This article was written by JP Werlin, EO Seattle member and CEO and Co-Founder of PipelineDeals
“Value.” Any business needs to constantly create it; the question becomes for whom and how. I sought to create value for my customers and employees first, before catering to shareholders and investors. My company, PipelineDeals, bootstrapped its first nine years before seeking outside investment. Why? We didn’t want to be dependent on external funding. Our goal was to use external funding strategically by better positioning our company once we’d already set a solid foundation.
PipelineDeals landed US$1 million in outside capital last year. We already had 3,000 global customers and made the Inc. 5000. Of course, it wasn’t easy; we’d hit a series of roadblocks and definitely made some mistakes along the way. From this, we realized we’d inadvertently developed five rules to create the value needed to survive the birth of a business and continue to move forward in an upward motion:
1) Make Customer Happiness Priority One for Hiring
Some of our most important business decisions centered around who to hire and when. When adding talent to your growing business, it’s easy to fall into the mindset of “How will this hire make my business more money?” We found the right thing to ask was, “How will this hire impact my customers?” Generating revenue is great, but I can honestly say a strong customer relationship that evokes loyalty and trust is far more valuable. We gained more by solidifying relationships with our existing customers than chasing new leads. Hiring a slick salesperson may help short-term revenue with a few quick customer wins. However, a customer service expert might be the better choice for your business.
2) Learning to Let Go
As a co-founder of a business, I realized that moving down the job spectrum from “specialist” to “generalist” was exceptionally hard. It’s like Michael Gerber’s now-famous line (and unofficial EO mantra), “Work on your business, not in your business.” This is akin to what I imagine practicing meditation is like – simple on the surface but very deep and multi-faceted in practice. I’m still learning lessons on how to hire awesome people, but I’ve found that if I hire correctly, I can let go. I realize this is likely the hardest thing for any ambitious, self-driven entrepreneur to do. Recently, we established our own version of Objectives and Key Results (OKRs) originally shared by Andy Grove in his book High Output Management. This assures the company leadership team and I are clear on our priorities. I learned I don’t need to control how the job gets done; I just need to know we’re on track and that our mutually agreed-upon objective is ultimately achieved. As much as I wanted to, I came to the realization that trying to be part of every decision only costs you time and your sanity.
3) Don’t Go It Alone
Starting and running a business is a heavy burden to carry. My solution: Don’t go it alone. If it weren’t for my co-founder, Nick Bertolino, I wouldn’t have made it. He was there for all of my ups and downs. Nick was and continues to be a good sounding board for me, and vice versa. I’m not saying I couldn’t have done it by myself, but having someone that truly appreciated the challenges made the road less bumpy. Create a small network of outside advisors who can dispassionately and objectively give you feedback. For me this consisted of my co-founder, some recent mentors and, of course, EO.
4) Learning Trumps Perfection
I found that all too often “great” is the enemy of “good.” We’d spend hours upon hours getting the product or the message “just right.” The kicker – once we got the product, service or campaign out into the wild, we realized it still wasn’t perfect. At that point we learned what it would take to improve it, and the entire process had to be iterated. In hindsight, we saw that in most cases, we’d arrived at 80% of the solution very quickly and diminished returns on time and money by continuing to focus on what we thought was the last 20%. Today we don’t necessarily strive for “perfection”; instead, we try to learn as much as possible as quickly as possible.
5) Know When You’ve Crossed the Survival Phase
The first phase of any business is survival, when your sole focus is whether the business will still be alive tomorrow. There comes a point when this is no longer the primary concern. For us, this was when we had a core set of customers, about six team members and a relatively reliable revenue stream. It was then when we stepped back and thought, “This business is the real deal.” So, what’s next? For us, it set us on a course of constant improvement within our business model, improved customer experience and gave us the ability to build an awesome culture in which to grow and thrive.
These five rules of value creation during phase one of PipelineDeals taught us that our early decisions had a major impact on our second phase; the two phases were inextricably linked. We were able to orchestrate, source and close our fundraising in just 79 days. Take it from us – creating value early directly correlates to success.
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