I frame it and explain the reason why we started with our “work for free”-recruitment strategy. So here it comes... I hope that you find it useful.

Introduction

The creation of our “work for free”-recruitment strategy.

Except for the small pre-seed 12kEUR that my partner Gracjan Polak put in at the inception of the company we haven’t had any cash coming in because the product (a service for electronic contracting) is actually really difficult to build and so much has to be right before you can really start selling it. So we have had to be on a starvation diet. Like most people at the start we believed that we had to pay people up-front to get things done. The problem was that we tried it and got burned 3 times in a row in just the first 1.5 month of the company existence. For some reason people seemed to strongly under-perform even though we had promised to pay them with shares or money. So we decided for a different approach. We didn’t promise anything at start or we promised very little. Then we tried the person out and they tried us out for a few weeks. Once both parts knew they were dedicated we would decide upon some type of economic solution. This way our recruitments suddenly improved drastically. Some people bounced immediately upon the bad offering and the ones who stayed got stuck and are still here to this day. Probably it worked out because by giving such a bad offering (“work for free”) we only got the ones who were really interested and motivated, not for survival or CV-building opportunities only. Possibly this is also the main reason we have such a passionate team, because only the ones who truly love the project have been able to motivate themselves to stay. Of cause there must be an end to this type of strategy and people must at some point get something material in reward if they are to stay. Actually we (me and Gracjan) feel we love our team so much and they are bringing so much passion and spirit to the table that we don’t think they should only be payed in cash, we want them to be part of the company. We are carving out the deal with our lawyers right now.

Magic can happen: example story about Emily from the finance bank in London

We found Emily on elance.com as a result of browsing the web while researching the possibility of finding Haskell programmers outside the tight Haskell community. Emily applied for a tiny job proposal that I had put up and she dumped the price and said she was interested, but not because of the money. She signed the NDA and was supposed to start working remotely from England. Nothing much happened though and soon we got a very very long email explaining her resignation. I called her up on Skype to ask for the reason she was leaving because the long explanation didn’t really communicate uninterest. Well, it turned out that she didn’t want to trouble us as she wasn’t yet great at Haskell. I convinced her that she should stick around and learn some Haskell as she goes and maybe one day when we really would need her she would be truly useful. So, she stayed. And not much more was heard of her, the finance bank had her in its claws having her working 9 to 9. Finally we set up a structure with short 15 minute stand-up meetings in the morning and asked her if she wanted to take part. She really wanted to so she applied to her boss at the finance bank to be able to take one day off a week to work with us for free. The boss was weary so we had to write long letters stating that we are completely uninterested in their technology and wont start stealing and doing industrial spionage through Emily. Finally they let her go to have fun with us one day per week and so it has been for about 4 months now. Last week we had our pre-launch party and she even came over to Sweden with her boyfriend Matt and they stayed with me at my tiny 19 square meter apartment. The big surprise was when she got back home. On Wednesday she Skyped Gracjan:

Emily: “I have two questions, do you have time?”

Gracjan: “Yes”

Emily: “Do you like my code?”

Gracjan: “Yes”

Emily: “Do you want to work with me?”

Gracjan: “Yes”

Emily: “Good, then I will go and resign from my job later today!”

Gracjan called me just moments later and we were both jumping up and down.

“OMG! Does she know we don’t have any money!? We have to ask her!”

We tried to contact her over Skype but she was gone. Soon she came back:

“I´ve just resigned. I feel like Im on top of the moon.”

Then she was gone from Skype again. When I talked to her later that evening I asked her if she knew we don’t have money. She said that was what she expected and she had calculated her savings and figured out that she would make it for some time anyway. Now we are thinking about how to make her boss let her go as soon as possible. Maybe we can write a letter stating that we intend to use Emily to steal their technology?

So to the original blog post…

The Help Me Toolkit and some philosophy

Building a successful startup = loads of external and internal help needed

When building a start-up there is so much that needs to work out right that I believe its virtually impossible to succeed in making it work unless you get loads of help on the way. Nobody, not even the most shining star on the entrepreneurial sky, has all the necessary skills to do it all alone, not if you really want to build something big at least. Help is not something that just happens to you, it’s a two way process, someone is able to help because you help them be helpful, you make yourself helpable. Therefore I perceive the opportunity to be helped as a set of techniques that the entrepreneur applies in order to make himself helpable. Of cause there is no natural law that guarantees help just because you apply the techniques, there is no 100% formula. Rather I perceive it as a game of numbers, the more techniques you apply and the more efficiently you apply them the higher are your probabilities to be helped. In this blog post I wont get into details, I rather want to share some general ideas that I practice and that I think have been extremely helpful in helping me to get great help.

The cash transaction obsession: The most common misconception

I believe that the most important reason people restrict their ability to be helped is that they incorrectly analyze the driving forces of the helpers. People tend to overemphasize the transaction of money, goods and practical services. The problem with this type of transaction is that it most often only satisfies the most basic needs of the person: food, shelter, clothing etc. If the person is fully satisfied with these needs, why should he ever help you out? This fact is especially important as many of the people you will need to help you are getting their basic needs met by someone else than you. Also employing everyone you need isn’t a feasible opportunity as often the only help you need in a specific situation is 15 minutes of advisory or the contact to someone else that is the real helper. So, many of the helpers you will need will be outside your organization doing something totally different and actually often completely uninterested in what you are doing. Also many of the people that can actually help you most are already very successful and thus already materially have everything they need and much more, so unless you pay them absurd amounts your contribution could never be felt enough to make a real difference. So for a bootstrapped start-up, the amount of help you can get through material transactions is really limited and you wont get very far if you think you have to pay everyone for everything. Actually you will probably not get anywhere. I think this might possibly be the number one reason many people get nowhere with their start-ups, because they don’t know how to ask for help. So what can you offer if not a material transaction in order to get the help you need to make your business grow?

