Category: Life in a Startup

Homecourt Advantage: 4 Reasons Why It’s STILL Awesome to Have an Actual Office

Peter Cauton
The new STORM office along Escriva – do visit if you’re in the area

A few of my startup founder friends are deliberately choosing NOT to have a physical office.

Their logic is simple:

  • Smaller utility costs (electricity, water, rent)
  • No travel costs (gas AND cost of time lost to traffic)
  • No furniture costs
  • Mobile technology now allows for free video conference calls across the internet

Last weekend, we moved to our new office along Escriva Drive in Ortigas. It is the fifth office we are moving into. Our original office was in the living room of my condominium, where we used a friend’s second-hand restaurant furniture.

When I think about it, we could save a small fortune NOT having an office and going purely mobile. Here are reasons why we would probably never do this:

1) Actual Interaction Beats Mobile

I’m not talking about production here. There are actually some studies which say that production actually increases when people work from home. What I’m pertaining to is teamwork and a shared purpose.

There’s a reason why training companies (paid billions by companies around the world) do a lot of teambuilding through actual shared experiences. Have you seen any team building activity done online?

The best way camaraderie and teamwork are built? When you are working in the trenches together. When it’s the deadline in a few hours and the guy to your left and the girl on your right are downing Cobras with you and its crunch-time. It’s the pizza and drinks you share as you celebrate beating the deadline the next day. This reasons alone justifies the costs of running an actual office for me.

Hmmm. I can picture a company wiring you money to buy pizza, then you celebrating together with you on Skype – but you know what, I just think it wouldn’t be the same.

I was with a startup company before who chose to do it the mobile route. And I don’t know, there was just less energy and excitement with that route. That company has since closed down – there were a lot of other reasons why it did, but working on a purely mobile environment certainly did not help.

2) Working at Home is Tough

It’s funny. I know a ton of employees who want to work from home. But you know what, I know freelancers and founders who work from home who “want to take the next step” by working in an outside office. It’s not so surprising.

Have you ever tried working at home? Not only is your gaming console there, but there’s also your bed, your very comfortable couch, plus dozens of other distractions. There’s also perhaps your mom who would suddenly want you to buy eggs in the grocery, or maybe your 4-year old kid who needs your help in finishing a stage in Bad Piggies.

 3) There’s Something Gratifying About Having a Home

I remember when Pao and I moved STORM from my condo to our first 20-square office space. We had just bought furniture and we were carrying it in. When we were placing the last table in its proper place, we looked at each other and couldn’t help but smile. It wasn’t verbalized, but it was clear – STORM had a home at last, and this was a moment to be remembered.

4) Having an Office Enables Recruitment

Or, more accurately, not having an office cripples recruitment.

After a few months on the job, our new hotshot programmer, Angela told me that she was thisclose to not doing the interview with our company at all. She said that she was standing in front of our door for a good 15 minutes, thinking whether she should ring the bell or not. After all, it was a RESIDENTIAL room.

Angela went on to design and build our first flexible benefits systems – the lifeblood of our firm. Had she not rung, things might have been very different for us.

I remember last year when Applabs (mobile development startup) CEO Ian Atienza was working feverishly on the details of their new office in Eastwood – where every brick went, what piece of furniture went where, how the conference room looked like, how the colors went together. After a few weeks I saw the office and it was amazing. In the next few months, I saw the rewards of what Ian was sweating over: some people were saying yes to his job offer just on the basis of what the office looked like.

Of course, ultimately, what matters would be the type of work and the fit. But you know, having a nice-looking home helps plenty. Unfairly or not, an office adds legitimacy.

Ultimately, of course it will boil down to whether your startup can safely afford the costs of having a home. But as soon as you can financially afford it, don’t hesitate – it’s easier to build with a foundation in place.

Emulate Tony Stark: Intuit The Future

Emulate Tony Stark: Intuit The Future

Peter Cauton

When Pao and I started STORM, we thought of a product which people WILL be buying – an online flexible benefits service for companies. There was nothing like it in the market yet. We decided to pursue a FUTURE need, as opposed to coming up with something we knew people were ALREADY buying.

