5 Questions to Ask Before Including Services in Your Bootstrapping Strategy

Most tech entrepreneurs these days stay away from services because investors are looking for high-margin, repeatable revenue. Service revenues don't command the same multiples that product revenues do.

When I decided to bootstrap my startup, I never expected to be selling professional services. I quickly learned, however, that offering services tied to your product can be incredibly useful when bootstrapping. When my company started offering design and development services utilizing our low-code development platform, these services led to high-margin recurring revenue and greatly improved unit economics. These services also drove a tremendous amount of customer success.

But, service offerings are not for everyone. Here are a few questions you should ask yourself in order to determine whether services should be part of your bootstrapping efforts.

Do the services have good margins?

For bootstrapping to work, you need a healthy margin. At one of the companies I founded, our professional services were a necessary element of customer onboarding since product implementation was incredibly complex and not self-service.

Our professional services margin was -20%, which eroded our cash significantly. In this instance, service was not a revenue center but a loss leader — something we had to offer to secure the more valuable recurring revenue. If you find yourself in the same boat, services will never be a viable bootstrapping strategy. They could, however, be a tool you utilize to drive the rapid growth of recurring revenues.

Does the market/customer want the services?

Many technology products simply can't be used by most people without a services component. At my company, we found that even though our low-code development platform could be utilized by people with minimal coding expertise, certain segments of our user base simply didn't have the inclination to build their solution on our platform. We also discovered that even with powerful tools, many people wanted to leverage the expertise of an experienced software design team.

This prompted us to spin up a services team that could charge for design and development as an initial project and even provide ongoing development services on a monthly basis. Going this route is driving a three-to-six month payback on sales and marketing investment for us. Do these types of opportunities exist for you?

Can your service offering eventually be outsourced to an ecosystem of providers?

Services can serve as a bridge to help fund platform losses up to a point where outsiders can take over. Building an ecosystem can create an awesome flywheel effect, whereby participants not only become service providers but a channel for bringing in new product sales — without the expense of having to add to your own sales team.

Salesforce and Workday both did a brilliant job of executing this strategy. Ideally your product will gain enough acceptance that you can sell off your services division for additional profit.

Do services provide you with more customer intimacy and enhance your retention metrics?

A customer's switching costs go way up when there is both a human and technological connection to your product and services. This sort of intimacy can provide a significant boost to your retention metrics and ensure predictable revenue.

Having great people to support clients can make up for early product deficiencies and create a level of trust that a pure low-touch product cannot. This is especially important in the early days of any startup's product lifecycle.

Can bootstrapping with services strengthen your product development?

Launching a services division also provides another benefit: the chance for you to "eat your own dogfood." It's a fact that when employees use their own product, it gets markedly better. At my company, we rotate core team members in and out of the professional services team to ensure every engineer feels what our customers feel. I believe this leads to product brilliance.

Now I'm not advocating you become a services company, but having a product company with a service business could stave off having to secure venture backing before your product is more mature. This can help you avoid things like dilution, a loss of control and the pressure to grow fast for a speedy exit.

As someone who's previously founded two venture-backed startups, I like how bootstrapping with services is allowing my company to grow more thoughtfully. We have time to think about product/market fit before scaling up, we're not pursuing growth rates that our platform can't support, we're making smart hires and we're scrutinizing the ROI of all of our expenses because every dollar counts.

Additionally, we are vetting the utility of our own product with real-life customers and creating a virtuous circle of feedback to drive new features. I feel like it's the smarter way to evolve a business like ours — building a company for the long haul versus hitting some arbitrary goal to secure additional venture capital.

There is one important consideration before bootstrapping with services: You'll want to make sure you're growing (albeit at a deliberate pace) and not just treading water. That's why the above questions are something you'll want to consider before following my lead. It's critical you feel confident that you'll create enough runway and customer success for your ultimate business model to take shape, while not letting services become a distraction.

Article originally published on Entrepreneur.com

4 Things You Need to Do to Secure Backing If You're In a Flyover Area

As an entrepreneur who started up companies in Miami before it was a tech darling, the odds of getting funding were against me. Yet my teams and I were able to get it done — and you can, too.

Before I share what has worked for me, it's important to acknowledge that the odds are stacked against you. My principal advice is to leave nothing to chance as opportunity favors the prepared mind.

Data can intimidate or inspire.

In an analysis of PitchBook data, Techstars' Ian Hathaway determined that 28% of venture capital (VC) firms are in the Bay Area and 42% of portfolio companies have their HQs there. That heavy concentration is also in New York City and Boston, where 23% of VC firms are based and 21% of portfolio companies are headquartered.

To emphasize how little things have changed over the past several years, Ross Baird's 2017 book The Innovation Blindspot presented similar findings. He wrote more than three-quarters of U.S. VC funding went to startups in three states: California, New York, and Massachusetts.

Beyond these geographic barriers, there are matters of education you'll have to overcome. A few years back, Harvard Business School's Alison Wood Brooks discovered that Stanford, Harvard, Berkeley, MIT, NYU, and Penn grads received 10% of all the world's startup financing. This is likely because investors are graduates of these schools as well.

