Welcome fellow Launch Chads. If you’re here, it’s likely that you’re trying to escape the rat race.
Working for a big company where you are just a line item on a spreadsheet. Looking to break out of Corporate Shawshank.
Today we will be breaking the matrix. Let me explain.
Bad Habits Accrue from Social Conditioning
What you’ll find is when you’re starting out building something new, you’ll carry over some bad mental habits from work & school.
The Cardinal Sins Series is about unlearning. This post will be the first installment of a series covering the biggest mistakes small tech newbies make & how to rewire your thinking to avoid them. The goal is to shed the baggage from mainstream education/work experience and to be more efficient while building a tech product from nothing.
Avoiding these mental traps and more importantly, keeping your *team members* from falling into these traps is going to have a major impact on your chances of success.
The Newbie’s Major Disconnect
If I had to boil it down into one sentence it’s this:
You’re trying to do business like a corporation while you have none of their advantages/resources.
You are not Shawshank Corp. Don’t try to do business like Shawshank Corp.
That’s a huge waste of time & money. And. You’re totally missing out on the numerous advantages of being small.
You’re starting a small tech venture. Which means you have fewer resources.
And yet.
You have all the flexibility and resourcefulness in the world. You can do things that don’t scale and entirely avoid the BS that drags corporations down. That is one of your biggest advantages.
You are the little boat. Small nimble, fast and able to change directions quickly. Embrace it!
Cardinal Sin #1: Trying to Prematurely Automate
When you come from a large corporation, even saving 2% on your team’s time or expenses can make a major difference at that scale.
So you, like most people newbies, will feel an impulse to automate everything. That urge is ever-present. You must resist that urge. Trying to automate processes prematurely leads to waste and takes away from the team’s focus.
In fact, intentionally *not* automating things can be a huge advantage (see Wizard of Oz Development Method which I will cover in depth in future posts).
The cost benefit ratio for automation is pretty much always going to be way less favorable for your team than it is for Shawshank Corp. So you should always be thorough & circumspect when someone on your team floats an automation idea.
Technical Debt is the accumulation of bad management decisions coupled with technical shortcuts that cost you in the long run - a time bomb waiting to go off!
Automation carries with it the risk of huge hidden costs. You could take on major technical debt to just keep the system running and to prevent angry customers from calling you.
The “Should I Automate This” Test:
Before you try to automate something ask yourself:
Grasping the Uncertainty of Requirements - Do you have an iron clad understanding of *exactly* all the steps you plan to automate?
Benefit Analysis - Will the benefits of automation be immediately and transparently felt by your customers AND outweigh the benefits of the manual process?
Cost Analysis - Will the cost invested in time/money to automate approximate those required for a manual alternative?
If the answers to any of these questions is “no” I strongly recommend you keep the process manual. You take on all kinds of timeline uncertainty building an automation without a confident “yes” to each of these points.
Illustrating with a Concrete Example
Let’s illustrate the “Should I Automate This” Test with a real world example from my life.
The Challenge:
Suppose you are developing a B2B mobile app. You are in the seed round and have about 100 users max. Your team needs to onboard new clients’ business banking accounts to the app before they can transact. Thanks to the Clown TradFi Financial System, you need to collect a lot of information about the customer before you’re legally allowed to process their 5 figure transactions. This includes all kinds of personal information about each member of the LLC & their business operating agreement.
Solution Options:
Automation: Spin up an automated tool that can request, collect, forward/process sensitive banking information securely and green light the customer’s transactions.
Manual: put one of the nicer people on your team on point to call customers who request to sign up a business account. Hold their hand from the very beginning all the way through to the point where they’re ready to transact. Correct their mistakes for them. Harangue the platform to expedite things. Whatever you gotta do.
Now that the scenario is set, let’s run through the questions:
Question 1: Grasping the Uncertainty of Requirements
Do you have an iron clad understanding of *exactly* all the steps you plan to automate?
