Sunday, 30 September 2018

Report: “Company” — Q3 2018

Francis Pedraza
Sep 30, 2018 · Unlisted

Growth. Yellow. In August, revenue hit $50K and in September we were just under that, but have more sales momentum going into October than ever before. Our target for December remains $150K, so we have to ramp aggressively in Q4. The new website and PR launch are coming up. We’re still doing marketing and sales channel development experiments, and getting ready to begin aggressive content marketing efforts. We just hired Lucia Comnes to lead our Customer Success team. Most of our revenue is coming through upsells from existing clients, which demonstrates lock in. But we don’t have a big red button that says “Print Customer” on it, yet. And until we do, we won’t have true product-market fit. The biggest limiting factor to growth is still hiring: we haven’t found “more Jays” yet. That is, more bright, young growth hackers who can source, close and run strategy for big client accounts, like Jay Kumar.

Operations. Yellow. Kamron has stabilized operations somewhat, and Jamie Doheny, Marshall’s boss from Bridgewater, joined in August. We’ve also Aris Brauchart to lead our Specialist line — he’s onboarding now. A couple great junior hires fell through in September, so now we’re behind schedule. Process Architecture, Capacity/Efficiency and Delivery all need leadership. Bruno is currently on Delivery, but we want to move him to Process Architecture. Steven is currently on Capacity, Jamie on Delivery, and nobody is worrying about Efficiency (which is very worrying). So we’re spread thing. And it is costing us a lot of money and time. Nothing would accelerate our growth and reduce our costs more than better execution in Operations. The problems are straightforward enough, but require strong executors.

Development. Yellow. Erinn sourced 400 partner applicants in August alone! She also hired Adam to lead training, and Steven moved from Operations to join her team, leading Agent Hiring (Ops Capacity) and company-wide Evaluations & Performance. The biggest problem is partner hiring: there are key roles that are still unfilled. Even though we’ve sourced a lot of candidates, Erinn is too stretched to move as fast on this as we need. Thankfully, we have an offer out to a hiring manager to take this over.

Finance. Yellow. The biggest win is that partner pay has been successfully automated: it only takes 6 hours a week to pay our agents, and next quarter we plan on reducing that to 1 hour a week. The biggest project right now is automating revenue reconciliation into our accrual accounting system so that we can, among other things, see our actual gross margins and monthly usage on the system. The biggest problem is that Zach needs to take over more day-to-day work from Ric, so that Ric can focus on solving strategic problems; and Erinn needs to hire a bookkeeper to take over that burden.

Tech. Yellow. A major crisis was resolved this quarter. None of the tech team’s internal clients (the leaders of the other teams) were pleased with results: everything was taking too long and requirements weren’t well understood. A month ago we switched from a centralized model to a matrix model, and that seems to have fixed the problems. Now each team has dedicated engineers and product managers — so that each team leader can manage and engage with their tech resources directly, and being embedded, they intuitively understand requirements. Shane and Keenahn are still providing leadership, setting standards, resolving escalations, looking for interstitial problems, and making sure the roadmap stays up to date.

Overall. Yellow. After closing our round in July, the company “got the cold”. We had been pushing so hard for so long, without my direct management oversight, so once tension was relieved, it was time for a bunch of problems to come to the surface, a few people to depart, some structural and cultural changes to be made, and a new clarity to emerge on our plan for the next 18 months. That chapter is now over, and I feel like it was successful overall: the structure, culture and overall plan feel stable.

A new chapter is opening. I see two crises coming. The first is going to be about operational efficiency. Our burn rate is too high — above what we modeled — and the main reason is that our billable hours don’t match 1:1 with agent pay hours. The second is going to be about product-market fit. We don’t have a “print customer” button and we need one. There’s a ton of general demand and we have lock-in, but we need a set of processes we can easily re-sell to a specific type of client. If we resolve these two crises in Q4, then we’ll be able to raise $2M in Q1 and will be on track to get to profitability in Q2 2019. If we don’t, then we’ll be in red until we do.

My first-person view. The above update is written in “map view,” which obscures the fog of war to provide an artificial clarity. But from my perspective, although it’s easy to see the problems and the theoretical solutions, it’s hard to know what to actually do every day to solve them myself. I rely on Erinn to solve hiring problems, Marshall to solve growth problems, Kamron to solve operations problems, Ric to solve finance problems and Shane to solve tech problems. As long as they see the same problems I see, co-operate with each other and aren’t stuck, then what value do I add? Over the last quarter operating primarily as a manager, I’ve resolved some structural, systems and cultural issues that perhaps only I could solve, but now what is required is very tight project-management. I can’t commit to taking on the set of projects that a COO should take on, because that would bog me down going into Q4 and Q1, when my focus should shift to marketing, fundraising, sales and business development in general. Moving forward my internal contribution will be to provide general leadership on vision, strategy and culture, and resolve a few key escalations. What I really need is a COO to take over management, and an Executive Assistant (via Keats) to abstract me from noise and maximize the value of my time. Erinn is helping me look for these roles but I’m also doing my own hunting. I’ll be the most help to my team if I’m helping us find product-market fit by closing key accounts and telling our story to the world, helping us find talent to solve our operations problems by meeting great people, etc. That’s why I’ve moved back to NYC and am re-entering head’s up mode.


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