Three other motivators

I believe that that people want to feel good and therefore they are opportunistic in exploiting opportunities to feel good. As we all know, at least in the developing world, money is just a small part of what makes us happy. Once the basic needs are met, we want other things. These are some of the needs I think you can help people satisfy to get the help you need in return:

1. Opportunity to learn

People love to learn and grow, it makes us feel good as we develop. I don’t mean forced learning as in school, I mean real learning as in satisfying your curiosity and want to become. So, if you have the opportunity to offer some kind of knowledge and an environment to learn something that is perceived as valuable to the person you want help from then that might be perceived as valuable enough to make that person engage in solving your problems. Of cause this situation rarely applies when doing a cold call to an expert, rather I think the knowledge sharing is possible in more long-term relationships, especially with people that would have the opportunity to work for you. What?! Opportunity? Work without payment? Why? I can think of several reasons, here are two of them:

• Because the creative process is exciting: You are an entrepreneur, an artist, you are creating something and it is exciting to be part of a creation process. To be part of that process is an opportunity to learn how to be an entrepreneur and how to create like an entrepreneur. This is a truly scarce recourse. There are not to many start-ups out there, and especially not many doing something exciting and also inviting people to be part of that process. The trouble here is of cause how to communicate in a believable way that you are really doing something exciting. In most cases, unless there is real proof of how great you are and what great things you are capable of achieving, like if you would be Mark Zukerberg or Bill Gates or some other outstanding entrepreneur, you must be able to show something external that is convincing enough. I guess the most apparent proof would be having a real product or service to show off or an organization that is clearly rocking it and on good way of creating something exciting. For these reasons I guess the first recruits will be the hardest.

• Because there is something at the core of your business that is new and exciting: This something can be the idea, the technology or the methods you are applying to organize your work. In the case of SkrivaPå we have been lucky: with an idea that many perceive as the obvious future (electronic contracting) and is clearly scalable (everyone needs contracts), with a technology (Haskell) that is perceived as very interesting and unexploited amongst certain types of functional programming nerds and with an interesting and new approach towards the organization of work (as all of our work is organized virtually through a whole set of cloud apps). So this opportunity aspect requires some thinking. What is there at the core of your business that could be an opportunity for others to learn, who is interested in that knowledge and how should you communicate that in a compelling manner? If you really believe in your business I cant imagine you cant figure out something that could be an interesting learning opportunity to someone.

2. Opportunity to be part of success

People like success and being part of success makes people feel good because we feel it reflects on us. If people really believe your project will be successful then the opportunity to be part of success might be a compelling factor that makes them want to join in. This is close to what has already been mentioned in the part “opportunity to learn”. A compelling idea or a successful person can communicate the opportunity to learn but also it can communicate the opportunity to be successful. Again I believe this motivator is most likely to be found in more long-term relationships with continuous transactions being made, relationships such as an employment or a mentoring relationship.

3. Opportunity to be acknowledged

People love to be acknowledged as it makes them feel important and valuable. The crux here is that the only way this can be achieved is by transaction, by externalizing and sharing something that someone else perceive as important and beneficial. Thus sharing is a prerequisite for being acknowledged. Therefore we should not underestimate the willingness of people to help out by sharing. I think actually this might be one of the most underused help-tools there are, people don’t ask because they don’t believe in sharing. Ask and you will be surprised of how much you will get. I use this all the time. I routinely identify people that have the knowledge or are able to do something that is important to me, then I contact them and tell them that I believe that they really have what it takes to help me out. Simply put: I tell them that they are great and ask them to share their greatness. Very often this works like magic and people open up in the most unexpected ways and even share things I couldn’t imagine they were capable of sharing. We live long lives and gather loads of information, contacts and skills, a person you contact for legal advice might be a super expert in astronomy, this happens to me all of the time.

Make sure the reasons are right and be honest

Finally, I want to emphasize the importance of being careful when trying to source help in other ways than the money transaction. When paying someone its very clear what is being exchanged but when offering other more immaterial values the lines are less clear. I guess you want to be an entrepreneur because you believe it will make your life better somehow, so don’t ruin that experience by creating unpleasant situations. When working with people you really don’t want people to think they will have benefits that they probably will not have, or that are difficult to promise. Simply because they will probably be disappointed once it occurs to them that their assumptions were incorrect (or even worse, that you have misled them somehow) and the more they have invested the larger the disappointment. Its not fun to be part of someone’s dissatisfaction and the larger it is the less pleasant the experience will be. This is not good for anyone, not for you, not for them and certainly not for business. So I really want to emphasize the importance of making sure that you identify the motivators of the people you want to work with and identify your ability to satisfy those motivators. If you cannot satisfy them, don’t engage in the transaction. Also be sure they are truly comfortable with their own motivators. They might actually be motivated by what you have to offer but not enough for that motivation to lastingly overshine the discomfort of not being paid in the ordinary way. Of cause I don’t want to discourage you from calling prominent people asking them for help, no, do it as much as you can, the worst that can happen is that they wont appreciate your offer and will hang up on you. I mean people you intend to work with some longer period of time. I’ve already done this mistake a few times and it is quite time and energy consuming. If your ambitions are high you don’t have that time and energy, so try not to waste it.

SkrivaPå Weekly: Stream of Conciousness Special ed

Hello team!

Have been writing papers all weekend as usual so Ill try to keep this one short (as short as I´m capable of = medium) Last week status update and some praises from me and G to you all and to ourselves:

• Mariusz. Has done a heroic job with the front end stuff. Hell of a lot of code and almost all is implemented. We will have a wonderfully beautiful app by the end of this sprint.

• Andzej. Big up for all the bug cracking in the code. Awesome to have you so self going so fast. Extra praises from Gracjan.

