Tag: Life in a startup

Why You Should Consider Staying The Course

Peter Cauton

The following is a guest post from Dino Alcoseba, newly-minted head honcho at the HR startup Strata.ph. I’ve known Dino for five years now and I’ve seen him develop since coming in as a fresh graduate working for STORM in 2008. Here, he shares about staying the course. I can remember the events Dino describes below (that YM Conversation!), and its a bit jarring to hear what exactly he felt. 

Considering the state of young employee turnover not only in startups, but for the entire industry, I think what Dino writes here is pretty important to consider.  – Peter 

photo 2
Despite his Miami Heat losing both the Championship AND Lebron, Dino is still all smiles nowadays 🙂

5 years ago, I was stuck with a dilemma…

I just finished packing 8,000 letters to employees for one of Storm’s clients. It was an implementation of an organizational climate survey, which, a few months earlier, seemed alien to me. I knew absolutely nothing about the consulting environment. I didn’t know how things were supposed to be done. All I knew was, it was my birthday, I was supposed to have a party at my house, and I spent almost 36 hours packing letters to unknown people, asking them to log into an online survey – a letter a large number of them ignored. To make matters worse, the delivery of the letters didn’t even need to be done by that day, as evidenced by the lengthy time it took to reach the intended participants, as I found out a few days after.

That experience made me want to quit.

Up to that time, I didn’t know if I actually was enjoying my work. I didn’t consider myself a creative person (I didn’t know I’d have to create report templates from scratch, someone I never did before). I didn’t like the idea of presenting the same things over and over again (something I did for 2 straight months, presenting the same old results to a different set of people and asking them to validate results, covering around 30 FGD’s and 200 people to meet). I just didn’t see myself as staying here for long. The thing is though, I realized up to that point that I didn’t actually have a career plan for myself. I had ideas about my interests, I knew that enrolling in graduate school would be an option, but that was basically it.

I had made up my mind right then and there to talk to our CEO (Peter), and explain the reasons for my resignation. What followed was a lengthy conversation over instant messenger (Y! Messenger, no less) and culminated in…. me staying.

I am thankful up to this day that I made this decision.

Up to now, I do not know why I decided to stay. Maybe it was the promise of better and brighter things to come. Maybe it was just naiveté on my part. But regardless of what those reasons were, it was my first experience that taught me to stay the course.  

I know it’s not easy looking at the bigger picture when you’re fresh out of college, all brimming with credentials and aching to make a difference. Sometimes, work doesn’t paint that kind of picture, and it’s something we want to feel everyday. If we don’t feel that we’re doing something that matters, we tend to focus on the little things that annoy us, and distract us from the bigger picture. This culminates in unsatisfactory feelings in work, and ultimately, in tendering our 30 day notice and looking for greener pastures. I am not saying this is wrong. There really are companies that make it hard for us to stay, especially if there were inconsistencies between the job that was explained, and the actual job. But sometimes, staying the course, sticking it out for a little more, matters.

This has been especially true for me.

Making a Difference

Fast forward to 2013-2014, where I’ve been blessed with the opportunity to be a part of Strata, one of Storm’s sister companies, and just recently in May, been tasked with leading it.

It’s been all a haze, and the months have come and gone so fast. It’s hard to believe that it’s been months, but it’s been equally hard to believe that it’s only been months. The work that we’ve been blessed with has been nothing short of amazing. I cannot believe how and why large corporations and big government agencies continue to trust us with their projects. It must mean that I, along with my amazing team, must be doing something right. This is exciting for Strata because it allows us to 1) use our HR knowledge and expertise (something the team LOVES discussing), and 2) make a huge difference in people’s lives. It allows for transformational change in organisations, but recently more with the government sector, partners we’ve recently begun to start working with (and is a personal preference of mine, and I’ve been an avid listener of AM radio since my 1st day of work). It allows us to see directly how our work contributes to society, and how we can make the Philippines a much better place. This is completely unprecedented, and I am completely dumbfounded that we find ourselves in such a good position.