In 2005, we launched our product with a hotel seminar which exhausted the little capital we had. It was a fully-booked (free) event, which made us think, “We’re going to kill it!”

Uhm. Not really.

When we talked to everyone after, NO ONE wanted to buy our product – largely because people didn’t understand it, and no one was using it. Wet behind the ears, we concluded that we still needed to educate the market sufficiently before we could sell.

(where were you and your book in 2005, Eric Ries?)

Actually, that could have been it for our fledgling company, but we really believed in our idea. Stubbornly, we said we’d still develop our flexible benefits idea and sell the concept. (this sounds a bit heroic when I write it – don’t get that idea, we actually just didn’t know what we were doing half the time)

We had a big problem though: monthly overhead. We only had enough cash for one more month of overhead.

So we got creative.

I feverishly called around 20-30 HR people I knew at that time and asked them repeatedly, “What do you need? What do you need now? What would you buy now?”

(It was the type of market research I SHOULD have done in the first place)

From the data, one trend I saw was a need for an employee satisfaction survey.

Problem was, we didn’t have any manpower to do this. Pao and I then wracked our brains in a small cafe in the Renaissance parking lot along Meralco Avenue. We decided that Pao needed to come up with an online survey system which we can use to scale processes for a new service. We called the system Websurv.

Astonishingly, Pao, finished the system in a month.

Our Websurv-powered Satisfaction Survey service kept us afloat from 2005 up to 2008. Around 80% of our revenue would come from that business line, with the other 20% from our very few clients in flexible benefits.

Starting 2008 however, the trend would begin reversing itself. We would encounter more and more competition in the survey industry, and it was getting tiring and a drain on resources to sell. Meanwhile, we were getting more and more clients for our flexible benefits line – without doing any marketing to speak of. We were relying (up to now) almost purely on word-of-mouth.

As I type this, we have altogether DROPPED the survey service (and all our other business lines), opting instead to go all-in with our initial bet for the future, which was flexible benefits. We are now the current local market leader in flexible benefits, and we’re really really excited with how everything has been developing for us.

Lessons Learned: 

1) Targeting a known market means going to war

If you KNOW people will buy your product, it means YOU ARE SEEING that they are currently buying from someone else. This “safer” choice is difficult, because it will necessitate going into immediate war with current competition. This might not be so palatable for startups – which often have a limited budget.

It’s like deciding to dive into a densely populated pond as a fingerling. You’ll have a very small chance of getting to be the big fish, plus you’ll always be in danger of getting commoditized.

2) To make it big, you have to be a FUTURIST

You have to have the Tony-Stark ability to intuit the future if you want to make it big as a startup.

If we decided in 2005 to be an Employee Survey company, then chances are, we’d now be one of the many players doing this. (and with Survey Monkey and Mail Chimp being offered free, we’d be deathly afraid now) We’d be a small, or at best, a mid-sized fish in the pond. Betting on something we thought people WOULD buy made it easier for us to be a bigger fish in the pond.

It was also a bit easier for us to market: there was less competition, and we could concentrate on building our product and customer base.

The caveat is clear though: you have to build something people will buy. Much easier said than done.

3) You might need your own Websurv first though

Yes, you can bet on the future, but you also would need to account for present concerns, like you know, food and stuff.   One way you can do this is to diversify your product portfolio with products which YOU KNOW people will buy now, while working on the killer FUTURE NEED idea in the background.

This is one advantage of funding versus bootstrapping. If sufficiently funded, you CAN pour all onto your future bet.

While we have closed our Websurv line, I am mightily grateful towards it because that was what kept us afloat during a crucial time.

 

A Different Startup Saturday, Inner Before Outer, and Startup Spirituality

A Different Startup Saturday, Inner Before Outer, and Startup Spirituality

Peter Cauton

Last Saturday in Starbucks Masinag, I had a slightly different Startup Saturday meeting with Nico Policarpio, a promising young entrepreneur (whose team won the second Startup Weekend).

I was originally going to meet 2 other people, but they each had sudden emergencies, so I met with Nico one-on-one.

Partly as a result of the decreased number of people, the conversation went into deeper ground. Instead of the usual “let’s come up with an idea” or “let’s develop an idea” or “let’s map out current opportunities,” we instead delved into   the philosophical – what drives us as entrepreneurs, taking a hold of who we are, and startup philosophy.

