10 Startup Tips Learned the Hard Way Be up front with customers about what you do and how much it will cost, and consider romantic relationships with co-workers very carefully.
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Co-written by Ryan Matzner
We've learned quite a lot from our humble kitchen table beginnings since 2009, when we founded Fueled. Our now global, award-winning mobile-design and development agency has offices in New York, London and Chicago, with more on the way.
While we've hit some bumps along the ride, we've learned from them, adapted and worked out how to build Fueled into a thriving agency. We've come up with a ton of pro tips along the way. Here are 10 of them.
1. Brand with a single purpose. From day one, we branded Fueled as mobile first and only, and we've ridden the wave of mobile's dominance ever since. We're grateful to receive the bulk of our new business through client referrals and friends. We do more than mobile apps -- website design, branding, SEO, community building -- but it's our mobile brand and expertise that gets people in the door.
2. Fire fast. If someone on your team is not working out, part ways now. It might leave the team crunched and you might have to work on Saturday and Sunday. Suck it up and do it. You'll thank us later.
When we hire someone, we tell them up front that it's for a three-month trial period. At two months, we have a check-in and assess the relationship from both sides. This gives them a month to improve or keep on keeping on. If major issues remain unsolved by the end of that three months, we say goodbye. When something is not working out, it's a mutual feeling more often than not.
3. Only charge flat fees for very discrete deliverables. Hourly rates or project fees? We finally found the perfect balance: charge flat fees for a series of well-defined, discrete deliverables with clear, inelastic boundaries.
Once a project is rolling, we move to a structure with a flat fee for a set amount of work. For us, that usually means a build of an app with a certain set of features. Clients know what they're paying, and we know what we're delivering. If the client adds features, we layer on more deliverables and flat fees.
4. Get paid up front. Don't start working until you get paid up front. Seriously, stop. Do something else until you get the money.
It may feel cheeky, but there's no faster way for an agency to fold than to carry the debt of your clients' unpaid bills. We ask our clients to pay in advance for each two-week period of work. If they don't pay, we don't work.
5. Avoid cheap clients. If a potential new client tries to lowball you or asks for deep discounts, shut the door.
It's this weird, inverted ratio: the law of discounting. The deeper the discount or the more generous the favor we give, the more unrealistic clients' demands will be. For some reason, the clients who demand discounts will never be happy with your work, and they're hardly worth your time and aggravation.
6. Build a lean product. Bully your clients into building less, not more. Some clients are surprised when we push for a smaller contract (which means less cash for us). But experience has taught us that six-month builds of apps with 150 screens is effectively a guaranteed disaster. Focus first on what you can build in eight weeks, max. Then add and release the most compelling additional features in one- or two-week increments.
7. Have plenty of conference rooms and phone booths. Remember this ratio: one to 11. Fueled runs and houses its NYC team in The Fueled Collective, a coworking space with 150 members and 35 startups. We've found that the magic ratio of conference rooms to people is 1 to 11.
Spacious conference rooms for five to eight people are great, but the number-one use of conference-room time is phone calls made by one or two members, so to be efficient with space, try creating phone booths or micro-conference rooms. A few nooks for impromptu breakouts is also very useful.
8. Managing the client and managing the process are two different jobs. When we started out, we had "producers," managers who handled both client relations, project management and the actual product. We've since learned that people are either really good at building product or really good at managing the client relationship, never both.
Now we have separate project managers and product managers. The tension between their different skills and priorities creates a healthy conflict that gets a quality product delivered on-time and on-budget.
9. Experience is valuable. Particularly in the tech world, the value of experience is easy to overlook. We had a bias, when we started, toward young talent rather than experience. We'll just train them, we thought.
But we've since learned that experience matters massively. Bringing in seasoned talent and managers is absolutely critical to our success and happiness, and it's been worth every extra penny.
10. Think before sleeping with your co-workers. Talented, creative human beings doing exciting work in intense environments? Love and other pangs of the heart will happen.
But think about it carefully before you give in to the longings of your loins. Just how awkward is it going to be if things don't work out? How much time and effort are you going to spend making it right? Do you risk losing someone valuable to your company?
It might also make sense to set expectations up front, about what the consequences might be if things don't work out. Basically, take the time to consider the consequences before hooking up with your hot colleague.
We hope these pro tips help you level-up your own agency's game. But whatever you do, don't stop experimenting and learning as you go. We got to where we are through constantly tweaking and iterating on how we do business.
Ultimately, our passion for experimentation and pushing the boundaries has been core to Fueled's success.