Mathematically, if you aren't a top-tier university graduate living in California, New York, or Massachusetts, your chances of securing investment aren't great. It's not impossible though, as my own experience proves. To help you achieve your goals, I'm sharing four strategies that were instrumental to getting my companies funded.

1. Participate in incubators and accelerators

In 2011 my second company participated in IBM's Smart Camp, which was a free program at the time. At the camp, my team had access to advisors, investors, and business mentors from IBM. Participating illuminated some key focus areas for us and allowed us to successfully upend an industry that's resistant to change. The exposure we received from winning the competition made it easier to raise a $20M Series A.

Money aside, the Smart Camp experience taught me there was so much I could learn from others. That's why a few years into running my third and current company, I went through the Techstars Austin accelerator program. Outside of the mentorship Techstars offered, it gave me access to one of the top entrepreneurial networks in the world.

If you're unable to participate in these types of programs, the wisdom you'll need to build a successful company is also accessible to you on the Internet. If it isn't available in a blog post somewhere, you can likely find it by connecting with the right person on LinkedIn. Silicon Valley-based Y-Combinator, which has done an extraordinary job of driving success for its cohort companies, has even democratized access to their best practices through its free Startup School and Startup Library.

2. Raise money in your backyard

When I started each of my companies, my general philosophy was that I would tap early-stage money in my community and then achieve enough success to eventually secure funds on the West Coast.

I got started by asking friends, family, and business contacts for investment and introductions to other investors. I secured enough to begin work and kept raising more as needed. I also worked hard to cultivate relationships with high-net-worth individuals in my area.

Sophisticated early-stage investors tend to invest close to their homes, so they can easily capture significant deal flow, remain close to their portfolio companies, and help them become successful. You see this most in Silicon Valley, but it can happen anywhere. That's why you should get to know local investors first.

3. Be ready for investor discussions

No one wants to invest in a founder who "thinks" they can get it done. Early investors buy into you and your vision. As much as they like you, they like their money more. You must convince them an investment in you will multiply many times over. A big part of this is preparation.

For any company I've started, I've never spoken with investors until I had:

• A solid company name and URL

• Proper company formation and resulting documents, put together by attorneys with startup experience

• A comprehensive pitch deck I was proud of (having different forms of this can be helpful, including a one- or two-page teaser)

• A well-constructed financial model that includes the relevant metrics an investor is seeking

• Investment documents with defined terms

• A great brand design integrated into my pitch deck and product

• A basic, but professional-looking website

You'll want everything "locked and loaded" so the time between the initial investor conversation and closing is minimized. "Time kills all deals," as the adage goes, and it's never been more true than in early-stage investing.

4. Don't under-pitch

Raising money outside the Valley requires a relentless appetite for talking with investors. Even when you're dejected, even when you don't need the money.

Many entrepreneurs only talk to five investors — and if you're doing the same, you're making a mistake. I give this advice to every founder who asks, yet most of the time they think they can speak with 3-5 investors and get all of the money they need. They'll then waste months in discussions and diligence only to receive a "no" or be ignored.

It's a fact: You're going to hear "no" way more than "yes." Securing investment is like a sales process. As a salesperson, you can never rely on a single deal closing before the end of the quarter. Cultivating and managing a healthy pipeline is what winners do. That's why I recommend you use an investor CRM to help you keep things organized, even if it's a simple Google Sheet.

I've probably pitched each of my companies 500 times. It's an exhausting and emotionally challenging process because you deal with a lot of rejection. What I've learned though is oftentimes that rejection has little to do with me — or the value of my venture — but it's instead tied to personal reasons the investor has for passing on the deal. Each conversation offers you an opportunity to learn, so modify your pitch and keep going.

Believe in yourself — and what you're doing

As the data shows, VCs aren't betting on those outside of California, New York, or Massachusetts. I knew I'd have to work twice as hard just to get noticed. If you know of a weakness in your story, work to fill it and have strong objection-handling responses ready. Investors want a startup founder who can see around corners, not be surprised when bad things happen.

With the proper motivation — and lots of preparation — you can overcome almost any obstacle. The first time I tried to start a company I largely worked without a net. I had quit my job in the wake of the dot-com bust and had a wife, a mortgage, and four young kids. Failure was not an option. But because I worked both harder and smarter, I was able to raise enough money to catalyze our growth, pay salaries and eventually sell the company.

Article originally published on Entrepreneur.com

Why Low-Code Platforms Are the Developer Shortage Solution People Aren't Talking About

According to the Bureau of Labor Statistics, the shortage of engineers in the U.S. will exceed 1.2 million by 2026. On a global level, according to staff augmentation firm Daxx, the talent shortage is expected to soar from the current 40 million to more than 85 million by 2030. A McKinsey survey from earlier this year additionally reported that 87% of businesses are already seeing a developer shortage, or anticipate one in a few years.

Case in point: Nate Chastain, OpenSea's head of product, recently tweeted a plea for help: "We need to ramp up hiring… We are 37 people handling 98% of all NFT [non-fungible token] volume. Referral bonus: Will pay 1 ETH [the Ethereum cryptocurrency] to anyone who connects us to engineers or designers that we hire."

