Typically you would classify your business into the following:

1. Conception or Early Stage
2. Seed Stage
3. Series A (or Funded) Stage

You need to know which stage your business is and align your operations and strategy to your phase.

Stage 1: Conception or Early Stage

Funding: Usually from savings or friends and family
Revenue: None / very little
Team: 1-3 people (founders)
Financials: Keep cash burn low as possible

Objective: Build the product

In this bootstrapping phase you are mainly focused on building the first version or prototype of your product. It is a lot easier to test your concept and raise seed funding if you have a tangible product. This is why I think it is essential that the founding team have at least one or two people who can build the product themselves; you cannot have founders who are all ideas people at this stage everyone needs to contribute to the product.

Quite often in this stage you will be working in small home office, bedroom or out of your garage.

This stage is about also about finding your working styles with your co-founders as usually you will not have employees apart from the founding team. After this stage you will really know if you can work together and you may find that you have to make the tough decision to remove one or more of the founders.

This stage is all about doing and action, there should not be lengthy debates or lots of planning, you need to build your product and build it fast. Think about the features you want to have in your beta version and then cut the feature list in half, you want to have the minimum viable product for your launch.

Stage 2: Seed Stage

Funding: Friends, family, angel investors or seed capital
Revenue: None / very little
Team: 2-7 people (mostly engineers)
Financials: Prove revenue model

Objective: Prove the concept

Now you have a working prototype you need to take your product to market and test your proposition. The whole approach is build, test, refine and build again in short cycles. You need to really communicate and listen to your early users and offer incentives for feedback.

At this stage you may have taken on seed funding so you can grow your team, most of your team will consist of software developers and designers as your focus is on developing and refining your product. I have seen some venture capitalists that value your business on the number of developers you have and then reduce that value for every person in a suit on your team!

This is a testing and feedback phase that applies to the whole of your business. You will want to test your marketing messages, marketing channels, operations practices and revenue model. You should start building your revenues and work on how you are going to refine your revenue model in later stages of business growth. This stage will prove if you have a viable business to grow in the future.

If you need to you should be looking at raising Series A funding, this can take several months so you need to start early before you run out of cash.

Stage 1: Series A (or Funded) Stage

Funding: Operating profit/ venture capital
Revenue: Moderate
Team: 7+ people (balanced team of engineers and business people)
Financials: Break even and move towards operating profit

Objective: Grow the business

Now you should have some real momentum behind you. Your product should be polished and you will have gone through several iterations using customer feedback. Your objective now should be to grow your customer base and grow your revenues (and operating profit).

Your team should start to become more balanced as well with a better mix of business people and engineers. You will need some people to deal with the sales, marketing and commercial side of the business as well as the technology side. Do not fall into the trap of growing your team too quickly as you may find that you run out of cash sooner that you think.

At this stage you should start to become self sufficient (if you haven’t already done so) and move from break even to profit. You need to generate enough profit to make your business viable. This is the really exciting phase where you really prove your worth and build a business for the long-term.

Everytime we solve a problem that is not well documented we post our solutions on there. It has started to become a really good resource for the community.

The stages of a business

When you start your business the founding entrepreneur is the face, soul and drive behind the business. As the business grows and more people join the team there is a point where the founder is stretched to breaking point. There is a moment in every business when the founder has to step aside and give more operational control to his or her senior team. This can be a very painful process and can be fraught with problems if you do not prepare for this well in advance.

Delegating and managing a team as opposed to doing the work is a real skill and something that takes time to learn. You need to have systems in place to help people do their job and you have to be on hand to troubleshoot and encourage.

A process for delegating projects

If you are going to move from the main operator of a company to more of a team structure there are a few things that I think might help you in the transition.

Build a great team

This seems obvious but it is hard to find great people. But more than that you need to have people in your team who are comfortable managing themselves and have attention to detail. You need to feel confident in your decision to give them more responsibility.

Design systems to support processes

If you have been doing all the work to date you will be best placed to know the ins and outs of every detail of the business. This makes you ideally placed to lay the foundations for systems and to write any manuals to those who will be stepping into your role.

Trust

Once you have starting delegating you really need to trust your team and have total trust in your decision. If you do not have trust then this new way of working will never work. There may be a period at the start where things do not go to plan you need to give it time as the benefits in the end will be worth it.

