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Ryan is the CEO of Broadwick Corp., a rapidly growing provider of web-based email marketing software started in 2003. Ryan is also the author of the book Zero to One Million: How to Build a Company to $1 Million in Sales and was named as one of the "Top 25 Entrepreneurs Under 25" by BusinessWeek in 2005.

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Startup Memories: Recalling the Long (and Bumpy) Road to Online Marketing Success

Written on
Feb 24, 2006 
Author
ryanallis  |
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Startup Memories: Recalling the Long (and Bumpy) Road to Online Marketing Success

Almost immediately, our support team began hearing from our true Q+A team, the paying customers that used the product. Emails, phone calls, and live chats started coming in from clients expressing concerns over changed locations of key functions, missing subscribers, and a different interface. We found out fairly quickly that something had happened during the transition to the new database structure that caused quite a few basic functions of the product to malfunction. We went from an average of 30 calls per day to close to 300 during that first week and from an average of 45 emails per day to 400 emails per day. With a staff of only three customer support reps, hold times went from nonexistent to 45 minutes and email response went from a four hour turnaround to a five day turnaround. We were effectively overwhelmed.

In trying to respond to the immediate crisis, I helped take support calls and answer emails, doing my best to compile a list of bugs, and doing my best to communicate internally as to the status of each fix. It was quite chaotic trying to determine what was a bug and what wasn’t, as there was never time to verify reports or even enter bugs into our bug-tracking tool. Bugs were reported on a central notepad and scratched off by the development team when they were deployed. I provided a daily summary of what was fixed and what was remaining to the team.

In terms of trying to get things fixed as quickly as possible and maintain internal communication, we had done pretty well. But we had forgotten one of the most important parts of crisis management: customer communication. In the confusion of responding to the situation, it took us four days to get a message to clients that we were aware of what was going on and were working to fix it. If we had done that one the first day rather than the fourth day, we would have likely had a lot less calls and emails calling to tell us about known bugs.

In the end, it took about 6 weeks to truly get past the crisis. It certainly had its effect, however, causing around 3% of our client base to leave and putting us a full month behind on our growth projections. We had learned our lesson and our v3.5 release in October 2005 went much more smoothly. We communicated in advance about the expected changes and improvements, thoroughly tested the release for over a month, and developed in a way such that we could backtrack to an earlier release version if any change we deployed did not work as expected. The release wasn’t perfect, but we had made a lot of progress.

We ended 2005 with 3600 clients, 21 employees, and over $1 million in sales.

The Challenges of Building a Strong and Scalable Business

As CEO over the past three years, I’ve learned some critical lessons about building a company, managing a team, and how the dynamics of a team can change as a company grows. In relation to this, I’ve found there are a few critical junctures in a company’s growth in which you as a CEO have to adapt and grow. The first critical juncture occurs when you hire your first employee. At this point, you have to learn how to manage someone and gain respect from those who work with you. This can certainly take time to adjust to if you have not managed or supervised anyone before.

The second critical juncture comes at around 5 employees. At this size, you have to start to put in place policies and procedures, start following through on processes like performance reviews, and start having weekly meetings. While before you could just talk with someone because you worked right next to them, at this point you have to start thinking about internal communication and formal planning processes.

The third critical juncture comes around 15 employees. At this stage, you have to build systems, procedures, and processes so that team members know what to do when you can’t manage them directly. Multiple layers of supervision and management arise, the structure of your hierarchy chart and communication flow starts to matter, and you better get pretty good at project management and meeting management fairly quickly or at least bring someone in who is. Other helpful items to have in place at this point include a compensation review procedure, an employee training procedure, an employee handbook, and a corporate values statement. Much of the work at this size revolves around human resources, billing, cash flow management, product development management, lead acquisition/sales management, and day-to-day operational execution management.

The fourth critical juncture is the one we’re in the middle of now–around 22-25 employees. It’s really been amazing how different running a 22 person company is than running a 15 person company. If you’re not careful, at this size a company can start to lose its entrepreneurial culture. Meetings start being called about when to hold meetings, forms for everything start popping up, schedules can be a mess to coordinate, and information on customer interactions can be disjointed. Things like having company baseball outings and yearly off-site planning and brainstorming meetings become critical. Turning weekly company-wide meetings into weekly Directors meetings with separate weekly departmental meetings can also be helpful, as can looking to expand your management team and making sure that you at least have a Director of Human Resources and Chief Operating Officer to help you manage day-to-day employee and operational issues.

I like to relate building a business to trying to push a big wooden wheel. For a long time, each push seems like it’s not having much effect at all, but over time, if you keep pushing, the wheel will start to move. If you continue to push long enough, the wheel will start moving faster and faster with its own inertia, making the effect of each additional push greater.





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