Never Ending Fears

Being part of a startup is hard. That’s just the truth. Leading it is even harder. The amount of decisions that have to be made on a daily basis range from petty (no more ink! where to buy ink?!), to complicated (how to present certain HR methodologies to the right audience), to downright insane (how, as a 27 year old, to tell much older and more experienced people that they have the wrong methodology). I sometimes feel like I’m in over my head, honestly. There are days when my feelings back in 2009 come haunting me back. . There are still days when I don’t feel like meeting some people. There are days when I just want to put earphones on and listen to my Jesuit-inclined playlist (The Song of Rupert Mayer has become a personal favourite). There are days when I wish for a simpler life, maybe one where I just have a role in a company, and I just have to do the same thing over and over again.

But at the end of every single day, I catch myself. I always find something good to smile about. And that, I find, is what gets me through most days.

Work is hard, but so is everything that is significant and life changing.

I find that with my never-ending fears, there are always reasons to stay the course make a difference in this world, and that’s all that matters.

 

5 Things I’ve Learned from Startups Unplugged

I’ve been trying to push myself to blog Post Startups Unplugged, and share all the instances of serendipity that truly made this miracle happen. However, I thought that it would be more effective if I were to cut to the chase about what I actually learned from it all. Here it goes! These are the 5 things that I’ve learned from Startups Unplugged:

Ask and you shall receive.

I had no shame in asking sponsors to join Startups Unplugged. This is how I usually got in contact with a sponsor:

A kind individual would give me a business card of XYZ individual from XYZ organization, and I’d literally call that person on the spot, even it if was the direct line of the CEO. It might sound too crazy or too bold, but it was a highly effective approach; about 80% of the sponsors that I talked to agreed to sponsoring the event.

Don’t get me wrong, I know that I had a sweet pitch for sponsors because of the incredibly awesome line-up of entrepreneurs that graced us with their presence for Startups Unplugged. The point I’m trying to convey in sharing this experience is to highlight that the simple act of asking makes all the difference in whatever you do. Making that conscious effort to ask is the catalyst to making deals happen.

Set your mind to work with purpose.

As with all startup journeys that start without any capital, it has been a rough and bumpy road. Moreover, as an inexperienced junior entrepreneur, I felt like there were things that I just didn’t think of or understand. I told myself if all else failed in my move to the Philippines, the one thing that I was determined to do was make this event happen. Because I had this mindset, I was able to do things outside of my usual self.

Facebook Ads Work.

On average we would get about 200 views for posts on our FB page. When Peter paid for promotion on FB, the views shot up to as high as 10,000 views. While it’s a big bummer that non-paid posts spark limited visibility, paying a little extra to promote does make a huge difference.

Evenbrite is an awesome tool for event registration! 

I recall getting into a heated discussion with Peter after his recommendation to use Evenbrite for JGL’s Open Coffee. Using a type of registration, in which participants would print-out tickets to attend a coffee chat, just didn’t make sense to me. Eventually, I realized I was wrong about it (Sorry Peter 🙂 )

Eventbrite makes it really easy for event organizers to keep track of attendees. In addition, it allows them to easily communicate with attendees and send attendees updates about the event and post-event activities. Eventbrite is truly a dynamic tool that makes event registration clean, simple, and easy.

Don’t Do it Alone! 

As tempting as it is to play the role of superman, don’t do it!  When there is a strong purpose or cause to what you are doing, people will gravitate towards you. Be open to people’s help and goodwill, and build together!

 

Justice League by DC Comics
Justice League by DC Comics

The Crucial Art Of Momentum Management, part deux

Peter Cauton

In the previous post, we talked about managing YOUR momentum in the startup process, about how we have to strike when the iron is hot and take advantage of our energy.

But what happens now when you’re now working with a team of either founders or employees?

Things become a bit trickier because now the startup exists outside of you. It now exists in your co-founders/employees, as well as the product you are now presumably working on.

Identifying Momentum Shifts

First of all, you have to be able to learn to READ how your momentum is. Is there an impasse in activity? Is output slower?