Do not micro manage or try to interfere

There will be a huge temptation to interfere and take over, this is the worst thing you can do. Firstly it shows that you do not trust in the person’s ability, and secondly you do not allow the person to learn if you keep jumping in and solving their problems.

Check in regularly

In the beginning you will need to check in with your team regularly to see if they have any questions, concerns or issues. You need to be readily available for people to ask questions. You cannot delegate and then think that you will not have to do anything until the project is due to deliver, there will be a period of transition. As your team get more confident you will need to check in less regularly.

High level overview

Once you have transitioned to delegating more you will need to get regular highlight reports from your team get a high level overview. I suggest daily emails on progress, any issues or items that need attention.

Now you should be free to working on growing the business and doing the things that will really make a difference to the growth of your business.

Personal outsourcing

As you may have read in a previous post I have been experimenting with a personal virtual assistant. The rationale is that you should try to outsource as many of your tasks as possible so that you can concentrate on the things that are really important in your life. This week I have used my personal assistant in India for the first time.

It was quite a learning curve and I think the next time will be a lot, lot easier. I emailed my enquiry to two outsourcing firms and the first one that responded I decided to use. Firstly the sign up process at VMG BPO was fairly painless, although PayPal rejected my card which was annoying.

Once signed up I read that in order to use the service I had to send an email to support. So I thought that I would start with something simple so I asked for someone to do some research to find an affordable Japanese restaurants near Covent Garden in London.

Then twenty-four hours later I had an email in my inbox with all the research I requested. I had a look through and the quality was superb and saved me quite a few hours. This was a very good start and cost me $6 (£4.50!).

I am going to try and use this service again in the future!

I read “The Four Hour Work Week” by Tim Ferriss a while ago and have been experimenting with some of the ideas in the book over the past month.

There was a lot of hype around this book and I was pleased to find that there were some good takeaways that I have found to increase my productivity. I have also combined what I learned from the book with my own tips and experiencep. Personally I think you have to take the book with a pinch of salt, be open minded and do what works for your lifestyle.

1. Reduce your email frequency

I can confidently say that this one alone saves me over an hour per day!

The book recommends checking email once per week! Well that is simply not practical for me at the moment, but what I have done is reduce my emailing time to only twice per day. I check my emails first thing in the morning and respond to all emails while I am on the train; and then I check them again in the evening so that my inbox is clear before I leave the office.

I had to ease myself into this gently; on the first day I only checked my emails once per hour, then the second day once every two hours and so on.

I found that the key to this is to close your email programme. If I saw the alert of a new email coming in I could not stop myself checking it. If you close the email programme then you have removed temptation. I thought that if I did not respond instantly then clients would become annoyed and leave in their droves. This is obviously a silly notion and so long as you respond within a few hours this is a more than acceptable level of service.

The big productivity gain is that email is very distracting, you can be in the middle of working and you stop what you are doing to check your email. It is constantly interrupting you and taking you away from the key tasks you should be doing.

2. Focus on your key tasks each day

There are very few tasks that really make a difference to your business. You should be writing down two key tasks per day (no more than two per day) and then do not leave the office until you have completed them. These tasks have to be items that move you towards your goals. Do not work on anything else until you have completed your key tasks.

I now have two to-do lists one for my key tasks and one for everything else. The everything else to-do list I try to apply the next principle which is elimination.

3. Eliminate tasks and eliminate mental clutter

You need to learn the art of saying “no”. Do not commit to things that remove your focus from your key tasks. Be ruthless your time and when thinking about things you need to do:

• Do you need to read 1,000 RSS feeds? I have had a big cull of my feeds.
• Do you have to read all the emails funnies? I am simply delete them now.
• Do you need to read the newspaper or watch the news? I read the headlines over someone’s shoulder on the tube.
• Do you need to watch 5 hours of TV per day? I have reduced my TV to less than an hour per day.

Some of these may seem drastic or severe, but these are the things I have done and I have found it has helped me to keep my mind clear and focused; and more importantly it has freed up a lot of my time.

4. Batch tasks together into blocks

Again this one makes a lot of sense once you think about it. If you want some cards printed you pay £100 for 100 cards but £120 for 200 cards because all the effort is done setting the machine up. Putting all of your repetitive tasks together to complete in one go means that your per task time is reduced, once you get in the flow you have crank out the rest of the items in no time.

