 All right. How's everyone doing? You have endured three or some of you two grueling days of learning and talking and networking. Everyone have a good time at WordCamp Miami this year? It has been awesome. So today our panel is talking about scaling, growing from freelance experience to a smaller team, too much larger company. You may have noticed there's been some substitutions and panelists and moderators throughout the day. So to start off, I'm going to let our panelists kind of introduce themselves. Some of you have heard their introductions two, three or four times today already. You get to hear it again, maybe in a unique way. I don't know. And I'm going to also ask you guys just to share a little bit about your company, what this current team atmosphere looks like at your company right now. So why don't we start with you? Hi everyone. My name is Brett Cohen. I am co-founder of Imagine where a digital agency outside of Boston. We have an office in Delray Beach also. Currently around 50 people, most of them in our Boston office. And I started, I did my first website in 1996. So as if you were here the last session I mentioned, I'm an overnight success. It just took me 20 years to become a success. And one of the things that I wanted to say is that I spent 20 years sitting on the other side at conferences like these. And when you're just getting going or if you're just by yourself and you're trying to grow your business, you can do it. And if you have any questions, just ask them. I'd be happy to answer. Andrew? My name is still Andrew Norcross. That's good to know. Yeah, it's worked well for me so far. I still run, I found a reactive studio that's based in Tampa. I like walks on the beach. Well, in Canada I like dinners. Writing complex code that looks really easy. And currently we are, we have five folks. It's myself, my business partner Josh in Indiana. We have a gal in Canada who handles support on the commercial product side. We have another developer's act over on the East Coast over in Fort St. Lucy. We have a gal who is current, she's moving I believe to Alabama right now. Like literally right now. And she does a lot of the admin and some of the project management, business development, client management stuff. And we're actually in the process of hiring another developer. So that's where we are currently from a staff standpoint. Alright, awesome. And based on that description, I might like to date you. I don't know. We'll consider that as an option. Chris, why don't you? Yeah, sure. So I'm Chris Christoff. I work on contributing a lot to WordPress Core. But I also work with Easy Digital Downloads, which is an e-commerce plugin for WordPress. We are now between full-time, part-time, and contractors, about 10 to 15 people. So it's been fun to watch it grow. Awesome. Well, cool. So let's start off with just a basic idea. When did you guys, give us a little bit of an idea of what the transition looked like of growing from freelancing, starting from doing things yourself, building your first website, to the idea where you started to realize, oh, I might need help. Can you give us a little bit of background on when you discovered that, like what that looked like for you? Let's go down the line. Yeah, alright. That works. I think I knew right from the beginning that I wanted to grow a business beyond myself. And I told this story all the time that I did this. I had a little printing business. And I had one of my clients ask me to do a website. And I said, I don't even know what a website is, but if you're paying me, I'll do it. And they paid me to do it. And I launched the site, took me three days to actually make it work online because I didn't understand the concept of index.html. I just didn't know what that meant. I didn't know you needed to name it that back in the day. So anyway, I spelled the owner's name wrong. His last name I spelled wrong. And he called me up and, you know, 10 seconds FTP, I fixed it. And I said to myself, boy, if I printed 20,000 brochures with his name spelled wrong, I would have eaten that. And I said, this is the business I want to be in. So, you know, and that was back when you would talk. So I had only a handful of printing customers. And I kind of would go to them and say, hey, you guys should have a website. And people had no idea, you know, I was in a small town. They didn't even know what a website was. But I knew right away that it was going to be something substantial. And I told everybody who I could tell, you know, get into the web, it's going to be important. And my current business partner for 20 years, he was actually a printing customer of mine. And he was a marketer on his own. And I used to print all the stuff. But I never actually looked at anything that he was, I was printing for him. I just printed it and he paid me. And then I started to read his copy. And I said, wow, this guy knows how to write. And he's a good marketer. And, you know, I knew right away that he had something I didn't have. And I recognized it. And I convinced him. It took six months of convincing. But he finally agreed. And that's how we kind of worked together. So the point is if you're on your own and, you know, I saw a presentation earlier where I don't know who it was, but he said the only ships that don't sail are partnerships. And I disagree. If you can find somebody who has a complimentary skill set to your own, you know, your partnership can sail. It actually brings up an interesting point too. Like you said, I always knew I wanted to build a business, build a team. Andrew, is that the same case for you? Like you said, I'm going to build a team? Or did you just kind of discover you needed a