Sometimes the signs are subtler: has a co-founder’s energy dwindled? How does undergoing your first bad break affect the team?

The more you get to know your team, the better you would be at reading the signs.

Then, as startup founder and dreamer, it is up to YOU to ensure energy is sustained, up to you to pick guys up.  I have yet to meet a startup founder who can be described as “low batt.” They can’t afford to. When momentum slows and the difficult times come, people look to the founder for motivation and energy.

Challenge: Doing It Part-Time

For practicality purposes, a lot of startups are founded by people with fulltime day-jobs working on the startup part-time, very typically with other part-time co-founders.

This is a challenge because it becomes easy for people to miss meetings, or miss updates, or miss deadlines. String together a few of these and sometimes before you know it your startup is dead – and people are just too distracted/disheartened to pick up the pieces and start anew.

Keeping momentum in this sort of situation requires one thing: that you become relentless. You have to be relentless in finding time to work on your startup. You have to be relentless in keeping your team accountable to deadlines. You have to be relentless in managing and sustaining momentum.

Creating Cadence

There has to be some structure that your team can adhere to and bank on. Introduce these and make sure the team sticks to them. It could be in the form of start-of the week Skype teleconference meetings between the founders, or Googledoc files people fill in with weekly updates, or perhaps 2x a month Saturday lunch meeting. Monitoring progress helps a lot in achieving more of it.

Just Care

In the end, perhaps the most important thing to remember here is that you just have to care enough and do something if you see slippage. Sure, it can be awkward as hell to call out a slow-performing co-founder. Yep, you don’t want to be the bad guy who called that meeting when it’s 5:30 pm on a Friday, and everyone is tired from their day jobs. Someone’s gotta do it though. And yes, that means you.

Hey, no one said it would be easy.

Why Uncertainty Is Your Friend

Peter Cauton

Do you know what you will be doing in your job in 2 week’s time? In 2 month’s time?

I did. I knew my HR routine for the day – around 10 email requests, 2-3 interviews, 1-2 disciplinary cases to type up, perhaps one meeting with a manager who either wishes to hire or fire someone. I’d also meet with the occasional employee who wants to talk to me about resigning,  and perhaps a general meeting with other managers if it’s a Monday.

Then it would depend on the time of year. Mid-year and year-end, I’d also be calling managers to submit their late performance management forms. First quarter? Meetings on increases and promotions. Summers, I’d have meetings about the company outing. Rainy season – perhaps there’d be inquiries on re-evaluating that policy on leaves and absences due to typhoon.

So give me a random date – and I can give a reasonable forecast of what I’d be doing.

You know, I’d bet a lot of people in corporate can give a similar, reasonable forecast.

Doesn’t that, you know… suck?

Certainty is overrated. Certainty is boring.

Don’t we hate predictable movies and TV shows? Isn’t uncertainty why we watch sports? We want to be thrilled by the battle of who comes out on top. The more evenly-matched the protagonists are – the more uncertain the outcome is – the better.

Being an entrepreneur, certainty is the first thing you throw out.

I was a ten-year corporate lifer before I leapt into startup life, so yes, having so much uncertainty was certainly scary. But over time, I have found that uncertainty is liberating.

Not knowing what I’ll be doing in 2 weeks is a gift. It’s a gift because it means I have control over what I will do in 2 weeks – and I know it will depend on what I’ll be thinking at that time.

It’s a gift because it also means that what I choose to do now has an effect on what will happen in 2 weeks. If I choose to put a lot of emphasis on sales today – that might mean that in 2 weeks I will be negotiating contracts. If I emphasize hiring today, then it increasingly means that I’ll be interviewing people in 2 weeks.

It’s a gift because it means I am quite equipped to pounce on opportunities should they arise. If in two weeks, one of the people I’ve been wooing to work with me suddenly wants to have a talk on the merits of leaving the corporate life – I can make an invite for coffee that very night.

Uncertainty means you have choices. Uncertainty is a gift. Learn to embrace it, to handle it with grace.

A Warning to the Dreamer: The World Will Make You Reconsider

Peter Cauton
This Is How The Status Quo Looks Like

Two friends mine are taking the leap.

