Friday, December 12, 2008

Strategy is Something You Can Only Learn

There is a great post by Mike Cannon-Brookes of Altassian, which talks about how they came up with the stellar business strategy that has that has driven the iconic company from strength to strength. Mike raises some interesting points, which are relevant to any tech start-up or indeed any industry that deals with progressive change, which are almost all industries.

I believe open source start-ups are particularly prone to bad strategic decisions because there is a very small pool of successful open source start-up with less than 10 years of history to draw upon. Furthermore, the market is rapidly changing making success factors from yesterday points of failure today.

I doubt there have been any companies in history that didn’t have to evolve their strategy to be successful. There are myriads of books out there that will try and tell you how to build a successful strategy, how to define it, how to target a market, what to measure, but until you try it you cannot ready yourself for the changes you and your company will need to go through to have a shot at success. When I was in high school applying for university I didn’t understand why the business degrees were Arts and not Sciences. The fact is business strategy is an art that you can only learn by doing.

My experience founding MuleSource so far has been a whirlwind of success, failure, enlightenment, disillusionment, confusion, uncertainty, terror and joy. And of course I am learning more every day. Mike’s post spurred me on to share some things I’ve learned over the last couple of years.

Your strategy will evolve over time but you mission should not. The mission statement sums up the ultimate goal of the company and will set the operating and strategic tone of the company. If you change the mission statement significantly you are changing the company significantly.

Fail early fail often. Every entrepreneur will cite this adage; the fact is failing takes practice. Until you have failed a few times its hard to know when you are failing or how to spot the early signs. Starting and open source company has been all about trial an error because there is very little experience to draw on. In order to fail early you need to really understand what you are aiming for, what you are selling and whom you are selling to.

Understand you market and understand that the market is always changing. When I created the Mule project I always knew that I would create a business around the project. Back then enterprises did not deploy software into production without a support contract from a vendor. In the time it took Mule to become popular, the market perception of open source had changed and companies were not so concerned with deploying unsupported software in to production (at least for non-mission critical applications). The fact is that the pitch to our investors for MuleSource was very different to how I once thought the company strategy would be when I started the project. And MuleSource today is a very different company to the one we pitched in 2006. To have a chance at success you must evolve your strategy.

For every goal you need a metric
. Metrics can be anything from downloads, sign-ups, bookings, renewal rates, bugs reported/closed, product releases, customer satisfaction indicators, website hits/clicks, upsells, burn rate, etc. Key metrics will be slightly different for every company, but every company needs to track their metrics rigorously. Without solid numbers to measure your business against its very hard to assess how you are doing, but more importantly it impossible to predict how you are trending in the future. Without these numbers it’s very difficult to know if you are spending precious time on things of little value to your business.

One of the toughest tasks of running a company is hiring. In a start-up every person you hire really counts. Your people are your company; they are the ones that make the dream a reality. You need to think long and hard about every position, understand not only the role and responsibilities but also the cultural aspects. You should always assess a candidate not only on their skills but also personality traits, employment values and the ability to work in your environment. The questions you ask should give you insights to the character of the person. Always do reference checks and backdoor checks where possible. Some of the best people I have hired have come from my network (LinkedIn is a great source) or someone else's network in the company. When we’ve hired from a recruiter we’ve had mixed results.

Communication is an art
. We all know communication is vital for any collaborative environment, but I have worked in many environments where we had lots of bad communication. Bad communication is frequent communication without getting the right messages across. Meetings shouldn’t be boring; attendees should walk out feeling that they learned something important to them. You don’t need gimmicks to make a meeting interesting you just need to focus on the content. We’ve learned a lot in this area at MuleSource. Our communication approach has evolved and continues to do so. Here are some principles to consider when scheduling a meeting –

  • What is the goal of the meeting? You’re about to take 30-60 minutes of your teams’ time. Make sure you make good use of that time

  • Invite only the people necessary to attend the meeting. If you want to let others know about the meeting, either share your calendar or make it clear in the invite that it is optional for certain people

  • Who is your audience? It’s very easy to ramble on about what’s important to you not what’s important to the goal of the meeting. This is especially true of status meetings. Try and keep your communication short and precise

  • Be honest, be open. Meetings shouldn’t be a place to blame colleagues, if employees feel the need to cover their back, there is probably a culture issue

  • If addressing the company, make sure the key points are clear and relevant. You should always relate back to objectives and the mission of the company. Company meetings should be energizing and gratifying, people need to see the impact of their hard work on the overall goals of the company.



Finally, the most important point is to enjoy what you do or don’t do it at all. Most open source developers are driven to write free software because they enjoy it and they chose to give up their spare time to pursue it. However, starting an open source project and starting a company are two very different beasts. I started Mule with a view to starting a company around it, I was considering the Mule project as a commercial avenue early on, it was part of a bigger plan. Now MuleSource has become a living entity that I truly enjoy being part of every day. Its very hard work, it consumes a lot of my life, its difficult on my wife. It’s a labour of love for both of us. You need to be really committed to create a successful open source project; you need to be little crazy (about it) to start company.

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