I won’t go into any of the details of our conversation, but let me highlight one very important theme:

Inner Before Outer

More than any other job in the planet, being an entrepreneur requires a tremendous amount of self-introspection and awareness.

Why?

A startup is basically an individual’s unique offering and contribution to the world. He’s basically saying, “Hey world, here’s what I can do, buy me!”

To be able to offer your best to the universe, you first have to figure out what it is, right?

A mistake a lot of entrepreneurs make is just going after the money. This produces a passionless startup which inevitably makes passionless products. Slow death.

Another is going after something “sexy,” – like perhaps forcing yourself to go into “mobile” or “social” even if it just isn’t you and it bores you to death. Destination Zombieland.

Another mistake is to go after everything you feel remotely interests you, ending up with 2-3 startups at the same time WHILE having a day job in some cases. Recipe for failure as what a startup needs MOST from you is time.

These mistakes are usually the product of a lack of proper introspection as to who you really are, what your gifts are, what you really want to do, what you consider to be your calling in this world. These mistakes are the product of choosing outer (ideas, opportunity, money) before choosing inner (who you are, introspection, Faith).

This is why I find the startup exercise such a Faith-walk.

I know most people don’t associate business with Faith, or business with God.

If you believe in God though, and you believe you have a specific Calling, it’s pretty difficult NOT to consider Faith when undergoing the entrepreneurial process.

Figuring out who you are in the world? Sounds like something God can help us out with, eh?

Align your life. Nothing will make you happier.

Get up and DESTROY those blinders!

Get up and DESTROY those blinders!

Peter Cauton

My whole entrepreneur life has been a series of episodes where my eyes were opened to a greater reality.

I can still remember when STORM collected its first payment back in 2005. My partner Pao and I gave a gaming company 2-weeks of access to our new online survey software for P5000. (which was completely, idiotically underpriced!)

But I remember the feeling.

“Someone paid us money for a product we made! OMG!”

After years in corporate, and knowing the salary as the only means of getting cash, it was quite the eye-opener.

It was like the very moment we got to know how to swim. At first, were scared of the water, right? We needed to hang on to the edge. At one point though, we just trusted and we let go. Then came a startling realization – that the water isn’t the enemy, after all. And then afterwards, all we wanted to do was swim around and around, explore, and test our limits.

After getting our feet wet with P5000, we wanted to do so much more.

In 2006, I remember when I had to kick STORM out of my condo because I just got married, and well, it would have been awkward if the living room was still going to be full of computers and employees.

So Pao and I rented out a small place for STORM – no more than the size of a conference room – at San Antonio Village in Pasig. We then we got ourselves our first set of “real” office furniture. I remember when we were first putting the furniture in the office. Pao and I couldn’t get rid of the smiles on our faces, even if we were shelling out major moolah and now had to pay rent. We had an office! In our minds, a foundation had been built – STORM could stand on its own.

Another moment when some of my blinders came off was in 2007 when STORM landed a big account in competition with two large multinational player. It further opened my eyes that a startup can be much more than a mom and pop, if you choose to do so.

Whenever I would have blinder-dissolving moments like these, I would have trouble sleeping (my friends would know this) because my mind would be on overdrive. I would be imagining the endless possibilities in a new reality – one where previous horizons have been pushed back.

My big fulltime leap in 2008 scratched a huge blinder – that I needed to work in a corporation to survive. It was liberating, in all sense of the word.

I think I grew addicted to the process, so now I SEEK opportunities where I can disentangle myself from even more blinders. 2008 was when I started reading startup and entrepreneurial books like crazy. Actually, I find that a good book – fiction or otherwise – will always result in blinders crashing down. Same goes to meeting new people. Or new experiences. Even failure.

Then I started realizing something – that there are indeed, no limits. The only limits would come from the limits we impose on ourselves, either consciously or unconsciously.

Remove those blinders. You can be all you want to be.

Can We Call Them “Finish-Ups” Instead?

Can We Call Them “Finish-Ups” Instead?

Peter Cauton

At this time last year, I was looking around our Southeast Asian neighbors with startup-scene envy. Why wasn’t our startup scene as vibrant?

