Tag Archives: Entrepreneurship

How to Virtually Onboard New Hires

Post Syndicated from Natalie Cook original https://www.backblaze.com/blog/how-to-virtually-onboard-new-hires/

Over the past few months, the world has been grappling with a pandemic which has unfortunately led to layoffs by some organizations and has resulted in others finding alternate ways to augment their team distribution, hiring, and onboarding. Both situations are challenging, logistically and emotionally.

At Backblaze, we feel incredibly fortunate that we’ve been able to continue employing our full staff and add some talented new employees to our roster. Thankfully, we’ve remotely onboarded employees in the past, which gives us a solid foundation to build out a process that can support a fully-distributed model.

We expect that there are a lot of companies out there who have never dealt with remote employees or onboarding before, but now have no other choice. With that in mind, we wanted to take a moment to share our experience with virtual onboarding processes to help those of you who now need to pivot in that direction.

Virtual Onboarding

Our Human Resources Generalist, Vanna Ngo, manages the onboarding processes at Backblaze and is a great resource to managers who may need ideas or advice. When someone accepts an offer to work with us, Vanna sends them a welcome email along with a “Getting to Know You” form that asks our new co-workers for some interesting facts. These range from their favorite foods and “Star”-related entertainment (like Wars, or Trek?), to their T-shirt size (so that we can give them swag when they come to the office, or ship it to them), and their favorite pastimes. Our Office Administrator, Judith Pimentel, uses this questionnaire to develop a personalized welcoming package of merchandise and goodies to help the new hire feel like a part of the team from day one.

Managers are informed of all required training and they build weekly plans for the new hire accordingly. The manager also determines an onboarding buddy, who is a resource for the new hire throughout the onboarding process and beyond. The buddy is chosen based on their role and their interest. They’re there for the new hire whether they have questions, need help with a project, or simply just want to have a casual conversation.

During the employee’s first weeks, managers are especially mindful of creating early social ties between new hires and a broad array of the Backblaze team. Normally, new hires have coffee with a few staffers from other teams. During our time working remotely, however, managers have vastly expanded this program by setting up a large number of virtual meet-and-greets. In addition, Vanna does 1:1 Slack calls with herself and the new hire for a few minutes during the first week or so of the new employee’s onboarding, simply to ensure they’re doing okay.

Tips and Tricks

Here’s some advice that we have compiled during our remote onboarding journey. We hope that your HR and IT departments will be able to carry them into your company’s onboarding processes.

      1. Welcome and introduce the new hire in an email and/or Slack channel. At Backblaze, when we have a new hire, the hiring manager emails the entire company and welcomes the new employee by describing who they are and how they will use their professional background to help at Backblaze. We also have Slack channels like #social and #virtualwatercooler where employees send welcome messages. These initiatives can help new hires feel more included.
      2. Turn on your video when doing an onboarding call. This is a best practice for any remote meeting, but especially true when onboarding a new hire. You want to reassure them that they still have co-workers even if they may not be sitting right next to them.
      3. If you are using Google Hangouts, take advantage of the presentation feature. This tool allows you to share your screen with the new hire, which can make training sessions a bit easier.
      4. Develop booklets to go along with virtual training sessions. At Backblaze, we created booklets and pre-recorded videos for our expense report training with accounting, security training with IT, and time card training with payroll. New hires can reference these booklets later, in the absence of being able to incidentally ask other staffers for help.
      5. Install necessary applications on the new hire’s computer before handing it off. Our IT department does this either by using system images or manually installing relevant software and configuration files. They also set up the new hire’s accounts with temporary passwords, so the employee can change their password later. This ensures that IT never knows the individual’s password.
      6. Implement and teach new hires about best security practices. Every computer that is given to our new hires uses Full Disk Encryption. Our IT team helps the new employee set up an account with a password manager so that they only have to remember one strong password rather than multiple vulnerable passwords. IT also teaches the new hire best security practices and they cover topics such as creating secure passwords, using a VPN, and keeping private information out of view during a video call.

Delivering Equipment

One initial roadblock to virtual onboarding during the COVID-19 epidemic was getting equipment shipped to new hires. Laptops were out of stock from our normal supplier, but our IT department worked quickly to procure a stock from elsewhere. If you have a certain hiring target, you may want to consider buying some amount of buffer stock even before new hires come on board. We likely haven’t seen the end of supply-chain disruptions for laptop manufacturing, which means out-of-stock situations could be a problem again.

