I hated HAVING to be at work at 9am, and feeling guilty and stressed if I was running late. I hated having people silently judge me if I was writing a personal email or reading a blog during work hours, and the challenge of having to always book things like dentists and home deliveries in my pre- or post- work hours. Its not that I have an aversion to work, far from it, but I hated that the times I was not performing in a ‘normal’ business way would be judged negatively. And perhaps this is more an indication of my inherent guilt, as possibly I was imagining these silent frowns of disapproval, but nevertheless, I hated feeling that way, and knew that being my own boss would be the only solution.

And I feel very lucky to have achieved my goal: I am my own boss, and I am more or less master of my own destiny.

Of course the irony is that far from working less, I am now working MORE than I ever did, when I was a normal employee. The beauty of my arrangement though, is its on my terms, and every day that passes I savour that feeling. I love that because I work best in the evenings, if I choose to start work at 10:30am, and work til 9pm, that is fine. If I need to go to the doctors, I can book at whatever time I like, and work from home til that time comes. What freedom! And if the way I work best is to stop every hour for a game of Spider Solitaire, no one is going to ever judge me. Brilliant!

The one big challenge though, is that this freedom requires a great deal of self-discipline. I love working and I am inspired by my work, but sometimes, my inherent laziness gets the better of me. Never is this more apparent than when I ‘work from home’. Now, don’t get me wrong, my working from home is vastly productive, and I enjoy the solitude to focus on something complicated. But… the lure of tempting procrastination is strong, and I find it hard to resist even though I really really want to, without the power of the guilt I feel when I am working in an office.

So, although I work for myself, being in an office with lots of other super dynamic people not only motivates me, but dispels my desire to procrastinate. I actually find the rigours of my training as a 9-5 employee actually helps and gives me discipline to go to work early, work hard, etc. I know some people are brilliant at working hard at home, and are great with self-discipline, but I have come to terms with the fact that for me, I need to almost trick myself that I am going to a normal job, in order to get the most out of my time. Of course, I do give myself some of the flexibility I have aspired to, and in all, this proves a healthy workable balance.

Being a naturally trusting person (some may say naive), I tend to trust everyone. “Surely they just want to help? Surely they have my best interests at heart?” And I guess I’ve been lucky in that, for the most part, I haven’t been completely screwed in the past as a result of this naivety.

However, now that I have a business that is potentially lucrative, I cannot help but be suspicious of people’s motives. “Are they helping because they want something out of it? Am I meant to be rewarding them for their advice? Is their advice tainted because they want something out of it?”

I couldn’t help it. I had been in places like Egypt, where the ‘baksheesh’ is part of the culture… where you are meant to line the palms of people who give you unrequested help. Its such a foreign concept to us westerners – we pay for things we request, or for things we choose to give to (charity, buskers, etc). But to pay someone because they approached you and gave you unasked for advice on the streets of Cairo, was always something I hated, especially because it made me suspicious of every person that was nice to me… are they only nice because they expect a baksheesh?

So here in the business world, it sometimes feels like I am on the streets of Cairo. I naturally assume if someone introduces me to someone who turns into a customer, that they were doing it to help me out, but then I discover I am expected to pay a significant commission. I find people so willing to help, and then I find myself wondering what the expectation is to reward that assistance, or whether its genuinely altruistic.

However, I am becoming more confident with navigating this new terrain. I am realising that certain people around me are both trustworthy, and open about their expectations. I have been helped immeasurably whilst setting up here in London. I have a desk in a funky office, financial and strategy advice, support in seeking funding, a set of firm shoulders to help me when I’m feeling weak… at the moment, I pay nothing for this. They are the first people to have invested in me, not in cash, but in very kind kind. They believe I can do this, and have voluntarily become the backbone to this endeavour. I know when I look back, I will say I couldn’t have done it without them.

