My college degree is in Industrial Engineering. Unlike other forms of engineering, IE is focused on process design and improvement and not product design and improvement. Using this mindset, I spent a considerable amount of time building to scale aspects of SportsLizard before I even launched it back in ’04. Most of what I did never ended up being applicable to the site…or needed to be tweaked considerably to be useful. I tried to automate things so that I could handle thousands of transactions a day before I even was getting one a day. Clearly I took the wrong approach.
So what’s a bootstrapping business owner to do? Do the absolute minimum amount of work to get your site online or your service to market. This allows you to spend your time elsewhere – taking more similar types of chances or doing other activities that have proven to bring in revenue/personal income. Your initial customers will take a long time to service, but you’ll learn every single intricacy of your unique process. Things you would have thought to be important or time consuming really aren’t, and others that would seemingly be easy to automate will need personal attention.
One perfect example is our customer service system. Here’s another:
In my Thoughts on Pricing and Profitability post back in April I discussed our decision to begin selling on Amazon. I did the absolute bare minimum to give it a test: I only listed products that were already in Amazon’s system and I spent no time entering ones in that weren’t. If there were five variations of a product listed, I just went with the first one I found. I put no effort into optimizing anything. Since it didn’t sync with our shipping/inventory system, we manually put every order through Tastefully Driven each time they came through. Each order was tedious, but at least we were only spending time after we made the money. We just wanted to give it a shot with as little effort as possible.
In that post I mentioned that we were getting some good sales from Amazon. Over the next several months the number of sales per day increased steadily to the point where we realized that it was worth the time to get all of our products listed. I spent a day doing that. Then I spent some time investigating their algorithm – how they decide what comes up when someone searches and which store gets preferential treatment as the primary seller. I then spent another day making some tweaks.
All of a sudden Amazon sales began to take off and it was taking us over an hour a day to put them through our system manually. At that point, I double backed and programmed a system to export all of the orders from Amazon directly to our back-end, and also to upload tracking numbers from our system back to them. It took me about a week to get all of this working.
So let’s recap: I spent about a day getting products up back in April. After it worked I spent two more days adding more products and tweaking our settings. After that worked, I spent a week automating the whole thing. Had I automated it from the beginning I would have risked wasting those two days and that week of programming on something that wasn’t going to drive revenue. I also may have programmed it worse due to a lack of familiarity with Amazon’s sale process.
In general, time is valuable so why waste it unless you know you’re using it on something productive? The tradeoff is that you grow a little slower, but you also significantly reduce your risk and the price you pay for failure.
Taking a step back, this is one of the reasons I think getting large amounts of Angel or VC funding to help scale rapidly is often not a very good idea. It’s just simply impossible for someone in your organization to really own a process and grow it correctly if you’re rushing to push things faster than they should go. Take a look at Startup Junkies if you want to get a feel for the types of catastrophes you can run into if you force growth.