McDonaldLand

Back in 2005 I had an idea to create a site that allows artists to sell their wares through the site, with me collecting a small fee for each sale. As I outline in this post, I made some mistakes in my approach that ultimately resulted in other companies beating me to market with the same idea. For a few years following I sporadically worked on the site and concept but never with any real vigor or drive.

About two years ago I decided that the idea still had merit but that I’d need to focus on a specific market that would give me an edge. Given that I planned on launching with my wood turning products and the fact that I know that art very well, I naturally decided to focus in on that niche. I put a plan into place for how I was going to market the site, how I was going to maintain it, and when I was going to call it quits.

To arrive at my plan I stepped back and asked myself what I wanted to achieve with the site. I decided that what I really wanted was an outlet to sell the products I make anyhow, while making a little bit of money, and the ability to allow other artists to do the same, should they choose to do so. It was never intended to be anywhere near capable of producing enough money to support me and could not interfere with my day job or family life.

Having that concept as my base, the rest of the planning was pretty easy:

• I wanted the site to handle most of the day to day operations itself – sale notifications were automated, the site was designed so that customers could use self service features, other artists could interact through the site without my involvement (aside from the fee), etc. This would require a little bit more coding to automate some things that previously were manual, but not too much. In the end I basically had to drive products to the post office and the site handled the rest.
• I wanted to limit the amount of money I put into it as I didn’t foresee a huge return. I arbitrarily landed on $500 seed money. Once that money was gone, no more could be put in. Any profit made from the site would be added to the pot as operating cash.
• Once the money was gone OR one year passed by without starting to see at least a modest uptick in sales, I’d pull the plug. My choice which.

I was off and running.

As of today I am about a month shy of the 1 year mark. I’ve spent almost all of the money – a small chunk went to domain registration and hosting fees and the rest went to my marketing campaigns. The sales were able to cover the spread for a few months but haven’t averaged out enough to keep cash balances moving in the right direction. As of today, the site has $38.

So I’m sticking to the plan and calling it quits. Kind of.

I’ve been toying with the idea of pulling the plug for a few weeks now. While the site is pretty much fully automated, I still have to log in periodically to check security, logs, and other maintenance items, which takes up time that is in high demand right now. After thinking through the problems and my desire to still have an outlet to sell the art that I will make anyhow, I came to the realization that I should pull the plug on the site, but not the concept (yet).

I’ve decided to invest my remaining $38 into Etsy, the very company who beat me to the punch with the idea I was working towards back in 2005. With my product set it will cost me $7 to post my inventory for 4 months. If nobody buys anything at all, I can run Tanglewood for another 24 months ($38 / $7 = 6 payments [I'll chip in a few bucks...]; 6 payments * 4 months each = 24 months) without having to worry about any sort of site maintenance at all.

Tonight I set up an Etsy storefront, shut Tanglewood Turnings down, and set up an automatic redirect from Tanglewood over to the Etsy storefront.

Was pulling the plug on my site hard? Of course. Was it the right decision? Absolutely. I made an objective line in the sand before I started and am sticking to it. Trying to trudge forward based on my emotional ties to what I’ve created simply doesn’t make sense. It isn’t hitting the business targets I set, thus it is failing. Bail out.

In this case I just happened to find an option that would allow me to extend the concept a little longer, while still not violating my objective exit strategy. The original Tanglewood site is sleeping now. In 24 months if I have no sales the Etsy Tanglewood store will be too.

There are countless articles out there on this topic, none of which will help you actually make a definitive decision for when the right time to launch is. The reason they won’t help you is because launching a new business is intrinsically subjective. There are so many variables that go into launching and running a business that even the best articles can provide only guidelines.

I’ll sum up most of the articles out there on this subject: Launch as soon as you can.

If you look past the simplicity of it, the answer and advice is dead on. It is important get your name out there and start building a relationship with customers. You can’t really do that unless you are live.

So, diving in deeper, what constitutes being ready? That depends on you, your business, your market, and your goals for the company. I can’t provide the answer to you but I can tell you what drove my decisions for my recent launch, Tanglewood Turnings.

Tanglewood Turnings started out entirely different from what it is today. Back in 2005 I had an idea for a website where artists from around the world could come together to sell their products without having to worry about all the technology setup and headaches of running a website – they could simply focus on their art. The site was going to be called TanglewoodArts.com and was going to become the de facto place for artists to sell their wares.