Simran Kaur, our recently hired Product Manager—who began her role here after Backblaze had shifted to a primarily work-from-home status during the COVID crisis—explained, “I got my laptop, keyboard, and an extra monitor a day or two before my start date. I had everything I needed before I even started working.” Our IT department planfully pulled together instructions so that new hires could easily assemble their work stations on arrival.

Simran’s experience of receiving everything she needed in a timely way is our ideal. But because we expect supplies of different work-from-home essentials to be constrained, Vanna has started asking new hires regarding what equipment they already have on hand. With this approach, we’re able to not only control our supply, but also accommodate limited spacing in employee’s homes. Some new hires already have a workstation at home, so sending them more equipment will only take up their space.

When onboarding employees remotely, it’s crucial that they have the backup tools they need. We set up each employee with a Backblaze Business Backup account on their laptop so that they can access their files from any location. The Business Backup product also allows for both IT-side and physical restores as well as groups-level file sharing. If you are interested in learning more about the advantages of implementing Backblaze Business Backup into your remote workflow, please read our blog post here.

Succeeding from Home with Backblaze Business Backup

Encouraging Productivity

Once an employee is effectively onboarded and their workstation is ready for daily use, the most important aspect of their orientation begins: ensuring that they’re able to be productive. To help with this, hiring managers create schedules for their new hires prior to their start date. This way, new hires know exactly what they need to do and when they need to do it each day.

Backblaze’s benefits package also includes an equipment stipend which employees can use on anything that would improve their productivity, whether in the office (eventually), or now at home. This includes home office furniture, an extra monitor, or any other tools that may help productivity.

Backblaze offers this perk because we understand that each employee has unique needs for doing their best work: for some it’s noise cancelling headphones, for others it’s a smartwatch to keep them active during the day. We strongly recommend providing your employees with some flexibility in customizing their workspace—especially as they work to make a place (their home) into something it likely wasn’t intended to be (their office).

Advice From One New Hire to Another

On the flip side, there are some things that new hires themselves can do to improve their remote onboarding experience. Shannon Gerard, our new Director of Marketing Operations, has worked remotely for the past five years. Her first piece of advice for new hires is to upgrade your internet connection. In an effort to assist with internet costs and upgrades, Backblaze has given employees (who were not remote prior to the shelter-in-place) a monthly stipend/allowance to cover that cost. Shannon said, “When it comes to your internet connection, you need to have a backup plan of some sort, whether that’s connecting to your mobile hotspot or just dialing into the call using your phone. You also need to be prepared to execute your plan quickly because there’s nothing worse than getting kicked off a meeting and taking a while to get back in.”

She also recommends scheduling brief meet-and-greets with people who you may not be formally meeting as part of your onboarding. “It doesn’t have to be anything super formal,” she explained. “Just a quick introduction so that you can actually meet the person before you start working with them.”

Virtual Socializing

Whether or not someone is a new hire, working remotely can take a toll on their social life. It can also be difficult to share the company culture with the new hire. To solve this challenge, Judith created various virtual social events throughout the week.

We suggest you create similar events that can help your employees socialize with their work friends and help new hires get a sense of the company culture. We have listed a few of the events that Judith initiated below. Feel free to use them as inspiration for your own virtual social events!

  • We start off every Monday, Wednesday, and Friday with “Brewtiful Mornings,” where employees gather on Google Hangouts to socialize over a cup of coffee or tea. During these 15-minute sessions (but they always go long), employees talk about everything from their coffee mugs to current events.
  • On Monday afternoon, we have an all-hands meeting where managers introduce their new hires to the rest of the company. We also have virtual yoga and meditation on Tuesday and Thursday afternoons, where employees can bond with their co-workers while resting their mind for a few moments. On Wednesday afternoon, employees enjoy a virtual lunch break together.
  • To end the week, we have a virtual happy hour on Friday evening. This is another chance for new hires to introduce themselves and to get to know their peers. Simran said that though these social events were virtual, she was still able to learn everything she needed to know about the Backblaze culture by participating.

    New Practices for Onsite Onboarding

    Remote onboarding may be a challenge, but there are some aspects of it that you can transfer to your onsite onboarding processes. We highly recommend you keep video training materials and have new hires watch them as part of their onboarding process even when everyone is back in the office. Training videos are more time efficient because the IT department will no longer have to conduct a training for every new hire.

    Another practice that can be carried into onsite onboarding processes is virtual meet-and-greets. This is especially useful if you have employees who work remotely full-time even when there is not a pandemic happening. Traditionally, new hires only meet those who work onsite and they don’t get a chance to meet remote employees or get much face time with them. Virtual meet-and-greets can help your new employees connect with your full-time remote staff. They can also help remote staff feel like they are still in the loop even if they may not be physically in the office.

