January 15

Lessons Learned From Running a Multi-Million Dollar Software Company

For those who don’t know me yet, let me quickly give you some context. My name is Hanne Vervaeck and I’m the COO of Thrive Themes, a profitable, bootstrapped software company with 50+ employees and tens of thousands of customers. 

At Thrive Themes we create WordPress tools to help solopreneurs and small businesses create a marketing focused website and sell their expertise online.

During the year, I spend most of my time planning and looking ahead making sure everyone is rowing in the same direction and course correcting along the way. 

But at the end of the year, I take some time to reflect back and write down what I learned and how I can take those lessons going forward. 

This however is the first time I’m publicly sharing these...

I hope reading this might help you learn the lessons without having to go through the painful learning curve or at least show you that you’re not alone in making mistakes and going through the ups and downs that come with running a business.

Alright, buckle in…

More...

Focus Is King AND Queen

3 years. That’s how long it took us to finally ship Thrive Theme Builder.

While there are a lot of reasons why it took us so long, the main reason is that while we were saying this project was important. We didn’t really make it our single focus.

In the past, we would plan to release a big project but also have all of these side projects that we would deliver upon... The result? A lot of 75% finished projects with nothing to show our customers.

This year, we got crystal clear about our focus and delivered.

That involved saying no to a lot of exciting projects and to a lot of customer requests. But it allowed for unity throughout the whole company.

When everyone in the organization knows what the NorthStar is, everyone can make decisions that will help get the company closer to that goal.

We started implementing the traction EOS system in 2019 and gradually got better at it. In 2020 this paid off bigtime.

Relentless focus is what allowed us to finally ship Thrive Theme Builder.

Until the product was in the hands of our customers, everyone in the company knew that this was the absolute highest priority and could ask themselves: “Is what I’m doing bringing us closer to shipping this product?” If the answer is “No”, there’s probably something else, more important they should be working on.

Relentless focus seems simple - just pick your NorthStar. But in reality it is HARD.

As a creator who loves new and exciting projects. Accepting that we can’t do everything at once is one of the hardest things for me!

Other things come up that feel important and urgent. 
Other projects have to be put on hold and will make little to no progress.

Note to Self

Relentless focus works. Pick one goal and stick with it until completion!

Truth is, this “NorthStar focus thing” only works if you implement it 100% and throughout the whole company. 

Which is where communication and action alignment come into play.

Broken Records Are Good and Actions Speak Louder Than Words

I once read that in order to remember something people have to hear it 7 times.

This year, I felt like repeating myself over and over again. And I had to remind myself that the only person who hears and reads all of my messages is… ME (sad but true). Most people are only exposed to a few of them and it’s only through repetition that the message is really becoming super clear.

I had to 

  • Communicate our NorthStar over and over again

But more importantly, I had to 

  • Be the guardian to ensure those words matched our actions.

It’s easy to SAY our main focus is this or that. It’s much more difficult to align actions to match those claims.

And actions speak louder than words. 

If you want everyone in the company to seriously believe a certain goal is the main focus… Kill any other projects (including your darlings).

As a leader, what you say has way more impact than you realize... If you say "Let's also do this thing in parallel." what you're actually saying is "This new thing is more important than our NorthStar." It kills relentless focus and it's a mistake I've made more often than I'd like to admit. 

Note to Self

If you’re not tired of hearing yourself rehash the same message over and over, you haven’t repeated it enough.

Ruthlessly shut down things that aren’t in alignment with reaching the NorthStar. If they are important they should become the next NorthStar or at least get the proper attention they deserve.

Side note: After launching Theme Builder, our NorthStar was "improve user experience". This allowed to work on "smaller" tasks that had been piling up while still having the relentless focus benefits.

Being extremely clear on the main goal and making sure everyone knows about it feels restrictive… “Really, that’s the only thing we’ll be doing for the next quarter?” Of course that’s not the case. The day-to-day, normal tasks still have to happen and there will still be fires that have to be put out. Which brings us to the next learning of the year.

Don’t Just Put Out Fires, Improve Your Processes

It’s the middle of Christmas holidays and our cloud server is down. Customers can’t download the products they purchased nor access templates (not good!). 

This is the type of situation that makes customers lose trust and support overloaded with requests.

But this time. Even though just about everyone is on holiday, the problem gets fixed fast enough our customers hardly notice it.

This was the result of a process put in place earlier in the year.

In every company there will be fires. But putting out that fire is only step one. The next step is to make sure this problem never occurs again.

