My management style
I always like going on business trips. Usually the travel time gives me time to myself to think things through, which until recently I haven’t allowed myself to do often enough during normal working life.
I just spent 3 days in Ukraine, working, followed by a few days in Vienna with Abi on the return trip. This gave me plenty of time to unclutter my brain, and have an awesome mini-break too! Vienna is most definitely worth visiting for those that haven’t.
My time away re-enforced something I’ve known for a while. My business can operate without me, certainly for short periods. Over the years I have been guilty of spending way too much time deliberating over minor details. Nothing wrong with demanding high standards – but my time definitely needs to be spent worrying about the bigger picture as the day-to-day stuff is perfectly safe being looked after by the team I now have.
This all fits in nicely with the purpose to this trip to Ukraine. Rather than as usual spend a lot of the time reviewing very specific sets of tasks and answering questions (still very worthwhile). It was focused on getting to know the team, sharing my vision and putting a foundation in place for a company philosophy and culture. I spent time with each person to go through their job role, agree long term goals, put simple processes in place and document it all…. something I’m just doing now, well what parts we agreed I should do!
Yes, it is a little time consuming but the key is in it’s simplicity. Goals are agreed and documented for everyone, for them to read and re-read whenever they like. Each one is only a short paragraph or two along with notes on exactly how we measure the success of each goal. This way everyone knows how they are being reviewed, and more importantly can evaluate themselves. Key tasks are summed up in documents explaining the process itself. Everyone will have access to these. And we are constantly checking and updating them.
We have a new short, weekly meeting. To discuss progress + specific plans for the next week. A Management meeting each month to discuss companies overall progress and address any issues.
It’s not complicated stuff, and a lot of it is not new to what we were doing. But now is the time to just do it better. I have a very good team which I want to keep happy and motivated. I think them knowing exactly what they’re doing, how their performance is being reviewed and know in themselves if they are doing a good job or not should help!
I want to have a management system that allows us to grow easily but maintain the same clarity, culture and efficiency.
It may sound a bit ideal or simplistic, and to die hard old-school managers with accreditations in all sorts of management methodologies, it probably sounds like a pile of crap! But IMHO it’s perfectly possible, something I’ve wanted all along but it’s not something that just happens. So now I am more actively reviewing myself to make sure I focus more on this – and the bigger picture, the company as a whole, not so much in minor details.
The 1st step now I am rested and recuperated is to tidy my desk before it affects my peaceful state of mind!
Facebook IPO
Following on in the theme of my last couple of posts, I’d thought I’d comment on something I heard through the grapevine (internet!).
It seems Facebook could have it’s IPO early next year, filing later this year. Apparently those in the know are estimating $100 billion floatation. If that’s an indicator from those really in the know then I’m going to be bold and say it will be considerably higher.
Facebook doesn’t have to float. It’s a private company with many investors and has bucket loads of cash. However, once they cross 500 private investors they must release quarterly financials just like quoted companies. So, they might as well float, and by doing so it will make it much easier for employees to trade their stock. Something which they can’t do at the moment because
- Private companies are not as liquid as quoted ones (obviously)
- Facebook probably have some employment clauses that prevent employees from trying to privately sell their shares – which has led to some leaving.
So, my take is that it’s a good thing. It will continue to fuel the “feel good” factor in tech companies, creating more opportunities for entrepreneurs to raise finance. Also, for employees with any sort of stock it’s clearly a very good thing!
Something else this got me thinking about was, if you are working for a private company, and you hold some sort of share options and you are staying purely because of this then be weary! In most cases they are structured so a private sale can happen without you seeing a penny – especially where there are multiple investors. Some private investors might exit while others remain, which would not classify as a sale which you can “tag along” to. Your shareholding is almost guaranteed to be linked to your employment so you can’t leave, and you have no way of selling it privately now or later…. so unless a complete buy-out or IPO is about to happen you’ve been f*cked! It’s a great way for employers to retain key employees without having to give any extra benefits or salary increases, but I say ask for the pay rise instead.
