Week 44: Ten things we never saw coming
Almost a year into this “be your own boss” adventure we take a look at the things we wish somebody had told us earlier. 😅
Welcome! I am Harry, one of the founders of digital branding and product development studio diesdas.digital. Each week we reflect on our progress and share what we learned — and this time, the 44th week in the life of our company, is no different: Let’s examine the things we had to learn the hard way. For once, let’s write a real Medium post, with lots of drastic, pretentious claims and black/white recommendations! It’s gonna be fun! Shall we? 👀
By pure coincidence we spent a couple of evenings this week socializing (🍻) with different people who are planning to found their own studios/startups. These conversations got me thinking about all the hard decisions we had to make in the beginning, with barely any knowledge and the learnings from these 11 months of running a business. Judging things in hindsight is always easy, so it might be important to point out that we have absolutely no ragrets, but there are definitely decisions we could’ve been smarter about. Maybe these insights help somebody else in a similar situation — take these with a grain of salt though, these are our experiences, observations and decisions. Yours will probably differ. 😇
If reading is not your thing, but for some reason you still made it this far … a few of these learnings are also to be found in the talk I recently gave at up.front.ug, which was just posted online for your viewing pleasure. 👇
Without further ado, let’s kick off the list with number one …
1. Take your time. Trust your gut feeling.
Starting your own business is a decision with far-reaching consequences for your professional as well as personal life. Take your time to consider the implications and listen to your gut feeling whether you’re ready to take this step. I am convinced that you can’t rush or force a decision of this magnitude: It’s okay to take more time to prepare. It’s also okay to ask people for help who have done it before.
For years I had the lingering feeling that at some point I’d found a studio, but I also knew the time hadn’t come yet. Then, sometime in 2015, I felt ready and we got the ball rolling. This was not a rational choice — good things take time to ripen. And then you wake up one day, and with overwhelming clarity you simply know that it’s now or never. 💡
2. You gotta make money. Duh.
At times it feels like founding your own company has become some kind of a status symbol in this industry. That’s idiotic. Only take this step if you have a solid idea and a business model that goes with it. If you don’t have investors backing you, then you better make money quickly. Starting a self-sustaining company is hard, so by all means do what you’re good at and do what brings in money. Taking risks is for later. Pursuing crazy ideas is for later. Investing time in side projects is for later. There’s nothing wrong with playing it safe at first.
In our case our business model is simple: We sell our strategy + design + coding skills, as a package, to clients who need guidance or support when it comes to their digital endeavors (primarily branding, websites and apps). Sure, we’d also like to build games, experiment with VR, create our own products … and we will! But the more important, immediate consideration is that we’re profitable with the skills that we already possess — then, but only then, we can invest in new areas of expertise or dive into side projects. Be cautious, but not afraid. Be curious and open-minded, but realistic in what can be achieved.
3. Understand your finances and the legal side of things.
There are a handful of different company types you can found (e.g. in Germany: GbR, UG, GmbH, GmbH & Co. KG, …) and your choice has massive implications regarding liability and taxes. Learn about this stuff, although it seems dull and unexciting. Understand what taxes you need to pay by the end of year, so you can use your revenue wisely. Be aware of the legal aspects of owning a company. Good lawyers and tax accountants are expensive, but it’s money well spent.
It took us weeks with our lawyer to draft our company contract, project contracts, freelancer contract, employment contract, … sure, you can use sample contracts for everything and save the money short-term, but you cannot save yourself the time to dig into this stuff. And doing it with a professional is much more efficient than googling everything yourself and reading obscure forum threads from 2009 that contain out-of-date information. Same goes for everything regarding your finances. Investing in a lawyer and a tax accountant helps you sleep at night. In a way they know your company better than you do and become valuable partners over time.
4. Your required skill set is not what you think it is.
So, you’re a good designer or developer? Cool, that’s great. Here’s the extended list of skills you’ll need: Project + time management, accounting, leadership, networking, discipline, effective communication, economics, business planning and, above all, empathy. You’ll be designing or coding maybe 50% of the time, the other half of your day is spread across all the things mentioned above.