One is a longtime banker. She is practical and very OC. She is married with one son, who is in his teens. She has been planning meticulously for a long while to take the leap and go into pre-school teaching, and ultimately, to owning a school. The past few years she’s been busy finishing her MA in Education. Late last year, she was finally going to submit her resignation.

Even before she got to talk to her superiors about leaving, she was suddenly offered a substantial raise and some other perks.

This led her to reconsider her decision.

My other friend has been in the FMCG business for a long time as well. She works as a brand manager for one of the bigger brand umbrellas in the country. She’s bright, smart, and always seems to do well in whatever company she goes to. She wanted out of the rat race though, to pursue her heart’s desires. So she gave her resignation, a number of months in advance even, just to be fair. How did the company respond? By giving her a substantial raise and assigning her to a team where one of her close friends was in.

This led her to reconsider her decision.

My banker friend had the will to push through with her resignation. She now teaches kids, to which she expounds “I’m so happy. This is something I would do for free.” You just know that her eventual school will be built by passion and love for the game. (Isn’t that a place you’d want to send your kids to?)

My second friend filed her resignation and is now counting the days down. I pray she doesn’t reconsider anymore.

When I took that leap a few years ago, my bank account (my “reserve”) was virtually wiped out by a new banking policy instituted the day before I left my day job.

This led me to reconsider my decision at the time.

Bottom line: if you are planning on taking that leap, the world will NOT make it easy on you. It will fight frantically to keep the status quo. It will either show you even more rewards the status quo brings, or more risk if you don’t choose it. And as the countdown ever draws closer, it will have aces up its sleeve.

This doesn’t help at all of course, because you are already conflicted on the inside as well.

What if I fail? What if this goes wrong? What will people think? Oh, a raise? Now?! So, hey, maybe I’m not supposed to be doing this after all…

The World will test your resolve. No one likes getting conquered, after all.

9 Startup Myths Part 2 of 3

Peter Cauton

(The following post is the second of a 3 part series. You can find part one over here)

4) Business Plans Are Important

Yup, it's for dummies alright.

What 4 years of college business teaching hammered in me was that I needed to create a business plan for my startup. I needed to put everything in writing and project my financials – on a short-term, medium term, and longterm basis. So during our first foray, we spent several days crafting an 80+ page business plan, crammed with a boatload of projections and analysis. We had a five-year sales forecast with assumptions on pricing, costs, and market. We had complete projected financial statements across those five years. It was a nice plan. It was something you could submit to a marketing class and get an A with.

It was also a complete waste of time.

The investors we gave it to never read it and instead asked us for a “simpler” 2-page summary. Moreover, after our initial effort to draft this plan, we ourselves never bothered to look it again.

Why? We really had no idea how people would react to our company. None. Our initial product, a fully customizable flexible benefits system, was a first in that 2005 market. Who knew how people would react? Our assumptions were guesses.

Remember this very important quote from renowned entrepreneur Steve Blank:

No plan survives the first contact with customers.

True enough, the moment we talked for the very first time with potential customers, we threw the initial plan (our 80 page masterpiece!)  out the window almost immediately. Almost all our assumptions were wrong. 2 weeks of work flushed down the toilet in seconds.

So instead of a crafting a long, static business plan, draft a short, flexible 2-page one. Use common sense to check if your numbers look alright. Take note of your assumptions.

Then, MOST IMPORTANTLY, immediately talk to potential customers and check out all your assumptions. Most of them will be wrong. Using what you learned, redraft your 2-pager. Rinse and repeat. Test and iterate till you get your model right.

5) Things Stabilize

Pao and I always thought, “OK, in time, we’d stabilize.”

Uhm, no.

What we’ve discovered instead is that every year is different. Vastly different. The moment we’d think that, okay, steady na tayo, let’s just stick with this, the market throws us a curveball and forces us to change things. Twice, we’ve decided to kill off certain services, only to have a huge company come and ask us for exactly those services. When it happened a second time, we even joked that the best way to make a business line profitable is by killing it off. Once, we were excited to bring out this new retention tool in the market. We made a big launch and started getting new clients. In a few months however, the recession came out of nowhere. Retention was the last thing on our clients’ minds, and one by one, our clients pulled out.

