6 lessons from 3 years running Made by People
I have been working on this post for months now. For some reason, every time I sat in front of my laptop my mind would go blank. It is one of those difficult posts because I am basically explaining to the world how and why I failed. In writing it, I wanted to make sure that I didn’t come out whining or blaming everyone else apart from me for not getting Made by People to where I had hoped I would. I wanted it to be a reflection of my time there and the key lessons I took during the three years I ran the company.
Before I continue, it is important to provide context. Towards the end of 2017, I bandied up with two people and we started a Human-centered design and software development consulting company. We leveraged the iHub brand (via co-branding agreement) to get started and when iHub was acquired in 2019, we transitioned from the iHub Consulting brand to ours — Made by People. At the beginning of 2021, I resigned from the company to chart a different path. As of now, MADE is very much alive and being run by my former business partner. To learn more about the transition and the thinking behind it you can read my “Top Five” post.
Now back to why we are here. During my 30-minute mentorship sessions (every Tuesday — you can book a slot ADPList) and from several conversations with entrepreneurs and people interested in being entrepreneurs, I have been asked multiple times about key lessons from the three years I ran MADE. In this post, in no particular order and weight, I will share the ones that stood out the most to me. In doing so, I am also reflecting on what I could have done better and creating a space on the vast internet where I can also come back to these lessons later.
#1. Co-founder fit is very critical
People often joke that having a co-founder is like getting married. You probably spend more time with your business partner even more than your spouse. It is therefore critical that you two/three/whatever number get along and have a shared view on a couple of things. I met my co-founders in a conventional way. I had previously worked with one and really enjoyed the working relationship we had. My second co-founder had worked with the other co-founder and we all got along well. There was always that mutual respect and appreciation of what each person brought to the table. However, I learned that co-founder relationships are tested during tough times. It started with one of my co-founders sort of stepping away as he had a lot going on in his life. With the remaining co-founder, we were able to redistribute roles but we still felt the effect of not having one of the cofounders as he was a critical part of our strategy. His main focus was fundraising and overseas sales.
Despite the setback, we soldiered on. With time as we grew and then went through a rough patch, I realized that my working style and my co-founder’s were quite different. I have always run my teams in an open and transparent manner. My co-founder was the opposite. I am very communicative and always ready to tackle issues quickly which at times come off as being abrasive. My co-founder is measured and more meticulous. In theory, this should not be a challenge. However, if you don’t discuss and agree on the way the company should ‘behave’ it quickly becomes an issue. Mismatched styles and approaches create confusion and will contribute to co-founders thrifting away and having fewer honest conversations. This one aspect I wished I had tackled better.
#2. Orchestra and not a jazz band
Jazz bands allow for a lot of improvisations. Orchestras don’t. In a jazz band, you can go with the flow and play something unplanned. You can’t use the same mentality in an orchestra or you will be thrown out.
A startup or a young business is more like an orchestra than a jazz band. Everyone in the team has to play the same tune and in the right order. When you are starting out, there are a lot of things that you need to figure out. You need to understand the product or service you selling and how to position it in the market. You need to hire and retain talent. You also need to make sure your clients or customers are happy and make amends any time you underdeliver. For a design or software consulting company, quality assurance will keep you up at night.
How does this relate to the analogy I shared? If you are not the sole founder, you will have different roles in your company. One person might be in charge of marketing, sales, and business development. Another person can take on operations and finance. You also need someone to lead project or product execution. When we started MADE, we had a decent pipeline of projects. However, I still spent the first six months working on our pipeline. This paid off really well and I was able to shift my focus to project execution. I also like design work so I was also part of the projects team. There are a couple of issues with this approach. First, anytime you shift focus something suffers. Second, this also means you are doing someone’s job and still paying them for the same. The same applies to any combination of roles. As long as it is assigned to someone, you should only provide guidance and let that person do it fully.
As the founder(s) or leadership team, it is your job to make sure you are an orchestra. Roles need to be clearly defined and responsibilities assigned and followed upon. This is the primary job of the CEO otherwise you will spend a lot of time fire fighting.
#3. One person has to be in charge
An organization (unless it is a DAO) needs one person in charge. The buck stops with that person. It doesn’t mean the person does everything but he/she has to make sure what needs to be done is done. He/she is answerable for any issues the organization faces and has to rally everyone else towards the organization’s mission.
In scenarios where there is more than one co-founder, it is common for co-founders to act as co-CEOs even when they have different titles. While there is a CEO, the other co-founders generally don’t report to him/her the way employees do. The reasoning is that since you all started the company together the traditional structures should not apply to the founders. In my experience, this is a terrible approach as it makes it relatively difficult to have one person who has a clear picture of how the organization is doing. Founders often split roles in distinct ways and try to stay out of each other’s way. While this creates autonomy and breeds freedom, it is dangerous when there is no central reporting mechanism. The easier way to go about this is to have one co-founder as the CEO with everyone reporting to him/her. On a shareholding basis, this has no effect as those discussions are separate. The CEO should then treat the co-founder(s) as normal employees using whatever framework the organization goes with. This will create immense clarity and ensure no part of the organization is lucking behind because there is no oversight.