Chances are, you got into this venture for the tech or the Wifi Money. Not for doing banking paperwork. In my case, our team had no idea all of the steps that were required. The payment processor had vague guidelines but the approval process in the TradFi system was ultimately a manual one. Even if I did the process with a few customers there would still be variables not yet considered.
Question #1 Verdict: No. You do not understand the steps well enough to automate. Manual processes to the rescue. Assign someone from your team to handhold the customer through the whole process. Ask them to carefully record every process they do for each customer. Then look at the patterns and start automating the biggest pain points once you’ve collected enough data on what is required.
Question 2: Analyzing the Benefits
Will the benefits of automation be immediately and transparently felt by your customers AND outweighs the benefits of the manual process?
Assuming we’re at around 20 customers, let’s break down the cost benefit in turn:
Automation Benefits
User can immediately onboard without waiting
Less headache for your team
Manual Benefits
Develop a personal relationship with customers while you’re still small enough
In the event something goes wrong, you have a human there to adapt and push for a successful result
Additional note: you’re at 20 users. How often do they add a banking account? Maybe once. Win for the manual solution.
Question #2 Verdict: No, the benefits of automation aren’t obvious at this scale. Arguably the manual solution is better because it’s going to give you “face time” with customers and potentially buy you loyalty/better understanding of their needs. Once you start scaling up the time savings and removal of hassle will be a bigger factor but not now.
Question 3: Analyzing the Benefits
Will the cost invested in time/money to automate approximate those required for a manual alternative?
Automation Costs:
Assume at least 120-140 hours of dev time
Continued maintenance and bug fixes (assume 10 hours/month conservatively)
Opportunity cost of lost focus on other items
High uncertainty on these estimates. Could be 90 hours could be 200 depending on what goes wrong!
Manual Costs:
Assume 1-2 hours per customer going back and forth requesting docs
Whomever you assign this to may hate you if it continues for too long. Tell them to take good notes so you can start partially automating!!
Question #3 Verdict: No, the cost is much higher for the automated solution at this stage. The investment in the fixed cost of spinning up an automated tool does not yet catch up to the relatively small variable cost of picking up the phone and talking to a customer once in a while. Just do it. Don’t be an autist.
Wrapping Up the Example:
You may be wondering “But BowTiedLaunch wasn’t that example a no brainer? Isn’t it obvious we shouldn’t automate?”
Yes it is. But you’re smart because you’re here. You would be amazed at how often small companies mess this up. They often don’t even ask the question “should I automate this or keep it manual?”. They just take it as a given it should be automated. In the process, they waste tons of resources on automating prematurely.
In this exact example given, C suite executives overrode me and ultimately wasted tens of thousands of dollars and dozens of man hours. As was routine. I’ll let you guess whether the company is still in business…
Being able to analyze and articulate the above in more ambiguous situations will lead to big wins for you. You’re bound to encounter them. Avoiding the Premature Automation Trap will either give you a huge leg up on competition or earn you clout with your startup peers as a sound decision maker.
Recap
The urge to automate things prematurely is a bad habit that you need to unlearn to succeed in small tech companies.
Before you implement a plan to automate make sure you use the Should I Automate This Test:
Grasping the Uncertainty of Requirements - Do you have an iron clad understanding of *exactly* all the steps you plan to automate?
Benefit Analysis - Will the benefits of automation be immediately and transparently felt by your customers AND outweigh the benefits of the manual process?
Cost Analysis - Will the cost invested in time/money to automate approximate those required for a manual alternative?
If you can’t confidently say “yes” to all three of this, I recommend deferring automation until it becomes a pain point.
More Cardinal Sins to Come
This was the first installment of BowTiedLaunch’s series about the mental blocks that hold back people new to small technology companies.
Join me next time in the free tier where we take on Cardinal Sin #2 or check out the paid tier where we dive deep on specific tactics you can use to go from fence sitting Idea Man™ to a man of action that actually executes - a Launch Chad.