Adii Pienaar

WooThemes has become a Mothership. A team of almost 20, more than 150 000 users and revenues / profits that most business owners would approve of. This is fantastic of course until the engine breaks, because I'm not necessarily able to fix the engine and neither are my co-founders.

See - as WooThemes has grown in the last 4 years, we've become this specialized unit and well-oiled machine. We've built out what started as a little (cyber)spaceship into an ominious mothership. We shaped & moulded the mothership according to our own strategic notions, market forces and popular demands from our users. The mothership is unrecognizable from the spaceship it was when we first launched it into space in 2007.

How Things Change

When my co-founders & I founded WooThemes, it was representative of our personalities, ambitions, personal cash reserves and of course: our skills.

4 years later, WooThemes only represents our personalities and ambitions (individual & combined). Our personal cash reserves aren't necessary anymore (as the business has its own now), but the important thing is that the WooTeam has grown to such an extent that the collective skills now eclipses our own as co-founders.

I remember and can identify 4 stages in this regard on our journey:

• Founding WooThemes: As co-founders, we were all hands-on-deck and our DIY approach meant that we did everything ourselves.
• Hiring our first team members: When we added the first members to our time, we did so to add capacity. Their skills mirrored our own, which meant that if they weren't around, one of the co-founders could still handle things.
• The second wave of hires: Similarly to our first hires, these were focused on extending our capacity as well. But we were starting to add individuals that could offer us a little bit extra ito their unique skills. Still though, 90% of what was going on in Mothership could be handled by the co-founders.
• Today: We're a specialized unit; internally & externally. Our products are more advanced and the glue that holds it all together takes some skilled maintenance. As co-founders, we can't do everything ourselves anymore and have to rely on individual team members to fix the engine if it's broken.

Managing Chaos When You're Out of Your Depth

Fred Wilson has been publishing a fantastic, series of posts on ["The Management Team"](When You Can't Fix The Mothership's Engine Anymore) in the last couple of weeks. This has caused me to spend more time thinking about what our management team looks like and how we've applied that within the context of not having all the skills to directly address every part of our business anymore.

These are the things that we've focused on:

• Surround yourself with great people. Hire only the best / most promising individuals and never compromise on that mantra.
• Trust in your team's individual & combined skills. Empower them to apply those skills whether you are around or not.
• Create a culture that fosters initiative, failure and learning. Rather have a team member take initiative (based on the trust you put in them), then sit around waiting for you to give the go-ahead to fix the server that's been down for 6 hours already. If they fuck up, move on and make sure that they (and you) learn from the experience.
• Create an environment where team members want to do their best. Whether that means buying them the best tech gadgets or painting the wall another shade of blue, just do it. People do more when they feel they belong.
• Give individuals ownership, meaning they get all the praise & criticism for the project / task that they've taken ownership for. People are bound to work harder for themselves than they would for any boss.

Lastly… As business owner, learn to sit back, relax and realize that even if you wanted to fix the engine yourself, you either don't have the time or the skills. The only way for you to do so, is support the team that you hired to look after the engine in the first place. :)

I guess this is likely the most obvious thing I can say about bootstrapping or running a lean startup: it seems that the obvious thing to do is to cut away all of the unnecessary expenses and only spend money on things that are needed in furthering the business.

Yet I don't think the principle is that clear. It makes sense in theory, but on the ground there's a whole different context to consider. I'll explain with the story of what is now the WooThemes office.

WooHQ: Then & Now

As you know by know, I conceptualized & released the product that lead to the creation of WooThemes, on my own and from my bedroom.

In the months thereafter, whilst my co-founders & I were building WooThemes V1, I decided that I had, had enough of working from home and I wanted to get a little office. The initial idea was to create some kind of co-working space (in hindsight, I was being too progressive & idealistic, as these are still not as popular in SA as they are abroad), but soon turned into Radiiate's (R.I.P) offices (which housed myself, FRESH01co & Foxinni). (This eventually became the WooThemes office when FRESH01 & Foxinni moved to Woo a couple of months later.)