What a difference a year makes.

In just one year, we’ve seen a couple of Startup Weekends, the rise of Twitmusic, the launch of Kickstart and Ideaspace, a booming economy, Streetfood Tycoon, co-lab amenities – all of which were made more all the more prominent by a rabid social media environment fueled by internet-savvy Pinoys.

I think everyone will agree though – this is just the tip of the iceberg.

I am excited at the thought. Giddy, even. We have so much potential as a people, and I really, really think startups will ultimately be how we can lift this nation up.

Hence kindly allow me this sobering reminder, then:

Startups require an incredible amount effort and perseverance to pull off.    

With the increased number of people trying to start up, I also see a number of people taking this for granted, acting as if it can be done with minimal effort, minimum quality, and very often, minimal research.

Perhaps the term “startup” has something to do with it.

After all, it’s relatively easy just to start a “startup.” As the cliché goes, though: it’s a marathon, not a sprint. It’s how you finish which will be crucial, where the wheat is separated from the chaff.

You know, we have a chance to do some amazing things. If there is any time in the history of the world, we have got to go for it now.

But like everything in life, there is a price, right? We KNOW that already. For us to mean it when we say stuff like “let’s put the Philippines on the map,” we need to bleed for it.

You want to fulfill your dreams? Startups are ANYTHING but a shortcut.

You want to take a leap and start? There’ll be an awful amount of bumps and bruises along the way.

Over 92% of startups fail. (very interesting link) If you don’t do the hustling necessary to finish, 8% becomes zero. You’d have NO chance. None. Zip.

So…c’mon everyone!

Let’s own up to the challenge. Let’s pay the price. Let’s refuse to build pwede na firms, but rather invest in the effort necessary to build great firms. Let’s put the Philippines on the map by giving her our all.

She deserves it, after all.

Leap, But Don’t Forget To Live

Leap, But Don’t Forget To Live

Peter Cauton

The entrepreneurial life can be exhilarating.

Receiving your first payment, landing a first client, landing a first BIG client – these experiences can rarely be matched by anything the corporate world can offer. Then this whole new social network/internet/mobile landscape just takes that experience and injects it with WWE-level steroids.

There is so much to do. People to connect with. Ideas to pursue. Strategies to try. Clients to land.

It can be addictive.

Almost everything addictive is dangerous.

Startups – NOT an exception.

The past 12 months have been such a whirlwind as far as my entrepreneurial career is concerned. There has been a plethora of Blessings. Apart from STORM, which has been growing even more, I co-founded 3 more firms. I started this blog. I meet 3-4 new passionate entrepreneurs every Saturday morning, engaging them in lively conversation. In the evening I work on blogposts and connect to people online. It is exhilarating. It is addictive.

It is dangerous.

Last night, my wife finally told me how she was feeling. How she’s been feeling very happy and excited at how I’ve grown in my career, but a bit worried about how we’ve also started to grow apart a bit.

I felt like Bruce Willis at the end of Sixth Sense, when he realized everything through flashbacks.

What an idiot I was. I was doing something I swore I’d never do –  I had been taking my wife for granted. I’d really rather work as a sewer cleaner and be with her than be the world’s greatest entrepreneur and not be by her side – so my actions were getting misaligned with what I truly deemed essential.

It then slowly dawned on me – I was so focused on this one part of my life that I started taking the other parts for granted: time with the rest of my family, connecting with my parents, my efforts to get back to running, writing more songs as a music minister, spending more time with God through prayer. That last one was a zinger. I had been so appreciative of the gifts, when I should’ve been much more appreciative of the Giver.

Balance. I was losing it for awhile. Instead of running startups, they were starting to run me.

I will do better.

The Entrepreneurial Fight for FREEDOM!

Peter Cauton

Glenn is a 30-something product manager who dreams of one day escaping the corporate rat race to pursue a music-related startup he’s always dreamed of.

Sylvia works for a telco. As such, it isn’t a rarity for her to log in 60-70 hours of work a week. She yearns of saving enough capital to put up a business which can allow her to spend more time with her kids.

Elmer is a mobile developer. He’s a fan of the bestseller, The 4-hour Workweek. He wants to create the next killer mobile app and rake in the cash –  while he goes about touring the world.