Given companies' inability to hire the developers they need, their short-term fix has been to pile more work on existing teams. This is not a sustainable solution; in an Indeed survey, 30% of respondents said this accelerates employee turnover. Fortunately, Stack Overflow has found that 75% of developers explore a new technology at least once a year, with many saying they learn a new language, framework or tool every few months. This aptitude sets companies up for a transition to a low-code platform, which allows IT and business professionals to create applications with fewer or no developers. As a result, using low-code platforms to develop custom software is significantly easier.

Reskilling is the right idea, but most are taking the wrong approach

The McKinsey survey mentioned earlier contains another intriguing stat: half of the respondents said skill-building would be the most effective action for their organization to take, as opposed to hiring. That follows, as it takes an average 50% longer to fill tech roles compared to other positions.

High-tech companies are the most likely to reskill part of their workforce, too; 23% of them report that their organizations have reskilled at least one group or class, although most of these reskilling programs are hindered at least in part by lack of infrastructure to properly train. Roughly six in 10 say their companies are good at selecting which employees to reskill — and have effectively prioritized the skills to address — but fewer than half say they have strong curriculum design capabilities.

With low-code, the learning curve is shorter, so the need for training is minimal. And most of the leading platforms have robust resource libraries, taking the burden of curriculum and education off employers.

Research points to a low-code future

Considering what Stack Overflow revealed about developers' interest in teaching themselves new things, getting comfortable with a low-code platform should be a light lift for employees. This will make it easier not just for developers, but other employees as well. I've seen companies deputize project managers with tasks that once required a developer; in one such instance, a project manager told me their knowledge of SQL made it easy for them to connect APIs to their backend using GraphQL, an open-source language originally developed at Facebook.

And this is not just anecdotal evidence. Research from Gartner tracking the growth of low-code platforms indicated that 41% of employees outside of IT now customize/build data or technology solutions. That same research report predicts that by the end of 2025, half of low-code platform clients will come from business buyers outside of the IT organization.

Forrester's Predictions 2021 further shows that low-code platforms are becoming a go-to for companies. By the end of 2021, such platforms will be used for 75% of application development (up 31% from 2020).

In a separate study Forrester conducted in partnership with Mendix, a composite organization derived from four companies using low-code platforms accrued $20.52 million in total quantified benefits over a three-year period. It also saved $8.1 million across its application delivery process, saw $6 million in efficiency gains from the digitizing processes, generated $3.1 million in incremental gross profit from better customer experiences and recorded a $3.3 million net gross profit by expediting time-to-market. Remarkable results, by any standard.

Becoming less reliant on developers is just one low-code benefit

If this is not enough proof that low-code platforms can help companies do more with fewer developers, consider this stat: developers can use them to build cloud-native applications ten-times faster. Companies can also spin up these experiences with 70% fewer resources.

Whether the transition to low-code enables your company to maximize its existing development team — or build a greater number of applications outside of IT — Forrester notes that making the shift will lead to faster testing of new ideas, lower-cost experiments with new technology and the ability to attract top talent, thanks to a culture of innovation.

Article originally published on Entrepreneur.com

3 Things Entrepreneurs Should Focus on Before Investor Meetings

The adage "you never get a second chance to make a first impression" has endured because it's true. That's why it's crucial to diligently prepare ahead of investor meetings, especially in these three areas.

Think about how much money you truly need

The cost of building startups has dropped dramatically over the past few years. I often see first-time entrepreneurs seeking to raise larger-than-required sums of money for their pre-seed or seed rounds, which decreases the number of investors likely to invest. In other words, they're trying to satisfy what could be multiple rounds of financing in one fell swoop. Or, they're accounting for roles in their plan that aren't suitable for their current phase — such as hiring assistants or salespeople during product development.

Angel investors don't like to be first. If you're raising $2 million, an investor seeking to invest $50-$100K is likely to ask how much you've raised so far. If the answer is low, they'll probably tell you they're interested but ask you to come back when you have $1.5 million raised. As you drop the amount you're seeking, this becomes easier.

For most first-time entrepreneurs, your story should read something like this:

• I'm seeking to raise $X to fund product development and the formation of essential parts of the business, including the website and initial go-to-market infrastructure.

• I'll start once I receive $X but will continue fundraising.

• As we approach the fulfillment of our initial milestones, we'll begin raising money to commercialize the business.

Research investors, and then research them again

Because investors will want to know how much you've already raised, you're going to want to go after investors in rapid succession. You want term sheets queued up so you don't have to tell an investor you're waiting on other term sheets to come in.

You don't want to focus solely on investor quantity though. It's equally important to have a high number of philosophically matched investors, too. Before you reach out, read their blog and tweets and anything else that might help you understand how they think.

You'll also want to get an idea of what stage they invest in and if your company is a good fit. If they show a preference for companies with network effects or product-led growth, make sure you're aligned there as well.

Once you have meetings with appropriate investors set up, continue to do your homework. I suggest you spend at least 30-60 minutes researching an investor before each pitch. Try to anticipate their questions, intuit what they're going to want to hear and think of answers to their objections. In short, do everything you can to manage any possible reason someone would not want to invest. Leave nothing to chance.