We had humble beginnings: loads of empty space, a whole office we didn't use and nothing fancy otherwise. This was just the place - away from home - that we could use to get some work done.

But we also had a little bit more… We had a few awesome posters on the walls (cheap decor), we had a good coffee machine and had a Wii for some fun.

If I argued that we should've avoided all of the seemingly unnecessary expenses, I could've probably argued that: 1) we didn't actually need an office (we could work remotely / from home if we wanted); or 2) that we definitely didn't need decor, a coffee machine (can you say instant coffee?) and a Wii (wtf?).

Balance, Pride & Progression

For me the balance of my decisions (ito the office) is clear today. Back then I got the extra stuff, because I was sucked in with the romanticism attached to being a successful startup. I wanted to start at the same place that a 1- or 2-year-old startup was at. Luckily for me, I had a bit of spare cash around (the combo of Woo's growth at the time and still doing loads of consulting work on Radiiate), so I could afford (ito the cash) to invest those things in the office and managed to not sink the business due to semi-reckless spending.

Today I realize that there was pride involved: I wanted to go to an office that I could be proud about and a place where I could actually get some work done. If the office was a complete shithole, it would've been better to just stay home and work remotely. An office is generally the last thing an early-stage startup should spend money on, but when you reach the point where you do need office space, you need to find that balance between what's necessary and what isn't. In hindsight it feels like I would've undone the good spending (conservative lease agreement) if I didn't augment it with a few extra's.

Finding that balance doesn't change the bootstrapping ethos either. We spent 4 years in that office until we finally outgrew it; each year, we'd make small, incremental changes / additions to the office to make it better. And it was only after that 4 year lease period that when we moved office that we could afford to splash a little on something awesome.

I don't think there is a black-on-white, right & wrong formula in terms of what you should & shouldn't spend money on whilst bootstrapping. Every expense just needs to serve its purpose and accelerate you meeting your goals.

I just read Fred Wilson's new post on Building The Ecosystem, which he explains as one of the additional things that he & his partners at Union Square Ventures (USV) take on.

Obviously the non-financial reinvestment in the startup community & ecosystem, means they're making a positive contribution that should see more / better startups coming to the fore and when they need funding, USV have already "bought" the good karma by giving back to the community. At that point (if USV decides to make an investment), they know that they helped shaped the startup (via the community) and if they exit from the investment, they will have a financial gain.

For me, this represents the perfect blend of altruism & profitability; two motivations that aren't necessarily exclusive and can work together. If your contribution to the community / ecosystem is sincere, then there's no reason why you shouldn't also potentially reap the rewards of that investment down the line. In USV's case, they are also helping a bunch of other startups that are signed up by other investors, who thus cashes in USV's altruism.

This balance resonates so much with me and is one of the reasons why I've decided to create The Rockstar Business Workshops. I love teaching and that's my top reason for setting up these workshops. But I also want to help nurture local entrepreneurs. And if that means that I may (or may not) be part of their future projects (as an advisor / mentor / investor / co-founder), then that is just a bonus.

This is the second post in my "Bootstrap Mondays" series. Read last week's post, Revenues & Momentum is Everything, first.

Bootstrapping obviously works best when you don't have loads of expenses & overheads burdening you down. One of these expenses that seems unavoidable in a startup, is marketing-related expenditure.

Regardless of what you classify under marketing, most of your options (PPC, Banner Advertising, PR etc.) will cost you something. The free alternatives are obviously viable, but they rely on significant word of mouth / viral traction, which in turn is only achieved if a couple of stars align for you: you have an amazing product, the way you first pitch that is perfect and your timing is spot-on. Whilst I wouldn't necessarily say that you only have one shot at this, it does sometimes feel like that; fuck it up and you might as just well move onto the next idea / project.

I did this a little bit differently when I launched the first product that eventually became WooThemes.

Reputation is free

Unlike these days, I used to have a thriving blog back in the day (probably due to being a relatively early adopter and the fact that everyone & their aunt has a blog nowadays), I blogged a lot and had a prominent voice within the WordPress community. I spent a lot of time making sure that I was being heard (sometimes controversially so) and I shaped my personal reputation & profile around that voice.