• Eric. Finally done with e-leg! Jiiiiiha!!! 1 week early to schedule. You’re the king! Will be finally tested this week and then the last USP (Unique Selling Point) that our Swedish competition has over us will be gone. Also want to thank you for a beautiful letter that almost made me cry. I think it touched us all.

• Viktor. Producing speccs as madman. Testing like a pro. Also great work on the new sales partner that we will most probably land and will work their butts off to sell us. It will be a great test on how it works to have an external sales org really dedicating time to selling our service. Hopefully they will deliver.

• Emily. Thanks for the great security updates. Also great job with the CSV together with Viktor. The customer is super happy about not having to manually send the 100 docs and promised to be patient = he loves you. We love you too.

• Nazli. Really getting a hang of the security stuff and doing great job with Emily. Gracjan loved your input on the log sorting software.

• Bell. King of the policies! Keep up the good job!

• Alexander Yngling. New satellite to our team. Thanks for the great API speccing. Awesome job.

• Johannes Schildt. Thanks for delivering some high quality project management tips and tricks and reviewing our pricing strategy and app usability to simple users. It really will make a difference I believe. I have been fighting with that pricing strategy for a long time and I think we finally nailed it. Its just beautiful. For the ones that want to read it its in the latest upgrade of the biz plan that I did this weekend (yeah, its kind of becoming a bad weekend addiction upgrading that PPT).

• Patrik and Tim. Thanks for finally delivering the front end stuff! Its so beautiful. Customers are going crazy: “Where is this Tim? Can we have him?”. Btw, have a cool company that want to meet with you Tim, Martin and David.

• Magnus Carlsson for the great hands-on dev team inspiration and help with reviewing our code. I loved listening out to your code deep talk. I guess my appreciation wasn’t even close to that of the tech teams.

• Stefan Kanev. Thanks for the long awaited testing seminar! It was really appreciated (though I had to hang up as it got too techie). Looking forward to the followup on that.

• John Allberg for the great advice on how to set up the hack competition. It was really useful. Its always fun to call you, always some really interesting insights.

• Richard von Essen for all the contacts and the deep dedication to getting the brand development going. Just saw your email. Wow, I want to work with that guy that does Harvard Universities branding! =) Sry, haven’t called Laurenti yet. Will definitely do.

• Pär Lundgren. For all the great perspectives on presentation skills. And just general wise advice.

• Hannes Dernehl. For the awesome contacts to people and great ideas. Really look forward to arranging that 72h SkrivaPå Go Global Camp. I think it will be a real PR hit.

• Henrik Stridsberg. I want you on the board! Hope you are still up for the task.

• Samuel Johansson. See you on Tuesday. Look forward to talking scalability and getting the nitty gritty of your start-up insights.

• Mike Cappy. Thanks for all the great financial advice on this investment round.

• Mary. I just say: RightSignature!! Please keep up sending me all the market analysis stuff.

• Gracjan. Thanks for all the server fixes, logging and foremost the patience with the crazy amount of lawyers stuff that we have been having to work through for the investment. I love you my dear co-founder.

• Hm who else? Me! Great job Lukas at getting so many new customer leads this week and finally getting all the investment paperwork done.

• Ah! And Dominik of cause! Thanks for investing! Ill quadruple and then quintuple your money. I promise. I’m going to do everything in my power to make you a happy and extra rich investor. And also provide some extra fun on the way there. Welcome to join a stand-up whenever you have time. Its 8.45-9.00 every weekday morning.

Wow, that was a long list of people. Did I really talk to you all this week? Naa, only 95% =) Thanks all for your great contributions. You are SkrivaPå and SkrivaPå is nothing without you.

General comments

Launch

We are doing quite well with the launch schedule. How can I say that?! We are launching next week?! Naa, we are not. Because of all the customer involvement, the product dev, the investment and not having a really beautiful product to show off before all the front end was done (tomorrow!) we have decided to postpone the launch with two weeks to really be able to deliver something ready (as expected). This week I will start calling journalists. Please don’t slow down the pace though. There is still loads of stuff to be finished before launch as you might have noticed in the last weekly.

Hacker competition

1 April Chalmers is starting a course on hacking. We will be one of the main targets. Of cause not our main server. Emily and Nazli will be administrators of the project and John and Magnus will be judges of the competition. This will be fun!

Customers

Our customers customers just absolutely love our service! As soon as a customer tries it out with their customers they get awesome feedback back. So awesome that it just kills all their initial doubt. Also the viral strategy seems to work well as many customers customers soon become our direct customer leads. I had a fun twitter conversation with one of them while he was praising our service and we will book a meeting tomorrow to do some sales. Another interesting story is that UpSales, a sales CRM company that might want to integrate our service into their CRM (they have thousands of customers) started to test out our service this week. Actually contracts were signed by four of their sales people and they all love it and are amazed at the great customer feedback that they are getting. Im quite confident that we will land this deal unless we screw up royale. Another fun story is a friend of mine that works as a sales guy at MyNewsdesk that called me in panic saying he just had to sign a contract NOWNOWNOW! So I set up an account for him at the spot and he was also just amazed at the great customer feedback and his own app usability experience: ”Wow, Lukas, what you’ve built is really great.”. Finally I want to report that Im in this breakfast sales network that eat breakfast together on Fridays. On average people get 0.5 or less hot customer leads at each meeting. I get an average of 6-8 (based on 3 breakfasts). So = what we got is something general, something that everybody (in business at least) can understand the need for and I get constant reports on how easy it is to sell the stuff. People just love to recommend us and they feel its so easy. Again: VIRALITY! Yeah.

To sum up

We are doing something that customers find really useful and absolutely love. I’m proud, of you and of what we are building together. Also it seems like we have really reached the tip of the mountain. The first and hardest part of the journey seems to be coming to an end. The part where we wonder if we will ever be done with a product that people will be willing to pay for, use and love. I can see that the downhill seems to be starting. Don’t expect any magic with adoption exploding but I think the upward curve is really starting to kick in.