It didn’t work out that way.

I kept tinkering with the code and kept adding “just one more feature” and adding “just one more cool technology” until it was too late and Etsy had burst onto the scene and carved out a place as the leader in this market. I waited too long and lost my opportunity.

I viewed the software I was writing in light of things I’d like to see go into the product and the technologies I’d like to use instead of things that will allow the business to start operating. In hindsight I didn’t need 90% of the crap that I wrote, at least not for launch. While much of it is useful and may eventually get some use, the only thing I needed for day 1 was a way for artists to upload their products, a way for users to look at the art, and a way to process payments and orders. Instead, what I was building was a complex system that gave artists and admins fine grained control over all sorts of different aspects – artist profiles, preferred shipping methods, custom order request capabilities, etc.

I missed the mark and I lost my opportunity to corner the market before Etsy did. I failed because I couldn’t draw a line in the sand and say, “these are the only things we need for day 1 and no more.”

The entire time I was adding feature after feature, Etsy was gaining market share and becoming a household name. What’s worse is that I didn’t realize my mistake until it was too late.

After my realization that I missed my window of opportunity I let the code float for a long time – multiple years. I’d write a little code here and there but it was never with the goal of launching anything. Instead, I wrote code because it kept my skills up to date and gave me a good opportunity to stay abreast of the latest happenings in the constantly evolving world of Ruby.

Last year I decided that I wanted to spin the idea up again. In thinking this through I decided to focus on a niche market that I knew well – wood turning. So I started doing research and found that while there are a bunch of sites out there that sell hand turned pens, pencils, bottle stoppers, etc., there are none that a) allow multiple turners to sell through the same site and b) provide a real time custom product builder. I decided that those were my differentiating features. The multiple artists at one site I had. I had already started on the concept of a much more generic custom product builder. I had a working shopping cart, order, and product system.

So I drew my line in the sand. I would launch as soon as the custom product builder was ready in its most basic form. I did. (Note that I did take a brief hiatus to pursue another project, otherwise this timeline would have been more like 2 months instead of 8.)

Now, I have a name out there and I have actual paying customers. I’ve got an offering that is truly unique, allowing me to build a customer base in areas that other sites and vendors can’t fulfill.

Is the site done? Hell, no. I’ve got a list of an additional 50 features or improvements I’d like to make to the site. Right now I have to manually process payments for artists, when it could be automated. Right now users simply get the lowest shipping rate available when I’d like for them to have an option so they can dictate preferred shipping speed. Today I have to manually update various data points such as prices, availability, etc. change in the market when this really should be automated. The custom product builder currently has the capability to support things like accessories, however I’ve not loaded any into the system. The list of things that would make the site better, but weren’t necessary for go live goes on.

Unfortunately it took me losing a really good business opportunity to realize that I didn’t need all the crap that I was writing in order to start the business. What I needed was quite simple but I made it much more complex because I liked writing the code.

Your case is likely no different. Put all the items you want for your product in a list. Now go through each item and individually decide if that item is an absolute must for go live. These are things that your site simply cannot function without or things that you’ll miss out on differentiation without. Once you finish this process you should have a much shorter list. Now do it again with that shorter list. When you are done with that, do it again. Keep doing it until you are sure that you have carved as much fat as possible. Now, when that list is coded and tested, you are ready to launch.

This is the process I followed for Tanglewood Turnings, which worked well. This is NOT the process I followed for Tanglewood Arts, which resulted in failure.

Many companies have the concept of “A”, “B”, and “C” players, although GE’s Jack Welch made this famous in one of his books. The reason there is no classification for a “D” player is because companies should ultimately get rid of anyone not performing to the expectations of, at the very least, a “C” player.

Characteristics of an “A” player:

• Challenges the status quo in order to drive positive change
• Delivers on objectives without having to have someone hold their hand
• Will largely succeed in their tasks despite the deadlines, politics, and team involved
• Wins

Characteristics of a “B” player:

• Does what they are supposed to do
• Has a good track record
• Needs guidance sometimes but not hand holding
• Sometimes goes above and beyond but is not the norm
• Has the potential to step up to be an “A” player
• Wins most of the time

Characteristics of a “C” player:

• Sometimes does what they are supposed to do
• Has a moderate track record
• Rarely, if ever, goes above and beyond
• Needs a fair to high level of hand holding
• Has the potential to step up to be a “B” player
• Sometimes wins

Most companies are bottom heavy. That is, they spend a large deal of time working with and fostering “C” players with the expectation that “A” and “B” players are already doing a good job and don’t need attention. Part of what Jack Welch and GE advise is that companies shift their paradigm to focus more on the “A” and “B” players, thus making them more top heavy. The basic idea is that you give “C” players a set goal and opportunity to become “B” players. If they don’t meet the expectations in the given timeframe, send them on their way. This allows management to focus on cultivating “B” players into “A” players and better supporting the already existent “A” players.