5. Every connection you ever made suddenly matters. Networking isn’t fun, but vital.
It’s surreal how many old connections suddenly became important again when we started out in January. People we worked with years ago called out of the blue to work with us. People I met at meet-ups showed up again to have coffee. You get the idea, the point being: hone your network early and make yourself visible, planting seeds for later success. Be nice to people, as you always meet twice. Sounds cliché, but it’s so, so true.
6. Everything takes much longer than you expect.
It takes ages until a project contract is signed and it takes ages until people pay your bills. It also takes ages to make decisions within a group of people. Sometimes that’s annoying, but getting everyone on board regarding important decisions just takes time. Don’t be ignorant and dismiss these discussions as “political”, try to see other perspectives instead, understanding the whole situation and not only your point of view.
7. Everything is much more expensive than you expect.
Oh my. Employing people is expensive. Freelancers want higher day rates. You want to pay yourself a salary as well. Tax bills always come in at the worst possible times. Technology is expensive. If you estimate prices or costs, always add 50% on top, to be safe. There are always activities to pay for or stuff to buy that you don’t take into account when forecasting.
8. Skip having your own office as long as possible.
Why? Because it’s crazy expensive. We’re in the process right now and trust me, it’s absolutely mental how much money goes into having your own space. First of all, finding the right space, then the contract negotiations + all the stuff you need (the initial deposit, tables, chairs, lamps, cables, meeting room equipment, locks, an alarm system, a kitchen, kitchen equipment, …). Save yourself the time, effort and money in the beginning and sublet somewhere. Having your own space is undeniably nice and important, but if you can sit with other people in the beginning, like we did with häberlein & mauerer, by all means go for the cheaper, less headache-inducing option. You’ll have plenty of other things to worry about. 😄
9. Social media has immense business value. Good writing is your secret super power.
Many people underestimate this. Make yourself visible, explain what you do and how you do it, on your website, through blog posts or in video. Clients pick studios because of project references, but also out of sympathy. Make as many people aware of your existence as you possibly can. It’s all worth it, even if you only get 1–2 projects through that. And besides, people giving you feedback on your thoughts or just randomly telling you that they read your blog posts feels really good. 🙃
More broadly speaking, writing is a completely underestimated skill (no job interview pays attention to this). People who are able to write are also able to structure their thoughts. Good writing helps with social media. It helps with conveying your ideas, plans and value on your website. Clear, precise emails are more convincing and move projects forward. Text-based communication à la Slack becomes more efficient. And as any other skill writing can be learned and practiced.
10. Miscellaneous smaller insights
- Accounting and office management is a full-time job pretty much from the start.
- Your team will probably grow more quickly than you’re comfortable with. Projects come in that demand new skills or a bigger team and then you pretty much have no choice but to grow. Plan for expansion when looking at office space / subletting.
- Usually every price or offer can be re-negotiated— you’re a business now, after all. There’s always wiggle-room. Never accept the first bid.
- Clients take a long time to pay bills. Expect money with a delay of up to 30 days.
- Don’t count on agreements if they don’t have a signature.
- You’re never save. Keep hustlin’!
That was a lot of stuff. As stated in the beginning: these are our learnings, so pick & choose what might apply to your plans. We definitely don’t have it all figured out … I mean, we haven’t even been doing this for a single year and every day brings new challenges, adventures or tax bills. 🙃
If you found this post helpful, entertaining or worth sharing, we’d be delighted if you clicked the little heart below or gave us a bit of feedback. Feel free to reach us by mail, on Twitter, Instagram, Snapchat or Facebook.
Oh, and it goes without saying: in case you recently came across a project you’d want to team up for, or you need a digital idea realized: We’re here and listening! Get in touch and let’s design/build great things together!
In any case: Take care, have a nice weekend and see you next week! If you want to get notifications for new posts, you could also subscribe to this publication.
All the best! 💚
your friends at diesdas.digital