So I have a reminder in my calendar that alerts me once per month for the following tasks:

• Bookkeeping
• Personal accounts
• Paying bills
• Non essential backups
• Downloading and editing my photos
• Software and server upgrades
• Etc etc

5. Outsource as much as you possibly can

This one is hard for a lot of entrepreneurs (myself included). Your time is super valuable and should be spent on tasks that you cannot outsource, everything else you should think about handing over to someone else.

I have tried this recently and have passed whole projects and accounts over to members of my team. The result has been twofold; my time has been freed up, and the people who I have handed over to have relished the challenge and grown into their new roles. You need to be on hand during the handover to make sure things run smoothly then you need to trust in the ability and skill of your team. The world will not end if you do not micromanage everything.

The other point is that outsourcing is not just for business it is for personal items too. There are lots of virtual assistant companies all over the world that will take care of booking your travel, booking restaurants, arranging meetings, dealing with permits, tracking your expenses etc. Personally I have not taken this step yet, I am planning to use https://yourmaninindia.com/ next week to do some simple research for me as an experiment.

6. Reduce meetings and if you must have them keep them short

Recently I listened a 37 Signals podcast that talked about their working practices. They said that the people in their office do not speak to each other! At first I thought this was madness why would you email or IM someone in the same room? Their rationale is that you have one working day, if someone interrupts you then your day is split in two, then another interruption and your day is split into three, pretty soon your day is so fragmented you have lost all your productivity. I have found this to a certain extent when I work from home; I find that I get about two or three times as much work done at home than I do in the office because there are fewer interruptions.

Is it practical to spend your working day not talking to anyone, not really and personally I enjoy the banter and the team collaborations, but you can have a half-way house. Perhaps you have two hours a day where you get your headphones on and get in the work zone.

Another big point about meetings is to try where possible to reduce them and if you must have one:

• Have an agenda that is circulated in advance (and keep to it)
• Keep them to less than an hour (ideally half an hour)

Again you have to be sensible; if I am at pitch which goes on for more than an hour I am hardly going to pack up my presentation and leave. You should however try to reduce internal or non-essential meetings.

7. Take regular mini retirements

Why do we want a 4 hour work week? If we save ourselves lots of time each day what do you do with the extra time?

My thought is to have fun and spend time with my friends and family. There is a tendency to use the extra time to carry on working, but that is not the point. You have to have mini retirements, or micro holidays to yourself fresh and at peak performance.

These could be anything you want; short day trips, weekends abroad, a day at the part, picnics, playing sport or anything else that you love to do.

Time is a scare resource that unfortunately you do not get more of. Do I think a 4 hour work week is achievable? Perhaps. More importantly for me is to get more done in less time, giving me the freedom to spend more time with my family. Also to make sure that when I am not working I am relaxed and not constantly stressing about my workload.

If you have any tips that you use to increase your productivity let me know; I would love to try them out!

It made me think that I should focus this blog on the things I am specialise in and the things I love to do:

• Web applications
• Building and operating technology businesses (operations, finance, strategy)

I think that as an entrepreneur once you have built a product and brought it to market; a big part of your success is how you operate your company and managing the finances. A lot of great business are no longer around because they failed to manage their businesses correctly.

Web 2.0 Show

This is a fantastic podcast, hosted by the superb Adam Stacoviak. I listen to this more than any other podcast and one in particular caught my imagination.
Episode 61 – Grasshopper, is a superb interview, the guys at Grasshopper have a very different approach to PR and a lot of good things to say about start-ups.

Gary Vaynerchuk

I love Gary Vee and he has such a great voice within the community, his passion comes across in everything he does. This is the first video I saw of him at the Web 2.0 expo and if you need a quick boost this is the video for you.
He advocates doing what you love, being 1% unhappy in your job is what you should strive for.

Start Up Inspiration

I watched a great video of Aron Patzner (CEO and founder of Mint.com). He comes across as a very personable guy and has some very good advice for the different stages in a the start-up cycle. This really got be excited about building a product business. There is one slide where he talks about pre-revenue valuations and he says that you should add $500k for every engineer and -$250 for every business guy to arrive at your company valuation.