Simple enough, right? Just don’t forget about the culture shift that will happen with this and what it means to the company.

The basic philosophy is going to differ between each class of employee. An “A” player will have a different outlook on values, vision, and ethics than a “B” or “C” player will. Each class of player will have different ideas of what they are looking for, what they can contribute, and what being part of the company means to them. What this means is that as a company shifts its weight from the bottom to the top the overall culture of the organization will change.

Don’t get me wrong here – I’m not talking about the core values or the culture that is transcribed in the mission statement and broadcast to the public. What I am talking about is the basic idea of what is important to employees.

Each class of employee will have distinctly different needs, each of which will typically correspond back to Maslow’s Hierarchy of Needs. Maslow’s basic idea is that human needs can be visualized as a pyramid.

 Figure 1: Maslow’s Hierarchy of Needs

 Here are the basic steps, from bottom to top, and how they relate to the typical work environment:

• Physiological
  This is the bottom of the pyramid. This typically relates to physical workplace safety. Construction workers are more likely to be focused on this step than are office workers. Likewise, police and soldiers are likely going to be more focused on this step than even construction. The main concern here will be whether something on the job will prove to be harmful or not.
• Security
  The security of this phase is more related to peace of mind than physical security. Security generally relates to whether or not the job is stable. Do workers worry about being demoted, not getting a stable paycheck, or getting laid off?
• Love and Belonging
  The idea that an employee can come into work and feel like part of a team falls into this category. Employees worried about this stage will often feel like they are an outside or loner and not fully part of the team. They may feel that they are moving in their own direction, which is incongruent to the direction of the team or company.
• Self Esteem
  This is the idea that when a worker contributes something he or she feels that it was of value and important to the organization. Workers stuck in this stage will generally be worried about the quality of their work and whether their peers and superiors view their work in the same light and with the same respect that they do.
• Self Actualization
  This is the top of the pyramid. This step focuses on creativity, morality, philosophy, and other higher level objectives. The concerns of people in this step are going to be whether they are afforded enough leeway to do things like be creative and whether the actions they take are moral and ethical.

The basic concept here is that as lower level needs are met the person is then able to shift their focus to higher level and more complex needs.  This means that “C” players may be highly focused on the stability of their job and continuing to get a paycheck while “A” players are more worried about autonomy, the ability to be creative, and doing what they feel is morally and ethically right.

The transition from an “A”, “B”, and “C” player paradigm to an “A” and “B” one will almost always include a cultural shift in order to accommodate the different level of needs required by the majority. As the company shifts away from focusing primarily on “C” players to focusing primarily on “A” and “B” players the hierarchy level at which the collective company’s need is at is raised.

For example, lets say the old company was 50% “C” players. “C” players are worried about security and they make up the majority of the organization so there will be a large portion of management that is devoted to holding hands, regimenting work schedules, and looking over employees shoulders. As this 50% of “C” players is either shifted to “B” players or released the new makeup of the company may be more along the lines of 80% “B” players and 20% “A” players.

If the management that is used to dealing with “C” players continues to focus on the same problems they will inevitably miss the mark and alienate “B” and, especially, “A” players. Without shifting the cultural paradigm along with the performance expectations two things will happen. First, a portion of “B” players will fall into a “C” player category. If they are being treated like “C” players regardless of what they do, why not act like them? Second, “A” players will leave. Regardless of the state of the economy “A” players are always in high demand. Even if they are not able to find a job immediately, they eventually will. Either way, they will leave.

In order to successfully rid a company of “C” players the focus must be two fold: performance and cultural expectations. Without this, companies simply shift the bar higher but ultimately still have “C” players in the mix. In addition, and perhaps most importantly, failure to shift cultural expectations will inevitably result in the loss of “A” players, which is corporate suicide.