What is time?
Last year I was feeling like I hadn’t accomplished anything. It was only by taking the time to slow down and look back that I gained some perspective. That perspective is energizing; it helped me come into this year ready to run.
And run we did. This year I have no doubts about what we accomplished. But it’s still easy to forget what things were like at the beginning of the year. Which means it’s also easy to forget the lessons we learned.
In 2019 we had a job post go viral, brought on 3 incredible team members, and fired 2 clients.
We nearly burnt out, then recovered and learned to create healthy boundaries. We got organized then blew up our processes and put them back together again.
In 2019 we came within $11,000 of doubling our 2018 revenue and more than tripled our profits. We saw two clients find product/market fit and another double their revenue.
It was a year where so much started clicking into place, but it wasn’t without its trials.
Here’s what I’ll be covering in this review, feel free to skip ahead to the section that looks most interesting to you:
- Goals - What were they and did we hit them?
- Stats - How much money did we make?
- Highs - What went well?
- Lows - What didn’t go well?
- Company initiatives
- Personal lessons learned
- Best resources of 2019 - Our favorite books, podcasts & blog posts
- Goals and focus for 2020
2019 Yearly Goal: Improve the leverage we have on our time so we can earn more, work less, and grow from a position of strength.
Overall, we had the feeling that we wanted to grow, but needed to work on the company first. 2018 was our best year ever, but we were barely profitable. So we decided to focus on profitability and our processes.
In a sense, it worked. We didn’t increase the leverage we had on our time. We raised our rates by a small amount, but didn’t launch any infoproducts or workshops that would help us separate our revenue from time.
But we spent a ton of time improving our processes and it paid off. We grew without meaning to. A lot of this was also because we had several long term clients grow substantially. Who you work with is equally as important as what you work on.
Q1 OKR: Have the best Q1 ever without working ourselves to death!!!
- Get 500 email signups for the book ❌
- Close 6 roadmapping sessions ❌
- Average less than 1 critical bug per month ✅
- At least 2 people make commits to each repo each month ❌
- Get 2 new qualified leads through content ✅
Historically the first quarter of the year has been really slow, so we wanted to focus on bringing in a bunch of new business without driving ourselves into the ground. We brought in a bunch of new business… 😬
Q2 OKR: Freaking eliminate any bad stress!
- Reduce problematic clients to 0 ❌
- No more than 2 unfinished cards per sprint cycle ❌
- Average less than 1 critical bug per month ✅
- $600,000 in the pipeline ❌
- Close 1 roadmapping session with a content lead ✅
The goal this quarter was a direct reaction to how stressful Q1 was. And even though we didn’t hit all of our KRs, we came close. Plus we drastically reduced the stress across the whole team. The big key here was firing 2 of our clients. I’ll talk more about this later. I would call our goals successful here.
Q3 OKR: Nail down our processes this quarter so that we can invest in ourselves next quarter.
- No more than two unfinished cards each sprint ❌
- $400,000 in new pipeline ❌
- One roadmapping session from content ✅
- 9/10 client satisfaction on 2 launches ❌
- 5% internal time ✅
We shifted our focus away from pipeline halfway through the quarter and the launch for one of our clients got delayed so we missed our goals here as well. We also didn’t do much to nail down processes.
Q4 OKR: Double internal time, guard it carefully, and use it in a focused way.
- 50 hours per month of internal project time ❌
- Launch 3 internal projects ❌
- Improve internal process confidence score ❌
- Document 9 new processes in the playbook ❌
- Two roadmapping sessions from content ❌
In the final quarter we started strong, but got slammed with client and admin work toward the end of the year and so missed all of our goals. In the future, we need to do a better job of planning around the holidays.
In general, we struggled with goal setting this year. Our priorities shifted often, and we struggled to stick to the goals we set. But we still had an incredibly successful year. Goals are only worth keeping if they’re helping us, so if we continue to struggle we’ll likely need to revamp the process. But for now I think we just need more focus.
- Sales: ~$709,000
- Expenses: ~$590,000
- Profit: ~$119,000
- Team growth: -1, +3
- Best month: $90,478 in sales in May
- Traffic: 15,996 people
- Organic traffic: 5,643 people
- 100+ job applicants
- Highest performing blog post: What you need to know about no-code prototypes. My surprising journey.
- Clients who came from content: 2
- Newsletter subscribers: 1,800
There are two stats that are worth pointing out here 👉traffic and newsletter subscribers.
In 2018, Designer News drove a bunch of traffic for us, but last year it stopped working. So our overall traffic went down, but organic traffic increased. Organic traffic is typically a much more reliable source and higher converting, so we’ve doubled down and are focused on growing that. We lost some momentum when we switched domains, but it has started to increase again.
Meanwhile, newsletter subscribers have decreased as well. Not worried about this yet, but it’s something I’ll keep an eye on.
Organic traffic took a dip after we switched domains, but it’s slowly been working it’s way back up thanks to Laura’s hard work.
Our job post got 2,586 visits, mostly from Twitter. From those visits we had 138 applicants and ended up hiring Austin Carr who has been a phenomenal front-end developer.