Bring it on!

Running a startup involves navigating your firm through a sea of constant change. So, while there’s always that huge problem which can sometimes threaten your very existence, thank God there are always even more opportunities to seize and take advantage of.

Yep, it isn’t for the faint of heart, but hey, you can bet it’s so much more exciting – and gratifying – than being a cog in the machine.

6) You need to pump money into traditional advertising

For years, I would always bemoan the fact that most of our clients came from word-of-mouth. I would always say, “imagine if we did active marketing instead of…nothing” And I would dream of big marketing campaigns – but couldn’t do it either because of a lack of time, a lack of budget, or both.

Eventually, we did direct marketing campaigns and sent an untold number of letters and email to potential customers. For all the time, money, and effort this necessitated, we got meager results – we got very few clients through this route. I then realized when I was in corporate I would just shred unopened sales letters, and delete sales emails before I read them. I hated spam.

In the meantime however, the “nothing” marketing strategy was churning out client after client. There would be phone calls from strangers referred by people we worked with, even people whom we didn’t work with, but with whom we shared an interaction or two with. Our biggest clients are almost all from referrals.

It turns out, it wasn’t “nothing” at all. The good work we poured in with our current clients – the service levels, the innovation, how we made it easy for people to relate and work with us – created ripples we never realized were spreading. In 2011, we spent I think the least amount on traditional marketing as we have had in the last 4 years, yet, this year is shaping up to be our best revenue year ever, by far. This has really made me reevaluate what I think I know about marketing. The rules are changing.

Last three myths next post!

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9 Startup Myths Part 1 of 3

Peter Cauton

For the next three days, I’ll be talking about 3 assumptions I discovered were completely wrong as I went through the startup process:

1) You need a ton of money to start

Nope, you don't need it.

Back in 2005, we were rejected by 2-3 investors before we said, “The heck with it, let’s just pool our own money and start.” My initial cash-out as an owner was P30,000.00. Far cry from the hundreds of thousands we thought we needed. It turns out it was enough.

Nowadays, you could start firms with even less, as the cost barriers continue to fall.

Last Thursday, I had a productive brainstorming session with an old friend of mine who was in the printing/publishing business. I suggested, “Why don’t you try building a 2.0 version of your current business on the net?” He told me he thought it would take around P2-3 million to do a web startup.

I told him I could connect him to tech people so he can knock zeroes out of his initial investment assumption.

Web startups are the most cost-effective startup type of them all. If you can program, you can build an e-commerce website for less than a pittance and start a business. You don’t know how to program? Sell your startup idea to someone who does and offer her substantial equity. She can instead work on the website for the equity instead of you paying a salary or a fee.

A great entrepreneur will ALWAYS find a way to get things done without a huge initial investment.

2) You will be your own boss

This was one of the first myths I discovered just wasn’t true.

When Pao and I started, we immediately made business cards which said “CEO” and “COO.” Yeah, we just loved the sound of that!

The moment we worked with clients though, it became very apparent who the real boss was. Needing to prove ourselves and earn trust in the market, we needed to over-deliver every time with every new client. That usually meant being under the beck and call of each client who chose to work with us. They were the real bosses and dictated everything.

Oh, you want this 4 month project crammed into a month?

Sure, no problem!

Oh, so you want me to do this 20-slide presentation which isn’t in the contract we signed? For free?

Sure, no problem!

Even the titles themselves worked against us. Once, Pao was in a presentation with a bank executive,  to whom he gave his “COO” biz card. Upon looking at the card, the client smiled and replied, “Oh, COO ka pala eh, ibaba mo naman young presyo.”

From then on, we just changed our titles to “Consultant.”

3) My corporate life would prepare me for startup life

When we were starting, I thought my 10-year corporate experience would help me run things in STORM.

Wrong.

There is nothing in my corporate career that could have prepared me for life in a startup.