Even if you realize an investor isn't right for you, learn as much from the conversation as you can. Within your first 10 meetings, you should have a better grasp of what changes you'll need to make your pitch.

Prepare a SAFE agreement

I recommend you come into investor meetings with a predefined structure. These days that's a Simple Agreement for Future Equity (SAFE), which was developed at Y Combinator (you can download a copy here.)

SAFEs let you delay your valuation until a future date while still raising capital. They allow you to take investor subscriptions as they come in, rather than having a defined closing as would be dictated by a priced round.

With a SAFE, your investors will receive stock in your company at a later date. This happens in conjunction with a specific, contractually agreed-upon financing event. It's generally the sale of preferred shares by your company, typically as part of a priced round.

Before we proceed further, here are some SAFE terminologies you should know (if you don't already):

• Valuation cap: Lets investors obtain a more favorable price per share in the future by setting a maximum convertible price. Valuation caps reward investors for taking on risk.

• Discounts: Discounts require investors to take on risk. They're used if an investor's money converts in future financing rounds and the valuation was at or below the valuation cap.

• Pre-money or post-money: Pre-money is the valuation before new investor money. Post-money is a valuation that includes capital raised in that round.

• Most-favored nations provision: Prior investors receive the same terms when SAFEs or convertible securities are issued to future investors at better terms. Essentially all investors enjoy the same privileges.

Unlike a straight-up equity purchase, shares have no value when the SAFE is signed. Instead, you and your investors negotiate a valuation cap for the company and/or a discount to the share valuation. In this way, a SAFE investor profits from company growth between the time the SAFE is signed and the trigger event.

A SAFE is not a loan though. There's no interest paid and no maturity date, which means SAFEs are not subject to the same regulations as convertible notes. According to Y Combinator, it was their intention for SAFEs to work just like convertible notes — but with fewer complications.

While you certainly can adjust the predetermined terms of a SAFE, I'd advise against it. Just put in your valuation cap and leave the discount at 20%. The minute you start to mess with a SAFE, you're changing what it is and inviting further negotiations — and perhaps legal expenses. The SAFE is a standard document, and thus, understood by both sides without having to get lawyers involved.

If an investor puts in a large amount of money and negotiates a better deal, you can always go back to your early investors and offer them the same terms. For what it's worth, I've done this on several occasions and investors are always thrilled.

Other ways to set yourself up for success

If possible, try to have a few "ringers" who become your first investors and seed your first round. This will show momentum and create FOMO for other investors. If any of these investors are experts in your space, then you can leverage their "star power" as an additional point of validation for your venture.

If you can't attract big names, don't let that affect your swagger. No one wants to fund an entrepreneur that doesn't project passion, so be sure to exude confidence while demonstrating competence. You're selling yourself in these early stages as much as you're selling your company.

Article originally published on Entrepreneur.com

5 Things Your Agency Must Know Before Establishing a Low-Code Practice

Gartner predicts that 70% of new software applications will be built using low-code or no-code platforms over the next three years. Adoption will have surged by almost 45% when compared to 2020 data. What's driving this growth?

Along with the high demand for new applications, the global developer shortage and resource costs are undoubtedly playing a role. In response, digital agencies, consultancies and other software development firms need cost-effective ways to create software while reducing complexity and risks.

Why low code?

Low-code platforms can deliver significant productivity boosts while enabling developers to configure many common elements of modern software applications without code — while not inhibiting their ability to infuse code wherever needed. This flexibility allows agencies and their staff to design, develop, deploy and run applications more effectively and efficiently.

• Architecture: Low code simplifies the architectural work required to build new applications. Technical architecture and the application underlying architecture are eliminated using these tools. The focus often becomes data and integration architecture. However, low-code tools provide simple ways to iterate on both options, minimizing the need for up-front or waterfall architecture. These time savings can then be passed on to clients.

• Design: Rather than designing every single screen and user interface interaction, you can build a style guide and a few key screens. These can then be implemented into the low-code platform, and detailed design can happen inside the low-code application rather than in the design tools. Some low-code tools additionally allow for the import of designs done in Figma or Sketch for rapid integration.

• Development: Low-code tools infuse improvements into the development process. Developers work differently, configuring pre-packaged components whenever possible and creating custom code when necessary. The best low-code platforms are fully extensible — providing the ability to import external code libraries and user interface components. Although the development process is faster and different, it does not negate the need for a professional software development lifecycle that includes different development environments and capturing versions in repositories such as Github, Gitlab, etc. For client projects and to satisfy compliance requirements, utilize low-code tools that accommodate these version control and environment capabilities.

• Quality assurance: Quality assurance processes should be greatly simplified because of the more iterative nature of low-code development. That said, each new change to an application can break existing functionality, so the best low-code platforms offer regression testing capabilities. Beyond regression, unit and integration tests should be conducted by your team and managed using existing software development lifecycle tools.

What to expect in terms of productivity and financial outcomes

Implementing a low-code practice can transform your team's productivity. A low-code platform — and its out-of-the-box components and capabilities — can eliminate errors, save time, prevent headaches and improve project delivery.