team? No, I discovered that I hated my job. I'm sure we get like a lot of people can agree with that, right? Yeah, I worked in finance for 10 years. All right. And the last couple of years that I was working there, I worked as a fiduciary asset manager, which is a very fancy way of saying I was in charge of dead people's money. They were dead. They didn't complain. But it was not mine. And when the market imploded in 0809, like I'd done it since I was 18, like in various roles within this firm. And while I was like, I guess I was good at it. I could not have cared less about it. I could not have been more bored. I had started, we had a computer in my house when I was four. I started running code when I was eight. This was before the internet. And I wanted, it was more important for me to be cool than it was for me to keep writing code. So I quit and I got a guitar and I got a skateboard and all that. And I started getting back into it around this time because my brother's a window tenor. He's like, I need a website. He's my older brother. And I'm like, all right. I'll figure out how to build one. And that's what I did. But it was a matter of, yeah, I was working in finance. And I just, when everything blew up, it just, you know, I had clients that lost a lot of money that it wasn't their fault and it wasn't my fault. But I still felt like it was my fault. And I just almost guilty. Like it was just like this feeling like I don't want to do this anymore. Like I finally had a reason to quit. Like I knew I didn't want to do it, but I didn't know what else to do. And I'm like, well, I keep showing up. They keep paying me. I should probably do this. You know, at the time I was married, I had a kid. And I was like, you know, there are people that depend on me. I can't just decide to go up and quit because I don't like it. But then other stuff worked out so I could. And for a while I'm like, I'll just do this nerd stuff to make some money. And it grew to the point like within six months I had to hire someone to answer emails for me. So that was like my first person. So that's it. That's kind of an interesting transition, right? It was just answering emails. Like I'm getting either support requests or questions or whatever the case may be. And your first hire is just, hey, I can't deal with the minutiae of all of the information coming to me. I need somebody to kind of be a gatekeeper of all the information. Chris, what about you? I started off actually in support ironically. Originally I was in sixth grade and I needed a way for at the time of client to do his photography business. I'm sorry. Back up. What grade were you in? Sixth. Yeah. Long time ago. Did you hear that? Yeah. I just want to make sure we didn't just like jump over that. Sure. So unfairly. Yeah. So in sixth grade, e-commerce obviously was in its infancy. And we started working on this jigger shop thing. And I mostly worked in the support forums there for quite some time until obviously the e-commerce fork happened. And then I stayed at jigger shop for quite some time. But I transitioned over to EDD at some point, easy to download, which is another e-commerce plugin. And I mean from there it's been smooth sailing. Yeah. Yeah. Watching the plugin grow. Very cool. So you hire your first person, you know, for you checking emails, you found somebody who was good at writing content, you got involved and started getting involved in a larger team, not just kind of working in the isolated. What are the challenges that you've come in with, especially in those first few hires, not being somebody who's worked with maybe managing a team yet at that point? What are some of the challenges you guys have faced when we started on the other end this time and come back? Okay. Sure. So I mean obviously when you have like one or two employees, it's not as bad. You don't have to manage, but as you start growing beyond that, you know, you have to start doing managing, you have to watch other people are doing. One of the more interesting ones, Corey Miller actually brought this up a couple of word camps ago, was the fact that when you're just a team of one, you only have to make enough income to support just one person. But before you can hire person number two, you have to be making twice as much money in order to support one person because that way you can carve out a salary because you can't hire someone before you have basically the money to cover their costs. Andrew. For myself, it was when it was only me, A, it's my fault. If something goes wrong, it's my fault. It's on to me. Everything about the whole process, I was the one doing it, which meant if I like something a certain way, that's the way that that thing's going to get done because I'm the only one doing it and I'm the only one seeing it, so who cares. Beyond that, I didn't have systems in place because it was me. I'm not going to run all of my own stuff through these multi-channel project management tools because I'm literally the one entering it and then reading it. It would be overkill. But when we started hiring and scaling and having people work with, all of a sudden realize, hey, I don't have any processes at all. I can't tell them to read my e-mail. Another developer was like, oh, I was on that call and here's eight words that I took as notes, like literal words. But I know exactly what all those eight words constituted a 45-minute conversation and now I'm not home and they can't work. It was one of those things where realizing that what I did and didn't do was affecting other people's ability to do their job. So that's when we had to look at things like implementing systems and all the workflows in process and then removing ego