Founder's Guide to Automation
FundersClub reviews thousands of technology startups every year, and as a VC, has backed a global portfolio of top startup founders. Our insights come from our network of top startup founders and startup investors, and from our own experiences. Christopher Steiner was a co-founder at Aisle50, YC S2011, acquired by Groupon in early 2015.
In this piece, we cover a number of tasks ripe for automation:
- Social Media
- Tasks Around Core Processes (like development)
Every startup piles up all manners of rote tasks that must be completed on a regular basis. These chores span across both technical and non-technical realms, from pushing out payroll, serving clients with invoices, sending out marketing emails, rounding up sales leads, and everything in between. After finding traction, startup founders can quickly become bogged down in busywork instead of concentrating on what got them this far: product and customers.
Founders counter this issue by hiring other people to handle these tasks as they mount. That's a reasonable solution. An even better solution in some situations, one that is practiced by the most efficient startups, is to automate any process that lends itself to it. Taking a full day to automate a process that normally costs just an hour a week offers a relatively quick payback on time invested. Clearing the schedule of busywork and unnecessary toil through automation is a hallmark of thoughtful management and well-run companies.
Many startups that draw venture capital funding build software products that automate processes for their clients. So it should be second nature for startups to knit their own bespoke automation methods into their operations.
Automated processes will often require some form of babysitting. Except for the most rote processes, such as downloading transaction data from an FTP server, founders should seek a healthy median between total automation and human agency. It’s wise to make an occasional check-in on automated systems and ensure they’re performing as intended—and that the mission and its constraints haven’t changed since the process was implemented.
Startups' inherent advantage compared with larger incumbent companies is their ability to be nimble. While large companies can bloat and be hampered by legacy costs and assumptions, startups can aggressively manage to avoid these things. Automating processes that would otherwise saddle new employees with arcane processes keeps startups from acquiring process debt that can sap time and creativity from their teams. By not automating processes early, startups surrender some of their early advantage.
Deciding what to automate can be difficult, especially for technical teams who well understand how to automate nearly anything. “As a startup company, it can often feel like you are on fire. You have so many things to get done. It can be a challenge to prioritize how you want to streamline your processes," says Brad Ross, CEO of CoinTent, which enables publishers to easily build paywalls around their content.
Automation provides a competitive edge. If a startup's founders and employees have more time because so many slices of work have been automated, they can handle more clients and more work. That allows a startup to operate with healthier margins than a competitor, which will ultimately help it win competitive battles in pricing, or enable it to simply put out a better product because team members have more bandwidth to concentrate on iterating and listening to customers.
To help startups know where to look for automation opportunities, we've spoken with founders who have automated processes that would otherwise cost them hours every week. Here are some of their recommendations and some of the areas in which they've found leverage:
Marketing encompasses a lot of business activities, and not all of them can be automated, but many parts of web marketing have already been adroitly automated by startups and companies who have learned to squeeze every efficiency possible from their customer funnel.
Nathan Gilmore, the CEO and co-founder of TeamGannt, which makes cloud-based project management software, has built a business with 5,800 customers across 120 countries with a team of just nine people. Automation enables TeamGannt to maintain a steady rate of customer acquisition while also preserving its current customers' satisfaction. An automated process for lead generation allows TeamGannt to net 200 new signups per day for its software platform, without tapping human-enabled marketing. Those trials come through a combination of paid ads, SEO and content marketing. Honing a portfolio of these elements can generate fresh leads every day.
Once a customer has walked in the door, the challenge is to hold on to them, or get them to commit to more. Many startups try to nudge people with automated emails that can further illuminate the customer about the product and its virtues. Many startups use these automated nudges and emails to prompt a conversation or a demo with a real person. TeamGannt has that capacity, but it also recognized that not all customers want to talk to a real person, as it can be bothersome, and carrying a large staff to hold customers' hands is expensive. So Gilmore built out a series of videos that show customers how to use his software. The company now gets thousands of video views every week.
"This is a great way to not only reduce support calls and emails, but to increase conversions from free trials to customers," Gilmore says. "Video is an incredible resource that makes learning more efficient for both the user and saves us on training time and costs."