Digital agencies are poised to reap the benefits delivered by using low-code tools. Here's how:

1. Less reliance on highly technical developers

ZDNet recently cited a report in which engineering managers and HR professionals said backend developers were the most in-demand hires. Instead of searching for more developers, consultancies have learned they can use a low-code platform to maximize their existing staff.

Once your team is up to speed, they'll work like full-stack developers. You can focus talent more on where value is added, resources can move easily across projects, and you'll be able to address career paths in new and compelling ways.

2. Delivering projects with compact and affordable teams

Low-code platforms help agencies take on more client work with the same — or fewer — resources. Low-code platforms dramatically cut the manual coding typically required, which can significantly increase developer productivity.

Smaller teams mean fewer friction-laden hand-offs and a reduced project management burden.

3. Delivering faster and at higher profit margins

As digital agencies consider acquiring tools or developing their repeatable capabilities to deliver client projects more rapidly and consistently, low code may provide the biggest return on internal transformation efforts. According to 451 Research, switching to low code reduces development time by 50% to 90%.

By using a low-code platform to configure and customize application development, project scope, cost, time and quality shift in your favor. A low-code option is faster and less expensive than a traditional custom app. Your firm will have the edge over competitors that haven't yet explored low-code solutions.

4. More maintainable applications

Code is a liability. Reducing the amount of manual coding means introducing fewer errors. This can prove significant at scale, especially considering a Harris Poll survey that found developers spend at least 42% of their time maintaining and debugging code.

With low-code platforms, visual development, configuration, automated code generation, and platform automation contribute to massive productivity gains. These capabilities bring an application's features to life faster, making them far more maintainable.

5. Easier sales and greater customer satisfaction

When a digital agency can tell a prospective customer they can reliably deliver in a shorter amount of time, at a lower price point and more rapid rate of iteration, the prospect is thrilled.

By presenting a low-code option that's faster and less expensive to execute, your firm will have the edge over competitors that haven't yet explored low-code solutions. You're also better positioned for repeat wins, allowing you to become more entrenched as a vendor. Once you've successfully delivered your first low-code application, you'll likely have the opportunity to discuss your client's application backlog and present similarly priced bids for additional work.

In short, leveraging a platform that reduces the time and complexity of delivering a client's project enables repeatable success.

The opportunities and risks

While programming languages and frameworks have evolved, software development is still done the same way it was 20+ years ago. We have witnessed productivity gains in other functional business areas due to software efforts focused on process improvement and digital transformation. Unless you believe software development is immune to disruptions — highly specialized and customized to each scenario — logic will dictate that it is a business process that can be radically transformed.

Low code presents a financial opportunity for digital agencies while highly disrupting existing business models.

The benefits of low code for digital agencies are realized in an enhanced ability to scale the business, reduced staffing complexity and cost, increased client satisfaction, and delivery of projects with far higher profit margins. On the flip side, a reluctance to adapt to this new paradigm introduces risks as competitors transform their businesses.

Article originally published on Entrepreneur.com

3 Ways to Determine if Low Code is Right for Your Agency

Low-code platforms can help digital agencies deliver client projects faster while increasing their margins and reducing reliance on scarce, expensive software development talent.

The intuitive "a-ha" about low code is that it lets developers spend more time writing the code that truly differentiates instead of working on the non-unique elements of a project, which can easily win over the productivity-minded who want to be as effective and efficient as possible. Instead of performing repetitive tasks, low code allows these developers to focus on the work and the code that truly matters.

Of course, some developers are "purists." They have a strong tendency for control and choice over the tech stack while coding everything from scratch. They constantly keep up with libraries and frameworks to improve productivity, but the complexity and maintainability can cause headaches and add cost.

So how can your agency find its way forward with low-code advocates and opponents on your payroll? Below are considerations as you begin to strategize and plan for building a low-code practice:

Evaluating if low code is for you

Embracing low code is a strategic decision for your agency. Creating alignment amongst key principals is as important as selecting your low-code partners.

1. Bring the appropriate stakeholders together to discuss expectations, concerns, next steps, etc.

2. Find one or more developers open to exploring what's possible outside of traditional development. Have them build the MVP or part of a client project over a few days and evaluate learnings.

3. Take note of the productivity gained during the development phase and evangelize it for greater internal adoption.

4. Create talking points around the potential competitive edge, estimated bid-to-win ratio, expected margins, etc.

Evaluating low-code platforms

It's also important to bring key stakeholders from the low-code evaluation phase into the platform selection process. There are various dimensions for evaluating which low-code platform is suitable for your agency and your customers; some include:

• Economics - Will the platform's pricing work for you and your customer profiles? Some may have high entry-level pricing designed for enterprise-level customers. Alternatively, others may be more affordable during the development phase and scale up in production due to compliance/security and runtime.

• Agency process - Does the platform feature capabilities built for agencies, such as:

• Multi-tenant use/views across clients.

• Workflows for transferring ownership and payment method of client projects.

• Hybrid client and agency team management.

• Ability to create agency-specific template libraries.

• Learning curve - How quickly can your team onboard and learn the platform? Is it something new or a better way of doing what they know?

• Developer experience - Will your developers feel constrained by the platform or feel like it enhances their productivity and ability to accomplish necessary tasks without extra workarounds or clunky architectural patterns?