Ok, enuff

Dear Dream Team SkrivaPå: an extract from SkrivaPå Weekly Insider, New Years Edition

As we are a dispersed team I write a weekly newsletter to all employees to keep everybody up to date with whats happening. I thought maybe this weeks newsletter might be interesting to someone outside the comp. Both because of the content and as an example of how you could write a newsletter to keept your team up to date. And to be honest, maybe its just because I´m so happy about the post myself or because it´s much of a summary of my own year as an entrepreneur with my beloved business SkrivaPå that I feel like sharing it here at my own entrepreneurship blog.

This one is of cause special as its a 2010 summary, I cut the more boring pieces about backlog technique and detailed team progressions in the end. Voila...

_________________________________________________________________________________

SkrivaPå Weekly Insider no 11, New Year Edition
“Rule 1: Always find a good excuse to write a lot”

Some thoughts of the past year and the year to come
Dear SkrivaPå dream team. At the late sprint meeting today (due to Gracian’s flu last week) me and Gracjan did some summing up of the SkrivaPå experience of ´2010. We looked back at the year and discussed what we have done great and what we could have done better…

What a great team we have!
Time to be emotional… We love you. It is so great to have you all on board and compared to just being me and Gracjan fighting all the small and large issues, its so much more fun and energizing to be a real team with so much diversity of knowledge’s and ideas. We are truly thankful (I’m convinced I can also speak on the behalf of Gracjan) for your full-hearted contributions and how you inspire us and push us and the business forward. I’m actually honestly surprised and amazed: how could we possibly get such a passionate and talented team so smoothly? How did this happen? Is it the idea? Is it us? Have we had a very long series of luck or are we just very good at good decisions and getting the right people attracted? I guess it might be a little bit of all. Anyway, big props to you all for being so awesome.

We are surprised by how well the dispersed team model has worked
Of cause you have heard it before: ”it is possible to work in dispersed teams, just look at 37Signals, they’re alive and rocking it” Of cause we hoped it would work, but we never thought is would work so well and that it would be possible to get such a tight organization with such efficiency as we actually have. The stand-ups were a spontaneous invention when we were trying to figure out our workflows back in early autumn. They immediately showed to be super valuable and have shown to be really essential in gathering the team and making us into a real organization. Also they have shown to be a real good whirlpool for either increasing engagement or pushing unserious interestees away, thus making the core tighter. I’m convinced Eric and Emily who also have experienced SkrivaPå without the stand-ups would agree with much of the above (or what do you think?).

We never expected the business to be so complex but now it seems like the bulldozer is starting to gain some speed
When I first got the idea (back at the bed of my friends apartment talking with him about his difficulties in finding a smooth way to sign with a label in Canada that wanted to release his song) it seemed like the most obvious and simple idea. When I told Gracjan about it just a few weeks later he was also fired up by the simplicity of the idea:

“let people sign documents electronically”

As it has shown during the year those 5 words have really shown to be everything but simple to put into reality. First we discovered the complexity of customer feature needs, then we discovered the depth of customer security needs, then we realized the complexity of the legal issues and just now the strong need of strong branding and forceful marketing is appearing at the horizon. We have had lots of ups and downs, moments of desperation (”Are we moving fast enough?”, ”Will we ever be able to convince those slow customers?”) and moments of great positive surprises (mostly helpful people giving us an extra push, including you guys here). And much of the time it has really been about just to remind oneself that its all just phases and to be more stubborn and just remember how obvious the idea is, that it is the obvious future and if we just work hard enough, stay on top of developments and stay creative and opportunistic we really stand a good chance in becoming the top player. From the start I have said (you may remember scattered pieces of this Gracjan, no?):

”I believe the wave is coming. Its quite far away but I think I can see it and it moves fast and it will be big. If we don’t move fast enough we wont catch it. I want to catch it. I want to run fast as hell and I want to surf that wave and be on top of it. To do a really successful business has been my dream for almost a decade now. I have had hundreds of business ideas since I started dreaming of becoming an entrepreneur and I believe I have never had any idea even remotely as good as this one. No project I have ever done have I ever believed in so much as this one. There is no chance in the world that I would let anything stop me from making this happen.”

From the start, doing this business was like being a human dragging a horse load to just make it move one meter or two. Today I said to Gracjan I’m starting to feel the carriage roll on its own and I’m starting to run ahead not to get squashed. I really feel something is starting to happen. The ups and downs are almost gone. Every day its just more and more up. More and more pure fun, its more and more to do but I just feel more and more energy to do it. And the strange thing is… I’m happier, more relaxed and more rested than ever. Can you figure out the equation? Maybe it’s the fact that more and more of the hardest nuts to crack have been cracked. More and more of the first deep research and tough decisions have been made. We know so much more and don’t have to start all over at every question. Or as Gracjan expressed it:

“This year was the year of decisions and learning, next year I feel will be the year of execution, the year to really put everything into practice.”

We have gotten more structured but we are still too sloppy
As you might know (and as Mariusz is so good to make fun about) neither me nor Gracjan are the most rigidly and well structured guys. All the structures and admin created so far have been the result of necessity. After enough pain and annoyance and realizing that the issue is a potential hindrance to achieving the goal of our dreams we have put our brains to solve the issue and implemented the structural change, but we kind of suck at nagging and being very consequential about it (as you might know with schedules for example). We agreed that this is really one of our weaker sides as consequence is good for structure and structure is good for efficiency. Thus we aspire to get better at this during 2011. We promise to nag a little bit more to push people to be more structured. Also now Viktor is entering full hearted into the organization with the first main task of developing our processes, structuring the company better and pushing everyone else to help out. We hope he will also help us get more structured and we encourage you all to nag us when necessary.