With this process, TeamGannt has effectively automated the training of customers.
For startups still searching for their first clients, however, automation may not be the best approach. The first cohort of clients is incredibly important to a startup, and founders should play the personalized attention card all the way through the process.
This falls under marketing, but many startups should automate aspects of it from the start. For SaaS companies and other web-based businesses, it can be effective to write batches of Twitter and Facebook posts in one sitting and then let an automated platform leak them out over time. It's important to show that your company has a presence and hasn't neglected social media—any investor or prospective customer digging into your company will likely peek at Twitter and Facebook—and this technique will give a startup a good baseline presence on the major platforms.
It is important, however, to monitor social media on an active basis, and to chip in comments on discussions and events of high relevance in a startup’s space. Here, listening tools can be vital, as founders and marketers can set alarms for mentions, direct messages, or trends on terms and hashtags. This will allow a startup to respond almost instantly to customer queries that arrive through social media, or address breaking news within their space.
For automating the posting of content that has been created ahead of time, there exist many tools, among them Tweetdeck and Buffer. For the monitoring of social media, some popular tools include Hootsuite, Keyhole, and Nuvi.
"Robots shouldn’t do the talking for you, but they can do the watching," advises Freddy Mini, CEO of Netvibes, a dashboard intelligence/automation company. "The success of your product launch is largely a function of the community you built ahead of time, and immediately after. At those stages, the most visible part of you by far is social media."
Zubin Irani, the CEO of cPrime, A $50 million (sales) company that helps big corporations like Apple, Adobe and Pinterest adopt agile development practices, likes to find the next chore to automate with this thought process: "If my business grew 50% in six months, what would be killing us?"
Managing the sales pipeline became the obvious answer to that question at some point for Irani. Automating the front end of the sales funnel, at the very least, ensures that no lead will go without some form of communication or attention, something that can happen when all is left up to humans. There are dozens of SaaS platforms, some of them industry-specific, that can integrate with a CRM such as Salesforce.
Perhaps the most important thing in such an automation process is having some form of listener built into the system so that a human salesperson can be alerted when a prospect is on the verge of being closed or requires a more detailed pitch. The sales funnel for web-based companies should also include automated billing and payment systems, particularly when targeting contracts of smaller value, so that clients can input a credit card and not worry about the transaction again. Only tailored, enterprise software platforms with higher value contracts should resort to a phone number or 'contact us' query instead of a credit card form.
Tasks Around Core Processes (like development)
Every business faces different kinds of busywork, so giving a standard prescription for implementing automation is difficult. But all startups should examine their core processes for automation opportunities, including those in accounting, legal, HR and even development.
Automating some processes may also involve changing other parts of the business–and it may be worth it. Rob Honeycutt, the CEO of SixAxis, a $100 million (sales) South Carolina manufacturer of industrial catwalks and safety stairs, winnowed his company's inventory down to just 20 distinct types of parts, which allowed his developers to more easily create software that automated the process of designing the structures. Before this was automated, every bid put out by a salesperson had to be designed by an engineer, who ensured the structure would meet safety requirements and be structurally sound.
Now SixAxis's software does all of that automatically, delivering customers' bids in minutes, bringing down the company's costs and allowing salespeople to service more accounts. With a larger parts inventory, writing the software to automate this process would have been even more complex.
Just as SixAxis changed its physical inventories to account for cloud-based sales and bid automation, companies in the business of writing software should also examine their core processes and products. Ben Cheng, CEO of Oursky.com, a 50-person app development studio based in Hong Kong, cites automation within his software company's development and deployment processes as the best investment he's made. The communication overhead between developers was lowered once there was an automatic build delivery and deployment to the firm's QA team, which also enabled the marketing and design teams to try out the builds immediately themselves.
Ultimately, software exists to assist humans in completing work. Startups, by and large, make software in one form or another, and startup founders should look to harness the same power they build into their products to augment the myriad jobs required of them.
Automation will rarely make a chore utterly disappear, nor should it. Founders need to track these processes and periodically ensure they’re operating as intended. But, just as with jobs that are helped by the products that startups create, the chore of checking in is far preferable to doing 100% of the work 100% of the time.