I think there are a lot of us who are like Glenn, Sylvia, and Elmer. Money’s nice for us, but the real motivator is something else.

Freedom.

The freedom to pursue OUR dreams, instead of helping someone else with theirs.

The freedom to spend our time in things we want to do.

The freedom not to have an a-hole boss.

The freedom to be much more available to our spouses, children, and loved ones.

The freedom to do what WE think is right.

It’s kind of funny to think that we live in a world full of choices. In fact, we’re all a bit spoiled by it. We can order the EXACT coffee we want in Starbucks, have virtually anything delivered to our doorstep through Amazon, have the world available to us through the internet. It’s a world of choice and abundance.

But not in the typical workplace, where we are governed by 8-5pm schedules, an exact salary we pull in per month, a usual way of doing things, a whole handbook of rules to follow, a small work area to do our jobs in, and my favorite, a specific job description to follow.

Come to think of it, more than money potential and more than the thrill of owning a firm, an extremely powerful motivator for me was to just break free and be my own person. Instead of, you know, working like an uninspired zombie at work.

How many of us feel like this at work?

All the risk (perceived and real) in becoming an entrepreneur was SOOOO much worth it. I would not exchange my freedom for any amount of salary.

If you have a chance to do so, go for it and don’t look back. For those currently toiling in trying to break free, take heed and comfort in this: the freedom’s worth fighting for.

Here’s the freedom speech from good ol’ William Wallace to help inspire all of us a bit. Enjoy!

FREEDOM!

You can choose your own adventure!

Peter Cauton

It’s not just about the money. It’s not just about making a dent in the world.

It is very much WHAT SORT OF DENT  and WHERE YOU WANT TO MAKE IT. Ultimately, the answer boils down to WHO YOU ARE.

What do you like doing? How and when do you do your best work? What are you good at? Bad at?

In corporations, you usually pick a department or a function you think you can grow in. So as a green-behind-the-ears fresh graduate, the thinking would be a bit simplistic:

“uhm…I like people so HR might be the field for me”

or

“I like numbers so I’ll give finance a try”

It’s obviously not so simplistic.

It might be the right field, but not the right industry. It could be the right field and industry, but not the right company. Nor the right boss. Nor culture. Nor pay. Nor workmates. Nor morality. Nor a plethora of so many other things.

Some months ago I had lunch with a reader who finished near the top of his class in an IT course and promptly spent the next 10 or so years programming for large firms. I was just astonished at how direct he was in saying he completely hates it. 

Now he’s on the path of reinvention.

In corporate, you always wind up conforming a bit – because no company or position will ever fit perfectly.

In startups, it’s a bit different.

A founder CREATES rather than conforms. She chooses the field she wants to operate in, chooses the battles she wants to be involved with. She chooses the people she wants to work with. She also chooses what role to take.

What should dictate these decisions is the founder’s knowledge of WHO SHE IS. If she creates a startup which makes money doing something she finds completely boring  – then this quickly becomes torture, and soon, the entrepreneur will feel inevitably trapped.

The thing is, we usually need to experience things before we realize whether “this is me” or “this is not me.” This is why we end up trying out different companies, and even different careers throughout our corporate life.

In startups, it works a bit differently.

Logically, you will pursue opportunities and ideas which interest you. So hopefully, you are already building a startup densely populated with “this is me” elements.

As far as role is concerned, when you start, you do EVERYTHING in a startup. And oh boy, what a tremendous learning experience that is – because you find out SO much about yourself. From 10 years of doing HR in corporate, I suddenly did finance, marketing, sales, HR, operations, admin, and many more for STORM. Eventually, you find out more about yourself, and what you love doing.  It’s like getting a job in a dozen different departments at the same time.

As your startup grows though, you can then slowly focus on the stuff you love. You can then change roles internally with a snap. You can hire for your gaps.

For example, if you find out that rocking the “startup CEO” role just isn’t your thing because you hate client work and only wish to work with numbers, then you could just hire a CEO or get a partner who can do that role. You can then work on your numbers.

If all you want to do is program, you could just get someone who can sell.

You can make it what you want.  You can build around who you are.