Yandex IPO and TweetDeck sale
After LinkedIn’s IPO I mentioned now is a good time for Tech companies. If you were in any doubt this past week has delivered a little more evidence – Yandex the Russian search engine floated last week and is now trading at about $34.45. I don’t have details on their projections, but here is some basic numbers:
Market Cap: $11 billion
2010 Revenues: $440 million
Value = 25x 2010 revenue.
This compares to Linkedin trading at about 36x 2010 revenue, and Baidu (Chinese search engine) trades at 32x 2010 revenue, so perhaps there’s even some upside!
Another company just hitting headlines is TweetDeck. In the past few days Twitter purchased the UK app (which I’ve just started using) for $40 million.
So.. anyone want to start a Tech company?
Thinking Big
After a pretty disappointing 2010 (for several reasons) I am thinking big again, partly because of the recent success of other companies.
A much hyped IPO of LinkedIn got me thinking about their numbers. My short period of trading shares are long over, so I won’t speculate as to how over valued the current price might or might not be, or if I think it’s a good buy or not – I’ll just go over the basics.
Estimated 2011 sales = $375 million (last year $250 million)
Current share price = $88.00
Shares = 94.5 million
Market cap = $8,316 million
This means LinkedIn is trading at 22x estimated 2011 sales! To put this in perspective current Facebook valuations put it at 13.8x projected sales.
LinkedIn unlike Facebook get’s 70% of it’s revenue from subscriptions from business users, so it’s more like a SaaS (Software as a Service) company in this respect.
Salesforce.com Inc. (CRM) is a successful SaaS company, which currently is trading at 8.3x projected sales. Other SaaS companies SuccessFactors Inc. (SFSF) and NetSuite Inc. (N) are also trading in the 8-9x projected sales region.
To LinkedIn’s defence their growth rate is higher than these other SaaS companies so a multiplier between theirs and Facebook (let’s not forget LinkedIn IS a social network) is probably fair for the moment.
Another thing to consider is that the money and management behind LinkedIn were happy for the IPO to be $32 per share (the demand actually increased this to $45 when they listed). At their managements valuation of $32 their market cap would have been just over $3 billion, or 8x projected sales – which seems “fair” given the value of the companies I highlighted above.
What does this all mean? Time will tell if we’re in another bubble, but for the time being there are more social networking and SaaS companies you can add to this list that have had recent IPO’s or about to with similar positive valuations. This means there has never been a better time to start a high growth tech company.
If you can build a multi-million pound/dollar sales company in the next few years, even with a pessimistic valuation inline with the Dow Jones Internet Services Index of 3.7, it’s going to make you a good return.
And that is why I’m thinking big – with one company potentially sitting in the high growth internet sector and another servicing other tech companies I am perfectly comfortable that this is going to be a good place to stay for a few years.
Tim is tired
I’m looking forward to tonight… putting my feet up and having a few alcoholic beverages and going to bed at a normal time! After a few long days I’m pretty sure I deserve it.
Wednesday and Thursday I was in London doing a spot of Networking at a couple of industry events. A large chunk of it involved going to bed late and getting drunk so not exactly hard work, there is plenty of following up to be done now.
This morning I also had morning meeting with fellow directors to discuss management of effective teams. On the whole I’m quite happy with how RS Outsource is doing this for clients, and how Online Entertainment Ventures own team is working. However there is always room for improvement so I’ll be doing a little more thinking about ways in which we can work better.
Bit too busy to do any proper number crunching today, but I’m expecting this month to see Online Entertainment Ventures to have a further 15% growth on last months revenues. Time will tell!
Review and Restructure
At the end of last year due to a few issues I was forced to review much of what I have been investing my time and money in to over the past few years. It made sense to also clean up the company structure in which all my ventures fall under as there was quite a lot overlapping going on making financial management and planning a little difficult. So after a lot of paper work, setting up of new companies and transferring of IP I can now “relax” and get back to doing some actual work. Actually – this has been the case for a month or two now, and thankfully business is picking up.
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I’ve still got my fingers in several pies, but they fall in to one of these three:
- RS Outsource – Management of clients offshore development teams. This includes managing teams that develop websites for other companies I am involved in.
- Online Entertainment Ventures – A network of websites, primarily dating and online communities, though these are mostly in development at the moment.
- Everything else – JV’s, white label sites etc are all kept completely separate, each has potentially different stake holders so there has to be no financial tie to any of my other companies, only to me personally.