out of it because, again, I'm not the easiest person to get along with. But there are certain things I'll be really particular about and certain things I couldn't care less about and that's everyone's like that with different things and realizing that, okay, if this is something that I'm not going to get too worried about, then I'm not going to try to micromanage it. If it's something that I know I'm going to be pretty picky about, they need to know ahead of time, I'm going to look at this. This is something I care about and kind of setting expectations and just trying to keep work at work and not work, not letting it flow over and things like that. Yeah, I think it's the first employee it comes down to money because you do have to pay that person but it's also time you all used to working at 110% is doing your own work and now you get a car boat, a piece of that percentage to manage somebody else and keep them busy. The other piece that was challenging with the first few hires, especially when you have a partner and you're not making all the decisions on your own, is who to hire. So my partner thinks we need a designer and I think we need a developer and we end up hiring a telemarketer. So it's... We're doing the same thing. Very cool. You know, kind of on that same topic for us, I noticed that as an owner I think about a business differently than my team is going to think about the business. They don't, it's not their life blood, they import blood, sweat and tears. They are an employee and while you want to give them a bit of ownership and you want to build that team culture, it is different and you have to not, you can't set the same expectation that you set for yourself onto your team member and that's, I think was a hard thing for me in the very beginning was to kind of transition with that. With that in mind, now that we've kind of opened up the topic a little bit is there any, does anybody have any questions for the panelists specific to this topic? Yes. So that's an interesting topic for you guys right? So when you're bringing on team members obviously you have your kind of your benefits package, your salary, what you do, but some companies do offer equity in the business. Is that something that you do right off from the beginning? Have you guys done that yet at this point or is that something you're like, you know they're not going to even tackle that? So for those of you that were around back in the late 90s you know it was crazy, right? It was we would try to hire somebody and you would have somebody with no experience who hadn't done nothing and say, oh well I got offered a job and we were right outside Boston so Boston was crazy with the dot-com boom and startups and web firms like us you know people would say well they offered me you know this crazy salary and you know full weeks vacation company car and they buy lunch every day and we would sit there and stock options you know we just couldn't, we were two guys that didn't even have $200 in the bank between us honestly so our first key person we did we did give equity and had since bought them out but you know now I think things have changed a lot over the last 20 years so and we're in a position where you know we don't do that anymore. When we actually formed the partnership agreement with Josh and I and at the time there was a third partner we had the equity split between three everything was based I had the extra 1% to make it 100 and I'm like well I started it so I get the 1% and then when that third partner left we figured we had written stuff out how we're going to handle it and everything worked out fine unless they're going to be ownership like legit ownership at that point then there's no need to get options because I mean I remember the dot-com most of those options were worth less than toilet paper when they were done and even now there's a whole lot you know you look at a lot of the startup stuff going on in San Francisco it's like yeah it's insane I think a lot of that culture is incredibly toxic too so I want someone to do a good job I want to pay them fairly I don't want to promise them and try to get them to necessarily buy in at a level that I'm already at because like as an owner of an agency I get paid last my employees get paid first my employees if I have a contractor vendors anybody else gets paid before I do if you've got equity you're an owner and you get paid last so if you've got a huge chunk of VC money then maybe I don't know that's not my game so for my whole feeling on it it's like no I just here's what we pay here's the benefits this is what our expectations are and I think that's a much more solid foundation to start that sort of relationship can I answer that question adequately for you any other questions yes so the question is if you get into this kind of a partnership with somebody maybe a third person then that person wants to either leave or maybe you want that person to leave how do you handle that what was your situation if you don't mind oh okay so you kicked her out of the business you are cold she has her own business in addition to being part of mine when I transitioned from being like a freelancer with a little bit of help here and there she took over like the management side of it and amazingly revenue went up like 250% in six months because she did things like email clients and invoice and those were quirky things but you know she got into a point where her business was growing and ours was growing where she just could not do both anymore so you know she you know she made the decision like okay I'm going to do mine so all of our stuff that we had written up in all our documentation I mean all our agreements were said