    We’re Still Hiring!

    The pandemic is not something we can control, but what we can adjust is how we respond to it. By being proactive and thinking outside of the box, we were able to pivot to a fully remote onboarding experience for our new hires. We hope some of the tips above are helpful for other organizations in the same boat.

    If you are currently seeking a new role, we are hiring at Backblaze. All of our interviews are being done virtually for the time being, but we are still committed to hiring and expanding our team. If you are interested in working with us, please feel free to apply through our Career Center or send your resume to jobscontact@backblaze.com! We look forward to hearing from you.

The post How to Virtually Onboard New Hires appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Business (Not) as Usual

Post Syndicated from Ahin Thomas original https://www.backblaze.com/blog/business-not-as-usual/

At the beginning of any given quarter, conference rooms fill with managers extolling the virtues of the key objectives and tactics for the next 90 days. I’ve always been amused by the little voice inside my head as I stand up in front of my team for these talks—in the best of times, it’s saying “C’mon… The probability that this goes exactly as planned is something like 2%.” But, you shrug it off because a good plan is one that creates a clear end point, proposes a viable way to get there, and has the agility to adapt when you come into contact with reality. 89 days later, you look back, chuckle a little at the twists and turns…and, hopefully, celebrate a mission accomplished.

That’s in the best of times. Today is nowhere near that. Today, it’s hard enough to know where the world will be in 90 days’ time, let alone where our business goals and initiatives will end up. To quote our CEO, Gleb, who was borrowing an idea from “Frozen 2,” the best thing is to focus on doing “the next right thing.”

So what, exactly, is that? Well, for Backblaze, it’s to remember that we’re Backblaze. Besides being the right thing, an advantage to being a transparent company is that it’s an easy thing to do even in uncertain times. Quite literally, it made a lot of sense to write a post that looks at the marketing and communications challenges for our business during a pandemic. Our hope is that in sharing what is happening behind the scenes, we might help those that are facing similar challenges.

Writing this post, I am very aware that some of our readers might be furloughed, laid off, or have their businesses entirely gone. I, and our team, hope that each day gets a little brighter and you get back to stable, soon. At the least, we hope you find something interesting or thought provoking here. At the most, we hope you’ll find inspiration to tackle whatever the next right thing is for you.

What Do We Know Right Now?

Fundamental demand is unaffected: The earliest data points we have for Backblaze’s business are that the top of funnel demand (web visits, account creates) have yet to be materially affected by the crisis. In March, those growth metrics hit the forecasts we created at the end of 2019.

These results are a bit head-scratching given the sheer dominance of pandemic news everywhere. Intuitively, one would assume data and cloud storage content wouldn’t be as interesting to people. And yet looking at the data, for now at least, the market for cloud storage is unchanged (more on that later).

Decision making by customers is affected: We can use our sales team’s pipeline to look a little deeper into customer behavior. What we’re seeing is that customers we were working on longer term projects with have largely paused or changed their decision-making approach.

Let’s say you’ve been planning some cool enhancement to your infrastructure since the beginning of the year and were just about to start executing. Well, migrating the archives off of those LTO tapes isn’t today’s problem (setting aside the fact that you may not even be allowed in your office to do that actual work). So those types of projects are delayed. “Change” or “enhance” takes a back seat to “stabilize.”

This does mean that new projects are springing up very quickly—all of a sudden you have a fully distributed workforce. Are your team members’ computers being backed up? How are they accessing mission critical data? While final decisions on existing projects have been delayed, new needs are being identified with accelerated timelines.

This is where a marketer’s post to other marketers feels particularly awkward. But Backblaze is a business: we have customers that rely on the services we provide, families that rely on the salaries we pay, and a broader community that enjoys our occasional gifs. In other words, we still have a responsibility to ensure the future success of the business. In a world where very little non-COVID related news seems to be relevant, what should our messaging look like?

What Can We Do?

There are three fundamental paths we could take with our outward messaging:

      1. We could go dark. Trying to run a for-profit enterprise is odd during a pandemic. That said, infrastructure as a service is an increasingly relevant thing to help with the problems our customers are dealing with.
      2. We could just blissfully execute against our pre-existing plans. Our business model is fortunate to be resilient against these types of events. But ignoring the elephant in the room is odd at best and, at worst, offensively tone deaf.
      3. We could attempt to be in conversation with the moment. Backblaze prides itself on being a transparent company. When other disasters have hit—like the 2011 flooding in Thailand—we’ve had a unique perspective to share. Just like every company, we’re bordering on obsessive consumption of the news on the pandemic. Unlike a lot of companies, we have statisticians capable of running their own models. However, customers come to us for perspectives on data storage topics, not public health—what unique, value added perspective, if any, can we offer?

