Danny Boice is the Founder and CEO of Trustify, a new service that lets consumers order a private investigator on-demand to verify anything or anyone. Prior to Trustify, Danny founded Speek, which patented a new way of doing conference calls without annoying dial-ins and PINs. He was also appointed as Entrepreneur in Residence to the United States under President Obama and has taught at Georgetown University as an adjunct professor. He and his wife Jen live in Washington, DC with their five children.
When building a company, there are a few basic guidelines to ensure your startup is successful. First, validate demand for your product before you build anything. Then grow your customer base as quickly as you can. Lastly, run a lean operation.
I've founded every one of my companies on these principles, which are part of the Lean Startup Methodology, a scientific approach to ensuring you have a product people want to buy. But in my latest company, Trustify, I've taken the Lean Startup approach a step further by rejecting the typical frills of most startups. Why the change? Like many entrepreneurs, I had to learn from my past successes and mistakes to see how lean I could go, and I've come to realize that less is truly more.
We're skimming the fat off the top because, quite frankly, it's just not who we are. But most importantly, it's a good business decision. The costs associated with frills are not dragging us down, and we're continuing to expand month after month. Here are a few areas of excess you can eliminate when it comes to scaling up your business:
Launch parties are notorious for being both a time suck and a waste of money for lean startups operating on a small budget. Big tech companies will have party budgets that are 10 times the size of a small startup's budget, and in turn, they will outshine the small startup's party every time. Think you need to have a launch party to create buzz for your product? Think again. Let your product speak for itself. We left the parties to someone else and focused on the work ahead, saving us thousands of dollars in costs associated with renting out a venue or hiring a bartender.
Remember those pens that pharmaceutical companies used to hand out? Sure, it was fun to write with a branded pen, but it probably didn't inspire anyone to buy the product. You eventually threw it in the trash. The same rule applies for t-shirts, laptop stickers, key fobs, USB sticks, magnets, stress balls and all the other clutter companies hand out. Our customers remember us and share their experiences with others because of the quality of service they receive, not cheap swag.
Fancy Retreats or "Ideas" Conferences
Office culture is an organic process. A weekend retreat to an exotic locale or a two-day "ideas" conference will not create the kind of cohesive team you need to succeed. Sure, Google, Facebook and the other big companies can afford extravagant expenses, but early stage startups are years from being able to manage that kind of cost. What we've found most beneficial is building our office culture with solid interoffice communication strategies, corporate policies driven by our employees, and a concerted effort to align our company values with our personal values. For instance, we've developed a corporate social responsibility policy early on and established an "8 for 8" program, meaning that employees who participate in our company-wide community service project are rewarded with eight hours of paid time off to give back in whatever way they'd like. Hold off on the island getaway, and get real with your team.
Skipping an opportunity to tell everyone how successful you are may seem like a mistake, but in truth, it's much better to focus your limited bandwidth on building the best product you can and turning a profit. While funding announcements were once the "make it or break it" moment for many startups, today they don't generate the buzz they once did. Also, your Regulation D filings are public, and journalists looking for this kind of information will find and report on this whether you send them a press release or not. Most importantly, funding announcements are the least relevant aspect of running a successful business. Keep focusing on your product, and people will soon pay attention.
Without the waste, we're keeping our heads down and getting the work done. The bottom line? Results matter and unnecessary costs and gimmicks, like launch parties, swag and fancy retreats, cut into your profits and your limited bandwidth without giving you the benefits that are promised. Don't listen to the fancy PR firms: keep it lean and you just might stick around for the next round of funding.