About a month ago I received some email with questions about how Airbag got started as a for-profit company. Here are the questions and answers for the benefit of others.
What factored you into quitting your day job and going solo? I’m assuming you built up enough of a name through your blog.
Well, I’d love to be able to say that yes my name, this Airbag brand, had reached such great heights that I had to leave the day job but that wasn’t necessarily the case.
Almost two years ago I left employment because my wife and I had decided to move out of state. Then quite suddenly we reversed that decision and I found myself at a good time in life to take what money I had saved for a rainy day—not much mind you—and turn Airbag into a corporation (read about it in now-agonizing detail). That said, years of writing about design, web standards, iced lattes led to the creation of a brand that definitely helped make that transition from employee to principal a lot easier.
Another factor in that decision making process was a large group of family and friends who all thought it was time that I started my own company. Their excitement and enthusiasm was the icing on the cake and what finally convinced me to go out on my own.
Most people I know who quit working for the Man so they could clock-in for themselves did so because their side-work-business grew to the point where they had the opportunity to go solo. Unless you’re a trust-fund baby or have an incredibly intelligent significant other who pulls down the big money based off her uber skillz in science and/or math then I would suggest going this route to avoid the financial hardships that are likely to come but it’s your roller coaster ride so do what you will.
Why go solo instead of partnering up with others (ie, Blue Flavor)?
It was never my intention to go solo, the plan for Airbag has always been to grow it well beyond the one-man shop (we are now three people flying blissfully under the radar). After more than a decade in the business I have gotten to know a lot of designers, developers, sysops, etc. all of whom I could bring in as subcontractors when the need arose so I didn’t feel compelled to latch on to someone in the beginning.
About partnering, I have been in too many situations where more resources and attention are spent creating the partnership than doing good work (sometime I’ll tell you about the web design shop I started with a Lt. Governor of Alaska). Focus on doing good work with people who compliment your skill set and the partnership will form naturally.
That said, it’s likely that clients will be concerned awarding a contract to a single operator. The best way to overcome this problem initially is to get time and cost commitments from people you need to add to your project team and then include everyone’s bio along with their skill sets in your proposal.
Do you solicit clients or do they all come to you? if you solicit, how do you decide who to go after?
Currently all of our jobs have come in through Airbag readership or referrals from friends and colleagues. For the last six months I have devoted time to prepare for some kind of marketing and sales effort in order to grow revenue and further stabilize cash flow. After you read the Journal long enough you realize that businesses spend money in amounts measured in tonnage. It’s my intention to make it easy for those companies to spend their tons at Airbag.
The first step in this process is to start learning more about money: Who has it, where do they spend it, and what can you do to help funnel it into your bank accounts.
One way to get your brain to start thinking like this is to read the financial news and occasionally magazines like Fast Company (Look it doesn’t make me happy to say this but Business 2.0 is a waste of money, who wants to read one month old blog posts printed on thin paper?), listen to Marketplace on NPR and subscribe to your local business journal.
That last part, I believe, is key to person starting out on their own. It’s one thing to learn more about global economics — that will help you to see money and that’s important if you, like me, have had a hard time seeing past seven digits — but unless your name is an established brand you’re not likely going to land a six-figure contract right out of the gates. Start small, manageable, and constantly prepare for success.
You would be amazed, perhaps astonished, at how little small to mid size companies know about the web and the many opportunities they may be missing because they lack the knowledge to know how to leverage the medium to grow sales, increase awareness, cut costs, etc. Wrap that into a proposal and submit it, via mail, to the person who will give you money to get things done.
I read somewhere (I’m kicking myself for not writing down the source) that half of all businesses in the United States are not on the web. Chew on that.
How much work do you do, and how much do you manage and contract out?
I only work on the parts of a project where my talents lie. For me this means writing all project planning documents, drafting the information architecture, designing, and occasionally copywriting (My strengths are not equal in these areas but they are not rocket science to me whereas dealing with .htacess files, MYSQL queries, and IE 6 hacks are and so I do my best to avoid ever having to do that work. Sometimes this means living in the mountains for months on end).
Once a project moves into development I hand that over to others and then put on my project manager overalls and start looking for the next three of four projects to bring in. During development and implementation I will assist with testing and handle the communication with the client up until the project has ended.
It sounds like you are building a pretty nice practice. How did you do it? Did you set out to build a particular kind of company, or is your practice in response to the kinds of work you get, or both?
This is a really great question. Initially I started Airbag as a company that designed and developed websites knowing that eventually I would add products and services to meet the demands of the marketplace while looking for new opportunities. In addition to Airbag’s soup-to-nuts services (web site design-to-development-to-implementation) we provide creative direction and production management to a companies who either can’t afford to hire these positions full-time or have had difficulty in finding a good employee for the job. Meanwhile we have a few product start ups that are in the research and planning stage (that said we absolutely do not work for startups in exchange for ownership, those deals are bogus).
How do you guarantee your employees pay. How do you know you will have enough work to stay busy, keep them busy and have enough cash flow to pay them?
There are no guarantees in business and there never will be (ask Wieden + Kennedy about loosing Nike’s $11M interactive running account after being BFF for twenty years) that’s the hard part about growing a company. The only thing you can do is to think 90-days out and do what you can to continually bring in business.
One way to help alleviate that gun-to-the-head feeling is to get a retainer or two. Generally that business arrangement favors the client but it’s nice to have a financial base to grow from. Another method is to have your companies bank set up a line of credit–for your business, not your personal account–that you can use to cover payroll for a month or two.
Usually people will use up their lifetime savings in the first year of going solo, while trying to stay afloat. I am not sure that is very smart, or safe at all. What do you have to say about that?
For some people, that’s the only way they can get started but I would agree with you, going that route is stupid. Keep your day job while growing the side-business. If you’re good there will come a point when working both jobs is going to be painful. That’s great! Keep going until you don’t think you can possibly do any more and sometime shortly afterward you’ll find that you have enough business momentum to go out on your own.
I don’t know anyone who took the fast track (meaning they burned through their savings trying to start a company) and was around longer than a year.
I would also think that any company, even as a one man show. Initially, you would need someone to handle marketing and sales. Even if it’s the same person doing the actual design. What are your views on that?
I guess. If you don’t have work already coming in then I don’t see the sense in starting a business. Marketing and sales should only be brought in when you have the infrastructure to handle success. I want to add a sales process to Airbag sometime in the Fall to see how that might work for this type of company. Otherwise we’ll continue to enhance the methods we currently use to get the Airbag brand name out there (read: networking, writing, paying off the Federalizes, and making good use of an army of ninjas) until that’s tapped dry.
If you have more questions about Airbag, the business of web design/development, or getting started feel free to ask.