Option one feels irresponsible. Option two is troubling on a number of levels. Option three is why this post was written (and will be followed up with similar posts covering the challenges faced by our Supply Chain and People Operations teams).

Tactically, we feel that option three means that we adjust our plans, speak to the moment in whatever manner we’re uniquely able to, monitor the market for when storage news becomes interesting again, and try to remain a good corporate citizen along the way.

How We’ve Resolved to Do It:

Backblaze made the decision to move the majority of our workforce to work from home on March 6th (prior to California’s “shelter-in-place” orders). Over that weekend, as our business continuity plans kicked in, a number of proposals were floated. Two broad themes emerged in those discussions:

Should we notify our customers? Sending an email out felt like the right thing to do. But what were we notifying people of? Our operations and services weren’t changing from a customer perspective. We generally don’t send out emails that say, “Here’s 500 words on something that will not affect your experience with Backblaze.” Again, our approach was to speak when and where we could add value to our customers’ lives. An immediate note didn’t pass the sniff test.

Do we adjust our marketing plans? In the most literal sense, we wanted to tone down some celebratory messaging we knew was coming. We cleared an exabyte of customer data under management, but it felt prudent to cancel the party (particularly with guests coming in from around the globe). We had a 5,300 word profile in Inc. magazine (it’s a fun read)…but promoting that in the middle of everything else felt odd. But in the end, if we’re working on products and releases that we think will help our customers, we should still get them out to market.

As we worked through those big picture questions, we arrived at guiding principles for ourselves:

  • We’re Still Running the Business: Our customers rely on us for their data storage. Every day, more people are looking for solutions and tools that can help them face their new reality. If we have a solution to a customer problem, let’s make sure the customer knows about it.
  • Plan for an Eventual Recovery: Most would agree that we are already in a recession. And things are likely to get worse before they get better. That fact can make it hard to plan for the future. So this principle underlines two important realities: admit that there’s a disruption today; believe that things will eventually get better. We can’t know when things will get better. But, by assuming they will, we’ll do our part to create that sunnier tomorrow.
    • This does mean that we should keep releasing our feature/functionality development. While our launches might be somewhat muted, if we have something that will help customers solve problems, let’s try to get it in their hands. (To that end, stay tuned for something big next month!)
  • We Don’t Traffic in Fear, Uncertainty, or Doubt (FUD): There’s plenty of FUD to go around right now, and a lot of companies will try and take advantage of it. That’s never been our style, and we’re not going to start now. We will never be predatory, either in action or perception.
  • Our Reality Isn’t Everyone’s Reality: Our business might be doing well, and much of our staff might be working from home, but that’s not the case for everyone. Our team may be relatively healthy, but many people and their families are fighting a deadly virus. Our communications need to include a statement or a sentiment that communicates, “This is a strange time. We’re staying safe and productive, and are trying to provide you tools/interesting stories.” Also, we need to review our automated messaging. As a backup company, the word “disaster” is often used in the context of “disaster recovery.” Those sentences could read poorly in today’s environment.
  • We’re Still Backblaze: We’re known for providing unique insights and information on our blog that is gleaned from how we operate. We should continue to find ways to share knowledge that might help (or uniquely interest others) from our blog perspective.
    • As part of this, remember that we’re a data storage company, not a health organization. There are many companies—like retailers, restaurants, medical providers—that need to communicate their relative status to the community and customers. Our customers trust that we are doing what’s right to keep their data safe and accessible. Always filter for “why does Backblaze have a value-add perspective?”

When Is the Beginning of Whatever Is Next?

As a business, it’s always important to stay in tune with how our markets and public are feeling. So how do we understand where society stands? With some hope and a lot of science, eventually, we think there will be a vaccine. But what are the steps before then? Will evidence that we’ve flattened the curve bring confidence that we’ve done the right thing and bring people back to more mundane topics?

At some point, we believe that there will be some leading indications that the recovery is starting from a psychological perspective. In that sense, we think that will be when customers will feel “stabilized” and begin thinking again about “changes” and “enhancements.” Here are three things we are monitoring.