The most exciting stat was the growth of our small team! We welcomed Karen, Austin, and Jess to the team in 2019 and they've all been fantastic.
- We had one of our job posts go viral. A total of 138 people applied to work with us!
- We started working with 2 new clients in the cyber security space. One of those clients, GreyNoise, launched their new visualizer in August, and it has been really well received by the community. Their growth has taken off in the past year.
- Three of us went to DEFCON in August to celebrate the launch of GreyNoise and learn more about the infosec world.
- Our client Case Status found product/market fit after 2 years of ups and downs and has grown rapidly. They’re preparing to raise a Series A.
- We bought krit.com after 5 years!!
- B3iAnalytics doubled their revenue. Meanwhile the founder only has to devote 4-5 hours a week to client support.
- We hired 2 awesome new developers and an assistant (Karen, you’ve made mine and Austin’s lives so much easier).
- We got our whole team together for a 3-day retreat in Pawley’s Island! It was so much fun to see this group of people I care about so much together in one place.
- We overworked ourselves in the beginning of the year. It happened because I failed as a project manager to keep things organized and establish healthy boundaries. To prevent it from continuing, I stepped away from project management. We also overhauled our process. Now we track hours more carefully throughout the month and set expectations with clients up front.
- We lost a really promising Venture Capital partner because they decided to return their fund. This was completely outside of our control, but definitely discouraging.
- We walked away from two of our most difficult clients halfway through the year. It has paid off tremendously but it was also extremely stressful. We never want to let anyone down, but have to protect our team.
- We had two clients churn due to budget constraints this year. Again, we never want to let anyone down. But startups are high risk ventures, and we’re up front with new clients about that.
Creating a compensation plan
Early in the year we were getting ready to hire and realized that up until that point we had been setting salaries somewhat arbitrarily. We care deeply about transparency and diversity, and so we knew we wanted something more like Buffer’s salary calculator to fairly determine what different employees make.
We did a ton of research into how other tech companies do it, looked at what market rates are and what we could afford. The result was a 5 tier scale, which we outlined here:
We currently have team members on 3 of the 5 tiers, with no one on the most junior or senior levels (although we definitely want to add more junior team members soon).
We still haven’t defined how the founders’ salaries should work, or figured out what other roles might look like. But for right now, it has been a good start. Our plan is to reevaluate every year to see if we can increase the base salaries to reflect our growth and inflation.
Building out a company playbook
Another big project we began working on in earnest in 2019 was the company playbook. Our goal is document everything so thoroughly that if Austin or I were to leave the company could keep running smoothly.
Neither of us has plans to leave any time soon, but documenting everything as if we did helps us get more organized. Having a clear playbook helps with onboarding new team members, communicating with clients, and keeping everyone on the same page.
One of our goals for this year is to release a version of the playbook publically. We still have some more work to do before we’re ready to share it with everyone, but our hope is that it can be a recruiting and marketing tool as well.
We had no intentions of changing our domain this year. Builtbykrit.com wasn’t perfect, but it worked well enough, and we’re not the type to invest tens of thousands in a four letter domain.
Then I wrote a blog post about running Krit with ADHD and it went viral. I got a ton of emails, and one of them happened to be from Petrus Theron, the owner of krit.com. He reached out to let me know he read the article, enjoyed it, and wanted to know if I was interested in the domain.
I didn’t respond for almost a month. I assumed that he would want more than we would ever pay for it, and so it probably wasn’t worth my time. Then one day on a whim I replied to find out what he wanted for it.
His price was super reasonable, and after a little negotiation we agreed. We bought the domain. Switching domains hurt our organic traffic growth for a while, but our growth has recovered now and outpaced where we were before. It’s so nice not having to explain to people that our company is called Krit. Just Krit.
Instituting a profit sharing program
In addition to everything else, this was the first year we made a really solid profit. We kept 2/3s of that in the company to build up our operating capital so that we could weather any future dips or fuel growth. But for the first time, we were able to distribute a big chunk of it to our team and ourselves, the founders.
We built a formula to split everything up in a way that felt fair and made sure everyone got to participate. 40% of the initial pot went to the partners and was distributed based on our ownership shares. The remaining 60% went to everyone on the team (right now all of the partners are also employees). Of the money that went to the team, 50% was distributed based on the time you’ve been with Krit, 25% was based on your salary, and 25% was distributed evenly amongst everyone. Here are what those numbers looked like in practice:
This was one of the absolute highlights of the year. I can’t wait to do it again next year, and hopefully we can increase the pot for everybody each year.
Personal lessons learned
Every year I try to reflect on the personal lessons I learned as a leader in addition to the milestones we went through as a company. Here are the lessons I learned in 2019.
The fastest way to level up is to level up your customers
At the beginning of the year we were struggling. Revenue was strong, but our team morale was low and stress levels were through the roof. We took a hard look at everything and quickly realized almost all of the stress was coming from two of the projects.
The first project wasn’t a good fit based on budget or working style, but we liked the founder so we took it on and tried to make it work by building on top of WordPress. This turned out to be a huge mistake. We had to hand the project off to a friend who was an experienced WordPress dev to help take it across the finish line. It felt awful, but it was in the best interests of the founder and our team.