Well that’s all for this years summary. Of cause there is a lot more to write about. But I guess it has to be enough of all this business poetry. So to sum up:

Look forward to work with you this year of 2011!

Happy new year!

The equation of finding top-notch programmers to a bootstrapped start-up at an affordable price: a live experiment

Background
I was a bit worried when my technical partner Gracjan told me he wanted to go with Haskell for building our application. Not that I knew what Haskell was. Most people don’t, not even experienced programmers. That’s what my hacker friends told me when I consulted them about the technical choice. So that was what made me worried. I knew we would have to have high speed to build a robust business before the big wave of big competition would be coming around and splash the small players. So how should we grow the business fast if we wouldn’t be able to find programmers to do the programming?

My hacker friends were excited about the choice though. They told me Haskell is a piece of hardcore technology and for someone to want to do an application in Haskell that someone has to eighter be very stupid or really know what they are doing. Upon meeting Gracjan they decided for the latter. I still wasn’t convinced though, I didn’t know Gracjan yet and I couldn’t tell if he really knew what he was doing concerning the tech choice (later I found out he didn’t, it was a gut feeling).

Haskell
The following weeks I did some digging around on the Internet to find out more on the topic. I couldn’t find much but most of the stuff I could find was hackers praising it, Google staff arranging a hackatons in Zürich and making PPTs about Haskell being the future, excellent for parallelism thus supporting the increasing speed of multiple core processors, pure, flawless, secure, cool, hard, superlatives all over the place. Negative comments were nowhere to be found. My googling skills might not be on top of the world but could I be that bad? The only thing I could find against were forum posts by programmers discussing the value of learning Haskell as almost no one was really using it for commercial applications. How could you ever get use of your skills if no one would hire you? Well, except for some high-end Wall Street banks and the American government building cloud platforms for storing internal and sometimes top secret documents.

The equation
A business guy as I am of cause I started to think of the topic in terms of demand and supply. On the supply side I figured this: Haskell is apparently hard to master for the weaker of mind so the worst lemons in the basket would be easily ruled out. People wanting to work with Haskell generally know what they are doing. So if anyone would apply those probably would be bringing something of value to the table. Also there seemed to be some hackers out there really wanting to work with the technology so it shouldn’t be impossible to get someone to apply. On the demand side I figured this: nobody is employing programmers in Haskell. So my conclusion was: there is excessive supply and not enough demand. That should bring prices down and being a bootstrapped start-up we might actually be able to afford those top-notch programmers. Not because we pay well but because we can provide some good hacker fun. That could really be an edge.

The decision
At hand I had a great programmer (Gracjan) excited about the prospect of being able to work with Haskell full time. Actually Gracjan had already started out doing some programming and was reporting small progress and mostly loads of fun. I thought about my own passion and what that would mean to the company future (everything) and I thought that passion comes from fun and doing something you really want to do. I wanted my partner and our co-workers to be as passionate for the business as I was as I believed that that would be great for business. So I figured, Haskell might not be such a bad choice after all. A gamble, yes. But with good odds.

The result
Unexpectedly good. We are now rapidly approaching launch of our first version of the app. We have a team of six programmers (five in Haskell) and three suits. Most are working for free or to a minimal salary. One is even asking permission from her boss at a finance bank in London to decrease work hours to be able to join our team at a part time basis. The programmers are dispersed all over the world: China, Poland, England and Sweden. One is backpacking in Asia with his fiancée and just delivered a huge patch after having crossed the Himalayas during two weeks. And there is a lot of hard work, passion and fun. It’s just what I wanted so I’m very happy so far.

The price and some new opportunities
The price we had to pay to manage finding the programmers we needed was to do global search and thus making a virtual team working mostly from home wherever they are at. It puts quite some pressure on management to coordinate virtually. We do it with an array of cloud-based apps: stand-up meetings every morning over Skype, task tracking with Pivotaltracker and coordination through Google Apps calendar functionality. This will of cause be a problem when we need programmers to be on spot to tend to customers integration needs. Yesterday Gracjan and me talked about this (over Skype) and figured that it might not only be a drawback. If we split the teams and create an integration unit close to the customers and keep R&D global we might be able to offer something unique to many programmers out there: work from wherever you want, maybe backpack around the world, earn money and work with a really exciting technology. Freedom, riches and fun, isn’t that a good equation? Well, the future will tell. Lets gamble some more.

Escape information hell and prepare for scale by using the cloud and English for building a time-space-culture neutral platform

When spreadsheets are rocket science then chaos is just around the corner
My previous start-up project was SpokenWord AB. It was a booking agency for spoken word artists that mainly took the form of a rebranding project of the genre in Sweden. We succeeded fairly well with the rebranding through multiple PR-campaigns, our own TV-show, multiple appearances on Sweden Got Talent and our own successful bar show. Businesswise the project was a fiasco with low probability of getting any significant revenues before I got grey hairs from age or from stress when trying to make the impossible happen. The company administration wasn’t a huge success either. It wasn’t that we were bad at organizing; both my partner and me did a good job at organizing our share of what needed to be organized. The problem was that there was no real sharing. All our documents were locally produced and stayed locally hosted unless the document was requested and verbally transferred, emailed or even printed and handed over at our next encounter. As we were bootstrapping we didn’t have a shared office space, so the alternative to walk over to each other’s desk at office and have a sneak peak wasn’t a viable alternative. So there we were, stuck in the good old days of analogue communication with e-mail and Excel spreadsheets almost looking like rocket science. We were proud of our spreadsheets back then. Curiously we didnt even reflect over the idea of a shared server appeared. I think we both thought of it as too time consuming to think of and set up compared to the tiny problems we had. Anyway, I think we underestimated the problems of inefficient sharing. In retrospect I think I could have saved many days of reproduction, waiting to receive the right document before I could proceed with a task, constant worrying and over thinking due to lack of control and just the pure relationship-undermining aspect of continuously having to nag each other for the sharing, searching and losses of small insignificant docs.