• Client experience - Is using a low-code platform beneficial for your client and agency?

Preparing for sales

P&S Intelligence predicts a low-code compound annual growth rate (CAGR) of 31.1% through 2030. Plan how to capture a slice of the $187B low-code market revenue predicted over this period.

Here are several helpful activities for new go-to-market motion in sales:

1. Sales collateral - Update your sales deck(s) or proposal template(s) to include messaging around how low code empowers productivity, development, and more. Consider how it adds to your existing value proposition. Include product literature and success stories from your preferred low-code platform.

2. Website - Update your website to reflect your low-code value proposition and partners. You may even build specific landing pages to optimize for SEO.

3. Template library - Build a library of pre-packaged low-code templates that represent the intellectual property you have built up either in preparation for opportunities or in the process of serving them. This library will become your most valuable asset for rapidly delivering new business.

4. Customer discovery - Talk to your best relationships to get feedback on this new offering without selling them on it. Ask for their help. If their interest in exploring is high, you may convert some of these to actual customers.

5. Case studies - Document your success stories and include them in your future sales materials. Be sure to educate your broader team on them continually.

6. Training - Educate your team on how to identify low-code opportunities and how to sell them.

7. ROI calculator - Develop a calculator for sales scenarios that depict the economics involved in traditional development versus low-code development.

8. Lead generation - The best way to see how a low-code platform can transform your agency business is to start with a live opportunity. In addition to sourcing a client yourself, some low-code platform companies offer partnership programs and marketplaces. Others will bring your firm leads they've secured.

9. Selling low code - Traditional agency sales work is a highly consultative process focused on people, past work, and methodologies. Bridging the "trust gap" is often the greatest inhibitor to closing a deal.

Once you've successfully executed your first project, weave this new mindset into the rest of your agency. Continue the virtuous cycle of low-code education, template development, talent development, and sales to transform the business with higher profit margins and greater client satisfaction.

With low-code tools, agencies have the opportunity to move past conversations. Imagine showing a client how their project comes to life rapidly rather than simply discussing it. That's because the right low-code tools can provide many of the building blocks in real time.

Organizing for low-code sales takes a slightly different approach. You will want to include sales engineers capable of rapidly embracing a client's requirements and building a mock-up of the application using the low-code platform and perhaps a template library built by your agency in anticipation of such opportunities. Lastly, the low-code company's marketing and sales support can often bolster your agency's efforts.

Low risk, high reward

Thanks to low code, you can offer clients more frequent CX iterations, decrease complexity, and accelerate time to market. This edge can lead to more wins, lower risk for your agency, and higher client satisfaction.

Article originally published on Entrepreneur.com

How to Gain 10x Productivity By Utilizing These 2 Time-Saving Tools

Research shows developers focus less on learning and mastery and more on productivity five years into their careers. And low-code tools can help them accomplish that.

According to IDC, low-code tools can increase productivity by 123%. Furthermore, companies that utilize low-code platforms can speed up their dev lifecycle for new applications and features by 62% and 72%, respectively.

However, traditional low-code (and no-code) platforms introduce proprietary languages, requiring developers to learn a new language from scratch. This can take 6 to 12 months, depending on its complexity, desired level of proficiency and the developer's prior experience.

A StackOverflow survey recently found that over 60% of developers utilize JavaScript. This makes the case for more low-code platforms that empower JavaScript developers. Doing so could set the stage for a significant boost in their productivity and efficiency.

The benefits of a low-code platform that incorporates JavaScript include the following:

1. Reduced learning curve

JavaScript eliminates the need for developers to learn new languages. Leveraging their existing knowledge of JavaScript and its framework constructs, these platforms offer a familiar environment, allowing developers to adapt quickly and spend time on more critical tasks.

Considering that Forrester's Total Economic Impact study revealed that low-code platforms increase developer efficiency by 62% over three years, just imagine the impact a JavaScript-centric platform could have.

2. Access to a larger talent pool

As the world's most popular programming language, JavaScript has a community of more than 17 million developers worldwide. A low-code platform designed for JavaScript can help businesses tap into a massive talent pool while streamlining recruitment efforts.

Companies will not only improve their agility but can also significantly reduce their costs. An Edelman Assembly study confirms that 87% of CIOs and IT pros say low code cuts their costs. JavaScript-compatible platforms can help teams do more, even in difficult hiring markets. 45% of IT pros told Forrester they first adopted low-code platforms to compensate for staff shortages.

3. The elimination of redundant work

JavaScript streamlines the development process, eliminating repetitive tasks and improving overall efficiency. These actions save valuable time and accelerate the development process.

UI components: Developers can assemble applications quickly using pre-built, customizable elements, saving time on front-end development.

Application infrastructure: Developers can leverage pre-built, configurable application services such as authentication, role-based access controls, notifications and more to accelerate and improve development processes.

Simplified backend integration: Built-in APIs and connectors allow developers to easily integrate applications with existing systems and databases, eliminating the need to write complex backend code from scratch.

These features jibe with a survey conducted by TechRepublic that illuminates how developers plan to use low-code and no-code tools. 15% want to speed up development time, 14% want to automate data collection and reporting, and 17% want to automate workflows.

