Monthly Archives: December 2013

Living on a budget

budgetI am not writing about my personal budget. Relax. This blog post is about the budgeting for a startup while you have extremely limited resources. Through the examples of my life I want to identify the main priorities for the budget planning.

During the last 4 years I had only one startup with a budget  formed from the external resources. This means that to cover our spending we had and still have to take cash from our (and our families) pockets. Also we are accountable to ourselves and we face issues when dealing with numbers. But lets start from the beginning.

When you are starting a new venture you usually run through the different phases:

  • Planning (idea setup, team formation, etc),
  • Building a product (development),
  • Building the audience (marketing, user base, suppliers, etc),
  • Rebuild/update (you got the feedback and you listened to it. So start updating!).

After the launch you also have to execute (monthly expenses). This means that you have daily/monthly spending’s.

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The main assets we have and operate

Hello everybody,

I was rarely posting during the last week. As you don`t want to hear about my daily routine. And as I had no time for anything else except work and football.. I wasn`t posting here. How ever the content returns! And it is related not only with startups, but with other business and daily life too. So:

As any project manager I always like to list for myself assets I currently have to achieve one or another task. The flow I was working on before was quite simple:

  1. Identify people and their availability (hours)
  2. Identify the budget
  3. Identify how you can use your stakeholders
  4. Identify and prioritize tasks (in a time constraint)

Simply I used to think what do I have to dedicate for a specific project and how much time is available.

Currently I have a bit changed mindset. I do not forget all those things above. How ever the main asset for me is trust/credibility. The idea is simple:

In a decision making process (to do something or not to do) I identify how much credibility “points” the action/project might earn or loose. Sometimes it is better not to make a risky action if you have a credible name. If you have no name – why to be afraid of risking? How ever do not take actions of which you will regret in the future. Eg. If you plan to invite few sluts to your opening party for media attention and you plan to become a biggest child crowd-sourced charity organization in future… Well you are fucked up right from this party. Or a marketing genius.

I do not take trust or credibility for granted. You can not expect that people will trust you for nothing. Or plan that they will be extremely suspicious about your actions (while actually they will love you). I try to get along with the stakeholders and find out what do they think about my project, organization and people (most important!).

Reinvest of trust is an action where the person/organization gets a second chance. If you do not valuate your trust – you keep reinvesting to the same burning “asset person/organization”. And you are/might be loosing again and again. I tend to give a second chance of a relative small amount. It means that the responsibility and potential affect to result is so small that fixing a second failure will not cost much for me. It is a second shot (a trust and nice action), but it is not as critical as returning a full trust (and responsibility) to somebody for a second time. Hope that he will not fail is really dangerous while you have a nice person (which is great. But I want to have a trustful professional!) in your team.

trust-politiciansI like (who doesn`t?) to find out as much as I can about my partners. And there I draw a line between their credibility and trust. A person can look trustful, how ever if I have doubts the credibility part is a decision making factor. It is a catastrophe (for me) trying to find out how much do I trust the person and to make a logical decision. How ever when it comes to credibility you have something to check, evaluate and rely on.

And don`t ever dream about the great results if there is no trust in your team. On a few harsh moments I lost faith in some team members. And in the end either I was wrong/overreacting or the person did not meet the team needs (was a nice person, but nothing more^^). In one case or another either affect was small or trust and credibility management was not implemented to decrease the risks.

So yeah, IMHO it is better to understand sooner then later that your startup business has a limited amount of trust and only by growing its credibility you can manage your activities best and attract other measurable resources “cheap”.

P.S. Sorry for the long post. It could be even longer!

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