Start Up School

This is another video, this time of David Heinemeier Hansson speaking at start up school 2008. He talks about just going out there and just doing it, building something, making a start; and also not being afraid to charge for your product.

There are lots of other articles and videos that I am sure you all know of, but these are my particular favourites, I hope you enjoy them.

The site is going to highlight the issues we come across and solve everyday, as with any framework (even the great ones like Django!) there are hacks, workarounds and things to improve.

Check it out, hopefully I will be writing some guest posts on there as well.

Over the couple of years I have been working on a very interesting collaborative project for Nesta and Oracle. The project started off as a small prototype based on an idea that was designed to encourage innovation at large corporate companies, and over several stages turned into an IP spin out of Oracle that is now being used as a business development tool.

The initial idea

NESTA and Oracle wanted to design an online collaborative tool to make it easy for participating companies to brainstorm ideas and invite suggestions from their colleagues.

The project started with a group of large companies to pilot the scheme. Arup, BBC, BP, BT, Cancer Research UK, the Department for Transport, Interbrand, Lloyds TSB, NHS, Pfizer, Rolls Royce, Unilever, Virgin Atlantic and Vocalink.

Senior executives from each of these companies met at a kick off dinner to decide on the main themes for the project. They decided to focus on brand, digital identity, networks, and personalised information provision. This formed the structure for the programme. For the next eight weeks the companies used the Open Alchemy platform (which we designed and developed) to innovate and share ideas. They would then between them pick the best ideas which would warrant further development.

How do you get corporations to innovate more?

This is the big question. We spent a lot of time working with stakeholders and innovation experts, Innovaro, to come up with the best workflow and incentives for employees. Getting employees to take time out of their day to post ideas and innovations is not an easy task.

Along with Nesta and Innovaro we decided that the application needed to be:

• Really easy to use (almost no learning curve)
• Different, a funky design that is fun and engaging
• Multiple methods to pull people back to the site; email alerts, daily digests, RSS feeds etc

The prototype

We had multiple iterations for the prototype, each time the workflow was tested with users to gauge their response. Quick iterations, fast feedback and short sprints were the key to meeting the tight deadline.

This project was more than just technology so we spent a lot of time on the design. In fact overall we probably had an even split in terms of design and programming resources. Innovation is about people; the prototype should support people and their ideas giving them the freedom to innovate.

We developed the first beta version of the prototype in less than six weeks.

Software evolution

At the end of the Open Alchemy project, which spawned some very interesting spin-offs (including WellBe, a points-based wellness programme designed to incentivise the public to adopt healthier behaviour which I am also a part of), what would become of the software now?

It was decided that as the software had proved so useful within Oracle that it should be deployed internally within Oracle and developed further. Over the course of the next year the software was improved, stress-tested and enhanced to meet the needs of a corporate giant. It gained a lot of traction and as such justified extra development.

IP spin out

Since deploying within Oracle the application has trialled internally within: Nesta, BT, NHS and other large corporates. Oracle made the decision to spin the IP of the software out into its own vehicle, which was a bold move. There was a lot of legal work in order to do this, but late last year it became a reality. The Open Alchemy platform will continue to grow and evolve, whilst providing strategic opportunities to the original creators Nesta and Oracle.

This project shows an interesting approach to technology business development. The Open Alchemy platform is not an expensive product but one of the software requirements is that it runs on the Oracle database and middleware stack. This embedded software approach means that every software licence means opportunity for Oracle.

You can read the full article and press release on the Nesta site (click here)

I have had to hire many programmers over the years and I tend to find that the really good ones have certain things in common. I have a three step process I go through now to find the best people with the best fit for the company.

1. Finding great people and attracting interest in your position
2. Working out if they are the right person for the role
3. The interview

Step 1: Finding great people and attracting interest in your position

The key to attracting great people is having a great place to work – that means the company culture, offices, people and the work you produce. Companies like Google and Apple have no problem finding the best people as they are like a recruitment magnet, people fall over themselves to work there. Now your company may not have the same size and appeal but every company have a unique culture and soul. You need to make sure you sell the full package to a potential recruit more than just their job role. Most great programmers love to challenge themselves and solve the big problems, so you need to let them know what kind of projects they will be working on.