Here’s the big difference: in corporations, unless you are the CEO, you think only as far as your function is concerned.

Going up the corporate ladder in human resources, I only thought as far as HR was concerned. Yes, I was trained to be a “strategic business partner” and know the business better – but I never made decisions for anything beyond my departmental role, and I would always look at things through the lens of my function.

In a startup, you learn veryveryvery quickly how and why every decision affects every other business function. Since resources are extra-scarce in new startups, you are forced to make (quick) decisions considering ALL the affected functions. Nothing in isolation.

Let’s say you want to implement a particular marketing plan. You then make an analysis that you would need someone full-time on it for 3 months. You could do it yourself, but then who would do current consulting work you are doing for a current client? Let’s say you consider hiring a person instead, what would that person do after the 3 months are up? What sort of person will you need? Do you have enough money to afford her? Who would train her? What happens if she’s successful and lands projects within the first month? Who would do the account management for these new clients?

Corporations train us to do work on a per-department basis. Sure, you have your management trainee programs – but each of these trainees is ultimately assigned to a home department after their tour of duty.

Startup work demands immediate holistic, systemic thinking. A corporation trains us in a singular function, because this is the most efficient way to structure things (like an assembly line).

This is why I’ve always said to friends that in a single year in a startup, I learned more about business than a decade in corporate.

Three more myths busted in part 2!

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What’s The First Rule of Startups? There Are No Rules!

Peter Cauton

Early this year at STORM, we began building a competency framework for use in the company.  This is one of the tools large firms use to align everything towards their vision. The logic was, as we got bigger, we would need these structures to guide us. Building a framework like this is massive work, and our HR guy, Dino, was assigned to work on quarterbacking the project.

Around two months ago, we were laying the finishing touches on the framework. We had our core competencies (behaviors everyone in the company should follow), and were finishing with the functional (behaviors everyone in a specific function/department should follow) ones.

Then, I recalled the “big” employee handbook project we did the previous year – something NO ONE EVER BOTHERED TO OPEN. I then thought “What the hell are we doing?!”

So I quickly called everyone to our conference room to say I wanted the project scrapped ASAP. Bewildered, Dino asked me why. I apologized and told him that I knew he was working hard on it (I probably assigned it to him in the first place), but that we have to scratch it out as soon as we can.

It was a distraction.

We’re fifteen freaking people, I don’t need a complicated list of behavioral indicators to ensure everyone is “aligned.” I know exactly what each person is doing.  If something were amiss, I don’t need a complicated report to give me the details. I’d rather look at you straight in the eye and talk about it openly and transparently.

So we scrapped it. I made sure any form of “job description” was also scrapped as well.

I hate job descriptions.

The lesser the rules there are in a startup, the better.  

Don’t concentrate on creating rules. Concentrate on creating culture. It is culture that should drive your startup. And I don’t mean the culture that you supposedly create from drafting those useless “Vision-Mission” statements that no one really cares about (Guy Kawasaki talks about this in the video below). Culture will emanate from you – how you act, what you say, what you stand for. If you are always late in the office, then that is the culture you will create. If you continually ask people opinions on what they think and encourage risk, then that is the culture you will create. If you hold people accountable – then that is the culture you create.

Rules in a startup are oftentimes unnecessary, and all most them do is constrict and distract. The time you spend crafting that 40-page employee policy manual is time you could’ve spent talking and learning from your clients. And guess what, NO ONE WILL READ your manual 40-page masterpiece anyway.

So what do you do? Aim to create as less rules / policies as possible. There will be policies  you should hang on to  – mostly policies on pay and benefits. But the rest? Scrap ’em.

Manage each person in your team personally and uniquely instead. Talk to them. Connect. Lead.

So if your question is,”what about HR policy in my new firm?” Take it from someone who used to make a living crafting those rules. Forget about taking care of HR policy, just take care of your people.

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Buhay Bootstrap (plus, free startup glossary!)