For better or worse, this culminated in the "Adii - WordPress Rockstar" moniker that I labeled on top of myself and people knew me as a result. (As I said: for better or worse… In hindsight I know that even though I probably seemed arrogant to many people, at least I had their attention…)

This meant that I had an audience; one that I had cultivated because of my reputation and the work that I put into building an online profile. I used my blog to do all of the marketing for my first ever product. I didn't have to pay $1 to get my message to my target audience; they were already there.

This is how you do it now

Sounds a bit like pipe dreams? Maybe… I'm the first to admit that it is hard to have a thriving blog these days and have seen a decrease in my own blog's traction since those earlier days. But I think there are other ways to build your reputation these days:

• Make friends & be easy to find. Yes, this means you'll have to interupt work every now & again to be active on Twitter for example, but that is where you connect with like-minded people that could be part of your eventual target market. Become known for something, so that people looking for someone like yourself are easily able to find you.
• Augment your online profile. If you're a designer, you need to be on Dribbble. Similarly, if you're a developer without a GitHub profile, then you're doing it wrong. Share your work. Connect with others through that work.
• Have an opinion. The person in the corner of the room that keeps quiet the whole time doesn't get any attention. Make yourself more visible and heard by commenting on blogs or across social networks. Be unique when shaping your online voice & share your opinion with humility (something I only learnt later on).
• Get noticed. The trickiest bit is to get attention the first time; thereafter it becomes easier for subsequent attempts. Get onto the homepage of Hacker News by writing a great blog post or sharing something cool you've built.

Your Strategy Simplified

Building your reputation & online profile is free. This is also the perfect foundation to launch a new business.

By doing all of this, you don't necessarily get closer to your target audience, but you do come onto the radar of influential people that will help you spread the word when you eventually launch your product / service.

For the next couple of weeks, Mondays will be "Bootstrap Mondays" on the blog & I'll try to share some insight into how we've bootstrapped WooThemes to the size & significance it is today.

Way back in 2007 (2 November 2007 to be exact) when I first released the original product that lead to me meeting my co-founders and us launching WooThemes, I wasn't thinking about bootstrapping nor any type of VC investment. Not that I hadn't come across either of these terms / activities before; it was just a case that neither was very relevant: I was generating revenue from Day 1.

Years later, having established a 17-person, strong team, 130 000+ customers and a multi-million dollar revenue business, I look back fondly on how we managed to bootstrap our business and grow it organically to the significance it is today.

The irony is however that we never made a conscious decision to bootstrap the business, yet this probably ranks as one of our finest decisions to date. Our ignorance in this regard is probably somewhat down to our relative inexperience in terms of running a startup back then, but I'd like to think it was mostly down to one thing: we had revenues (and thus profits) immediately after launch, which meant we didn't need to figure out a way in which we would fund the growth of the business.

Revenue: Impossible

I hear you reading the above and thinking "Well… That's all fine & dandy, but being revenue-positive from day one isn't possible for all businesses or business models." And I agree with that.

I was able to release the first product based purely on my own skills. I also managed to launch it via my own blog, where I'd built up quite an audience (many of whom would be the target audience for my first product), which meant I had no marketing costs.

This left a little bit of hosting costs and the opportunity cost of my own time & energy. The latter theoretically being "free" or at least it didn't require a cash outflow.

The result was that once I had enough revenues to pay for hosting, the residue had two destinations: 1) re-investment into the business; or 2) my pockets.

Sooner is better

Not every new startup will be able to switch revenue on from day one, but there's one reason you should aim to do so sooner, rather than later: revenue generates momentum.

Ask any startup founder what it is like to start a new business and they'll likely you that it's a tough, rollercoaster-like journey.

This phenomenon will always be present in startup-life, but I've found that having momentum is key in negotiating the highs & lows that you will inevitably face. Momentum means you get through the low times much quicker and you can leverage it to go even higher on your highs.

Momentum runs on validation (knowing that your startup is doing the right thing) and excitement (knowing that you are making progress towards your vision). Early revenues creates both of those.