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The Entrepreneurial Punch in the Mouth

Peter Cauton
Uhm, nope, the entrepreneur doesn’t do the punching in this piece…

Seasoned entrepreneurs know that they will eventually get punched in the mouth.

A lot.

This is the litmus test for new entrepreneurs, and remains one key reason why the majority of people don’t take the plunge.

When you are starting up, you have all sorts of enthusiasm. Everyone is excited. The energy is palpable. You think you’ve got a great plan in place. YEAH! I’M GOING TO MAKE IT BIG, WORLD!

Then you get punched in the mouth.

You lay sprawled on the floor. There is blood all over. Your plan has gone up in smoke.

How will you react?

The following are punches in the mouth that I’ve personally gone through, or have seen friends gone through:

  • You discover that the super-duper, world-changing, paradigm-shifting, world-beating, the-word-innovation-fails-in-describing idea that you had is actually already being done. And they are doing it so much better than you imagined.
  • Your parents don’t support your leap
  • Co-founders leaving
  • There’s just no money in the bank anymore, and your employees are asking for their salaries
  • Your biggest client sends you casual fax message that they are letting you go
  • The prized employee who singlehandedly built your system leaves for Singapore
  • You realize the product you spent all this time building has no market
  • Facebook or google decides to create a feature which happens to be your main selling point
  • No one believes in your idea (or in essence, in you) enough to fund it

These are the type of things I never ever felt in corporate, so when I started getting punched like this, sometimes one after another, it was jarring.

We keep hearing things like “will” and “perseverance” associated with entrepreneurs.

This is why.

No matter how much it is glamorized (especially nowadays), being an entrepreneur is DIFFICULT.

We get punched like that for the first time, we fall. And more than the shock, more than the pain, the overwhelming thing which creeps in is doubt. Sitting down reeling and dazed, the thought that will circle back time after time is: can I really do this?

How you recover, how you ignore the pain, how you CHOOSE to repeatedly get up, how you go on with hardly any motivation, will greatly determine how far you will go in being an entrepreneur. It is a grind.

Are you ready to get punched in the mouth?

Run Far, Far, Away From These Soul Suckers!

Run Far, Far, Away From These Soul Suckers!

Peter Cauton
Is it feeding time yet?!

Two quick stories.

Last week, a friend of mine was about to take the leap. She had a consulting concept in mind and had a client ready. Being someone with integrity, she decided to ask her boss if there was anything at all that would be construed as unethical if she put up the practice she had in mind. She didn’t think it was going to be a problem, but she just wanted to be sure. She also trusted her boss and valued his opinion.

The boss shot the idea down. It WAS unethical, he said.

Huh?!

Tell me, is there something unethical when a marketing manager from an FMCG firm wishes to put up a consulting firm whose first potential client was a small firm engaged in construction?

I know a handful of FMCG marketing people who have put up their own consulting firms. None were sued. In fact, almost all these new firms were contracted by the very firms their founders resigned from.

So what gives ?!

Perhaps the boss thought:

“Uh-oh. If she leaves, I’m going to have to do more work, I’ve got to find a replacement, and it also hurts my reputation. Easy call here.”

Next story.

Another friend, this time from a large IT firm, had been in his firm for good number of years already. One very common occurrence was having lunch out with a set of friends in the office. He admitted that they would always have a good time – mostly bashing his current employers and trying to out-do one another with boss horror stories.

During one lunch session, he told his friends about a recent decision he’d made: he was going to take a pay cut to join a startup.

To my friend’s utter surprise, there wasn’t universal support!

“Of course, mostly everyone congratulated me at first, but you can see from their expressions and body language that some thought differently. Then later it came out:”

Iiwan mo na kami dito!” (So, now you are leaving us behind)

My friend was puzzled because he thought he’d get all-out support, after all, they were his friends.

Perhaps not. Perhaps the basis of their friendship had been the bonds they formed hating on their current jobs, so once that was gone…

Or perhaps it’s simply people being crabs.

I guess that’s one more advantage of doing bold leaps – you get to see who your real friends are. Real friends believe in you, and WILL support any endeavor of yours that involves pursuing your heart’s desires.

Find them and distance yourself from the selfish soul-suckers above.