Dan Pink is an author and speaker who despite having worked in politics, has a surprisingly interesting take on managing employees and how the modern workplace should function.
I watched a recent talk of his at TED after being pointed to it by Herb Kim. I would advise anyone who is considering running their own business or has already been running one to watch the talk, which makes a strong fact-based argument for radically re-defining the way we motivate employees at work.
In both his talk at TED and his thought-provoking book A Whole New Mind, Dan talks about right-brain thinking and how creativity is now an essential competitive advantage in the workplace. Like the talk, the book is a must-read for the insight it provides into creativity and how simple it can be to instil it into both your personal and work life.
At hedgehog lab, we have always taken pride in our left-brain strengths and developers with strong logic, reasoning and language skills. Our entire hiring policy and ethos has been surrounded by the fact that we are a company for developers, by developers. Sure there is a lot of creativity and abstract thinking involved in general software development but our work practises and hiring processes were geared towards left-brain focused developers.
We did have processes in place to encourage creativity, like our Lab Days, which were informal internal hack days. Unfortunately, the pressures of every day work and deadlines meant that this process was woefully managed and resulted in very little. In retrospect, this was a necessary but unfortunate path to becoming a sustainable small company.
Meanwhile, in the past year, we turned down around 10 different designers who applied to work at hedgehog lab because I was absolutely convinced that our in-house team had no need for a permanent creative member of staff. Why hire a full-time creative person when we could focus on our core competency[sic] and outsource graphic design and creative work to freelancers and companies skilled at this?
The problem with this was that, although it was good traditional business wisdom, it did not take into account the exponential benefits a creative person could bring to our team and products while changing the monotonous composition of the team. It was becoming clear to us that the advantages of having an in-house designer far outweighed the negatives.
This is where Dan Pink and his theories come into play. To tie in with our recent office move, we took some time off to think about how we can inject some of the creative principles and right-brain culture in hedgehog lab. This essentially culminated in the following new practises that have been brought about at the lab.
Switching to a Results-Only Work Environment (ROWE)
ROWE is an extension of our existing working practises to focus on results and move the focus away from time spent on a particular task. We have always had a liberal working policy at hedgehog lab but we have often been guilty of focusing too much on measuring and evaluating the amount of time spent by individuals in "doing stuff". Although results were still more important than time in the past, a formalised ROWE process gives us better guidelines and tools to measure and motivate employees in the future.
Monthly "Hog Camp"
Hog Camp is essentially our version of the Google 20% time (where each engineer gets to spend 20% of their time working on interesting and non-core projects). Unlike Google however, our growth rate is far slower, which means we could not afford a day a week from employees' time. Hog Camp is a monthly internal 2-day BarCamp where the team gets together every month to hack on interesting ideas and code fuelled by plenty of pizza and beer. Our first Hog Camp is in September and we will posting the results of this soon.
Hiring a designer
We are now actively looking for a creative designer for our team. If you are someone who loves producing beautiful and usable interfaces and "gets design", then please get in touch with us. Alternatively, if you know someone who is looking for a new challenge and is happy working with geeks, let them know about us. We have no specific and rigid criteria as long as you have the right aptitude and principles to fit into hedgehog lab. A creative job application could help too.
No doubt, I will be reporting in a few months what impact these changes have had at hedgehog lab and if there were any negative results.
I think we have already established the fact that I am not going ga-ga over SaaS and the hype machine which currently surrounds hosted software.
One frequent financial argument I always come across, on-line or off-line, for people choosing hosted software is the superiority of the subscription-based, pay monthly model, as a consumer. And to a large extent, this is an advantage that I cannot brush off easily. However, if we delve into the reasoning behind why people see this as a better model, it becomes apparent that these are exactly the kind of decisions that led to the excessive financial debt that plagues many people in their personal life.
People will gladly pay $19.99 a month, rather than a $149 up-front because the initial cost of the monthly option is nearly 10 times lower. Who can argue with that? If you decide 3 months into your product use that it isn't good enough, just cancel your account and you have only spent around $60. That is still a $90 saving over an up-front option. I am not really making my case here, am I?