It appears that I will be very busy for a few months now, concentrating on really driving each and every single company forwards.
I am overseeing the design of several new websites and major updates to existing ones. Further research is needed on some, technical specifications made and finally project and development plans to be drawn up to work out launch timeframes and costs. The idea is to either ring-fence budgets for marketing or securing additional investment.
I’m also implementing a better lead generation and proposal process for RS Outsource. This means I’ll personally be doing a lot of networking, and making sure our literature is updated to better convey the USP’s.
Obviously I’m not doing everything myself, but I am involved in a lot of the ground work, and for all of these tasks I am personally overlooking what is being done – at least for the moment anyway. This is not an issue about not trusting or wanting others to do it, but rather that I want to keep expenses to an absolute minimum over the next few months, spending only where it’s 100% necessary. For the websites being worked on this will leave a larger budget for marketing. And for RS Outsource it means we can make more interesting propositions to potential clients – such as completely removing our company fees during the startup or initial development phase. Something which would not be an option if there were more sales or administrative costs to cover.
3 Top Tips to get Everything, Ever.
This is a picture of me pretending to work hard while on a recent visit to our wonderful RS Outsource office in Kharkov, Ukraine. The purple t-shirt says “I am your boss, but I’m really cool too. Let’s work hard, then go drinking and bowling”.
This attention to detail in my appearance links us very badly to what I am about to write. You are looking at this and wondering how did this well dressed handsome man become so successful/delusional. To answer here are my 3 top tips. They’re not really tips for success, just random tips…
- Dress to impress. Someone wise probably never said this, but has since been quoted not saying it many times “You never get a second chance at first impressions”. It’s said a lot so must be quite important.
- Fool them. You’ve spent hours getting ready, you look the part but can you play the part? Your illusion will be destroyed as soon as you open that big mouth of yours – unless you sound like you look. Join a local amateur dramatics association, practise in front of the mirror. As soon as the garbage that is coming out of your mouth matches your ridiculous disguise others will believe you’re real.
- Control them. So now people believe you are some sort of god, it’s time to make them do whatever you want. The only problem is you’re so convincing in everything you say it sounds too good to be true. The trick is to plant the seed of your idea in their weak and susceptible brains, make them think it was their idea not yours. Watch Inception for details on how to do this – it’s got some really big explosions too.
Now that you have everything you want, tune in next week to find out how to lose it all just so you can try getting it back again.
Of course, these methods don’t always work and there is an argument for being “genuine”, and not just pretending to be interested in what others have to say. If you love what you do it might even be the better option, just beware that others aren’t always what they seem.
Site optimisation
My team have been very busy developing new updates. Some have been fixes, but most are improvements and new features that we hope will encourage more activity from users and ultimately make us more money.
However we have no way of guaranteeing that these “improvements” will work, so the only logical thing to do is for us to test EVERYTHING. Or at least test what we can.
If you own a site then you should have a methodology in place for optimising it. I don’t mean SEO (which is important), but improving the website to encourage whatever activity you want from your visitors.
This is a break down of the kinds of testing we do and the tools available to optimise your site.
AREAS TO OPTIMISE
1. Page design
There are certain pages that you should be constantly optimising. Registration and payment pages are key examples which are easy to monitor as you only need to measure conversion rates. Changes like a simple text change, a new button or a completely new layout can all have an effect. We do this as an ongoing tasks constantly trialling small and big design changes.
2. Core logic
In the case of Besinful these are things like: What features our members pay for, how many messages they can send, is it free to read or send messages, how much they pay for 1 months membership etc.
Tracking and reporting on changes to core logic is harder than simple design tweaks, however it’s still massively important. We recently made 1 small change which resulted in members becoming 3x more likely to upgrade! It was obviously worth while us making this discovery!
3. New features
If you have a site which is constantly evolving like we do, you’ll have a roadmap of big development milestones. While on the face of this it’s easy to assume that more and better features is a good thing it is definitely not always the case. Site users are often attached to what they currently have, big changes might aggravate them if they don’t personally like them, or scare them away if it’s not easy to use. Facebook is a prime example of this, every time they roll out something new a small % of members go crazy! Although in Facebooks case they clearly test everything very well and based on their success it’s impossible to argue they’ve done much wrong.
