Telling the truth about SME life today

From light bulb moment to online success

Over the past 15 years Ive been lucky enough to work with an unusually high number of entrepreneurs and been heavily involved with startup programmes, entrepreneurial groups and government sponsored high growth programmes. Ive conceived websites and applications for large entrepreneurial organisations and one-man startups. With big budget and no budgets. Ive worked with many of Scotland leading business people and been closely involved in helping take some amazing ideas onto the Web.

I get a real buzz out of listening to business owners describe their vision and then imagining how together we might turn that into digital real estate that drives their business, builds profit and helps fulfil their ambitions. The design and technical part are interesting, but not nearly as exciting as the idea itself. And over the years I have observed some traits and common misperceptions and this is what Id like to share with you now. And of course, the stuff that really works.

Three common mistakes

You might not be surprised to hear that most entrepreneurs badly under-estimate the cost of taking their idea online. Sure, you can bootstrap your venture, but most startups have a rose-tinted view about web development and online marketing generally. Getting it right takes more time and effort than one might think and you need to be prepared to test, iterate and test again. Cash can be burned quickly, so focus on delivering a Minimum Viable Product (MVP) that contains the core features that provides tangible benefits that your target market will value and potentially pay for.

The second area is marketing. I see a disproportionate effort (and cash) placed into the creative and build phases of projects leaving little for research and promotion. Real world testing and marketing are often afterthoughts and yet are the real keys to viability, sustainability and growth. I like to remind our clients of the £3 rule”. Its simple: For every pound you make available for design and build, make another pound available for marketing and another for maintenance and upkeep.

Strategic marketing is all about understanding customer needs and fulfilling these profitably. Dont assume you know what your customers want, make sure you ask them. Demonstrate your ideas and vision and learn about what matters most to them. What problems are you trying to solve What is your solution worth to your customer Marketing principles apply just as much in the digital world as they do on the high street.

The third area is law. Again I usually see this tagged onto the end of projects when it should be considered up front. How will you protect your idea Your content, data or customers Who will own the rights to your code, branding or ideas Getting a competent lawyer involved at an early stage is essential.

If you’re handling card payments you will need to consider PCI DSS compliance, if you’re capturing and storing user data you also need to have clear policies on your website and more importantly, robust processes for handling and securing the data on your server in line with current data processing law. You should also consider how you might deal with a disaster scenario, such as what if your web developer or host goes out of business This is where good advice early in the process is invaluable.

To put this all this into context, lets say you have a 50k budget in mind for year one of your project. When you consider all the above, how much should you be spending on design and build of your MVP” Probably not more than 15-20k, maybe less, depending on how expensive it will be to market it and start to deliver value. You might also want to consider some kind of performance related pay arrangement for your designers and marketers or some other way to get buy in to your bigger vision.

Controlling your budget

Technology projects often run over budget and the bigger the project, the more complex and uncertain it becomes, then the risk is greater than ever. Every year countless high profile web projects are shelved. This can be because priorities change or more often than not because the complexity and requirements spiral out of control. Your project manager and choice of digital partner is key. They will need to work closely together to keep a tight rein on your budget.

Payments to your agency partner should be staged on the successful completion of agreed project milestones and you will want to keep some contingency in hand for the unexpected, but inevitable scope creep . Scope creep is the biggest enemy of cost control and can lead to disputes that draw the lifeblood and energy out of your project. You avoid this (or at least mitigate its impact) by tightening up your requirements, ensuring early buy-in from stakeholders, meeting often with your team and releasing iterative versions of your site.

Now the good news

The web provides a level playing field, where great ideas can flourish and where small budgets and entrepreneurs can punch well above their weight. Modern Content Management Systems (CMS) and development frameworks speed up the creation process, enabling faster working and prototype developments. You can often develop a well-polished prototype suitable for an investor meeting or research group session without outlaying huge sums. Agile development and management methodologies can keep things moving along swiftly and the knowledge and quality of your core team (your web designer, technical lead and marketer) is the most important factor. Working with someone whos been there and done that for other start ups can help you avoid the rocks and contribute invaluable ideas and suggestions.

Phil Holt is CEO of Edinburgh-headquartered digital agency Web Foundry.

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