What we learned in our first 12 months – lessons for startups

I’m going to go away from our usual format here of talking about tech advances and digital trends to talk a little about our business and the first 12 months of our operation. Why? Well because it is our first birthday today, Krafthaus officially opened for business one year ago today. We have grown rapidly (from four people involved initially to nine today, and soon to be thirteen) and while this presents its challenges we were lucky to have a solid business background, so most of the financial stuff came fairly easily to us. The bigger challenges came in setting up our processes, finding staff, knowing how to price ourselves and finding and converting sales.

In the last few months I have been receiving emails from other designers and new freelancers about the business of running a design studio. Unfortunately I have been lax to reply to most and I apologise, but hopefully this post will make it up to you.

So here are the things we did in in the process of our first year of operations, they don’t just apply for a digital and design business, but any business launching in our increasingly digital world.

Read, and research

I personally spend a minimum of two hours a day reading news sites, industry blogs, tech blogs, marketing forums, twitter and other social media sites. I am also constantly digging deeper when I discover something new. For example, google glass. Google’s marketing videos are amazing, but what really is the ramifications for society, our business, what are the opportunities, the threats. This takes research. It could be as simple as reading a few opinion pieces or as we did it could be worth investigating the app development process. Will it be a game changer like the introduction of the mobile phone, or a market disruptor like the ipod, well that’s another blog for another day.

Network – with like-minded people

There are networking nights being run all over melbourne for web design, social media and dozens of other sector, and if you are interested in the market, go along, meet some like-minded people. You can learn more from what is said in a 30 second conversation (or sometimes what isn’t said) with someone with knowledge on a subject than a 2000 word article on the topic. Twitter is also a great way to meet like-minded industry people. We have made contact IRL (in real life for those who aren’t Netizens) with several industry people we met via twitter. Sometimes it has ended up being no more than a chat, but in others it has led to a lot of business.

Smart marketing spend

For some reason (I suspect it is our propensity to push the boundaries) we attract a disproportionate amount of start-up online businesses. They all have one thing in common, they are strapped for capital. We were no different. We shared the offices of our sister company, we ran everything on a shoestring for the first six months until we had some cash flow and we had very little in terms of a marketing budget. One way to overcome this is via government grants, or via venture capital, unfortunately the first is time consuming and the second isn’t that prevalent in Australia. And while the US may have a much better venture capital culture to support start-ups in this situation, Australian start-up companies do have one advantage over their US counterparts, and it is the (relatively) low level of keyword competition for search engines.  So with our limited budget we focused on the one area that we thought would give us the best return. This was Search Engine Optimisation. With a paltry $2300 investment over 12 months (plus, I do admit, a few man hours), we have managed to climb Krafthaus to second position on google for web development melbourne and sixth for graphic design melbourne. These rankings have resulted in several leads a week, almost more than we can handle. We are actually reviewing how much we focus on SEO at the moment as with our newly established business networks and referrals, we are comfortably busy without the external enquiries!


Use your existing networks

So how did we get business for the first six months before our SEO campaign kicked in? Well we used our existing networks. I got several pieces of business through Linkedin contacts who had seen the new business area I had gone into, and word of mouth soon spread through our social networks. We have done work for family, friends, people from our sporting clubs, anyone we could get the word to. Usually these have been done at “mates rates” but they allowed us to grow our turnover, and usually they allowed us to experiment with new ideas and products.

Grab creative talent when you see it

Hiring talent is always a challenge, but having going through the process of hiring several creative people over the past decade I have found that they are not always there when you actively seek them. For example, almost every designer position I have advertised attracts well over 150 applications and you would think that would be enough to find someone with the talent to match our business. This is not always the case. In the past 12 months we have added team members (who approached us with their folio) despite the fact that financially we may not have been ready to justify the appointment. As it turned out in these cases, we quickly filled their capacity and we are currently looking for additional design support. The lesson here is grab creative talent when you see it as it is not always there when you want it.

Look at what others (overseas) are doing

In this wonderful country of ours we do have a tendency to be a bit insular at times, and when we are not we tend to try and reinvent the wheel, with oft disastrous results (Hello Myki!). We now live in a global economy and ideas are spreading faster than ever before. When it comes to web design and technology this is very apparent, how, in this day and age, developers are still building and selling sites that aren’t responsive or rely on flash, is beyond me. At Krafthaus we look to Europe, South America, and some parts of the US for design and functionality inspiration and we are not afraid to experiment and try out the latest trend.

Well that’s it for now, I could talk about pricing, dealing with clients, closing sales, but all of these issues are evolving as we work on building our brand, so perhaps something for our second anniversary.

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