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Surfing the crest and trough of business waves

It’s been quite a ride.

We are a software development services company, bootstrapped by my own savings, and profitable after 2 months.  We took this thing to $2MM over the first 12 months and established a nice kitty for ourselves.  The last 6 months has not been as rewarding.

While we have grown our number of clients to 9, the gaps in the project work have created quite a challenge to know when to hire and when to subcontract.  I liken it to knowing how deep the ocean is (the steady work) versus the crest and troughs of the waves (project work that comes and goes).  This, of course, has a direct impact on who we hire and who we subcontract.

The problem is that our biggest client has become less reliant on us.  We (really just me as the sole sales person) have failed at replacing that stream of revenue, and so the ocean has become shallower.  This has forced us to terminate some of our core players. Terminating employees is a real challenge for a services organization because retaining people you trust to deliver, and who define your capabilities, is critical to your brand and sales process.

So here we stand.  Me, 6 employees and two partnerships for subcontract work.  Our waves our large and our depth is not deep enough.

I am confident that as more clients sign on and as those wave troughs either have shorter periods or overlap with other wave crests, we will be able to retain that core.  Until then, it feels like and awful lot of churn / inefficiency; which unfortunately is also having a negative consequence on morale.

Maybe I’m just not a good surfer yet, or maybe I’m not cut out to surf.

 

  • I’ve seen this model work very poorly for companies like yours. It’s easy for a client to hand over 100k and then demand 250k of work. This is often a culprit for stagnant growth in a saas because good employees get too busy, burnt out, they leave, clients realize they are getting the bare minimum of expectations met, account manager can’t upsell them because they’re having just an ‘ok; experience.

    Without knowing anything about your specific product, I would say make everything configurable from the front end and be clear in the sales process that this is the product. Make the UX so damn impressive and engrossing that the client is too busy Wowing to ask for changes.

    It’s easier said than done, but don’t take new business to grow your top line. Only take new business if the client’s needs are in line with where you want to take the product, and you don’t need to make promises for customizations that will chop off your bottom line.

    Good luck

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