how that was going to be handled so at that point it wasn't a question anymore about it wasn't personal it wasn't trying to come up with well what do we think is here's what the legal document that we all signed that was written by a lawyer says at that point there was no debate or argument anymore all that stuff should absolutely be written up by a lawyer pay a competent lawyer to do it and then pay another lawyer to read it I'm a big fan of paying professionals to do what they do best I'm not an attorney so I don't try to be one of them and the key is do it when you're all friends upfront so you know what we did we had an exit strategy in place right from the beginning so everybody understood that if this happened this is what it was going to be and if this happened that's what it was going to be we all agreed to it when we were friends and when we weren't friends anymore it's we executed on what we had agreed on so and when I say we were friends but you know it ended yes yeah I well for me I had a little company yeah I had like an escort printing shop but when when we met my partner we started doing some project he had his own little thing I had my own little thing and we started doing stuff together and we would just kind of he would build some of them from his company I would build from my company and then once we kind of knew that it was going to be real then we we incorporated it you know we did the I mean the incorporation it's not expensive especially now you can you can do it yourself for about a hundred dollars so Chris leaning in a little bit yeah yeah so that was probably one of my larger regrets of not doing it earlier I would definitely recommend doing it particularly if you're in client work where you can get one person extremely pissed off because if you don't LLC then they can start going after you in other places so yeah definitely if you're if you're a freelancer and you're above the point where it's no longer a hobby and you're considering doing it for a very long time it's really cheap and there's a lot of services I and I would add to that to again to kind of echo what Andrew said find a good tax lawyer find a good lawyer to kind of walk through that process with you because an LLC may not be the best organization structure for you you may need to do something more like an S Corp it just depends on what your future goals are and where you're headed so in what state you're in what state you're in all of those things are major factors so yeah absolutely anyone else another question so we're talking now right about a little bit away from the team more in the partnership structure but we'll address this kind of briefly but the idea of when you are a partner how do you determine how do you set up the the gauge or is there do you ever find yourself in a situation where you may be one part you feel one partner is putting more in than the other partner and how do you kind of deal with that kind of dynamic we're talking about ourselves I have a partner we're 50-50 and I just assume he's doing as much as I'm doing at any given time even though we do very different things but that doesn't always work so do you guys have some thoughts on that? yeah so my my partner is a 50-50 and you know we formed it early on like literally when we had nothing so it wasn't about who brought what to the table and you know like I said earlier we had worked together for six months we formed the partnership so I kind of knew what I was getting and to be honest with you it took six months because I was at a different stage in my life than my partner was I was married I had a I had a daughter he was single and he used to see me like crazy I was with my own little shop he'd come in and see me in there from like 7 in the morning till 11 at night and he didn't want to be my partner because he thought he couldn't do what I was doing initially he's like I don't want to work that I want to wake up and at 10 o'clock and go to the gym and go tanning like that was kind of his mentality and then and then finally he kind of came around and said okay I'm ready to do it so but one of the one of the good things and you guys that have partners can kind of speak to this too about having a good partner is that you go through times in your life where you have other things life itself that's distracting and it's great to have a partner that can actually pick up the load while you are distracting being distracted doing some real estate trends you know buying a house or moving or traveling or raising kids or you know doing things like that it's good to have a partner who can especially when you're just you two who can actually pick up the slack for you and you can do the same so you know you don't want to go into a partnership lightly you know with someone you meet for an hour at lunch outside you have to get in you know maybe a less formal relationship first and make sure that you're aligned on with the same goals yeah like for us like we actually pay ourselves a set salary it's not a percentage of you know we whatever's left over like we'll do like your end bonuses for ourselves and just divide it up but other than that like I don't want to get in the habit of a spending more time worrying about what someone else is doing and what I'm doing also I kind of fall back to the idea that you know like most people I'm going to judge everybody else by their actions but me by my intent so it's like oh well I know that I didn't get quite as much done this week because of you know I was at the doctor you know with one of the kids and then you know this that and the other but I'm going to look at like oh well they just didn't get their shit done I just like I don't