One of them I have known for many years… the others only a few months. At first I couldn’t understand why people that didn’t know me would be so kind. But as it turns out, they make gut instinct calls, and they decided to back me and believe in me… and they trust that if I make it, I’ll reward them. And of course I will. But I’m so touched that they haven’t negotiated or demanded certain equity, and I do believe a large part of the reason they do this is because they want to help and be involved in helping others achieve their dreams.

So, in the end, trust is very much a mutual thing, and honesty and forthrightness have to be constant companions on this journey. I guess it wasn’t that foreign a conclusion afterall.

A few of my challenges at the moment:

I need a legal opinion on my site so I can get public indemnity insurance. Just to get the Terms of Use document written is $4000. I do not have this money. I also need further advice to avoid being sued for copyright infringement, which with my type of site, is a risk. I cannot afford to do this – perhaps later when/if I have secured venture capital funding or when the site is making money, but right now, this money does not exist. So I have been asking my lawyer friends to help, which has meant I have my Terms of Use document written, but they don’t feel very sure about the copyright protection side of things. I am taking a gamble that I will be safe for now.

Although my site is functioning well and is nice design-wise, the Homepage needs a bit more va-va-voom. Everyone I have shown it to is very forthcoming with what is wrong with it: what is harder is getting anyone to be more specific about what actually should be done to make it better. The conclusion is that I need a brilliant designer to jazz it up. But brilliant designers do not come cheap. So what to do? Well, I have a colleague at work who might be willing to do it for a little bit of money, he is an excellent designer and web specialist, so if this pans out, it will be great.

Hosting is very expensive! To ensure maximum up-time, independence, safety from being labeled as spam, etc, I have gone the path of a dedicated server, but they are hideously expensive, and I just don’t have the traffic to warrant several hundred dollars a month for a top notch machine. So, once again, I need to make concessions to accommodate budget. I have gone for a very budget dedicated server option, but the sacrifice is speed. It’s a dangerous concession to make, as although I can pre-warn friends coming to the site that its slow for this reason, once the site launches to the mass market, I can’t be whispering into everyone’s ears to be patient. The ramifications are pretty awful too – if its too slow, they won’t come back. But is it worth spending thousands on this now, thousands I do not have?

So… these are just a few of the many many concessions I have to make as I launch my business. I am constantly evaluating if an expense is warranted, how I can get something for free, how I can delay expense… I think this must be very normal for a web startup, and it certainly stokes the fires of creativity as I have to work out how I can get maximum benefit for minimum cost.

1. Don’t worry about NDAs. Firstly, they don’t really protect you; secondly, they are a lot of fuss, and thirdly and most importantly, its better to talk about your idea to friends and colleagues rather than hide it ferociously from everyone (like I did initially). You get so much more value from people’s feedback than you get risk from people stealing your idea. And the truth is, its incredibly difficult to start a business, most people will never do it, and even if someone is passionately intent on leveraging your ideas immediately, you will still have a head-start on them. My inspiring friend who created Marziplanner taught me this.
2. If you can do it without a business partner, do it. I have been through three business partners in the last 8 months, and for various reasons they didn’t stay involved. I am now very pleased things have worked out this way. Although its great now and then to share the responsibility and financial risk, I find it better to have complete autonomy. Everything moves along so much faster when every decision does not have to be shared, and I have only myself to worry about. If I need to run things past someone, I leverage friends in the industry for second (and subsequent) opinions. And I am extraordinarily lucky to be working with an excellent development house whose owner acts like a business partner, ie. he doesn’t just do what he is told, he offers better solutions when he thinks ones exist, and he is versed up on web 2.0 trends so speaks wisely.

 

3. It takes a lot longer than you think it will. I came up with the idea for my business more than a year ago, pre web 2.0 madness. It wasn’t until early 2006 that I thought I should start to make it happen. I then spent the next several months designing the functionality, writing specifications, mocking up wireframes, preparing business plans, attempting to get government innovation grants (thanks, Aussie government, for not considering an internet business ‘innovative’ enough… they tend to focus on pharmaceutical companies apparently), sourcing developers, negotiating terms, etc… It’s now a year on, and I’m still not launched. It takes a long long time, but I tell you, if you love it – and you need to love it – it’s a breeze.