Let me present another angle. What if you paid $149 for an up-front, self-hosted software product but it came with a 90 day refund policy? That is a total cost of zero to you.
What if you, for some weird reason, decided to stay with the product and the product offered free upgrades for up to a year? That is a total cost of $149 with your up-front option, while your hosted option comes to $240. What if you decided to use it for 2 years? This is a very realistic usage pattern for most people, where systems are used for years.
"Great! But what about the time and effort you spend installing, configuring and upgrading this self-hosted product." What if the product took an average of 5 minutes to install, configure and 5 minutes every time you upgraded it?
No matter how you look at this hypothetical situation, only 1 option makes financial sense for the person making the purchasing decision. Yet, it comes as no surprise to me that many would take the subscription option, because it allows you to "pay in instalments" despite the high overall cost.
To be clear, there are many domains and scenarios in which the hosted option is the better financial choice. For me, this is any up-front option that costs more than 24 to 30 times (because I expect to use most software on average for 2 years) the monthly subscription cost for the hosted option.
So what has SaaS got to do with the Credit Crunch? Nothing except the fact that the financial reasoning behind both seems very dubious!
A recent conversation on a local community forum about a software vendor who required the filling in of a 2 page form just to get in touch raised my irk and reminded me of key marketing errors that ISVs seem to make. I wanted to share these in the hope that budding entrepreneurs avoid these mistakes that can be very frustrating for customers.
Not publishing your contact details
Yes, you can have a Contact form that tries to collect structured data to allow you to respond to queries but not publishing your e-mail, telephone number, or address is a big no when it comes to selling products online.
Other than building trust in the customer that you are not a doubt-able business, it encourages customers to start a dialogue in a manner that they choose and at a time they choose.
Requiring sign-up to download your free/trial product.
To be clear, there are niche sectors and products where it might well be required to capture a lot of customer information before you let them download a product (no examples I am afraid).
However, for most software products and especially in crowded marketplaces, it just doesn't make sense to force customers to go through a lengthy sign-up process and gather their auto-biography to let them download the product.
If the trial does not convince the customer to purchase a product, then I doubt any direct marketing gimmicks will.
Having a blog / news section that doesn't say much.
A blog is a powerful marketing tool, but I see this so often that I had to mention it. They usually fall into 1 of 2 categories,
Press Releases These blogs and news sections are nothing but press releases with a fancy picture added to make it look more personal. They usually talk about how awesome the company is, or how a new client has decided to choose their awesomeness, or how they are doing awesome things.
Don't get me wrong. There is nothing wrong with keeping readers up-to-date with your successes and promoting the good work you are doing. The problem is people will get frustrated with all the self promotion if you have nothing useful to say eventually.
Journal I know of a few companies (whose names I shall not mention), who excruciatingly detail every mundane activity from buying new desks to an employee being off sick. How is this useful to a customer, fan, or prospective employee? All it tells them is that you are dull and have nothing useful to say.
Having a blog but not allowing comments
Note that I am not saying that you should not moderate comments (we moderate all our comments). Moderation is fine as long as you allow some form of feedback and a way for people to engage with you and react to your blog post. Rejecting criticism and allowing only nice comments might sound prudent but people are bound to take their criticism elsewhere, where you have no control over the medium.
Lack of spam prevention on the blog
As a professional company, it reflects very badly if you do not moderate your blog or have spam prevention tools on it. This is a no-brainer given most popular blogging platforms allow this or it is fairly easy to implement in a custom blogging solution.
Our solution to this problem is to moderate all comments, whether it be for spam or inappropriate content. Even regular comments are not approved until someone manually approves it. This means that the quality of the comments and dialogue is fairly good.
Competitive comparisons
The biggest purchasing activity that a customer performs is to compare competing products to help make a decision on which one to purchase. It just seems obvious then that it is a great idea to include a matrix comparing your competitors to your product.
The practical flaw with comparisons is that they are never objective (unless they are on Wikipedia). Do you know anyone that actively lists factual weaknesses against their competitors? Most people I have spoken to say they immediately dismiss comparisons with competing products as they never trust them.