#4. Governance
Related to the previous point about having a single person in charge, it is also important to have an external set of eyes even when you are starting out. Most founders are eternally optimistic and will keep soldiering on even when it is clear to everyone that the idea or the strategy is not working. This is where governance comes in. For more mature organizations, they have a Board of Directors as the primary outside eye. The leadership has to report regularly to the Board. Boards are powerful enough to fire founders! In the startup ecosystem, it is very common especially at the beginning for founders not to have a Board. Most find it premature and there is a good reason for this. However, you can still have a Board of Advisors. It can be 3 or 5 (odd number to make decision-making easier) people you know or have worked with and feel their input will be invaluable. When you are starting out, make sure such positions are unpaid as you need to save all the money you can.
How does a Board of Advisors add value to your young company? They are your sounding board and will hold you accountable. You share with them your strategy and targets which then you have to report against. What happens when you significantly miss a sales target or ship a product poorly? What happens when your costs are spiraling and you are not clear on how you will make amends? The Board will ask you what happened and how you plan to remedy it. You will then report against this in the next session. Traditionally, if the founders don’t report to anyone outside themselves they just make a promise themselves they will do better. This keeps happening until your organization completely fails.
A bonus from a Board of Advisors is your ability to tap into their network and build credibility for you. However, when starting off, this is not the key focus. Start with the angle of accountability and then let the rest come later.
#5. Invest more in PR, branding, and marketing
I was having a long chat with a friend a couple of months ago and we inevitably touched on how running a company feels like. You start off on a very high note with the trajectory looking really great. After the 1.5 year mark, things starting getting tough. If you don’t survive the valley of death, it is a wrap. If you do, you will probably thrive. Upon reflection, I realized as techies we really undervalue PR, branding, and marketing. It is heavily driven by the Silicon Valley mantra of if you build it they will come. I have bad news for you if you are operating in emerging markets; they won’t come 😂
What then is the reason for the initial traction? From my experience, during your first 1 or 2 years, your network will connect you to a lot of opportunities. When we started out, almost all our initial work came from people we knew or through referrals from the people we knew. The gravy ends at some point though. There is only so much your network can give. Therefore, you have to make sure your company and what it does are known beyond your existing cycle. Go beyond the usual tech events and tap into mainstream events such as radio and TV. Don’t run away from paid marketing because it is not the norm in tech. Write and share as much content as you can. Make sure the people outside your network know you exist and clearly understand your service or product.
#6. Operate within your means
This is an easy one but many times we don’t actually abide by it. Only funded startups can afford to live beyond their means as they have the cash that allows to buy them time. If you are in traditional spaces like consulting, you have to track this very closely. You need to know where you are making money and where you are losing. At any point in time, the financial status of the company should be very very clear to the leadership team. With this information, you need to make decisions fast! Is your pipeline looking bad and your cash flow poor? You have to downsize quickly in order to give yourself a fighting chance. Downsizing can be moving to a smaller office or letting go of the office entirely. It can be effecting salary cuts for the leadership team. It can be letting go of some of your employees. These are very hard decisions to make but you have to make them give yourself a fighting chance.
For this to work well, you need to have two things in place. First, at any given point in time, you need to have a clear picture of your finances. These factors are in your sales pipeline, ongoing projects, and collections. There are times you might not have the money at that point but a few weeks away you will. This is not a reason to panic when you are young. There are few young companies who have their cash flow well for the first two years hence the common challenge of delayed salaries. Second, your employee contracts need to be up to date at all times. This allows you to make decisions like redundancies without breaking labor laws and running into even more problems. If you watch these two things closely and you are truly adaptive then you stand a better chance of succeeding. If you don’t, you might have to shut down or do a hard reset.
On a personal note
The three years I ran Made by People was one of the most exhilarating, difficult, and formative aspects of my life. I have never gone through such a rollercoaster of emotions in such a short time. From a professional perspective, I learned the most compared to any other stint in my career. It also helped me shore up my mental and physical health. The mental part was not easy. The hardest part was the financial effect. I ended up having to liquidate some of my assets (my crypto 😩 ) and use my savings to get through the particularly difficult times. I still have debts from the company that morally I can’t write off. I am giving myself time and I will finally settle my portion. Another aspect that is not very visible is the opportunity costs associated with not having disposable income for a considerable period. You miss out on so many investment opportunities and you make little progress in other aspects of life. However, I have chosen not to dwell on what didn’t work out but look at what I gained.
I have thought long and hard about writing this post. Every sense in my body told me not to as this is basically admitting I failed. However, a lot of people can learn from my failure. The company hasn’t failed, though. It is still being run by my business partner and they are using the lessons we learned. I just ran out of energy and passion. I hope this will be useful to someone out there!
What next? For the next 2–3 years I will focus on being a great designer and product manager. Once the 3 years are over, I will see what's next.