Why have a gym when you can have an access-safe folder structure?
But the problems we had at SpokenWord AB were really baby problems compared to the communication problems I experienced once I started my new job in January 2010 at one of Sweden’s fastest growing companies. One of my first assignments was to research and propose a solution to a more efficient mechanism for internal document sharing. In specific it was about the sharing of up to date documents that were produced continuously and were to be shared with different departments within the company.

I started out by interviewing all the managers of different departments and different people in other positions that for some reasons had key positions in relation to or knowledge about the internal info handling mechanisms. In total I interviewed about 20 people at the 180 people large company. The deeper I dug into the problem the more complex the issue started to look like. My tiny problem that was supposed to only be an introduction and take one or two days evolved. At the core of the problem was the "old" (the company has only been in existence for about 5 years), server system that was based on a simple non-searchable folder structure. On top there were no extra layers of information management software. It was a pure desktop structure with manual "click and you will find"-search. Combined with this desktop structure was a need for a rigid access structure within the folder system. So, in reality, the departments only had access to their own stuff. For management reasons middle management often had cross-access, but often non-middle management employees were dependent on documents from other departments to perform their tasks. The problem was that they couldn’t be given access to the folders of the other department because the document they should have access to shared folder with some other sensitive documents that they were not supposed to have access to.

To surpass the boundaries of the folders, document sharing through e-mail and Google Docs (essentially an invite through e-mail) was the instrument of choice. So basically sharing was reduced to a one-on-one request-and-share structure. So everybody producing documents to be shared had their own lists of internal customers to whom they had to send the docs. As the company growth-speed was so extreme people kept changing positions, new people were getting hired and so on. As a result recipients were often missing from the mailing lists, resulting in growing frustration for many recipients that constantly had to be begging and nagging to get the necessary stuff. Also, the rate of document reproduction was a common issue, where people would spend days at reproducing already existing documents just because they happened not to have access to the right folder to be able to realize in time that the document was already there. Of cause they couldn’t just go around and ask all of the time if a doc was there or not so people just simply reproduced over and over again. On top of all this, the internal servers had a tendency to go down every once in a while and reboot the access structure.

Adding to the problems was a language problem. The company started out as a local Swedish venture and thus had produced all the core company documents in Swedish. Now the company was fast expanding into new markets and thus the more and more common English speakers had an extra tough time to just handle what they actually could get access to.

The CEO experience
When interviewing people I soon got to understand that for most, the information sharing was really an emotional issue and a weekly source of annoyance and shaking heads. When I sat down with the CEO to talk about his specific info-sharing requests, he showed me his point of view: the dozens of weekly reports landing in his inbox for unknown reasons and to never be read, the dozens of haphazardly organized Google Docs he had access to often for unknown reasons getting him stressed out every time he opened his Google account, and to make things even better, after the last server self-reboot the server guy had forgot to give the CEO access to all the folders on the server. So now he didn’t even have access to the core documents of his own company. Just like everyone else he wasn’t very happy about how things were going with the document flows.

The potential price tag
Now I knew the info-sharing problem was kind of disturbing to everyone and for many causing multiple extra cross-office walks and talks on a daily basis. But, when I made a poll to estimate the real costs for the lack of efficient info sharing, I was truly shocked to find that the costs where potentially somewhere about 500-600k EURO per year. That’s about the cost of ten employees or 1/18th of the company spending on employees. It’s not insignificant. Of cause, there is always some level of inefficiency in human communication, but a better-designed system could probably have some nice and large cost and frustration cutting effects.

So why didn’t they just implement a better system?
The main reason was the growth rate. The company had been and still was so tremendously successful that all efforts have to be put on just serving to the extreme rate of growth. Between when I entered the company in January and when I left in May (to do SkrivaPå), the staff grew from 180 to 240. In September just 4 months later, they were about 330. No wonder nobody had time to care for some document structure when exponentially growing streams of hard cash had to be managed and everybody was overloaded with more urgent issues to cater to until the work force could be expanded to give some time to contemplate internal issues.

Lessons learned: some information philosophy
If you want to grow fast you might want to optimize for internal “fast thinking”. At the core of efficient internal scalability I believe is the possibility of instant and effortless sharing. As the amount of documents, knowledge and parallel processes keep growing, you can’t manually keep requesting and sharing updates on each and every thing that is produced. With increasing amount of documents and increasing amount of people the points of connection grow exponentially and soon the complexity is impossible to manage manually without getting lots of black holes in mind space. There is just not enough time to do the patching and growing the business at the same time. Therefore the sharing has to be automated somehow. In a way that people that are supposed to have the access, effortlessly can share and receive the company productions. The "stream of consciousness" should be naturally easy to plug into.

Two barriers to scale
I believe there are two main needs that are necessary to satisfy to achieve successful automation:
1. Language: A language accessible to everybody. If you are going to grow exponentially in a global world and you want to go global you don’t want the language to be a hindrance to hiring top talent. I’ve heard its in the loop, but there are still a few years before we will be able to have real time translation through Google Translate. Therefore I would recommend English as the language of choice.
2. Instantation: You want sharing to be instant. You don’t want people to wait with sharing and wait with getting. Optimal productivity comes from lean production chains. Not only in industry concerned with material production but also in soft businesses concerned with intellectual output. Therefore time and space is key. The information cannot be local, neither in time nor in space. Cloud computing is the new revolution catering to that need of instantation.