Your effort is better spent in highlighting the benefits of your product and why a customer should consider purchasing your product on it's own merits.
Putting valuable content in inaccessible documents
Lots of companies have excellent case studies and valuable marketing material but in a moment of uninspired genius, they decide to make them available in either PDF format, or worse, as Microsoft Word or Powerpoint files.
There is nothing wrong with a well-designed concise PDF that people can take away to read in their own time. We use them ourselves. The problem is that most of these PDFs were made for print (large sizes and unnecessary graphics) and just dumped in a download-able folder making it tedious for the customer to get information.
So you are a small company or ISV that develops software products. Your company is doing great and sales are increasing but you find that you are spending more and more time doing support and dealing with irate customers. You are developer(s) at heart and find it frustrating to deal with customer service and support. After all, why should you? It is not your core competency. You feel you should focus on what you are best at, coding.
In a moment of genius, it strikes you that if you can outsource accounting/book-keeping and your legal issues, why not outsource your sales and support to a company that specialises in sales & marketing. This would free up all your time to work on some beautiful code. Tip : Do not do it!
Outsourcing your sales and support is one of the worst ideas you can conceive of. Forget about cost-cutting, efficiency and all the apparent benefits you can see. Just don't do it!
Customer service is a competitive advantage
Whether you are a small business or large, customer service is one of your biggest competitive advantages. All the bells and whistles, features and innovation in your product combined are still worth less than delivering exceptional customer service.
Very few companies can get away with poor service and a great product (I would love to hear if you know any). On the other hand, a lot of companies do great with exceptional customer service and mundane products. Zappos sells shoes. But try convincing their customers they are the average shoestore and they will probably disagree.
Customer service is marketing
This is not rocket science. Great customer service generates word of mouth and creates fans. This directly leads to increased sales and recognition. Do you spend lots on PR and advertising? Try cutting that spend and investing in great customer service.
Customer service is employee retention
Great customer service is not just about selling and marketing. It also generates motivation in your team, helps your employees spread the word about how good you are and creates an environment where everybody wants to work.
Customer service is about knowledge
At hedgehog lab, we encourage and sometimes require that our developers deal with support and sales queries. This is because no amount of documentation/manuals/training can give anyone else the deep knowledge of a product that you as the developer have. Someone who is not involved with the company on an intrinsic and daily basis will just not have the knowledge and answers required, resulting in canned responses and delayed support.
Customer service is not rocket science
Despite customer service being a great skill to have, it is not a complicated science and comes naturally to most people. It is about being polite, responsive, giving the right answers, and being emphatic in dealing with problems. Yes, you might need some experience to become good, but there is absolutely no obstacle (other than attitude) to prevent delivering great support.
All of these principles apply whether you are a small or large company. Whether you have specialised support staff or do support yourself depends on your size and business, but for God's sake, do not outsource customer service and support.
The year was 1999. It was my first year of University and I had a compulsory module titled "Fundamentals of Software Engineering". As a self-taught programmer, who liked to learn things by "hacking" at code, there was nothing I dreaded more than a 40-year old balding professor who was going to preach "methodologies" and talk about some language used in World War I called Ada. Why couldn't we just get on and create some cool Assembly code and hack on those spare micro-processor units?
Turns out that the professor was not that boring after all and methodologies were quite important in the real world. Between the yawn inducing talk of SSADM and boring geometry of UML, we talked about gems like No Silver Bullet, The Mythical Man Month, and other interesting discussions on real-world software delivery.
It was in this module that I learned of the then revolutionary [sic] software development methodology called Iterative Incremental Development. It just made sense! This was the real deal and I was going to conquer the world with an all new way of developing software. And then I got a real job!
The iterative incremental model was primarily championed in those days by the Rational Unified Process, which had more templates and documentation than my entire university course books combined. It was the flavour of the day, and it was meant to solve all our software engineering pains.
Fast forward nearly 10 years and the web is now filled with talk about how agile development will rescue the economy (interesting, Toyota reported their first operating loss in their 71 year history today). Heck, SCRUM is so cool, it is the only software development process where I can call someone pig and still keep a straight face.
