Carsonified

No one is successful 100% of the time. Just look at entreprenuers like Richard Branson (founder of Virgin) and Milton Hershey (founder of Hershey’s Chocolate). They are (were) both extremely succesful and yet they’ve also had some spectacular failures (remember Virgin Brides?).

Thankfully we’ve enjoyed a couple successful ideas here at Carsonified on the web app front:

* DropSend was built on a budget, grown to a profitable monthly revenue and sold for a healthy sum of money.

* Our internal event booking web app EventStream has been a big help to the company.

* Matt was a successful small app which didn’t make us any money, but was really fun to build and got us a ton of press coverage. Awesome.

But we’ve also failed pretty badly with another web app called Amigo. We launched it in late 2006 and received some great press. The idea was solid (pay-per-click advertising in email newsleters) but the problem is that we were naive and we thought we could run it in our free time.

Wake up call: you can’t run a web app in your free time.

You can build a web app in your free time, but you sure as hell can’t market it, grow it, maintain it and promote it. Once you build a web app you need to pay attention to all the details. Things like:

1. A/B testing
2. Conversion rates
3. Usability tweaks
4. Email marketing
5. Blogging
6. Networking and sales

So Amigo is going on the chopping block at Ebay so another owner, with time and money, can make some serious money with it. I’ve never sold a web app on Ebay, so it should be an interesting ride. Stay tuned.

Time to build a big app again

So now with three successes and one failure under our belt (well, two if you count DropSend’s short-lived predecessor FlightDeck that I coded in PHP), we’ve learned a huge amount about what makes a great app and what doesn’t.

With that in mind, I’m very excited to announce that we’re building a new web app called Truvay (a play on the Frech word trouver which means ‘to find’). It’s the brainchild of Keir Whitaker and I’m fricken excited about it.

Mike Kus will be designing it and Elliott Kember will be building it and we’ve set up a pretty interesting arrangement with Elliott (as he’s no longer working at Carsonified).

Here’s the rough contract that Elliott has agreed to:

Maintenance
=====================

* Work at least 8 consecutive hours per week every Monday

* Answer all support emails within 24 hours

* Use Basecamp for project milestones and todos

* Use a bug tracking solution (suggestions?)

* Blog at least once a week on Carsonified.com about the development and progress of Truvay, before and after launch. This isn’t a part of the 8 hours of consecutive work every Monday

Ownership
=====================

Carsonified will own all intellectual property for the project.

Financials
=====================

There will be no charge for building or maintenance of the app, but instead Elliott will receive a monthly cut of the revenue. This will be after expenses, which include:

1. Hosting bill (bandwidth, rental, etc)
2. Marketing costs (variable but will include AdWords), which Elliott will be consulted on
3. Bookkeeping
4. One day of Ryan’s time per week for management (normally charged out at £800 per day, but reduced to £300)

Elliott will receive 10% of monthly revenues, after the expenses listed above. If he launches the site on time (3pm April 20th), this will increase to 15% (hat tip to Natasha on that idea). When the site hits $25,000 monthly revenue (excluding VAT), his take will increase to 25%.

His monthly cheque will be determined by a snapshot of the revenue on the 1st of every month at 9am.

If the app is sold, Elliott will receive 10% of the cash price, after lawyer and accountancy costs.

Notice period
=====================

Either party can terminate the contract with one month’s notice. After the one month notice period has ended Elliott will stop receiving monthly revenue and will no longer be eligible for 10% of any future sale price. If we receive a Letter of Intent for an acquisition, we will not be allowed to cancel the contract, providing he is still dedicating at least one day (8 consecutive hours) per week to the project.

Your thoughts?

Normally companies would just hire a developer to build a web app but we don’t want to take that financial risk right now. I think that this deal is a win-win for Elliott and Carsonified. He has the potential of making serious long-term revenue and we get to launch the app with very small financial risk.

Love to hear your thoughts …
[Photo Credit: http://flickr.com/photos/babsphotosecosse]

The other day I asked this question on Twitter (twitter.com/ryancarson):

“My sis is looking for an affordable, but fast and reliable backup drive for her Mac. Suggestions? Is Firewire or USB faster these days?”

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I am delighted to announce the dates for Carson Workshops 2009, yippee!