4. Reduced errors with pre-packaged, fully integrated components

Stable, reliable and secure components — whether UI or application infrastructure — let developers build applications confidently. By reducing errors and promoting code quality, developers can concentrate on their core tasks and drive innovation.

5. Less maintenance

Combining low-code tools and JavaScript reduces the code needed, resulting in easier maintenance. With fewer bugs, streamlined debugging and faster updates, maintenance costs decrease and development cycles become more efficient. This gain is critically important as a Harris Poll/Stripe survey found developers spend at least 42% of their time maintaining and debugging code.

6. A focus on the development that matters most

With no need for specialized skills, developers can refine their JavaScript expertise, produce higher-quality code and drive innovation — creating more value for their organizations. Low code eliminates unnecessary distractions, repetitive tasks and time spent on developing non-unique elements of a project.

7. An entire ecosystem to leverage

Developers can use abundant libraries and tools to rapidly build and enhance their applications, boost productivity and accelerate innovation by leveraging familiar technologies instead of proprietary solutions.

8. Future-proofed applications

Low-code platforms with JavaScript at their core ensure applications remain adaptable to future technological changes. JavaScript's wide usage and continuous evolution make it a future-proof choice. Adopting a platform that embraces this language offers long-term viability and resilience as the underlying computing architecture is continuously enhanced and improving, giving developers the confidence their applications will remain relevant.

9. Built-in security and compliance

A JavaScript-centric low-code platform has built-in security and compliance features, enabling developers to build secure applications that meet industry standards and regulations. By saving time and effort, these platforms can offer peace of mind for both developers and organizations.

By choosing a low-code platform compatible with the world's 17-million-plus JavaScript developers, businesses can unlock a 10X productivity boost — and solve the problem of a global developer shortage.

In addition, a JavaScript-based low-code platform fosters a strong sense of community and collaboration, enabling developers to learn from one another and share best practices. This collaborative environment improves code quality, accelerates problem-solving and provides a more enjoyable development experience.

Ultimately, utilizing a low-code platform designed exclusively for JavaScript developers will empower them to be more productive and drive innovation rapidly. By adopting this approach, organizations can maximize their investment in their development teams, delivering cutting-edge applications and solutions that set them apart in the market.

Article originally published on Entrepreneur.com

How to Choose a Low-Code Development Platform That Has Your Best Interests In Mind

Low-code platforms are garnering widespread adoption for application development, as highlighted in a 2023 Forrester Wave report. However, these platforms' per-user pricing models have become a non-starter for many startups.

It doesn't have to be that way, though. Some low-code platforms offer flexible pricing models that promote innovation and growth. Entrepreneurs just need to know what to look for. By understanding the approaches available, entrepreneurs can select the proper vendor and model to ensure their vision thrives.

The per-user pricing conundrum

According to OutSystem's most recent State of Application Development report, 70% of IT decision-makers said per-user pricing limits their ability to develop customer-facing applications.

Consider a consumer application developed on a low-code platform with a per-user pricing model of $25/mo. Suppose the application has 10,000 end-users. The monthly cost for maintaining this application would be $250,000, and the annual cost would be $3 million.

As a user base grows, the expenses escalate, making it increasingly difficult for businesses — particularly startups and SMBs with tight budgets — to justify the investment in low-code platforms.

This data point highlights the need for founders to seek out low-code platforms with alternative pricing strategies to ensure the viability of the digital products they want to build (and scale).

While my cost analysis is purely hypothetical, it is an illustrative example of the financial challenge per-user pricing poses. Fortunately, some low-code platforms offer a more equitable pricing structure. Here's how these alternative pricing strategies can benefit entrepreneurs:

Developer seats

This model aligns with the industry trend of charging for the resources a development team utilizes vs. the number of end-users.

• Collaboration & efficiency: When low-code platforms charge for seats instead of users, they encourage collaboration among developers. Team members work together, leveraging their expertise to build applications more efficiently.

• Resource allocation: Paying for a specific number of seats allows startups to assign their development team members to different projects or tasks based on priority and workload.

• Simplified budgeting: Entrepreneurs can easily calculate and plan their expenses with a fixed cost per seat.

Advanced tool capabilities

Tiered pricing based on features and capabilities allows startups to select a pricing plan that suits their needs and budget. This approach provides scalability options and helps leadership optimize resource allocation.

• Customization: Different tiers offer varying levels of advanced features and capabilities, enabling entrepreneurs to choose the package that aligns with their requirements. This customization ensures a business only pays for needed features, avoiding unnecessary expenses and optimizing their investment in a low-code platform.

• Resource optimization: With different tiers offering specific features, businesses can allocate resources and focus on the most relevant tools to their projects. This flexibility ensures that development efforts align with the business's goals and efficiently utilize resources.

• Value for money: Startups can choose a pricing plan that balances cost and functionality. This value-driven approach allows businesses to access advanced features and capabilities that can significantly enhance their development process and the quality of their applications.

Consumption-based runtime

A consumption-based pricing model, which charges for data storage, API calls or compute resources, empowers business leaders to control their costs better. By paying just for the resources they consume, startups can align their expenses with actual usage and requirements, promoting cost predictability and efficiency. This model offers a more viable option for developing consumer applications with large user bases.

