First of all, let me own the responsibility of not giving a December update. It was part of the initial commitment set in November but in the process of finishing that between the daily work and the retrospective of the month, quarter and year I never ended up finishing it. As compensation, I promise there will be one in February :)
In 2016 we had set three-year goals:
500K€ of revenue - our preliminary results indicate we had 499K€ in sales last year, which even if below the goal, is bloody close. Our consulting business has been working well and we were able to grow quite a bit from the 305K€ of the previous year, not only in the volume of consulting services but most importantly in their value.
6 projects in beta - we launched 3 in 2016, even though we have 2 not that far off from launching.
Product/Market fit of a product - we are still not comfortable in claiming product/market fit in any of our products. In both cases, we had some validation in the sense of people paying to use our products, but there isn’t a sample big enough that gives us confidence we can replicate the business model successfully.
Objectively, we failed all our three goals for last year, even if on the revenue metric it was by an inch. In a more qualitative view, we made a ton of progress in the right direction so it was better than you can understand by those three failed goals. We have learned a lot and have better processes and habits of improvement that will certainly have an impact on the long-run.
In terms of consulting, we got crazy close to our goal and considering how hard it is to predict and plan such things, we should be happy even if not satisfied with this result.
We are clearly not where we wanted to be in terms of shipping our own projects and taking our products into the market, though. This is quite important because even if financially things were good, we always had the ambition of having impact through our products. The team made quite an effort to improve in this area, but we are still not progressing as much as we wanted, in order to achieve our long-term vision: an IoT startup studio, making an impact by connecting the physical and digital worlds.
As usual, our results and lack thereof also are useful feedback of what we improve on this next cycle to keep growing (in company maturity and value, not necessarily headcount). Here are the overarching principles we expect to guide us into the next level:
Yearly goals are not effective in driving focus, as we naturally tend to focus on the nearer term, and the context is actually prone to change in between. Even if we can change goals midway, on that point there’s still too much to discuss on changing goals and strategy or keep going. So they are not very useful in making us think.
Monthly and Quarterly goals have proven to be more effective as a force function for improvement. Having goals that span more than a quarter also gives a bit too much freedom on how to do it, while constraints are an important factor for focus. With what we know now and more focused, any single goal could have been tackled in a quarter if we had focused on that. Yearly revenue amount is the exception.
In a more general pattern, failing some goals indicates that we had more scope working in parallel than capacity. As we don’t intend to increase a lot in terms of capacity, we need to narrow scope. We should keep applying this pattern to all things that it fits. So we should instead have fewer monthly and quarterly goals and really focus on those, so that we level up > 4 times/year on any front.
#####More product focus
On 2016 we matured a lot in our effort of developing our own products (Qold & Unplugg), but we didn’t yet get where we wanted. As with good healthy growth, this came at a cost of our comfort and previous beliefs, which means at least we are on the right path and will be more mature and effective in the future.
An important pattern here is the effectiveness of the team, process and discussion grew with their understanding of product instead of tech + sales + other isolated pieces as a whole. This is a good evidence on the value of learning outside your standard role. The team evolves not through the compromises between each discipline, but instead, each team member makes sensible and coherent proposals considering business, technology and user experience from the start. That’s the fastest and most effective way to build a great product.
In some regard, this could be seen as more people learning about Product Management. Albeit that’s true in its essence, the vision is more about increasing the product management wisdom of each team’s member than having a stronger Product Manager at the head of each product. Even if in any project there is some need of leadership, we want to keep the structure as little as viable and ensure all leaders keep getting their hands dirty in some way.
We also want to increase the time we spend on products a bit. It’s clear that a bigger team on a product might actually cause noise, so the path here is to more strictly define a full-time, core team, that leverages the wider Whitesmith team on an ad-hoc basis as general Investment Time.
To avoid confusing incentives, we should also start considering all our products as part of Investment Time (which wasn’t the case previously), and avoid having any long-term goals of launching projects (like slackmarq and soundy). This way the primary focus of Investment time is to validate, scale and spin-off those products into startups.
As the team is relatively big, there still will be plenty of Investment Time to work on other projects like we have done on soundy or slackmarq, but we want to make it clearer that validation of our products is job #1 and all-hands on deck as necessary. So each Friday, atomic and self-contained product tasks should take precedence, and only after good progress on those is ensured we should review what else is a good investment of our time.
This also means that product development cycles and goals should evolve gradually their focus to weekly goals and retrospective while ensuring that process is transparent for everyone in the company to know how they can help.
To make this viable, the product team should be fully blocked to product work for the period set to achieve next product validation checkpoint.
We also want to align our consulting services more with this, by giving priority to building multiple layers of new products while discussing new business opportunities.
#####More craftsmanship through less volume & smaller scope
Over the next cycle, we want to invest more time on leveling up our craftsmanship in a few areas. This is important both for personal growth of our team, but also for the company to keep up with all the things changing. It’s not so much that we feel stuck on tech stone-age, but instead, we aren’t happy with our growth rate in this matter, so we want to improve that.
To make this work we want to increase the feedback loop between team members on their respective craft and also reduce the scope and goals on non-critical matters to free up time, as that is sometimes the enemy of improving/better work.
The natural risk is that we use this time to overengineer/overdesign/over plan things, but the most efficient and effective way is to do less and simpler things, better.
It’s also important to avoid the ‘this time I’ll do it right’ mindset. As we take pride in our craft and enjoy tinkering with it, it’s quite normal wanting to take a new endeavor into perfection. However, perfection has a promiscuous and dysfunctional relationship with improvement. Perfectionism is a good driving function to motivate us to improve, but we need to know when to turn it off. Instead, let’s just ensure any new piece is slightly better than the last one while ignoring the perfectionism, and let the compounding factor take us to craftsmanship through practice.