 

4. Know your market. This is a rather obvious point, of course everyone knows this. But the reality, especially when it comes to the web application and trends space, takes some dedication to actually achieve. I thought I knew it all, but when I consciously threw myself into a daily and detailed analysis, I realised how little I knew. For the past 8 months, I read about 20-30 blogs on a daily basis, I follow the links discussed in these blogs, I keep a catalogue of sites whose designs and functionality I like, I read technology news, I am abreast of all developments by the major technology players, I talk to people in the industry, I socialise at web events… its exhausting at times, and I could do a lot more if I didn’t have to work a full-time job as the amount of relevant material out there seems never-ending at times. But it makes such a tremendous difference to the quality of your business and the confidence with which you promote it: I know my competition, I know how to market my site, I know what I need to deliver to compete in this market… It takes more than a cursory search to know your market, its a task you need to commit to on a daily basis.

 

5. Keep your life balanced. At one point, I was waking up at 5am to work a few hours before work started, I worked a long day, I went home, and worked til midnight, and did it all again the next day. I was so exhausted and burnt out, my eyes ached, my back was a mess, I missed my friends, I felt disjointed from the world. I didn’t do my best work in those weeks. Even if it means I don’t get as rich, or my site takes a little longer to launch, my health and happiness come first. And it actually works in your favour: I will do better work if I have exercised, if I feel supported by my network of friends and family, if I have eaten well, and if I am generally happy.

What do you think? What learnings can you share about what it takes to build a business?

The process of coming up with my company name (which is, of course, still under wraps for now!) was an arduous and frustrating experience. I came up with so many gems that shone with brilliance and wit, only to be devastated to find that the domain name was not available. And it would have been fine if I saw some other little company had snapped it up and was doing imaginative and useful things with the domain, but my blood erupted with anger to find that 90% of the domains I wanted were parked and available for sale. When I dared to enquire what they wanted for the honour of using a domain that was lying dormant, they responded with US$10,000! Now, I am sure that would be open to negotiation, but considering my budget for the entire design, development and publicity of my whole site is close to that amount, its close to criminal to request that something that should cost US$10 should cost several orders of magnitude more. I’m all for entrepreneurship and supply/demand, but this trend which seems to be ballooning out of control is affecting the people that need the most assistance, those little people with big dreams who want to have a crack at making something fun and special online. And these sharks are holding domains up for ransom, turning a commodity into a rare jewel.

It means internet entrepreneurs – the good ones that are actually creating something of value – are having to come up with rather ridiculous words to name their business. Twango, Yugma, Stikkit, Rootly, Gpokr, Spurl, Zuula, Zypsy, MoVoxx, Boxxet etc… you see my point. Funnily enough, I don’t think this impact is necessarily a bad thing, I am quite amused by the imaginative results of these constraints – some of the best ideas come as a result of constraints – so I have nothing but praise for beleaguered entrepreneurs who come up with something new and vaguely memorable to name their businesses.

I just wonder where this will end. Eventually some pedantic domain shark will sit with a random word generator and buy up all possible combinations of letters in domain names, and then us little wannabe entrepreneurs will have to scrap our dreams of internet greatness because it will cost more to buy a domain than to hire a team of developers for two months to build the site. Who knows. I am just glad that at long last I came up with a company name whose domain name was also available (aren’t you just gagging to find out what it is now?!)

My obvious initial assumption was that I would go for a white background. When aiming for simplicity and elegance, the white-backgrounded site seems to be ubiquitous. See Google, MyBlogLog, Riffs, YouTube, Amazon, etc.

Alternatively, there are sites using coloured backgrounds effectively: The Best Stuff in the World, Lingr, Joopz etc.

The audience I want to appeal to is largely comprised of non-technical women. So my thinking goes: a plain white background often has a clinical feel to it, that tends to be great for appealing to men, but less so women. However, I don’t want my site to feel explicitly feminine, so that rules out pinks and other overtly womanly colours. Instead, I wanted something soft, using pastel colours that appealed to women. My conclusion thus was to go for the soft blue-green colour that I have also used as the background to this blog. It’s a colour I viewed as reminiscent of tropical waters, of mermaid tails, of twilight skies: surely this is imagery that conveys relaxation, feminine energy, and enticing adventures? It happens to also be my favourite colour… half my wardrobe and shoe collection is made up of teal-coloured items. I acknowledge this is a very self-centred decision-making process, but then, aren’t so many business decisions politically or egotistically driven? At least I’m admitting this from the outset, right?

So it came as a surprise when I shared my website HTML designs with a few select friends and family members to find everyone didn’t agree with me! One friend was encouraging and positive, but admitted that personally, she didn’t like the blue-green background as she thought it was a bit corporate. My mother, bless her, said it looked a bit washed out to her.

Notwithstanding this valued feedback, I think I will persevere with my colour choice. At this early stage, I am cautious of changing my designs dramatically based on the feedback of few. My intention is to be very encouraging of user feedback once my site launches, and make an assessment of how the design is perceived by users at that stage. I am open to the possibility that the site design may need to change post-launch. However, there are so many sites out there that are popular and usable despite their less than ideal design: MySpace is by far the most obvious example. It is possible that users will grow to love a less than perfect design if it does everything else passionately and exceptionally. So, for now, my plan is to follow my intuition and my learnings gleaned from other sites and blogs, and use a colour scheme that excites and inspires me, because at this stage anyway, the success of the business depends on how much I love the site I’m building.

What are your thoughts? Do you hate the colour?

Web design contracts: Why Bother?

What I particularly liked was the proposition that besides being a legal document (which almost certainly you will never exercise legally), a contract fulfills a socio-psychological function, by forcing all parties to think about the agreement they are about to enter. Specifically, “the solemnity involved in the act of signing a contract—the ritual of the contract negotiation and execution itself—impresses on the parties that they are making a commitment to each other, and that the document they are signing describes that commitment.”

Admitedly this process is somewhat less solemn when it being conducted in different countries, and document you are signing is a scanned and emailed and then printed version of the contract… but the essence is still there.

This process generally involves lawyers and long documents and much to-ing and fro-ing, but we are a small company, and my supplier is as well. There were no lawyers involved on my side, and the contract that the supplier proposed was only 3 pages long. However, we were able to pool together other contract and non-disclosure agreement templates from other software development projects we had done in the past, and just decided to use common sense in compiling a reasonable contract. We realised early on that with our budget, and the suppliers Eastern European location, the likelihood of us ever mounting a legal challenge on any point, and of a resolution ever being achieved through legal means, was negligible. The costs of such a process were prohibitive, and the discrepancies between the legal systems in both countries was too difficult to contemplate.

So, we decided to trust our instincts. We had spent a lot of time talking to the supplier, and had built a trust there. In the end, we set-up the contract to be simple, fair, and workable. These were the main points we sought to cover:

• what happens if we want to end the relationship? We said either party should give 2 weeks written notice.
• when would the supplier be paid? We broke it down by milestones. 20% upfront, 20% when the core engine and main features were fully functional, 20% when the features are fully finished and the web application is default-free, and the final 40% when the application is launched and the client is fully satisfied
• who owns the intellectual capital? We wanted to be sure that in the event that the supplier did not work out, that we could take all the code they had worked on and give it to another development house to complete. We would then pay the supplier pro-rata for what they had achieved to that point.
• how do we make sure it stays confidential? We inserted fairly standard non-disclosure agreement points, but kept it quite simple. We’ve seen NDAs that were novella like in length, our equivalent was brought down to 3 bullet point.