Peter Cauton

The year is 2006. Pao and I were about 15-20 pounds lighter. Pao was still enjoying his mullet haircut, while I was still enjoying some hair.We wanted to put up a flexible benefits solutions firm, capitalizing on my own early-market experience with flexible benefits.

None of us were really “entrepreneurs” when we started. I was an HR guy and Pao was a programmer. We tried pitching to investors for startup capital, but I think this failed for two reasons: a) the mammoth 100+ page business plan (AKA complete waste of time) we crafted, and b) at that time, no one understood what our idea was and could become. So we ended up bootstrapping.

Funding. There are two general ways to fund a firm: a) raising capital from investors, or b) bootstrapping. Bootstrapping basically means getting no outside funds. The founders themselves would put up the initial capital (another common ploy would be credit cards, although nowadays there seem to be no end to spammed loan offers), minimize costs by all means necessary, survive, and wait for the business to break even and eventually, be profitable. What you give up when you get funding from investors is equity – and thereby control. When you bootstrap though, and it works – you retain control.

We put in around 90K all in all and got started. Pao actually took the leap much earlier than I did. In a crucial move, he went full-time in STORM immediately. I worked with him part-time. To minimize costs, the company began operating in the living room of my 1-bedroom condo. The bedroom effectively became my house. (When I stepped out of the door – boom, I was at work!) We didn’t pay for any office furniture – everything was something someone had donated, so uhm … it wasn’t exactly a breathtaking sight. Our monthly costs were Pao’s salary (near minimum), electricity, and the cheapest internet provider at that time – Destiny (don’t get me started). We felt like we could manage the burn and survive until we got a client or two.

Burn rate is a synonymous term for negative cash flow. It is a measure for how fast a company will use up its initial shareholder capital. If shareholder capital is exhausted, the company will either have to start making a profit, find additional funding, or close down. (wikipedia)

Our plan: to make money from flexible benefits consulting first, and then eventually use the funds to develop an online flexible benefits system to market. Game.

Excited, we planned out a half-day seminar on flexible benefits in Discovery Suites.  Then we started calling people to come. The event was jam-packed, filled with a lot of large firms. Peso signs started broadcasting out of our eyes and stuff. We we’re Kings of the World!

Until we talked to them.

None of them wanted merely consulting. They wanted the online system.

Hokay. This was a significant problem. We had wanted a kick-ass online system. We had previously developed the specs and we designed the data flow very carefully, capturing the various nuances of a comprehensive flexible benefits program. The resulting design was a gargantuan task which would take months to develop for a team. On pao’s salary alone we had 2-3 months of burn left. So what to do?

This led to our first pivot.

Pivot: this is when, due to new insights gathered from the market a firm does a quick turn, a quick strategy change, WITHOUT changing the overall vision of the firm

We needed small, quick wins to allows to raise funds to hire one more programmer to help Pao finish our system as fast as possible. Prior to this time, I had conducted an organizational climate survey for a friend’s organization – and thought that might be a cool service. However, there were a large number of competitors in the business, so we thought an online web survey tool (there wasn’t a popular one at that time) could make us unique in this market.

Amazingly, Pao did the tool in a month, we dubbed it WebSurv. (we still use it now for some projects) Websurv helped STORM land its first few projects – analyze/report projects for some medium-sized firms.

We eventually got to hire our first employee, Angela (who, during her initial interview, took fifteen minutes waiting just outside the door of my residential condo unit before finally mustering the courage to knock). This set the stage for everything. We finished the flexible benefits system before the year ended, managed to land two major flexible benefits clients as 2007 started, and the rest is company history.

In six years, STORM has manage to become a bona-fide player in the local HR technology market, with its sights set abroad.

Some items to takeaway:

1) No, it’s not as glamorous as you might think. (not at all!) It takes a whole lot of sacrifice and humility.

2) It really helps to have a partner with you to weather the storms (pun intended).

3) It’s mighty tough to get investor money (a bit easier nowadays though). Bootstrapping is entirely possible though and has a lot of upside. Check this out. I’m a big believer.

4)  Your plan has to be really be very very flexible to changes.

5) It can take a long time – so patience and perseverance are paramount.