7 cloud apps we love
So before we wrap up lets look at 7 cloud apps we use internally at SkrivaPå. The services have been chosen specifically as a result of a trade-off between affordability, setup-costs, scalability and lean. We consider the choices optimal for us as a bootstrapped and small teamed transaction-based IT-start-up. If you are too, then these tools probably can be really useful. If you’re not, they still might be or they might inspire you to research and find other and more fit alternatives for your needs. Good luck!

Dropbox
This is really a genius instrument for primitive desktop sharing if you don’t want to host your own server. You just share folders by a simple e-mail invite and de-share folders by a simple two click process. Also, if you’re lazy and don’t want to leave your e-mail inbox, you can directly save docs in the right places through e-mailing documents straight into the chosen folders with the help of AirDropper (AirDropper is still in beta so it hasnt yet fully reached its potential). Check out Dropbox.

Highrise
An exquisite slimmed CRM-tool for the small business. Administering and sharing contacts is made so intuitive and easy and the time costs of setup are minimal. This is perfect for the small business that cant afford the high price of other services such as SalesForce.com and don’t have the man resources to set aside a full timer for two months to configure the CRM to become lean and free from annoying fluff. Back when I did SpokenWord AB I researched CRMs for 2 months in total and couldn’t find any that was nicer to use and cheaper than Highrise. Cudos to 37Signals. Check out Highrise.

Pivotaltracker
An errand handling system specially designed for agile development (which is necessary if you want to be fast in the IT-dev world). Just two weeks ago I would have recommended Google Docs spreadsheets because of its pure simplicity and because if you just add the correct categories its really easy to sort by columns depending on what you need to know. But Pivotaltracker really kicks-ass when it comes to effortlessness and sorting. It doesn’t take more than 5 minutes to setup and another 5 minutes to learn. I love the restrictiveness of the software and the lack of features except just the essential stuff. Also I love the real time reports when something has happened so that I can keep track of and affect developments in real time without being intrusive. I’m not really a master of agile, but I was surprised to find that exactly the same structure as I intuitively had designed for us in Google Docs is the structure of Pivotaltracker. First you have the icebox, things you might do. Then you have the backlog, things you will do. Finally you have the sprint, things you are doing this week. And all this can be sorted smoothly in the order you want it to be taken care of. And as opposed to Google Docs where all the stuff has to be copied and pasted back and forth between documents, here you just drag and drop. Check out Pivotaltracker.

Google Apps
Let Google host your e-mail servers. They do it for free and it’s spam free, reliable, fast, encrypted and the risk of ending up in someone’s spam box is minimized. Also cross company sharing of calendars and booking meetings is made so much easier. You don’t have to request someone’s calendar to have the access. Also you don’t have to e-mail to get a confirmation for a meeting. You just schedule a proposal and the system e-mails you to say if the meeting was booked or if the other person suggested another time. Check out Google Apps Standard Edition (free version).

Skype
Of cause you know Skype, but do you have the habit of using it for your meetings? If you are not in the same office, meetings through Skype are the bomb. For some reason seeing the other persons face makes the meeting so much closer. Also, the feature of sharing the screen makes it possible to really demonstrate things in real time. It’s just like standing over someone’s shoulder and having them demonstrate something on their computer. Also we do a lot of our sales calls directly through Skype. And of cause, you don’t need to have a phone or a land line connection; it’s all in the cloud. Check out Skype.

SpeedLedger (swedish)
It’s an online accounting program that is directly connected to the company bank account. When transactions are made through the account SpeedLedger automatically creates verifications from that. The only thing one has to do is to choose the correct account for counter-booking the transaction and press ok. By making sure that all our transactions are registered through the account we can be sure that the bank status and the accounting status are always in sync and thus we can minimize time spent on trouble shooting when doing the book keeping. Also we can share our books with our accountant without having to send the stuff by paper. We just share the accounting account with him online. Its genius and we love it. Check out SpeedLedger.

SkrivaPå (swedish)
Really, I mean it. We love our own service! It has been so helpful in making it easy and effortless when writing our staff NDAs and immaterial rights agreements. Our team happens to be dispersed all over the world with programmers in Pakistan, Nepal, US, GB, Poland and Sweden. If we wouldn’t have our own contracting service we most probably wouldn’t have had the energy to administer the sending of the NDAs all over the world thus increasing business risk. Or, if we chose to send it we would have to wait for days or weeks until we could take people on board. Now we can get the papers signed in minutes and people can get started within one hour. If you’re interested just give me a notice by e-mail (emaillink: lukas[at]skrivapa.se) and Ill set up an account for you. Check out SkrivaPå.

OMG, this post was long. Have a rest and look at the demo of our service.

Brilliant YouTube commercial

Alpha sales and staged alpha customer usage

At last back from a long summer leave! Time for some new posts. Some of the upcoming topics are:

* Partnership agreement
* Code valuation and how to start a corporation without having to put in money.
* Strange ways of finding programmers

This post will be about alpha sales and staged alpha customer usage. Basically it´s a technique I have deployed for the last two weeks, since I got back from vacations, to get valid customer feedback for our alpha version of our online app SkrivaPå (skrivapa.se), before getting into real sales with the beta version. I want to write about it because I think the technique has worked out very well. If you don´t have an online app but you are into sales, the post might be interesting to you anyway, as it´s really a post about network sales.

Alpha Sales - step by step
1. You are past the stage where you´ve walked n talked to everybody you know about this app you are creating. You have done it so much that you are sick of yourself talking about it. You know exactly how you will start the pitch, you know exactly what questions you are going to get and then what your answers will be. Whenever the topic comes up you turn on the autopilot and start reflecting on how to change topic as fast as you can before you get bored to death. This is important because as you know the topic this well, you will be able to maximize the value of the feedback. You will be geared to really ask the right questions, better understand the doubts, distinguish the more important from the less important feedback and really find what iterations are needed in what prioritized order.

