Business Models Career life Organization

Reaching Profitability – 7 Things I’ve Learned

water vole
Credit: Flickr / Peter Trimming

In May, I met my revenue goals, and in June I’ll take a pay-check – my first since I escaped my gilded cage. It’s an exciting milestone, and one I’m proud of.

However when people say they envy my life, or that I’m “living the dream” I get quite irritated. Yeah, it looks good, now. It didn’t two years ago when I walked home from work in tears several times a week. It didn’t look that appealing a year ago when I came home from “work” to continue “working” – and given the restrictions of my contract, not even on what I actually wanted to do when I went out on my own… but things I gave away for free hoping they’d help in some way. It didn’t look that appealing every month until now when I transferred money to live on from my savings account to my current account.

When I talk about “revenue goals” and a pay-check. We’re talking about ~1/3 of what I used to make at the Conglomerate. I’m happy with this – for now at least – but I made a conscious choice between being paid well at a job I hated in a city I despised to being paid badly doing things I enjoy and working with people who treat me well, wherever I want. This choice was partly a function of privilege (having savings) and partly of desperation (I couldn’t go on in that environment).

Some Things I’ve Learned

Work at your relationship with your cofounder. Plenty of companies implode because of infighting. I think the biggest thing my business partner and I do is: we let each other make our choices, and we don’t express resentment. I hope we don’t feel resentful either, but I can only speak for myself there.

Keep your operating costs low. No, lower. Decide the absolute minimum you can live on, and eliminate anything extra. You can think “oh [luxury] is just X a month” but if that logic is applied to a number of things, it really adds up. For me being homeless is part of that – it means I can go wherever, but it also means that I don’t have a set amount of rent to find each and every month. This is absolutely not viable for everyone.

Focus on what you’re doing. “Culture” is a word that gets thrown around a lot and as an abstract concept it’s not one I have a lot of time for. Culture evolves from what you do, and is a function of your processes. Essentially I think any success you have in “culture” is meaningless before you’ve achieved sustainability, and discussion of it is just a distraction.

Build strong collaborations. I expected this adventure to be much more lonely than it is. In reality, I have people who I work with over longer time frames, or on multiple projects. Working for yourself doesn’t mean not dealing with people! I’ve realised how important it is to keep working at these skills, even if it means allocating some time for projects that don’t contribute to the bottom line (for me this is Technically Speaking).

Work with people who want to pay you. I feel like this is the catchy snippet capturing a number of disparate learnings. I want to work with people who value and appreciate what I do for them, and the best metric I know to indicate that is that they tell me to send them an invoice. There are people who will never pay you, and I avoid them. And then there are people who might but are really difficult about it, and I have decided that I don’t have the time or inclination for them, either. The way think about this is in placing “manageable bets” – like I’ll bet one hour of my time on that potential project, or four hours on that big, interesting one. And then I let things fall where they may. I think this has made for a longer timeframe to profitability, but does mean that the contracts I have I feel really good about, and that is a trade-off I was happy to make.

Let things change. I had this idea when I started all this, that I wanted to help non-technical founders with the technical aspects of what they were building. Whilst I do kind of function like a senior engineer on call, it’s not quite as I envisaged. In general what I found is whilst people really do need this help, they aren’t prepared to pay for it (e.g. they don’t want to pay someone to explain why they shouldn’t build their own e-commerce system). I have some ideas on this that I hope I’ll get to later in the year, but for now I’m focusing on other things.

Large projects require focus. I have probably 4 big projects I want to achieve this year. Because part of my time is already allocated, typically I can only focus on one of them at a time. I tend to be trying to move forward on two – one writing, one coding (e.g. I focus on the writing project when I’m low on or without internet). I’ve learned to be pretty ruthless about ideas that aren’t current priorities – they are on the list, but they won’t move forward until the thing ahead of them ships.

And Some Things I’m Figuring Out

Balancing client work and your own is hard. In theory, I bill out 2-3 days a week and work 2-3 days a week on my own stuff. In practise… well I’m working on it.

Taxes and forms and everything. We have an accountant and my business partner is good at this stuff, but this really stresses me out. I had to fill in some terrifying US form and call the IRS and I worried about it for a week.

Outsourcing and contractors. At first we wanted admin help, but it was really hard to hire an admin and eventually we just decided not to. I’m trying to look for things I could break out and have someone else do either because it’s not a competency for me or because I’m short on time.

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