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?"

Re:Outsource it all to India

[vasqzr]

If you need some innovative R&D and designing stuff like algorithms or optimization routines, hire Russians.


A colleague tried that. They got all drunk on vodka and made some program with colored blocks. I think it was called Tetris.

Start hiring

[Kethinov]

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.

Re:Start hiring

[Tool Man]

It isn't obvious that these guys need to hire anyone yet, so this is premature.

The company I work for started out as a couple guys, with one client. It's grown since, more like 225 people, but it grew only as needed. That time with some focus will help to iron out some kinks before growth makes those kinks bigger.

I would think that some structure is needed right away. Pick the boss, delegate the rest, and stick with it. It can't stay too democratic for long, as decisions do have to be made. Our CEO and Ex

Re:Start hiring

[sql*kitten]

The best way to motivate people is with money.

No, the best way to motivate people is with opportunity for self-actualization.

For some that's money... for some it's training, for some it's working with cutting-edge-tech, for some it's tuition subsidy, for some it's on-site childcare, etc etc. You need to sit down and work out "what sort of people do I want, and what motivates those kinds of people".

Throwing money at academics doesn't work as well as throwing money at bankers. And bankers couldn't care l

Re:Start hiring

[b!arg]

The best way to motivate people is with money

Actually money does not motivate. Money reduces the dissatisfaction one has with a job. It does not increase the satisfaction one has with a job. Money given as a raise (but only a merit based raise) can increase satisfaction but as a result of the recognition, not the money itself. If you were an underarm deodorant smell-tester (specially designed for gamers :)) that made $200,000 you would most likely do enough not to get fired. But it would not motivat

Before you worry about growth...

[Agar]

...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.

Re:Before you worry about growth...

[sglane81]

Better yet, watch "Startup.com" which used to come on HBO. But, don't do what they did. ;)

Keep it flat

[BoomerSooner]

The best place I've ever worked had a very loose structure.

Partners
|
Managers
|
Consultants

There are about 85,000 employees. You don't work under a specific manager you work with managers. The managers would decide where the resources best fit the current need. You were always one person away from one of the owners. Not too bad of a layout in my opinion.

The worst companies I've worked for have 10+ layers between the low level grunt (programmer) and the CIO. Totally unnecessary in my opinion.

Sounds like you're up for hiring a CEO

[prostoalex]

The least painful way to accomplish what you're describing is to hire a CEO. Maybe a COO as well, but for a small company under 50 people it doesn't make sense to have a separate COO.

Whose money is the company built on? If you have any venture capital investment, the capitalist might have a CEO handy. I am not saying that it's the best option, but sounds like your company is ripe for professional management, even one brought in from the outside.

If you don't have venture capital, network with friends for s

You need books full of advice

[hey!]

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.

Cart before horse

[DrSkwid]

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.

Re:Cart before horse

[jgardn]

Try reading a book called "eMyth", which has nothing to do with the internet and has everything to do with why businesses can't get started and what successful businesses do to begin a growth pattern.

It basically revolves around clear roles, the development of processes, and hiring people who aren't bleeding geniuses to compensate for the lack of structure in your company.

It's like writing a program, but for an entire company. If you get the algorithm right, and if you get all the components working toget

two letters

[mattboston]

VC - you need to find a Venture Capitalist

Two more letters

[MarkusQ]

VC - you need to find a Venture Capitalist

Nooooooo!!!!!

A pact with the devil is a better long-term plan than bringing on venture capitalists.

-- MarkusQ

Re:Two more letters

[BJH]

Yeah, at least the Devil only tries to take your soul after you're dead.

Take it slow, prepare early and more

[mosabua]

I have been in a few places that experienced the growth and helped were I could. Just a few tips:

Prepare early - You will have to keep things under control when everything starts to get faster. Prepare as much as you can BEFORE you start exploding. This includes project management, time tracking, office admin, staff introduction kits and so on. The more of these procedures that help you enhance you efficiency you have in place the easier you can grow. Once you start growing quickly you wont have the tim

Managment is key

[Graelin]

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.

growth shouldn't be your primary concern

[Tumbleweed]

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!

typo!

[Tumbleweed]

"Promise little, deliver more." promite. What was I thinking? *sigh*

How to Grow

[mugnyte]

Water Frequenty

Believe in the existance unnecessary growth and trim it

Get plenty of sunshine

Vary your surroundings

Empower people to decide their own environment and schedule

Ask people their opinion and sometimes follow them

Encourage growth

[sharkey]

Eat bigger meals.

Marketing

[4of12]

...several interested clients

You've already had some brushes with a critical ingredient: those people that are willing to pay money for your product. Names, phone numbers, and people that are willing to say they'd pay X for your product that does Y.

If you're talented and have some background in marketing, you can pursue this further, because it needs to be done. Finding out what your customers really want is not as easy as it sounds.

If you're a rational, intelligent person not in need of frequent ego inflation, then you know which subject areas you're good at - say, programming - and which areas you're not familiar with. That's OK; there are specialists for every craft, including marketing. The next step is to get someone on board who knows marketing, preferably of software and preferably with a background in the same areas that your customers interests lie.

2 comments

[avoelker]

Bill Gates said to a confidant early-on that he could see MS growing to $1B in sales, but not beyond that... Now look at them. If you execute well on a viable business model, new opportunities will present themselves you can't see beforehand.

The reason for existance of a business is to make money, which it feeds on. I wouldn't start a business without the primary goal being to make income. Fun will follow. Of course, you should pick a business you are interested in.

May I recommend

[xutopia]

you actually write a business plan for profit only? Most banks don't give out cheques to people who's business plan says "yeah we want to have fun and make some profit".

Hire me ;)

[complete loony]

You could hire me ;), I'd have to telecommute from australia..
From another thread (posted by SiliconJesus (1407)) Slashdot JobCenter [slashdot.org]

If you want to bring more people on eventually...

[jgardn]

...adhere to strict software development guidelines.

If a new developer joins the team and discovers that the old developers had graciously...

• Commented their code liberally
• Documented the code, use cases, and architecture
• Provided unit tests and test plans
• Left notes on why things were done one way and not another

... the effort required to get up to speed will be greatly reduced.

I can't count the number of times where I've joined a team, spent 6 months investigating how they put things together, and t

How about a dynamic company?

[PurplePhase]

Sorry, too many ideas and not enough continuity. But here's what I threw together:

Don't add new employees. Yet. That can be the hardest part of a company - and after a point you have more and different rules to follow for your business. Er, so I've heard.

I don't have any resources for this, but I hope others chime in with them because I've been interested in it since I first heard about it but lost whatever links I had along the way.

The idea to pass along to you is to have a dynamic company. Some we

Grow Slowly

[eclectic_echidna]

Set a high watermark for incoming developers. The question for your interview team is: "Would I really like to personally work with that person on any project"? Even if you aren't "stuck" with them on your particular part of the project, don't "stick" them to another team, you will end up working together sooner or later. Just drop them, and keep searching.

Grow slowly, at most 1-2 developers a quarter. That way, you can teach them about the existing procedures and culture, and also take in what they br

joelonsoftware.com

[PinglePongle]

is worth reading - he writes very eloquently on this topic.
From personal experience :

• Hire a hard-ass financial controller. Make sure someone asks all the hard questions about how growth gets funded - don't rely on the customer-facing folk, their job is to be gung-ho.
• Start out with a scaleable development process; I'd recommend something like Scrum [agilealliance.com] or eXtreme Programming [agilealliance.com]. The point is that when it comes time to scale up the development team, you don't want to find out that the old ways of getting stuff do