Let me make it clear that I (and my company) believe and practise the core principles of Agile Software Development, primarily the iterative incremental development, transparency, and working systems at all stages. I have no problem with promoting and encouraging agile development, however, let's just be clear that this is nothing new. Scrum was mainstream since 2001 and iterative incremental development preceded even that.
Agile Software Development is not about tools, technology or marketing buzzwords. You don't need fancy words like sprint, card walls, or Scrum to practise an agile development process. Agile development is about people and process, and no one has a monopoly on this.
A day doesn't go by without someone I know asking me "how is business going?", obviously referring to our being a small boot-strapped start-up in the current economic climate. The media is doing a great job of covering the doom-and-gloom of the state of the economy, so I am afraid there isn't much more I can report on that end.
My response to them always is "Hell! Better than ever before." Sure, we are all affected by the economic crisis, and there is no denying that. Venture Capital has dried up and credit is nowhere to be found. Hence, now is the best time to be a boot-strapped technology start-up.
Here is why,
Lack of lavish venture capital and easy credit is a boon. Businesses now have to become cash-flow positive rather than building their strategy on "borrowed" money. Which means, that if you start a company that is cash-flow positive in the current economy, it will have a sound financial infrastructure for the future.
If you have been laid off recently, terrible as it may be, now is a perfect time to pursue that idea or business you always wanted to. You have already faced the worst that could happen and your risk profile is probably lowest at this time. You have nothing to lose and the opportunity cost is low.
If you are in the service business, larger clients are more likely to explore working with smaller companies to be more cost-effective. This doesn't mean you have to be cheap, but as a small/start-up company your overheads will be so low that you can effectively compete with larger businesses. At hedgehog lab, service-based activity has increased 5 fold in the last 2 months, with even FTSE 100 companies considering working with more flexible, smaller businesses.
With your larger competitors cutting costs and trying to reduce their exposure to financial risk (because of larger payroll and costs), you will have decreased competition and a great opportunity to offer value in both products and services. As a small company, you don't need that much revenue or profit to stay afloat, while your larger competitors needs hundreds of thousands just to pay their employees.
If you are in the product business and build business software that makes companies more efficient, saves them time, and saves them money, then you are likely to have more interest from customers. This is especially true if your product is priced affordably for the mid-market. Big-ticket purchases are unlikely to get approved in corporations in the current climate, but small software purchases that fly under corporate purchasing limits are likely to get the nod.
An unfortunate up-side of all the people being laid off is that great employees and co-founders are easier to come by. Not all corporate "cost-cutting policies" are based on merit and you will get to hire great talent for a relatively lower cost with no competition.
Obviously, I am not claiming that it is good to start a business only in an economic downturn, but now is as good as any other time, if not better.
I was on the panel last week, at a very interesting Think and a Drink event on SaaS and Cloud Computing.
For the purpose of this blog post (and given the gist of the event), let us simplify "cloud computing" to mean "utility computing" (although the purists would argue the cloud is more than just this), where the idea is that you can access, use and discard computing power and resources in the same way you get your gas or electricity, i.e., pay as you use. Also bear with me while I throw in random musings about SaaS in the same breath as cloud computing, since they are so inter-linked.
The core debate of the panel was on the pros and cons of cloud computing, with some having a bi-partisan view on whether it is good or bad for you. However, the undercurrent was on how this is the hot-topic of the day and how everyone could utilise this "revolutionary" advance in technology. Certainly, the recent marketing overdrive by giants like Google, Amazon, and IBM would have you believe that (Random alphabet here)aaS is the future of computing.
Now, I am not nearly as old to say this with any authority, but wasn't this exactly what mainframes offered in the old days? Sure, the Internet makes this cloud a lot more accessible, and huge compared to primitive mainframe deployments, but the concepts of time-sharing, using processor cycles and dumbed down terminals are certainly not new. In fact, the whole desktop/personal computer market came to be because people were dis-satisfied with the restrictive nature of using software that was under a centralised regime.
