OPINION: A Year into Choir Digital: Some Lessons (Part #2)

Written by: Anthony Ferrier, Managing Director at Choir Digital 

I recently wrote an article about some of the experiences that I’ve had in the last year of starting a new business, Choir Digital.

I’ve had some great feedback since the article launched, and I also thought that I left a few key points out, which I wanted to address today. So here goes:

Engaging the Best Employees

When you are starting a new business, it can be a challenge to access / engage the best and brightest talent as employees. These high performers are often looking for secure, high-paying roles, with benefits, bonuses and a defined career pathway. An entrepreneur can be challenged to compete directly with those factors from day #1. In response, you may need to flex on how you structure a role, the skill sets of people you engage and the full intangible / tangible package you can create. At the same time, you need to remain true to your abilities, expectations and client needs. In short, you need to be creative in how you can present value for employees, in ways that bigger organisation may struggle to replicate.

Limiting Weekly Expenses

At this stage of the journey, I have specifically designed this business to limit my ongoing expenses. This means that I have a very limited employee-base, supported by high-quality contractor resources to execute client engagements, on an ‘as needs’ basis.

There are pros and cons to this approach:

·      Pros: Using contractors limits my exposure during the inevitable bumpy patches when starting a new business. There are high-quality resources within the technical contractor space, but finding the best in market needs to be an ongoing focus

·      Cons: High-quality contractors charge a premium, which impacts your margins. For me, that’s a price I’m willing to pay, to get my projects delivered at the highest standards. In the longer-term there can be issues in retaining IP across rotating contractors, but for now I can manage that by leveraging my employee base

Consider the Risks

I often get questions around why I started a new business. The answer is nuanced, but what I can answer clearly is what enabled me to start a new business. In my case, I don't have kids, my partner earns a steady income (as a safety net), I have limited debt and can manage the short-term income hit of starting a new business. I’ve also done this before, so on some level I was aware of the challenges of this process.

These factors enable me to take on the risk of starting a new business, which made the decision easier.

When asked, I strongly encourage people to think carefully about their personal financial position, risk tolerance, mental strength / support, etc. This isn’t for the faint of heart, but worth the effort, at least in my view.

Avoid the BS

Given AI is such an evolving area of need and opportunity, there is a bit of a ‘wild west’ atmosphere to the market. It comes from all sides, ‘AI developers’ (often non-technical but good at the AI tools) who promise to 10X impact over traditional developers, clients who don’t know / understand what they want, partners who promise to create massive client pipelines, etc.. Within this environment, you really need to hone your ability to navigate through the hyperbole, to be clear about what is real, and where you can realistically create impact. Otherwise you just get endlessly distracted with get rich quick schemes.

Price Correctly

If you’re new in market, it’s hard not to try and ‘buy in’ work. I get it, as a new business you need to create high-quality case studies, quickly. I’ve done it, and it makes sense to a point.

But once established, you need to price realistically, in a way that you can sustain for your own benefit, as well as your clients and workforce.

I recently met with a retired CFO from an ASX100 organisation who said that smaller consultancies always under price and Big 4 consultancies always over price. He suggested that I follow the Big 4 pricing, with a moderate discount. I think that is so true, and I’ve tried to stick with it ever since.

Take a Break Before Starting

I was so burnt out from my last role, but I had created my own timelines for launching the new venture, which I stuck with. In retrospect, I should have recognised that my timelines were totally made up and if I delayed a couple of weeks, it wasn’t a problem. Ah well, that big break can wait to another day.

I think that’s it for now. Let me know if any of these related to your experiences?