2. Also, you have managed to develop your app to minimum viability. This means, just enough features and just enough design, for the app to be useable. This doesnt mean its really desirable to use yet, but someone that is in great need and that likes you very much, could possibly imagine swallowing their pride and use it at least once.

3. Make a list of friends, people in your closer network and possibly some warmhearted business contacts that would be glad to help you out.

4. Think about an appropriate way to pitch. Do they need to use the app themselves or yould you demonstrate it to them? What techniques should you use? I could strongly recommend demonstration by Skype. I have used it for almost all my pitches and I love it! It´s almost as a real live meeting. But it´s way more efficient. No travelling time and low incentives to do too much social chattering (the latter is nice and even recommended in the pitch as its your friends and close contacts you are calling, but there is less risk of getting stuck for too long). Also it´s perfect for demonstrations, you can share the screen and guide the person with a firm hand through your application. Personally I think it´s better for you to guide them because you know exactly where you are going and you don´t want to waste to much time and create frustration with explaining and figuring out what buttons to press and what´s important to read.

5. Start with calling the nicest, closest and possibly neediest on your list. They will probably be the ones most inclined to really take interest in what you are doing, both from an egoistic and from a helping friends point of view. Which means they probably will dedicate more brainpower and time for creative feedback. As you go you can take people further and further away on the list. Btw, don´t call the ones who potentially could be the most heavy users, making you a lot of cash further on. They are too valuable for that. You want the small fish to see the crums. It wont hurt if some minor fish swim away. Their big value is the feedback they will give you, not the money. What you don´t want is the big fish to remember you as a crum. You want to present to them when there is enough for them to imagine a big tasty loaf of olive bread.

6. Start with some initiating chit chat, let it take a few minutes, remember that you are actually calling people that YOU LIKE and CARE ABOUT. Indulge for a few moments, it will give you both some good energy and make it a better day. A sad salesman is a bad salesman. Now, start the pitch with describing exactly what you are up to:
a. I´ve just starded this new company...
b. Describe what you do.
c. Say you are in alpha mode.
d. Say you are starting with some soft sales just to get good feedback and you thought of them because you know them and you thought they could be a perfect early tester.
e. If necessary recomfirm if you were right and they actually could have an interest in your app.
f. Ask if they would have time for you to demo the app.
g. If no: ask when. If yes: ask if they have Skype.
h. If no Skype: help them install it. Most people will actually be willing to do it. As it is an app you are proposing they are most likley to also have some level of computer knowledge. Some will ask you to get back when they´ve installed it. Don´t rush. Get back when they´ve installed it. If yes Skype: start the pitch.

7. Share your screen and guide them through the app. Be careful to make every step properly and write down all the feedback you find interesting. Don´t be afraid to stop and ask for specifications on the feedback, so that it becomes really concrete. What you really want are all the details. That you have misspelled this, that this button doesnt work, that that step in this process is not logic, that there should be more info somewhere and so on. Write everything down, even the smallest thing, only if relevant and interesting of cause.

8. When all the details are done - usually all of this can take as much as one hour, let it take time, you are really digging gold with all the information and positive energy you get from your helping hand and you really dont want to ever stop as long as you are getting valid feedback - ask what the person would really require to start using the app. If you are actually solving a real problem for the person they will most likley give you the one to three things lacking they consider most important. Don´t miss this point as this is the closing of the sale and also the definition of what feedback they themselves considered most important! This is the real payoff. You make them really imagine using your app and then you get the answer what would make usage into a reality. Now, if you truely believe you will implement the necessary features, give them an estimate on when you think you will be done and say you´ll get back to them as soon as it´s implemented.

9. One very common problem is that they need to show and discuss the app with someone else before taking a decision to use it. Even if the implementation of the features are quite far off, invite them to a testaccount. This will make it possible for them to continue the process you started. They can continue thinking about your app, keep being updated on your progress and do some internal discussions with the people they know and work with. They might even demo it to some external person they consider in need and thus extend the sale you just made.

10. Send them the test account immediately. Say that they will get the app for free for x amount of time as a "thank you" for all the valuable feedback. This gesture is actually not costing you anything as you know they wont be heavy users and you are probably getting a loyal customer. Those will probably be very important for you in the future as they probably will continue to give you great feedback and possibly even evangelize for the app and thus extending the sale over a long period of time

11. Put all the obvious feedback in your global backlog. Put all the larger stuff to think about and the feedback thats interesting but that might not be implemented in the near future, in you customer feedback backlog. Also note in your CRM when and why to get back to the person. I use 37Signals Highrise (great app!) free version and put the reminder on status "later".

12. Show the new stuff in the backlog to you partners and talk through with your partners what stuff from the customer feedback should be put in the global backlog.

13. Implement the feedback put in the global backlog.

14. Get back to the customer when the necessary stuff is done. Probably they wont be fully satisfied. Do as many rounds as necessary to close the sale, but of cause only if the feedback and demands keep being valid.

15. Done.


So to sum up
With the method you:

a. Get great feedback.
b. Get great energy.
c. Test and correct your pitch on safe ground.
d. Close sales at a very high sucessrate.
e. Get more confident.
f. Get core customers that have a high probability of continuing giving great feedback and might continue to evangelize.
g. Also you will have some people that will have seen the app from its very first days and will have a historical perspective and will be able to tell you if you have been going in the wrong direction.

Phew, that was a long post. One can notice I have been missing the blogging during the summer =)

And dont miss this!
Anyway, I want to finish by recommending the best source of fantastic information on IT Entrepreneurship I have found so far. Check out This Week in Startups. It´s a weekly online independent TV show, broadcast from the Silicon Valley with the brilliant serial entrepreneur Jason Calacanis. The show is quite long most often, like 1,5-2h, but it´s really worth the time. Put on play, and do your cleaning or play some poker while watching. This is the latest show found on their webpage: