Bootstrapped startups and the shit I learn in therapy

We had one overarching goal at the beginning of Q2 — eliminate stress.

Our first quarter of the year was our best ever from a financial perspective, but our team came dangerously close to burning out. That’s not the kind of company we want to be. Financial success isn’t worth it if you’re miserable.

Heading into the second quarter, we made some big changes.

Moving on from clients & improving project management

The majority of our stress came from two projects, so we decided to hand off both. Moving on from a client is never an easy decision. From a purely business perspective, it creates financial pressure on us to replace that time and income.

But more than that, we take our partnerships seriously. Building a business is tough, and some stress comes with the territory. We don’t give up just because things get tough.

At a certain point though, the relationship isn’t working anymore, and it’s in both parties’ best interests to move on (yes, I’m painfully aware it sounds like I’m talking about a divorce).

We were able to move on from one project right away. So we reached out to a friend who does good work and facilitated the handoff. The other was an older client and a more sensitive project, so we agreed on a transition plan and spent the quarter working on finding the right person to take it over. Both projects are still doing well and moving along with new partners.

Next, we took a hard look at our project management processes.

When I looked at which projects were doing well and which were struggling, I noticed a common theme: me. It was painfully obvious I was failing as a project manager.

I had two hypotheses for why:

1. Project management does not come naturally for me.

I’m neither particularly organized nor detail-oriented. I’m easily distracted when I try to accomplish simple, routine tasks. And I’m a people pleaser. I’m working on all of these things, but it was obvious I shouldn’t be spearheading project management.

2. I’m not involved in the day-to-day work.

Our first instinct was to hire a full-time project manager. If we were having problems, it probably meant we were at that size, and it was time. I talked to a project management consultant and an agency owner I respect who confirmed as much.

But something about this route didn’t sit right.

I’m not involved in the day-to-day technical work, and so there were details I was missing. Things were also getting missed in the game of telephone between the client, me, and our technical team. A good project manager might be able to spend enough time to overcome these challenges, but hiring a full-time PM still felt like an inefficient system.

Our projects that were going the best were managed by developers. Our developers are smart, and they have people skills. Why not leverage those? So we put a new system in place where we assign each project a lead developer, and the lead serves as the project manager and point of contact for the client. So far, this new system has been working much better.

We also doubled down on our Roadmapping process, dedicating more time to quoting and (most importantly) documentation. Our Roadmap Reports are more detailed and accurate than ever.

Finally, we started investing a good chunk of my time into documenting all of our processes in a handbook we’ll be sharing in the next couple of months.


Objective: Freaking eliminate any bad stress!

Key Results:

✅Reduce problematic clients to 0

❌No more than 2 unfinished cards per sprint cycle

✅Average less than 1 critical bug per month

❌Finish the quarter with $600,000 in the pipeline

✅Close 1 Roadmapping Session from a content lead

So far, we’ve seen overwhelmingly positive results from the changes we’ve made. We’ll get into the details down below, but our team is less stressed and we still had a fantastic quarter from a financial perspective. The agency isn’t perfect, but we’ve made strides I’m really proud of.

Of the two key results we didn’t hit, only one was project-focused. With “No more than 2 unfinished cards per sprint cycle,” we were trying to measure how well we create and stick to plans within our two-week sprints. We still like this as a measurement, and so we’ll keep it around for the third quarter.

“Finish the quarter with $600k in the pipeline,” was a sales goal. While we hit $600k in the pipeline at the peak of the quarter, we did not finish with the pipeline full. That’s okay for the moment because we still closed a large project we began July 1, but I definitely have room to improve here.

💵 Revenue

In the second quarter of 2019, we brought in $176,092 of revenue with $27,826 in profits. Our revenue was very slightly down from Q1, and our profits were down significantly. This is because we increased our expenses at the end of Q1 and again during Q2 (more on that further down). We still ended with a ~16% profit margin which is within our ideal range of 10-20%.


💰 Expenses

Our total expenses for Q2 were $148,266 or ~$49,000 per month. Because our margins were healthy in the first quarter, we decided to increase Kevin’s, Jerry’s, and Garrett’s salaries and hire 2 new team members. We put a compensation plan in place so salaries are less arbitrary. Austin and I still fall outside this compensation plan, but our jobs are more nebulous and we stand to benefit the most from company profits.

We considered making additional investments into marketing, but our focus for the year is on profitability. We’re choosing to remain scrappy and keep our marketing spend as low as possible.


👥 Revenue per client

In quarter 2 we only had 7 total clients for an average revenue per client of ~$21,000 or $7,000 per month. This is probably healthier than our numbers in the first quarter when we had more clients.

👨💻 Number of team members

For Q2, we grew to 8 team members, with 6 full-time. We also had 1 kick-ass financial advisor.

We brought on 2 awesome new people in the second quarter! Karen White joined the team as an Executive Assistant and Austin Carr joined as a front-end developer. We found Karen through an awesome service called Boldly, while Austin beat out 140 other applicants for the front-end job.

Our front-end job post went viral on Twitter, and we got a phenomenal response. Unfortunately, this meant we had to turn down some really talented people, but Austin has been an incredible addition to the team.

Karen is based out of Ecuador and Austin is based in Durham, NC.

💸 Salaries

One of the big things we did this quarter in preparation for the new hire was establish a compensation plan. Up until now, we’ve basically set salaries arbitrarily based on what we could afford. As we grow and add more roles, we want a clear path for promotion and policy for annual raises.

The plan still isn’t perfect. For one, it only includes one role at the moment. We also need to figure out how the promotion process actually works. And while our salaries are pretty solid on the more junior end, the upper end is still on the lower side of market rates. But it’s a start!

  • Andrew Askins (Partner / CEO) - $72,000 year
  • Austin Price (Partner / Designer) - $72,000 per year
  • Kevin Hoffman (Lead Developer) - $84,000 per year
  • Garrett Vangilder (Developer) - $74,000 per year
  • Jerry Hardee (Developer) - $74,000 per year
  • Austin Carr (Developer) - $68,000 per year

🧠 Mental health

Our mental health as a team is much-improved. In addition to transitioning away from difficult clients and instituting better project management practices, we’ve also started taking one day a month to work on internal projects. This has been a really nice break from client work and has energized the team. We eventually want to do this one day a week, like Thoughtbot.

One of the areas where we still struggle is what to do when we need to work on a project outside of normal work hours. There are occasionally critical bugs we need to fix or deployments we need to do outside of peak hours to prevent a service disruption. When these add up it can cause stress, especially for Kevin who has to handle a lot of these as our lead developer. We’re trying to spread these tasks around more and prevent them from happening too often. But some of it is inevitable.

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