One of the things we’ve been working hard on in 2020 is improving all of our processes and putting in place new processes to increase performance. 

Now, I can take very little credit for the actual improvements.

However, I learned that looking for improvement opportunities is a habit you can cultivate within the company. 

I constantly ask the managers “How can we improve this?” “How can we make this better/easier/faster/bulletproof/…?” They will then ask those questions to the whole team which  slowly but surely improve every area in the company. 

Note to Self

Fires are an opportunity to improve or create processes.

A culture of improvement makes for a better company over time.

Which leads to the next learning point.

Give Autonomy - You Don’t Know Better!

In 2020 I decided I wasn’t going to sign off on design, product improvements or email campaigns anymore and neither were the company founders.

Every manager was given full autonomy over the decisions in their team. 

Because really… I don’t know design better than our head of design (that would be really bad given my design skills) and I don’t know what we need in our products better than our product owners who spend hours researching the competition and going over customer requests. 

I’m more than happy to provide feedback or input when requested but the final decision lays in the hands of the team lead. 

This was something I learned from management coach Mads Singers, he taught me to spend my time making sure everyone knew HOW TO THINK and give feedback on their thinking processes rather than the outcome.

Now, when I see something that I would have done differently or that doesn’t resemble what I had in mind, I ask how they came to that result. If the thinking behind the result is “correct” I don’t step in. If there's a problem with the reasoning, I spend my time discussing why this was wrong and help improve the thinking.

This is super powerful.

When people think in line with the goals, objectives and values of the company, great things start to happen without your involvement.

It allowed me to stop being a bottleneck while giving our team greater ownership and ultimately greater job satisfaction which is extremely important to me

Note to Self

Hire people that are excellent at their job.

Teach them to think in accordance with the company values, objectives and goals.

Get out of their way and let them do their job.

Which leads me to one of the most painful lessons I learned this year…

95% Culture Fit is Not Enough

I pride myself in helping people get better, grow and improve. Admitting that sometimes it’s just not working out because of those 5% that are a misfit was a hard lesson to learn.

Having someone who almost thinks the way you want them to think is not enough.

There’s no such thing as almost understanding the company values or almost doing the right thing.

It’s like vegan food. Either it’s vegan or it’s not. There’s no such thing as 95% vegan.

When the culture fit is not 100%, you can’t trust that they will do the right thing which leads to micro-management and ultimately to a lot of stress.

It also leads to a lot of situations where something is just a little off. Not enough to be considered a mistake, which makes it very hard to put a finger on what’s really going on, but enough to create friction. 

And those little things add up and can create a ripple effect.

Note to Self

If you feel like you can’t trust someone will make the right decisions, it’s time to let them go.

Profitability Is Sexy

As I stated in the introduction of this blogpost: we’re a profitable, bootstrapped company. 

Which I love (and am very proud of)!

But every now and then, I look at our competitors and see the millions of investment money they can blow on brand recognition and growth strategies and I get envious

This year, this translated into spending countless hours and sleepless nights fantasizing about a freemium strategy.

The excitement about the possibilities coupled with the calculations of how big we would need to be for this to pay off, quickly made me realize that that was not the type of company I would enjoy running.

It made me realize again how grateful I am to be able to focus purely on bringing value to our customers, not on 10x-ing investors´ money. 

It’s easy to look around and see all the things you don’t have or can’t do which can lead to massive frustration and stupid actions.

It’s why I believe it’s crucial to be clear on the type of company you want to build (or be part of).

Note to Self

Don’t fall in the comparison trap. Focus on your customers and your employees. If those two are happy you’re doing a damn good job.

There you go...

Those were some of the lessons I learned in 2020. It's by no means an exhaustive list and I'm sure that some of the lessons I "learned" I will look back at in a couple of months and realize I didn't ACTUALLY understood the whole picture.

But that's what makes life interesting.

When I joined the team 5 years ago, I told Shane that the moment I was bored I was out... And well, I'm not at risk of being bored any time soon. 

Thanks for reading, I would love to hear from you in the comments below!

Did you learn any similar lessons this year? Or maybe the opposite of what I experienced happened to you? Let's have a chat!

  • Hi Hanne, I loved reading this – so much of it resonated with the success and challenges we experienced at Paddle last year. Also well done for getting through a whole 2020 review without mentioning the pandemic and ‘lessons learned/the new normal’ once – very refreshing!

    Our theme for 2021 is all around levelling up – how can we meaningfully improve our people, product, tools and processes and add more value for our sellers. Good luck with the year ahead! 🙂

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