Our Lean Startup

There are a lot of misconceptions about lean startups. This is a great introduction to the nuances of the topic, with concepts we subscribe to. However in the context of this post, I’ll equate “lean” practices to bootstrapping – or the efficient use of resources.

How did Pagely evolve from a managed WordPress hosting company with an idea in 2009, into a market innovator and leader that’s profitable and serving enterprise customers in 2018? And, more importantly, how did we do all of that while remaining a bootstrapped company?

To put it simply, Pagely is a set of systems.

  • Adding variables to a system makes it more complex.
  • Complex systems take more resources to manage.
  • So, we reduce complexity by automating everything.

Now you say to yourself: Well, yeah. I know that systems rule!

I didn’t. I came from a design background where everything was a one-off custom job. We had a loose process that would sometimes hold together, as each client site had a unique set of variables. However, when we started Pagely we had a few parameters in place we adhered to, and while they may seem draconian, they forced us to be efficient and build systems. Thankfully Sally is the Queen of systems and she beat me into shape.

Our startup dogma:

We had to earn revenue on user #1.

We bootstrapped this company from personal savings and supplemented it in the early days with income from our design agency that we were winding down. Without revenue on every customer, the burn rate would have been unsustainable.

Today, ‘Freemium’ and ‘Free Trials’ are dirty words. We value our product and expect our users to as well.

Raising capital is an inefficient use of time.

We could have spent 3 months chasing money, or 3 months earning it. We chose the latter and have a much better product because of it. As an added bonus, if we ever did take money, we now have powerful leverage: profit.

Zero dollar marketing is key.

Also known as Word of Mouth, this involves creating a brand people may actually care about. Tools like Twitter and Facebook can help. So can content marketing.

Act as if we will never hire anyone, ever.

This is a powerful motivator in creating efficient and autonomous systems. How can we build a business that requires minimal human intervention? With only so many hours in a day and only 2 people at the beginning, we had to get creative.

The site setup, teardown, upgrades, billing, common administrative tasks and much more had to be automated. There was no other way to grow beyond a few dozen customers without making efficient use of our time. Early on, we were getting lots of support requests for whitescreens (user error can cause WordPress to display empty pages) and the volume was such that it would demand hours each day to solve support requests. So I built a self-service tool for customers to remedy it themselves.

We made the investment in time instead of capital. We grew slower but grew with profit, not trying to outrun burn.

Spend the money on quality…

We didn’t want to manage servers, we wanted to manage a business. So at the start we partnered with a managed hosting company to handle all that for us. It costs much, much more than standard hosting, but is a very efficient use of capital for us as we did not need to hire two $80k/year sysadmins to setup and babysit our hardware 24/7. On top of that, we got all the extra benefits they offer to pass through to our own customers.

Not on the latest must haves.

Pagely was coded and designed entirely on an aging 15″ 2.16ghz Macbook Pro with 3gb of ram and an old analog 19″ 4:3 Dell monitor for some added screen real estate. Sally and I rocked our gen 1 iPhones for years, refusing to upgrade just to have the latest and greatest. The phones were older than pagely.com!

Be the best, and price accordingly.

There is no profit margin on mediocre. While every company, including ours, has its hiccups as it grows, we set the bar on Day One to offer a premium service, and priced it as such. We are unapologetic about it.

Expect customers to learn.

I am a kinesthetic learner. If I don’t know something, I look it up and try it. I love to learn how to do new things. I expect the same from our customers to a small degree. Many a support request is answered with links to learning resources and a clarifying explanation of the reason why the issue is happening and how they can fix it. Knowledgeable customers are more self-sufficient. Self-sufficient customers require less support resources, making them happier customers.

Said another way, I expect our customers to take some responsibility for educating themselves on how to use the product our service provides.

That being said, we of course have made it our priority to help our customers with anything that comes up in a fast and courteous manner.

Prioritize focus and discipline.

We’ve got ideas coming out of our ears. So do you. We realized in the early days we might not have time to pursue them (we’ve got more time for that these days) as they are a distraction from the current business. We had to get used to saying “no.” We had to have the discipline to work on the right things: Acquiring customers and systems automation. New features are rare, measurable improvements to the system, and growth is common.

For us, it really came down to making the most efficient use of our human and capital resources. Call it lean, call it bootstrapped. The bottom line is that we had to get creative and build a company that would run itself. We had to think and deploy smarter.

For now, our trusted client list speaks for itself.

Our new challenge is how to transition successfully into a high growth company and keep the lean mentality that got us here. I hear it is easy to lose your way when money and talent are foolishly applied.

5 Comments

  1. Robert Sandie
    Robert Sandie

    Incredible post Josh! If you were any leaner.. you would have to cut off a limb or something.

    Reply

  2. Peter Fletcher
    Peter Fletcher

    Josh, I’m stunned that you’re able to achieve what you have with only two people. I’ve posted a few support tickets and the speed with which they’re sorted is amazing, something I wouldn’t expect from a two person outfit. Great example of a can-do attitude getting things done.

    Reply

  3. Bernd Petak
    Bernd Petak

    Awesome wisdom here Josh. Many thanks for sharing your learnings. I LOVE the startup world and our values.

    Reply

  4. Ward Andrews
    Ward Andrews

    Great post Josh, the power of focus and persistence is shining through.

    Reply

  5. ASP.Net Halifax
    ASP.Net Halifax

    Great post – nice to read about a practicial and focused approach to growing a business.

    Reply