Building a Profitable Company

Sometimes you spend your money, sometimes you raise some off others, but in the end the aim is always be to build a profitable company.

Consulting and Side Product Development

My first business was profitable from day one, consulting. I saved plenty from this and in parallel quietly started self funding a product development, hired a couple of people part time and after a while of getting somewhere but seemlingly not far enough, put the consulting on hold and made a good go of it together full-time.

Back to Services

When that didn’t get profitable on the money I had (made mistakes, learning experiences…), instead of raising money from others, I went back into services mode, used some of the experience and talent I’d built up from this investment and built a web design business, didn’t take too long to get this profitable.

Then back into product again

Then right at that point decided again to have a crack at a new product, except this time would keep the services company ticking away in the background to prevent the risk of hitting rock bottom on cash, which while fine is just hard and you don’t want to do too many times. While just profitable again, with no cash reserves and a desire to both build a cool product and the rails and interaction design community around NZ, I had to raise some money. Almost 5 years on in business now, I’ve raised as much money from others as I’ve invested myself, which is around $300k from each side.

Profitable Product Company coming very soon…

Through all this, the risk of trying to build a cool product, learning whats needed to get this right on the way, providing an environment where people can skill up and build experience, one aim for the busienss is always clear. You’re not a start-up to stay a startup, you’re a startup because you’re on the road to being a profitable company.

I know what numbers this means for PlanHQ, and stay pretty focused on them and what makes them move. But while most do, and I have, not everyone has to go through failure to get there, and here’s a great video from the Startup 08 gathering in San Fran David Heinemeier Hansson one of the 37signals guys who managed to get it right on the first hit.