In the end, we thought even though there is little to protect us if the supplier stole our idea or didn’t do the work they had agreed, the agreement was such that we were not at a financial loss at any stage. The supplier strangely (and fabulously) offered a bug-free system prior to full payment of fees, which is quite remarkable, having worked on web software projects in the past and know that a bug-free system is a rare beast. The distribution of payments also made us feel protected: a majority of the payment would not be made until the web application was almost fully complete. We felt as protected as we could be, so we decided to take the plunge.

We then signed the contract, faxed it to the supplier, who signed and faxed it back. All good. Work began.

A few weeks after, I realised I didn’t have an invoice for the first payment of 20% I had transferred over. On request, the supplier duly provided one, but commented that I had sent over insufficient funds, that 20% of the agreed amount was more than I had sent. I realised with a thud of my heart that the supplier was quoting the price prior to the final 10% discount he had agreed to. “That isn’t right!” I said to myself, and went to find the copy of the signed contract. To my absolute horror, I saw we had written this in the contract: “BUYER shall pay PROVIDER the amount of $xxxx”. The ‘xxxx’ is not my insertion now, that was what the contract actually said!!! I was appalled. How on earth did all parties miss the critical element of price in the contract!

I then started to panic. What if the supplier said this higher price was what we agreed to? Would I be further out of pocket? I dived into my saved emails, desperate to find some sort of written evidence of our agreement, and with a sense of belated embarrassment, noted that we had not documented even via email the agreed discount. I then recalled we had made that final agreement over a phone call, so there was no record of the reduced price. What a great entrepreneur I am: I had fallen into my first awful pit.

Luckily, my supplier is a gem. When I reminded him (via email this time!) of our conversation and the reduced price we had agreed to, he good humoredly recalled it, and we laughed at ourselves for our foolishness. This fault was quickly remedied, and a new version of the contract updated and co-signed.

So, a valuable lesson was learnt here. Attention to detail. Get someone to read over something as critical as a contract to make sure you have not missed something important due to familiarity and habit. And make sure you have utmost trust and faith in your chosen supplier, as when it comes down to it, its all about relationships, not contracts.

We were very lucky, and our first choice in supplier was consistently reliable, and constantly exuded trustworthiness. Their language skills were exceptional, and the quality and timeliness of the documents they provided were exceptional.

And then even once you have established rapport, the next challenge is negotiating the price and conditions for the project. I freely admit I am not a brilliant negotiator: I am mercy to that frustrating female trait (in business at least) of being compassionate. Still, I was lucky enough to be very experienced in quoting for development jobs, it being my day job, so I was able to gauge fairly accurately if estimates for certain tasks were reasonable or not. The process turned out to be relatively painless, and I believe, mutually satisfactory. The process involved the following components:

• descoping some parts of my project. Some low-priority elements were estimated to require significant amounts of work (and money!), so I cut out these elements to make the first release affordable and efficient.
• negotiating down on certain tasks that appeared to be particularly over-estimated. In many cases, the supplier explained the reasoning behing the estimate, and I accepted this, and in others, they agreed to cut their estimates down.
• finally, I asked for the rate per developer and designer to be dropped a little to bring the overall cost of design and development down by 10%

One thing I learnt in a Negotiation course I went on a few years ago was that each party in a negotiation has personal reasons for making the deal happen quickly, and the biggest mistake you can make is to only focus on your own reasons for making it happen. I think in this instance, I wanted the project started at a good price, and my supplier – I believe – wanted a major project to keep their developers gainfully employed for large amounts of time. As a result, we were able to agree on a price that was a significant reduction on the original estimate, and that I am sure was still a good price for the supplier.

I also learnt that in the spirit of fostering a trusting and pleasant working environment, it is important to compromise sometimes. So, when I proposed that we shared the costs of transferring the funds internationally, and the supplier politely said that he thought I should cover that cost as he had already dropped his price considerably, I pondered whether I should labour the point and insist. I could have probably won, but in the long run, I wanted eager and satisfied developers, so I relented happily.

Then it was time to negotiate contracts… more on that next post.