I’m not a businessman. I’m a business, man!JAY-Z
Diamonds from Sierra Leone (Remix)
If you come from a product background like design or development, you probably don’t have a sense of just how much overhead is involved in running a business. Legal stuff, like privacy policies and terms of service, is the tip of the iceberg. Payment processing, refunds, and chargebacks will be part of it too. Incorporation. Bookkeeping. Accounting. Taxes. Customer support. Marketing. Sales. Research. These things will all chip away at the time available for doing product work.
It’s easy to view these tasks as interlopers getting in your way, and, to some degree, you should. However, it’s imperative you also recognize they’re necessary. Building a business requires much more than just building a product, and neglecting these tasks or how they intertwine with your product will create problems.
Let’s take a moment to talk about making product decisions in the context of a business. You’re no longer writing code to write code. You’re writing code to create value and, hopefully, revenue. Or, better yet, profit.
To do that, it requires investment in your operations. Just as you might want to optimize your release process, you’ll want to optimize these processes too, and you’ll need to understand how your business decisions interact with your development decisions and vice versa.
You have to think like a business owner rather than a developer. This means you have to value your time differently. Paying a bookkeeper isn’t costing you $200 per month: it’s saving you $1,000 because it frees you to focus on building your business. The distraction alone of bookkeeping makes it worth outsourcing sooner rather than later. The risk of making mistakes doing it yourself further increases the value of a bookkeeper. Sure, it’s worth learning the basics and doing it yourself in the very early days, but you should be champing at the bit to hand it off to a professional as soon as you have room in the budget.
Then there’s the age-old build vs. buy debate. That is, you’re always going to be tempted to believe that your needs are so unique that you should build your own internal tools rather than buying existing software solutions. When you don’t have money, even a tool that only costs $50 per month may seem expensive, but the cost of building your own will be much, much more when you factor in your time and consider maintenance and bug fixes. If you’re at a point where you can’t afford to pay for a tool, you’re better off going without that tool than building it yourself.
In the early days, the only time you should consider building your own tool is if it’s a core part of your business, or it otherwise provides a deep competitive advantage that makes your business unique. Outside of your actual product, these scenarios are few and far between.
With every change you make to your business, you’ll also need to think of the downstream impact on your customers and your ability to support them. How will a new feature change customer service? Do you need to write help documents? Similarly, you can’t just release a new feature without preparing and informing your customers. Your code doesn’t live in a vacuum. It’s something that others rely on to get their job done. Ultimately, they don’t care about your product–they only care about what your product enables them to do. Every feature change creates a possibility that you’re making their job harder to do, not easier.
At larger companies, things like help documentation, release announcements, or increased infrastructure costs will often be handled by other teams. So it’s easy to be oblivious to how it all happens. With your own company, you’ll quickly learn just how many tasks there are to releasing new software.
You’re not just coding with blinders on anymore. You’re running a business, and that means countless ancillary tasks screaming for your attention. You’re no longer making decisions only for yourself. Instead, you’re weighing design, development, legal, accounting, payroll, customer service, and countless other considerations with every decision you make. In some ways, these competing interests can be crippling; but in others, it’s liberating because your understanding of the business as a whole shines a light perfectly on the right path. It’s more complex now, but that’s what you signed up for.
Baremetrics Build vs. Buy Calculator The team at Baremetrics has put together a great calculator to help you value your time and understand the true cost of building your own tools against the cost of buying existing tools.