It’s been about 10 days since I returned home from MicroConf Europe 2016. MicroConf is a special event for those in attendance - part industry event, part seminar, part summer camp, part support group. And every year, I come away with a shopping list of tactics to try and tasks to be done AND the motivation to dig in and get started on them. This year was no different. Since getting back to my desk, I’ve already:
- Collected relevant statistics my sales funnel since the beginning of 2016.
- Filled in my content calendar for September and October.
- Finished half of the book that was recommended to me by three different people.
- Sketched out the broad strokes for two new projects.
- Planned a head to head test to compare the two and decide which one to work on first later this year.
Setting aside the tactical for a moment though, a lot the value of MicroConf comes from the larger lessons drawn from the talks and hallway conversations. Sometimes, these are common threads that run through many interactions but never appear on a slide. Now that I’ve had some time for rest and recovery, I took some time this week to think through some of the broader themes from this year’s conference.
(Special thanks to Christoph Engelhardt, the official MicroConf Europe scribe. Without his always great conference notes to refer to, I wouldn’t have been able to collect my thoughts nearly as easily.)
Kiss your comfort zone goodbye.
A number of the speakers recalled times when they were forced to do things that were something more than what they’d signed up for:
- Peter Coppinger used to lament the things that weren’t happening in his business until one day he had a revelation - those things were the job the CEO, and that was him. Since then, he’s shifted his focus away from the coding that he loves to concentrate on building the company.
- Jordan Gal talked about acquiring his company’s first customers by scanning the web for leads and plain, old cold emailing. Pure hustle.
- Steli Efti put everyone in the room on notice that selling is not a super power. No one likes being rejected, he just happens to have a little more practice at it than you do.
Most founders starting businesses start off as practitioners with certain competencies and strengths. That means that there will be a time in every business when something needs to be done, no one is quite sure how to do it, but they’re all looking at you. It might be sooner, it might be later, but it will happen. And when it does, you can’t put it off, you can’t outsource it, you just need to roll up your sleeves and get it done. Because if you signed up to be the founder, then doing the things that need doing is what you signed up for.
If revenue is a rocket, profit is more like a 4×4.
One thing that was very clear from many of the talks is that growing a software business is constant fire fighting. There’s no magic set of coefficients that when set up just right give you the magic formula for worry-free, sustained, ever-increasing profitability. Up to a point, it’s likely that the founders, possibly with the help of external contractors, can handle the work, but as the business grows, there are new challenges and tasks that need to be addressed. Imagine this, for example:
- Congratulations, you added 50 new customers last month!
- Wow, look at all the new support tickets. You’re going to need to hire someone to cut down on resolution times.
- Oh noes, seems like all the tickets are being generated during onboarding. You might want to hire a full-time success person to take ownership of that process.
- Dammit, now you’ve got employees, so you’re going to need employment contracts (legal), health insurance (HR), better systems for running the team (managers), …
- The new customers are really excited about the application, but now the system is slowing down. You’ll need to bump up the number of servers, too.
You see where this is going. Revenue is headed sharply up and to the right, but profitability is taking a much bumpier path as the new income is being eaten up to support a growing user base.
These are the growing pains that any business is going to experience when moving from childhood to adolescence. The light at the end of the tunnel is that only some of these new expenses are going to grow in lock-step with revenue, so a SaaS business that reaches maturity should continue to benefit from the investments made during this growth phase.
Put your trust in targets, not feelings.
Two of the best talks at this year’s conference were given by the organizers, Mike Taber and Rob Walling. Mike spoke about building and launching a product that, in spite of the time and effort he put into it, didn’t find a market. After he made the decision to kill the product, the experience led him to ask an important and valuable question: how do you know if you’re failing? He’s now in the process of collecting information about self-funded product launches from builders and founders, and he talked about using “guard rails” - well-informed, predefined targets - to know whether the business that you’re working on is on track or headed for the ditch. He also outlined an approach that he used to select his next project which underscored the point about letting data make the decisions you don’t trust yourself to make
Rob recently sold his email marketing automation company, Drip, and in his talk, he reflected on the goals that have motivated him to acquire and build businesses over the years - freedom, purpose, relationships, and stability. At various points along the way, he felt strong in some of those areas and weaker in others, and the talk was very candid about the kinds of stresses and struggles that this kinds of life can place on the founder and those close to him.
The common thread between these two very different talks was this: whether in your business or your life, it’s easy to lose sight of the goal. Your emotions can deceive you, especially when you’re under stress, and how you feel from day to day isn’t any indicator of progress. You might be busting ass and maybe even making headway on short- and mid-term goals, and it might be taking you further away from where you want to be. That’s why it’s crucial to decide early what will success look like when I get there and what do I expect to see along the way. Write those things down somewhere, and refer to them periodically to make sure that all the work you’re doing is having the desired effect.
Until next time…
Unlike so many technology-focused or big, heavily sponsored business conferences, MicroConf’s secret sauce is the people you meet. For a lot of the nerds in the house, three days of solid socializing can be exhausting, but for some of us, this is the one time of the year where we can sit down across the table from a stranger and talk about our ideas and struggles, successes and failures, without the need for prologue. People just get you there.
This year, I had a chance to meet up with old friends and new ones, and I came away with stories, tips, hacks, book recommendations, feedback, criticism, and enough food for thought to feast on until next time. Many thanks to Anders, Benedikt, Stephen, Janna, Thomas, Kamil, Steffen, Rachel, Patrick, Gareth, Silvio, Daniel, and Lukasz. And a special thanks to Rob, Mike, and Xander for putting together another great MicroConf. I’m already excited to see you all next year.