Try not to use an agency if you can help it; I have rarely had much joy with agencies, they are incentives to find candidates but not the best candidates. It is much better if you can find someone who has been recommended, someone who worked for you as an intern, perhaps someone you have come across on a forum or an open source project. There are always many routes to finding great people.

I read recently that the 37 Signals team and the Hash Rocket team pretty much only recruit people who they have worked with, so freelancers or contractors who have worked on joint projects with them.

Step 2: Working out who is the right person for the role

Now hopefully some CVs and emails enquires are coming in and you need some way to filter them. Of course the CVs you see are important but qualifications and work history do not give you the whole picture. Have a look at the person’s blog, portfolio site, twitter account etc. Google their name to see what comes up. It is interesting if they have been posting and promoting themselves within the web community.

When I am sifting through potential people I am trying to answer the following questions:

Can they get things done?

The most important thing for me is that they have the focus, resolve and energy to get projects done. That is not to say they have to do this all by themselves but most of the time they will be working alone. The way to see if people can get things done is to look at their personal projects, open source projects, github repo, anything that shows they can see a project through to the end and not give up.

Do they have a thirst to learn new skills and technologies and can they pick things up easily?

All good programmers can pick up programming languages with ease, much like linguists can learn new spoken languages. There are people in my team who just have spend a few days learning a new language before they are off and running; PHP, Python, Lisp, ActionScript skills can be acquired with what looks like seemly little effort.

Do they challenge themselves in the projects and job roles they have had? Age is not a factor here as I know some incredible programmers who are right out of school and some who are further down the line in their career.

Are they passionate about the web, do they share things that they have learnt with you, do they keep up with the latest trends and news, do they read RSS feeds and listen to podcasts?

Are they an artist looking for beauty?

Attention to detail and the personal drive to write elegant, beautiful code. We all know that we have to write hacky, quick fixes some times but that should be the exception not the norm. If someone in our programming team tries to write some hacky code, it is usually picked up by the other developers even before it reaches me.

Good coding is an art form, as you move from planning, to psudo code, to basic, and then elegant scripts, refactoring along the way. I have said it before but attention to detail is key.

Have a look at some of the person’s open source scripts or code examples on their blog. Are they a coding artist?

Now once you think you have found the right person you can move onto to the interview process.

Step 3: The interview

So once you have found some potentials stars you need to get them in to meet them in person.

Telephone chat

First of all I have a quick chat on the phone, no more than ten minutes just to get a feel for the kind of person they are. This is simply a getting to know you chat there are no interview questions, I am simply chatting to them as if I had been introduced to them at a dinner party.

Personal chat

If I think they are a good fit with the culture and think their personality would fit in with the company I invite them in for a chat in person.
This is a very informal event, I do not ask interview style questions or sit behind a big desk. This is one person talking to another person. I try to make them comfortable as you will never get to really see what they are like if there is tension in the air.

Are they a great communicator?

I don’t buy the stereotypical picture of a nerd programmer who is devoid of social skills. Programmers have to work as part of a team, they have to disseminate specs and write documentation, write comments, they also have to keep the project manager or tech lead informed of progress. There are often brainstorming and strategy meetings, code reviews. These all requires great communication both written and verbal. I do not mean they have to be an orator but they have to be able to clearly communicate their ideas and opinions.

Do they know their stuff?

You have already had a look at what they can do, but by talking to someone face to face you can see if they really know what they are talking about. Try to ask for specifics as that will show if they actually understand what they are talking about. The best people ask questions themselves relevant the the conversation and are keen to share opinions and throw ideas around.

Give them a real project to solve, not a pointless test

I have done some tests in corporate interviews in the past and they are pointless and not relevant and I think they should be scrapped! I like to get the person to do a small self contained project and then peer review their code. I never compile or test the code I only want to see the style and the methodology. This usually takes the form of a current project we have in the office. They can do it in their own time and take as long as they want this is not an exam. You do not code under time pressure in real life (well not often anyway!).

If they have got this far then they are probably a superstar, so hire them quickly before someone else does! It might seem like a lot of time and effort but creating the right team is the most important thing for your company and both you and your team deserve to have the best people.

One last sanity check is that we have a one month probation period (which we should really never have to use) just to make sure that we all work together like a well oiled machine.

I would love to hear what other people do as part of their hiring process. Especially how they attract and find the best people to start with. Any thoughts?