Guy's Blog Blog from December, 2006

As a small but rapidly growing company, we've gone through all kinds of pain over the past 6 months. Sales are doubling almost on a monthly basis and if you've been following our progress you'll know that's caused us all kinds of logisitical problems.

So, while I'm taking a "brain rest" (few and far between), I thought I'd blog about some of the things we've experienced in the hope that they'll be useful to other companies in our position...

Expect success, not faliure

The founders of Adaptavist all came from jobs at companies that consistently failed. To us, failure was a normal aspect of companies in the UK. We decided to develop Adaptavist in the complete opposite way to how those companies worked and we prepared for the worst at every stage.

Alas, we became successful really quickly and easily. We became profitable 2 years ahead of schedule. We gained a large multinational client base 4 years ahead of schedule. We developed more solutions than we had ever imagined possible in an amazingly short amount of time. This is all stuff we'd not planned for.

Our company was geared up for long periods of money problems, extreme difficulty in getting clients and huge problems with getting solutions to market. None of these problems occurred.

The problems that did occur took us completely by supprise. Our manual sales process quickly crumbled as we gained hundreds of clients worldwide in a matter of months. Our hosting facilities needed expanding on a regular basis due to ever-increasing demand. While these are all good problems to have, we weren't prepared for them.

So, plan for success, not for failure. Just because all the other companies you've worked for in the past were pants doesn't mean your company will suffer the same fate.

Choose a decent bank!

You'd think institutions like banks would have all the latest technology and offer tried-and-tested services. Think again.

Here in the UK, every single bank we've looked at (with the exception of HSBC) has been truly appaling.

The banks in the UK are "business preventers" not "business facilitators". Their online account management services are amongst the most difficult to use and least functional sites you can imagine. The bank managers simply have no clue about the way modern business works - to them delays and errors are just part and parcel of the terrible service they offer.

The sole purpose of 99% of all banks in the UK is to extract as much money from your business as possible and do everything in their power to inhibit growth.

Want to take credit card transactions online? Nah, you can't do that until you're at least 3 years old. Want to trade in multiple currencies? Sure, just pay excessive montly fees designed to deter even the most affluent organisations from attempting to offer customised sales to their clients. Want to integrate your systems with the bank? Yeah, just download that CSV file that contains the worlds' most obfuscated information!

You can spot a crap bank by these traits:

Everything takes ages to do, it's like wading through treacle
Every time you interact with them, it's painful and costs money
Getting detailed transaction information is almost impossible
They do everything possible to inhibit growth of your business
They think in a single currency
Their computers sleep at weekends and national holidays

Rarrgh!

So, use a modern and global bank like HSBC (we'll be moving to HSBC some time in 2007 hopefully).

Modern banks understand that:

The internet affects all aspects of your business
Trading in dozens of currencies is commonplace and should be cheap and easy to do so
Delays running in to weeks and months are simply not acceptable
Your organisation needs to sell stuff to stay afloat
If your business grows, they'll make more money and have a stronger market position

All of these things are blatantly obvious, but not to most banks in the UK.

For any SME in the UK, here's the best tacit advice I can possibly give you: "There is another way... Use HSBC"

Ignore business advisors

It might just be us, but business in the 21st centurary is not the same as it was 30 years ago. Things like the internet and globalisation have changed everything. Alas, it seems that most business advisors have not realised this:

It doesn't matter how successful a business advisor or their strategies were 15-30 years ago - everything's changed and their knowledge is now obsolete
What worked for them will almost certainly not work for you

As an example, many business advisors (and banks and investors, etc) have this insane notion that you should spend abhorrent amounts of time doing business plans and projections whilst getting your business up and running. This is bonkers. The last thing you want to be doing in the first few years is wasting time on spreadsheets and lenghty documents that will be obsolete before you even complete them.

Here's the total extent of Adaptavist's business planning to date:

Q1: Set-up company, then work out what we should do
Q2: Develop theme plugin for Confluence, release several open source plugins beforehand
Q3: Add e-commerce to our website, build portfolio of clients by doing lots of freebies
Q4: Offer hosting services, win most prestigious industry award
Q5: Offer licensing for complimentary products, double hosting capacity
Q6: Offer customisation/consultancy services, double hosting capacity again
Q7: Major new version of theme plugin based on client feedback, get internet merchant account
Q8: Upgrade sales system to handle current exponential sales growth

Set a primary and secondary task each quarter. Spend all the rest of your time selling and developing your business.

The result: Over 400 clients in 47 countries and profitable within 12 months. Sales increasing almost uncontrollably, etc.

Obviously, as your business grows you will reach a point where you need more formal financial planning simply because it gets more difficult to weather any disasters. But you can offset that with having low overheads...

Obliterate Overheads

If your overheads are anything more than the essentials, you're doing something wrong.

Get as much stuff for free or reduced cost as you possibly can. At Adaptavist our main overheads are:

Staff Wages
Tax (extortionate!)
Servers, Hosting, Software
Insurance
HR outsourcing (cheaper than an additional member of staff)

We use VoIP (internet telephony) so our phone costs are almost zero even though we have clients worldwide.

Environmental Policy

We set up our environmental policy because we actually care about the environment. But one thing that freaked us out is just how much money it saves!

We're pretty much a paperless office - we're not spending time and money on paper and clutter
We don't travel unless we absolutely have no choice - the savings gained from this are staggering
We conserve power wherever possible - you'd be amazed how much cheaper Dual Core CPUs are in a hosting facility!

Do not employ a sales team

Or at least not until you can really afford one!

Your products and services should sell themselves. It's a really simple concept that lots of companies don't seem to understand. If you sell stuff that people want or need, people will buy that stuff.

In contrast, we've worked at companies in the past that sold stuff that nobody wanted and at a price nobody would consider. Guess what the outcome of that was?

So, at Adaptavist we only sell stuff that our clients want (and we're pretty in-tune with what they want now and in the future) at a price that's very appealing (ie. cheap!). We sell lots of stuff to lots of clients all over the world. That means that the loss of a client, the demise of a business sector or exchange rate traumas in a specific region really don't affect us that much - our clients are spread so far and wide that you'd have to have global economy problems before we'd start to feel the pain.

Because we tend to sell things that clients actually need (rahter than just want), those things will continue to be sold even in to a global economy downturn.

Anyway, I could ramble on for days but my "brain rest" time is up and I've got to get back to working on SLAs, new licensing models, documentation, the sales process and ponderance about yet another hosting facility!