want to start breeding resentment you know with someone that I'm trying to build something with and so I just don't even think about it like did the work get done yes or no you know is it something where you know we've got a good relationship to the point where like if there's something coming up you know saying ahead time I'm going to need a hand so we can reach this day kind of the idea like with employees it's like I can deal with bad news I don't like surprises so you know I have a level of trust in my business partner that I'm not going to be left out to dry and vice versa so I'm not worried like oh this week you know I'm not going to keep tabs you know it's just not healthy yeah and I think if you're going to go into partnership with somebody you need to there has to be a level of trust like there has to be I know who you are I know what you do and I know you've got my back from our perspective I handle the business side of the business and the marketing side and the sales side and my partner handles all the technical side of it and that's really important to me because on a Saturday night if something crashes I need to know that I have somebody who's vested to get up and fix it whatever it is because I can't do it and so you need to have that level of trust that just says you know what there are times and I'm working long hours figuring out our finances and figuring out how payroll is going to work out and all of these different things but I know he's up at midnight on Saturday you know on Saturday fixing bugs or something like that so trust is a big deal in that do you have any thoughts on that that you want to know I was actually hoping you didn't but I just wanted to make sure last question it's been said yeah so that this is a great question right you have this team we all know sales can be volatile your clients can be volatile one month you're high one month you're low and if you if you maybe off a little bit you may have to downsize your team or you may have to let someone go because the financial health of your business is important otherwise you won't be able to pay anyone else on your team either have you guys have to experience that and deal with something like that yeah so things were going great for us we had about 22 employees and then September 11th happened and it was like everything just stopped nobody was buying anything and you know so we had to make some tough cuts because at that point you have this huge payroll and every dollar that you're paying out is literally coming out of your pocket it's not coming out of like some fictitious bank account or you know it's coming out of your pocket so you know you have to do what's at the end of the day you have to do what's best for the business and what's best for you you are the one who started this thing and you are the one whose neck is on the line and you have to do what's best for you and if you can keep things going we had the same issue in 2008 with the financial crisis and we held on to a few people probably longer than we should and it had a financial impact on us but you know at the end of the day you have to just realize that this is your baby and you've almost killed yourself to keep this thing going and it's your job to keep it alive and you just have to do what's tough that's why you own the business you know like we made it a point to keep a pretty large reserve of money just for salary so we're not as susceptible to spikes like that we're fortunate that we have product revenue in addition to client service so we do have kind of a buffer that is going to be there to kind of help meet salary and make sure the things are there but you know we've also made it a point to grow slowly I've never wanted to be in a position just to pay the people that I've hired and I also don't want to be at a point to hire someone I don't really want to hire just to deal with the work that's coming in the door because once that cycle starts you're pretty much never going to be out of it you're either hiring people or you're taking on more work or you're hiring people or you're taking on more work and then you know it grows so fast you don't know what you have anymore so you know dealing like I've let people go in the past got to the point where like everybody's kind of aware like everybody knows this is happening like it's not a you know it's not like waking up and be like hey guess what you don't have a job anymore or like why can't I log into my email it's because we fired you I'd like to think that that won't ever be a thing that I do you know so it's one of those things we're looking at like hey look you know the way this is going we're probably you know I don't think we're going to need you much longer if you start looking let us know we can help you look more than happy recommendations more than happy to you know thankfully with the word press community usually somebody's hiring and if it's not a personality issue if it's simply work you know workflow issue they're probably not going to be unemployed very long and you know the flip side is that if they're let go because they're just working with they might not be employed very easily because we all talk and you know so it's a matter of like you know if you're going to let somebody go you let them go yeah you help them out as much as possible whether it's severance or whether it's helping them find something somewhere else or whether it's giving them enough lead time to get their affairs in order but you know it's if I don't fire someone and the business closes then what was the point of fire exactly thank you everybody for your questions let's just give a round to our panelists for taking the time appreciate them