The second project was different— it was actually one of our oldest clients. They had plenty of budget, and we built the project from scratch following our usual processes. But over the years it became clear that our companies had different values, and we occasionally felt disrespected. We stuck with them anyway out of a sense of loyalty and fear of losing one of our steadiest income streams.
Walking away from both projects was nerve-wracking. But our business grew more than ever before, and while running a company is always stressful, having strong relationships with your customers eases that stress. When a team member left to take a year off in August, we didn’t feel the need to panic. We told clients what was going on and how we were handling it. They worked with us and we found an awesome new developer to join the team in just 6 weeks.
Moving forward we’re clear with new clients about how we expect to be treated, and what we can do with their budget. We don’t deviate from our processes and are focusing our marketing efforts on attracting experienced business owners who have already validated their idea.
Stack your 1-on-1s
In 2018 I started holding monthly 1-on-1s with our team. As we’ve grown, those have proven to be more important than ever before. I stack all of these meetings on 1 day, and meet with my two partners (Kevin and Austin) last. Structuring things this way helps me to notice trends with the team. Often, if one person is feeling stressed or noticing an inefficiency, someone else is too. Anytime I hear the same thing from multiple people I know we need to address it and can bring it up with Austin and Kevin.
If you don’t hold 1-on-1s with your team yet, start right away. Know Your Team has excellent resources written for both the employer and employee.
Consistency in marketing isn’t enough
One of our biggest marketing focuses in 2018 was consistency. We wanted to be consistently publishing newsletters and blog posts, and spending some time promoting them. It was a great start, and we continued it into 2019. But while our marketing worked in 2019, it often felt like it was slowly crawling along.
Meanwhile I noticed the same thing with my personal newsletter, Startup Watching. I consistently published it to my list throughout the year, but consistency in publishing alone wasn’t enough. The list shrunk for most of the year.
Moving into 2020 we’re focusing on being more strategic with content creation and devoting more resources (both time and money) to promotion. We hired Daisy Quaker to help us with both.
Take care of yourself
Early in the year, Austin and I gave ourselves a raise from ~$50,000 to $72,000 per year. Money doesn’t make you happy, but it has made a huge (positive) difference in my personal stress levels. It’s hard to feel secure when car troubles or a trip to the hospital can wipe out your savings.
In addition to building savings, I invested heavily in exercise, therapy, and a personal project—restoring my grandfather’s sailboat. Therapy has made a huge difference, and I’m a different person than I was when I started. Some of my personal highlights from last year were treating my parents to a nice dinner in Charleston, going sky-diving with my little sister, and taking friends out on the sailboat. These would have been hard or impossible before.
I often feel a lot of guilt about not saving more, or feel bad about how much I enjoy having more money than I used to. But while it’s healthy to be skeptical of money, remember that it’s okay to reward yourself for hard work. It’s also okay to take care of yourself and invest in things that make you happy.
Over communicate and constantly manage expectations
We’ve done a much better job of managing client projects through the second half of the year. But the moments where we have struggled have all been due to a lack of communication. We’re investing a lot of time right now into defining and improving our client communication processes.
Most of our clients are already happy, but I’m really excited about how much better the experience is going to get.
On that note, when things do get tense, pick up the phone. Our most stressful moments this year could have likely been made much smoother by picking up the phone sooner. It’s so easy for tone and intent to get misconstrued in Slack or over email.
Best resources of 2019
These are some of our favorite reads and listens from throughout the year.
- How I run a company with ADHD
- 8 user retention tactics tested on 300 million users
- The guide to writing well
- The day I became a millionaire
- Hiten Shah’s billion dollar mistake
- If I had to live my life over again
- How to win traffic by refreshing old content
- Stop normalizing failure
- The ladders of wealth creation
- Reflecting on my failure to build a billion dollar company
Goals and focus for 2020
Towards the end of last year, I realized that most of the team didn’t know what my vision was for the future of Krit. I decided that was because I didn’t know what my vision was. So I spent a lot of time thinking about it. I wrote about the process in more detail, but the gist is this:
In 5 years we will be a renowned agency that commands high rates with a diverse team who love working here. We will expand our revenue streams, but services will still be our primary focus. We will take at least one big swing, either building a product of our own or partnering with an entrepreneur we’re excited about. The goal isn’t to replace our agency business but to prove our process works and hone our skills.
Our goals for 2020 are:
- Hire 4 new people (increase diversity)
- $1 million in annual revenue
- People love working here
- 5 new products
- 50,000 people visit the Krit website
- Profit margin of 15%
The theme is sustainable growth. We want to take advantage of a great opportunity to help more founders and expand our team. We don’t want to be afraid to take risks, or bet on ourselves. But we don’t believe in growth at all costs. We’re going to stay profitable, and take care of ourselves as we grow.
Thank you for reading and following our journey. If you know anyone who wants to work with the best team of app designers out there, or if you have any questions about therapy, startups or growing an agency, email me. I’m firstname.lastname@example.org. Have a great year!
P.S. If you're interested in being a part of what we're doing... we're hiring again! https://krit.homerun.co/back-end-developer