#####Less overhead through more focused teams & leaner overall process
Our process and management approach has been improving incrementally for a while, mostly with good results. Many of the things we do were defined through retrospectives where we understood the root cause of a given problem and design systems to prevent it again.
Even if we are relatively effective today, there are quite a few symptoms of inefficiency. Related to that, in times with an unusual workload, there are a few things which start to break down. That’s fairly normal in any system, but also a good opportunity to understand where are the bottlenecks of our process and system so we can fix those.
Our current single point of failure, if you will, seems to be the meta team, which basically handles all the support & management activities of the company. As meta, we are the nexus of information and coordination of most things, and take care of everything that’s necessary, from support activities to the less technical side of things in the company. We also have quite loose roles/scopes of work inside meta, leading to a lot of context switching.
We could add more people to the meta team, but that would increase capacity, not efficiency, and it feels like a step in the wrong direction at this point. It might lead to a more hierarchical company with heavier processes to keep everything and everyone in the loop.
A better solution seems to be to reduce the scope of meta and move part of it closer to the respective teams/clients, and have a stronger separation between meta, investment time and consulting. By reducing the scope of meta activities, we can simplify the process there and save time, while giving more ownership and responsibility to the rest of the team.
To make this work, we need to think of Whitesmith as two tribes and two smaller teams, each one managed independently.
- Consulting: which provides services to our clients and makes our company sustainable;
- Investment Time: which is where we validate our own products, improve our craft and build tools for ourselves;
- Meta: which has only the functions shared by Consulting and Investment Time like administration/accounting of the company;
- Marketing: create more awareness about Whitesmith and our products.
Having the leadership of both consulting and investment time inside meta provided some benefits in terms of coordination and buffer in times of need, but also noise and overhead as most topics under meta are not important for all metas. To ensure coordination and support exist as necessary, all teams should share on a weekly basis key metrics about their specific mission, which will make info more transparent to everyone on the company but also allow to quickly address any concerning pattern.
#####Direct growth from size to value
Since early in our history, there was value and opportunity of growing the team a bit, so we had enough people and financial resources to build our own products in a focused manner. We are quite aware that’s very hard to transit from a services company to build its own products, requiring capital and a focused team.
By the end of 2016, we are quite lucky in having a sustainable business that pays our bills and still allows for a few members working mostly on our products. As our reference, we believe that a team of about three people is right to validate a new product in a focused manner, and over the last quarter, we were not far to have two teams of those. We still want to increase focus to make all this more consistent as explained above, but as we achieve this nice point we want to slow down the growth spurt.
In the future, we still expect to grow revenue quite a bit, as we know we have that potential and eventually hire new people once in a while if they are a really great match. Having said that, we will focus more now on investing our funds and energy into our products and existing team. On the consulting side, we expect to keep the volume stable or perhaps with a small growth, while increasing the quality of our services and focusing more on helping our clients build full products.
Previously we spoke already about yearly revenue goal, where we didn’t reach the 500k€ goal by 1k€. Nonetheless, we can say the 4th quarter was pretty good - we achieved all the goals that we had defined:
- Closed 3/3 new projects
- All new projects with higher rates
- Revenue of 186k€/150k€
Now it’s time to think about the first quarter of 2017!
As we mentioned above, we have as a goal for this quarter to improve our craftsmanship. And this can be done not only by working on our products but also by working with our consulting clients.
More specifically, we believe we should continuously migrate from the dev shop type of services we have been doing - where we are responsible for just a few layers of the product, - and aim to become responsible for the full products instead. This is in line with our strategy of being a product studio that we’ve been working towards since the beginning.
For this quarter, the step we want to make in that direction is to guarantee that every new project we acquire is a Multi-layer Product project - where we are responsible for at least 2 layers of the product (for example, design and backend dev, or mobile dev and marketing, etc). We aim to close 2 new projects of these.
The other goals for this quarter are:
- Close 1 Product Design Sprint;
- Achieve a revenue of 150k€.
We also want to improve the communication and to increase transparency with our Consultancy tribe. For that to happen, we will start sharing some more in-depth metrics and highlights with everyone on the team on a weekly basis.
January wise, we aim to close 1 new Multi-Layer Product project and guarantee a revenue of 50K€ for the total consulting business.
Regarding content, this was not the best month for us, we published two blog posts instead of four. These two blog posts were about our own product, Qold, the first one described the latest changes that we made and the second one explained the process to find the price of that product.
December was also the month to reveal the main conclusions about our Internal Survey that helps to know which areas we need to improve in the next year. Each year, we asked our team to give their opinion about different areas of the company: mission & purpose, welcome process, work, communication & feedback, opportunities for growth, compensation, and respect. This year we had 23 answers and we will focus on improving our feedback loop, investing more time on leveling up our craftsmanship in a few areas, simplifying the process and giving more ownership and responsibility to the rest of the team, as detailed in the first part of the post.
New year, new challenges! We have as long term goal to create more awareness about Whitesmith and our products and to improve our inbound marketing. During 2017 we will try new things in terms of content, social media, and events in order to reach our public more easily.
Our goals for the quarter are:
- Close 1 project via inbound marketing;
- Write 2 guest blog posts for another blog about IoT/product or web development;
- Have 2 guests writers for our blog;
- Write 12 blog posts :muscle:;
- Publish 3 slideshares.
This concludes the notes about the company, consulting work and marketing for this month. But we still haven’t shared what we have been up to in terms of our products and Investment Time, don’t miss the next post!