To enable more large-scale development projects, select low-code platforms have additionally explored offering:

• Volume discounts: These give businesses a discount on their subscription price if they commit to a certain number of seats or a certain usage level, such as the required data storage, number of API calls, or compute resources consumed. A volume discount can benefit entrepreneurs planning to use a low-code development platform for a significant number of projects.

• Pay-as-you-go pricing: This model allows businesses to pay just for the resources they use rather than a fixed monthly subscription. It's ideal for those only working on a limited number of projects

• Freemium plans: Under this approach, businesses can use a low-code development platform for free, with limited features. It permits entrepreneurs to try out a low-code development platform before they commit to a paid plan.

Choose wisely

As low-code platforms continue to reshape the application development landscape, the need for more flexible pricing models is evident. So, before committing to a low-code platform, carefully evaluate how its pricing model could hamper you once you've achieved scale.

With the right low-code platform as your partner, you'll be able to align costs with actual usage and requirements, which will help guarantee the success of your startup's digital product over the long term.

Article originally published on Entrepreneur.com

How To Ensure You Own Most Of The Company You Founded

It’s said that the only certainties in life are death and taxes. In the life of a startup founder, the two certainties are that you will need more capital and that your ownership will be diluted. 

So how can you ensure these things don’t completely negate the hard work and sacrifices you make as a founder to ensure your company a success? As a founder who’s built three venture-backed companies, and raised plenty of capital along the way, here’s some advice based on my experience:

Raise the money you need — and a little more

Investors in early-stage startups receive equity when a company has very little worth. Hence, every dollar they invest gives them a proportionally larger stake in your company. And that means the money you borrow in your company’s infancy will be the most dilutive. With this in mind, you’ll want to figure out an operating budget that’s lean but not so anemic that you will fail to achieve your goals. 

When I heard Troy Henikoff speak at TechStars Austin in 2020, these are the cash outlays he said entrepreneurs should take into consideration when building their financial model:

Rent 

Taxes

IT infrastructure

Manufacturing & warehousing [if applicable]

Salaries & benefits

Recruiting & training

Marketing (SEM, social media advertising, etc.) 

Travel 

Of course, this is only a broad overview of what you’ll need to consider. Every startup has different expenditures and will need to develop a custom financial model filled with finer details. Avoiding off-the-shelf templates is something Troy advocates for in a series of blog posts he co-authored with Will Little of Math Venture Partners. Another great primer on how to create a custom financial model comes from Wout Bobbink at EY. 

Regardless of what your unique expenditures are, you’ll want to arrive at how much funding you’ll require for at least 12-to-18 months of operation. You’ll also want to consider how much of your expenditures can be offset by revenue, which can decrease the amount you’ll have to raise.

Thoughtful planning upfront will help you avoid the need for a bridge round, which would require further dilution. According to Silicon Valley Bank’s Lewis Hower, each round of post-seed funding could cost you between 20 - 30% of your ownership stake. 

Keep your options pool small

Through my company, I meet a lot of technical solopreneurs. That’s obviously a great position to be in, as you can ship an MVP without giving equity to a technical co-founder or a CTO.

However, not everyone is in this position. Many founders will need hires that complement their skill set to get a company up and running. To safeguard equity, you’ll want to be conservative with your hires early on — for the same reason you want to be tight in your fundraising ask. 

So how much of your ownership stake will you have to share with employees? For a CTO or CRO, it’s common to award between 1 - 2%. Other senior roles, like a Lead Engineer or Marketing Director, may receive half a percent in equity. As a general rule, most entrepreneurs will set aside 10 - 20% of equity for current and future employees. 

Fight for the best terms possible

The best way to avoid unnecessary dilution is to get investors to sign a Simple Agreement for Future Equity (SAFE). This will allow you to put the valuation conversation off until later (preferably once you have reliable revenue numbers).

I’ve briefly written about SAFEs before, but what’s important to know in terms of dilution is that a pre-money SAFE is more founder-friendly. With a pre-money SAFE, each investor’s ownership percentage is undecided until you raise your next round. With this type of SAFE, everyone gets diluted simultaneously, and it’s math-driven vs. some arbitrary decision. 

Post-money SAFEs, on the other hand, lock in an investor’s ownership percentage before the Series A (or some other qualified fundraising round). While this gives founders and investors a clearer idea of their ownership stake, the only person who gets diluted in a post-money SAFE is the founder. As such, it seems more punitive for entrepreneurs.

The valuation cap in either SAFE can offer you some protection, though. If a startup raises a priced round at a high valuation, it locks in a future equity stake. With a $10M cap, a SAFE holder would have the same ownership percentage regardless of whether $15 or $20M was raised. 

If you’re forced into signing a term sheet instead of a SAFE, be on the lookout for super pro ratas. These give investors the right to expand their ownership stake in the future as a condition of their early investment. 

Your ideal ownership stake

What can you expect to hold onto after a few funding rounds and an impending exit? There’s no standard answer, really. But if you’ve managed to retain a 15 - 25% ownership stake, you’ve done better than most.