The real challenge for people in decision-making positions in terms of organisational infrastructure is not to take the extreme viewpoint but to judge the necessity for cloud computing and it's use on a case-by-case basis.
In summary, I think the following key points were made by the panel,
There was overall consensus that "cloud computing" was too often being used as buzzword to cover a lot of scenarios and that we have all been using SaaS from the days of Hotmail and Salesforce, well before Web 2.0 made it trendy.
SaaS and Cloud Computing deliver real value to younger, smaller and riskier start-ups by allowing them to create and run an infrastructure that can compete with larger competitors. It was agreed that larger enterprises would rarely see the benefits of increased adoption.
The main arguments for SaaS (especially) was that there is a lower barrier to entry and you don't need an "IT Department" to deploy and run software that is critical to your business. I personally see this as being a problem with traditional "deployed" software, with it's lack of user friendliness, rather than a real advantage of SaaS.
Salesforce became the dominant player in the CRM market not because it was hosted, but because it offered a painless and user-friendly alternative to the consultingware offered by competing offerings like Siebel and SAP.
There was also a general consensus that SaaS and cloud computing generally cost more in the longer run due to the popular subscription model and the need for people providing hosted services to earn recurring revenue.
One argument I do disagree with in the whole hosted vs installed debate, is that systems you own and run are somehow inherently more secure and reliable. The biggest myth when it comes to the SaaS debate in the enterprise is the concern over data security in hosted systems. Given that SaaS providers cater to economies of scale, their reliability and data security will more likely be better than most in-house infrastructure can come up with.
Flexibility is a huge problem when it comes to hosted software. Again, economies of scale dictate that software delivered using the SaaS model is mostly homogenous, which means you have little or limited choice when it comes to functionality (Facebook re-design anyone?)
A great practical application of SaaS and Cloud Computing infrastructure is to outsource non-core and non-critical operations to these systems. For example, at hedgehog lab, we make heavy use of the cloud to deploy bandwidth intensive downloads (Amazon S3) and we are experimenting with using Amazon EC2 to provide us with a wealth of virtual machines to run our integration and test environments.
However, it was very clear that a lot of enterprises still have real concerns about basing their business model and/or their core operations on a SaaS or cloud computing provider.
I have no doubt that as hardware becomes cheaper and skilled resources become dearer, more people will opt to move everything from non-critical to core operations into the cloud, and that SaaS adoption will increase gradually.
However, let us not lose sight of the reality of the software industry as it stands. Desktop and installed software still outsells hosted software (I would love to know the stats if anyone has them) and SaaS/Cloud Computing is no silver bullet.
I am a contributor and avid reader of the Business of Software forums. For those who are not aware, it is an excellent resource for small and micro businesses in the software sector.
However, what piqued my interest this week was a post by an anonymous young reader, who was seeking advice on Procrastination and how to get over it. The overarching theme in the discussion seemed to be that a lot of people feel that they are spending an increasingly more amount of time "surfing the web", than getting things done.
Since the early days of the web, random surfing has always been the bane of productivity for many people (I was there in my university days, so I know the feeling). Obviously, there are many contributing factors to why our active time on the web has increased (I am looking at you Facebook), but I cannot help feeling that RSS is probably a bigger slayer of productivity in early adopters and especially the tech-savvy crowd.
Before the semantic-web-loving, standards-touting crowd frown at me in disgust, let me make it clear that "I love RSS!". Without it, I would not have a voice. Neither would I have been able to keep abreast of current events using what is now my "daily newspaper".
Recent data from time management solution Rescuetime indicates that even though e-mail and IM are still the primary bane of productivity, news & blogs are the second worst offenders when it comes to productivity killers. Obviously, this data is skewed towards people who are sensitive about time management, but nevertheless, it shows an increasing addiction in feed subscribers.
How should organisations handle this? How should individuals handle this? Is the targeted-delivery and subscription RSS provides, increasing the information that is delivered to us or decreasing it? I am afraid I only have questions and no answers at this point.
Finally, I must say I am sorry! Not only have I left this post with more questions than answers, I have also just contributed to killing more of your productivity.
