I was reflecting on my entrepreneurial journey, and one construct outlines it very well to me. It is the Stair Step Method coined by Rob Walling.
Method
The overarching idea is very close to the incremental development we love so much as coders. Identify and launch the tiniest possible bit and iterate based on the feedback.
Here are the steps:
- Launch a plugin on an existing platform
- Grow the plugin or add more to replace your salary level
- Launch a stand-alone SaaS tool
I have had a similar journey so far. I can also summarise it in more detail, so let’s recap.
I also found this very cool list of plugin platforms for steps 1 and 2.
Step A: Accounting is where it’s at
My first step was switching from being an employee to a consultant. I would be lying if I said it was some strategic move in my case. I got a great offer from Automattic (the best place I worked at).
As they don’t have a legal entity in Sweden, to “employ” me, it had to be a consultancy setup.
However, due to its nature, it was a consultancy in easy mode. There was an agreed-upon monthly retainer – a fixed amount to be paid to me each month. And I was working full-time within a team, so the same as during my regular employment.
How that works is that I set up my company in Sweden – Beaver Codes AB. Then, Beaver Codes would invoice Automattic, a US-based entity, for the same monthly amount. Finally, Beaver Codes would hire me and pay me a salary as well as all the employer contributions and taxes.
One thing to note is that this shift not only forced me to learn a bunch of stuff, but it also made financial sense, even if the “salary” would be the same. Beaver Codes can take over some personal costs as benefits – it is easy to be generous if the company’s only employee is the owner. Also, shareholders enjoy better tax treatment within some limits.
What I learned about:
- Setting up a limited liability company (LLC in US, AB in Sweden)
- Bookkeeping
- Salary Contributions and Taxes
- Basic Tax Optimization
Step B: Lure of Startups
Once I became comfortable with the above, I started to want to do more. I would go to social events in the startup world, network with folks, and experiment after work and on weekends.
One thing to note here: from my experience, startups don’t really have money 🙂 It is much easier then if there is a main contract that brings the cash, and then the startups are where I would go for the experience.
And oh boy. Experience is what I got! Anything from learning a new language or set of tools to setting up agreements and forms of cooperation.
The first startup I worked with was Cruitify, and I am very good friends with Daniel, the founder.
What I learned about:
- Tech expertise
- Rate negotiation
- Starts of business angle – how to get customers, pricing, etc
- Basic agreements and the usefulness of having them written
Step C: The Golden Goose
Each of these steps involves a bit of luck. I hit it big on the luck side with the Google Reviews List plugin. On the other hand, this was the fourth or fifth software product I tried to build. I fully subscribe to the idea that one should help one’s own luck by trying things out.
Building a plugin in Wix would correspond to Rob’s Step 1. However, the parts before this step helped a ton. I did not come up with the idea for the plugin – at least not exactly.
When building something, we should start from a problem it solves.
That is where my startup connection and experience came into play. Johan from JNF, whom I worked with, wanted to show Google reviews on his website. Based on my experience with other startups and podcasts, I did some research. I read all the Reddit and Facebook groups related to Wix to find out if that is something more people want.
And they did.
Google Reviews List now covers nearly all my salary expenses, which is still growing.
The great thing about building a plugin, at least in Wix (the same is true for many platforms), is that several things are taken care of.
I didn’t need to build payment processing and plan management.
I didn’t need to worry about marketing. People just find it organically through Wix search.
What I learned about:
- Plugin Platforms
- Scaling challenges
- Pricing (!)
- Automating (and when not to)
Step D: Scaling up
This is where I am right now. I am working on a few more plugins and expanding to other platforms with them.
At the same time, I am carefully testing out the waters of the big, full-blown SaaS promise land.
Now is also the time to start expanding the team.
I have already mentored a bunch of folks over the past five or six years (iterative approach, anyone), many of whom were in the form of unpaid internships. The truth is that it does cost a lot of time, and it would be faster to just “do it yourself.” Let me rephrase it: It does cost more time in the short term.
The mentoring does pay off. Not only did the interns become much more capable, but I also learned a ton from them.
With the trajectory, Beaver Codes is on, having a stronger team feels like a good long-term decision.