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Last week I had to make the terrible decision to lay off three amazing people from the Carsonified Family. We really love and value Simon, Elliott and Dom, and it was very painful to have to let them go. We’re a tight knit group so it was tough on everyone - especially those who are having to leave. They’re talented, friendly and hard-working so I know that another company will snap them right up.

If you’re for an amazing developer, Elliott really kicks ass. If you’re trying to find someone who really understands the web industry and has amazing ideas, Simon is your man, and if you need someone who’s an expert in Mobile, just get in touch with Dom. We’re really sad to part ways with these guys - they kick ass.

So why did we do it?

We did it to make sure that Carsonified would make it through this recession. These weren’t emergency cuts. It was a pre-emptive decision that will give the company plenty of what Jason Calacanis calls ‘Runway’ - cash to see us through slow times.

What are you doing about the Recession?

Whether you’re a employee, freelancer or entrepreneur, you need to be thinking about several important issues right now. These tips should be followed at all times, but they’re especially important during an economic downturn.

Employees

1. Make sure you’re earning revenue for the company and covering your salary. As brutal as it sounds, the founders of the company are going to be looking at your salary versus the amount of revenue coming in and making a decision accordingly. If you’re not directly bringing in enough revenue to cover your salary, it’s going to be very hard for them to justify keeping you on board. If you aren’t currently covering your own salary, then make sure to be able to demonstrate that your revenue stream is increasing dramatically and you’ll soon be covering your salary and making a decent profit for the company.

2. Demonstrate that you have profit-generating ideas. Create and execute simple ideas that bring in profit for the company. These can be things like selling t-shirts or sending valuable leads to the sales team (make sure your boss knows you did this!).

3. Volunteer to do extra work. I’m not talking about kissing the founder’s ass. I’m talking about doing anything you can to help the company survive. The more you demonstrate that you’re committed to helping the company make it through the recession, the more valuable you’ll become.

Unfortunately, even if you’re working hard on the above three points, sadly there’s no guarantee that you’ll be able to keep your job. Sometimes your company just doesn’t have enough time to allow you to build up levels of revenue or value and they will have to make a tough decision. If you think this might be the case in your situation, it’s important to communicate early and often with your boss to ask whether your job is at risk and what you can do about it.

Entrepreneurs and Freelancers

1. Cut unnecessary costs. And I mean all of them. Here are some ideas:

- Sell the company car and ride a bike. I sold the company Audi A6 and now ride a bike to work - great for getting fit.
- Rent out desks in your office.
- Book your travel tickets way in advance to take advantage of early-bird offers.
- During business trips stay at a cheap B&B instead of in a hotel room.
- Learn how much your broadband, phone and electricity cost. Can you change providers to save money?
- Go through your P&L statement line by line and check all the figures. Any over-spending should be identified and cut.
- Double-check everyone’s credit card statements and get on top of any over-spending.

2. Get deadly serious about watching your cash flow. I’d recommend doing this every week, no matter how big your business. The most important thing is to plan on a decrease in your revenue of at least 20% with costs increasing by 5%. Make this a variable that you can change in one cell which then updates all your revenue forecasts.

3. Require 50% payment up-front from your customers and make sure this is in their contract. Don’t be a hard-ass (as they’ll just ignore you) but make sure you get paid early.

4. Diversify. At Carsonified we recently branched out into consultancy, marketing, design and development. We are pretty good at all these things but we previously only did them for our own products. As soon as we offered these services to other companies, we immediately created a new revenue stream.

5. As hard as it may be, it’s time to lay off staff who aren’t directly generating revenue. If you avoid doing this now, you might go out of business later which means you have to lay off everyone, which will be much, much worse.

6. Think hard about what sets you apart from your competitors. Why should your customers spend their hard-earned cash with you?

7. Take really good care of your big customers. We should take good care of all our customers, but make sure youre paying extra attention to the folks who do a lot of business with you. Ideas: Send them thankyou and birthday cards, call them, send them a personal gift and remember their partner’s or kids’ names.

Thoughts?

Times are tough but if you’re smart, you have a great chance of surviving. The key is to not stick your head in the stand - be proactive.

What are your tips for surviving the recession? Please share below.

Pret, a sandwich shop here in the UK, regularly amazes me with their copywriting.

In a (misguided) bid to stimulate the economy the British government has just decreased the sales tax rate here and all the shops and businesses are having to update their prices.

Here’s what it said:

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