We recently introduced a new user dashboard on Besinful. While we had immediate positive feedback via member emails, the real sign for us that it was a good feature was an increase in the number of pages visited by members, longer time on the site and an increase in uploads – all of which we were aiming to achieve.
TOOLS FOR TESTING
1. Google analytics
It’s free, constantly being improved and works directly with google adwords so you’d be mad no to use it! Though it’s not exact, you’ll be able to see where your members are coming from, what pages they’re visiting, how long they’re staying for, set up goals and funnels, and segment the data in many different ways, plus you’ll see all the results in some lovely easy to read graphs.
2. Google Website Optimiser
This is an extension to google analytics which is also completely free that makes it very easy for you to split test different versions of the same page with a few lines of code, and find out which version has the highest chance of success, and with what probability it has of out performing the others.
3. 3rd party solutions
There are restrictions to using google analytics. Primarily the biggest problem is that you have no link to your own database. As you’d expect there are numerous solutions out there that promise to provide you with much better insights and results than you’d see using just google. Some might offer ways of integrating with your database to give better segmented targeting or testing, even more specialised reports, or they might have a managed solution whereby they provide suggestions for improvements, run the tests and report the results to you.
4. In-house solution
Because of the restrictions of google analytics and the cost of 3rd party software we opted to build in tracking and reporting to our own system. We know what the conversion rates are for members that come in from different sources using google analytics, but by storing campaign data in our own database we know the the spending habits of members from different sources which is much more useful. No point in paying for traffic that appears to convert well, but in reality they’re only spending 1 penny over their lifetime!
We also filter by user demographics: country, region, age, gender… by usage demographics: registration dates, payments dates, last login dates…. by what features members have access to (when we roll out a new feature we don’t make it available to everyone allowing us to compare how the feature is used)… and a lot more besides!
CONCLUSION
Make use of everything you can get your hands on, especially free tools. Don’t assume that just improving your site will give you better results.
Have someone responsible for continually testing your pages – it doesn’t matter if it’s yourself, an employee, freelancer or another company.
If you’re developing a site yourself rather than using someone else’s software, build in to the specification some extra reporting tools. This doesn’t have to be any more than recording a little bit more about your members and having the ability to manually run a query on the database. You just need to decide what it is you want to know about your customers to determine what data to store about them.
Don’t delay – do this from day 1. If your site is more optimised from day 1 your bottom line will be better from day 1.
If you read this and think missed anything off let me know. We’ve applied a simple, logical and mathematical approach to optimisation, but there are other tools we could be using and other things we could be doing which I’d always be willing to explore.
Happy optimising!
Brown is the new Black
This is a bit of a pointless post just to say I have updated the look of TimRees.net…previously it was brown, now it’s black.
Though it’s common knowledge that I am an ultra-cool guy, this was not a fashion statement! The old site looked good, but functionality was a bit crap. So I’ve gone back to something really basic so that I can concentrate purely on writing interesting posts rather then f’ing around with a site!
I’m already overloaded with work, so in order to keep this site up to date, as with everything else I am doing now, I must be as efficient as possible.
Steady growth
I’ve spent a couple of weeks burying myself in numbers. Numbers for projections and budgets on 2 separate companies. Numbers on the relative performance of individual sites, and strangely listing all the numbers I want to be able to see, but don’t have immediate access to yet.
The most interesting numbers though are from one site. Since the proper launch in November it’s been doing all the right things and growing each month, which has all taken place with no extra spend on marketing or investment in development.
This shows the daily sales, weekly average and 30 day average. All following a steady growth.
The tracking system we’ve developed also allows us to constantly optimise the site to suck the best performance from it too. This is one factor that will help in ensuring this graph continues to go up.
Other factors which will also soon be playing a part are: several site updates in the short and mid term, big improvements to the eCRM (the volume and quality of emails we send members) and now we’ve got some data on member values we’ll be actively marketing the site.
It’s an interesting learning experience – developing an idea, building the site from scratch and seeing the positive results. Everything being learned now will be wisely used too as there are other sites we’re launching which I am determined to see exactly the same kind of results from.