  • The curve gets flattened in major markets. We can measure the reduction in rates of infection and mortality in California and New York. Two large media markets, but in terms of coverage and where the majority of media lives. Also, two of the initial “hotspots” for COVID in the US. As those two states progress, we believe that the media environment will start covering other news (and that there will be increasing numbers of people receptive to non-COVID information). The sad realities of overlooking mid and small markets are not lost on us. This is just our perception of how public sentiment will go.
  • Ability to care for those that are sick—as measured by having enough hospital beds for those that need it. As a society, we are facing many challenges in managing this outbreak. But, just like in wartime, the resilience and abilities of humans should never be underestimated. Factories are converting to produce more sanitizer, masks, and ventilators. The Army Corps of Engineers are converting spaces (auditoriums, arenas, etc.) into hospitals. We can track the projected number of beds needed and the capacity in given locales. When supply meets demand, it will be a good thing.
  • Consumers are consuming more non-COVID stories—as measured in week over week podcast listening. The good people at Podtrac are providing statistics on podcast consumption during this time. It’s hard to imagine total consumption returning until people start commuting again, but it should begin to rise as consumer sentiment starts having interest in non-pandemic news.

When I became part of the Backblaze family four years ago, we were a third of the size we are today. The growth and expansion of the business is incredibly energizing, but does bring increased costs around keeping the team on the same page. Writing this post started as an internal memo to help organize our team. We thought it was potentially interesting enough to merit sharing with you. In keeping with our principles, we’ll continue to share our thinking as it evolves and whatever insights we believe might be helpful. We hope you and your family stay as safe and healthy as possible. As always, we’re happy to engage with you in the comments below.

The post Business (Not) as Usual appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

TV Insider Tips to Upscale Your Next Video Conference

Post Syndicated from Skip Levens original https://www.backblaze.com/blog/tv-insider-tips-to-upscale-your-next-video-conference/

Am I Set for Video Conferencing

These tips were compiled with the help of:

Video conferencing is absolutely everywhere now, and for good reason! Social distancing appears to be helping “flatten the curve” around the world, and the ability to do video conferencing has certainly helped.

Seeing a ring of friendly faces on our calls has proven a fantastic way to bring teams, families, and friends together—even if we’re all calling from our kitchen tables instead of our offices, or chatting from the couch instead of together at a coffee shop. And it’s not just us normal folks—it’s now common to see chat show presenters and cable TV interviews delivered from laptops and iPads as well.

We’re lucky to work with a lot of folks on staff and among our customers who’ve spent careers helping people look good on camera. So we figured, since everyone’s thinking about how to put their best faces forward, we’d reach out to some of our friends who produce beautiful video and images for a living and collect their top tips to bring TV studio magic to your own video conferencing, or even prepare for your own remote TV interview.

As we cover each area where you can upgrade your setup, we’ll provide tips that cost little or nothing, but be sure to call out options where you can get more dramatic results for modest expense.

The Expert’s Guide to Upping your Video Conference Game

Before you start to worry about lighting your “good side” let’s make sure you’ve got the fundamentals dialed in first. You want to be sure that your “stage”—including baselines like network bandwidth, power, and your computer’s desktop—is set for success. No matter how well you set the scene, if your shot is blurry because the rest of your housemates are streaming 4K video, your work will have been for nothing.

Equipment Check

Mount

Most of us use our laptops for video conferencing, but iPhones and iPads are great self-contained video streaming devices too. Whichever you use, make sure that you have them on a stable platform. Even mild shaking as you type away or move at your desk can translate to jittery video for everyone else, distracting your audience from you and what you’re presenting.

Network

Having a solid network connection is one of the most important factors in your setup. If you’re on WiFi, see if you can prioritize your connection using your router’s Quality of Service feature, or move everyone not presenting to their own network. Use a 5GHz network for work, and a 2.5GHz network for, well, everything else.

If you’re on a laptop, try to get a wired ethernet connection for the biggest and most forgiving bandwidth. If you’re like most people and run a 100% WiFi household, don’t worry, this isn’t as hard as it sounds. Your WiFi router likely has an ethernet port you can use to get a direct, wired connection to get the maximum bandwidth. Of course, depending on the computer you have, you may need an adapter and possibly a long ethernet cable to complete this fix.

HowToGeek’s Home Router Guide to Quality of Service.

Power

It may seem obvious, but make sure everything’s plugged into power or at least has a healthy charge—your computer, bluetooth keyboard and mouse, everything—before starting that critical video conference or webinar. And be sure to temporarily set your laptop to “no sleep mode” to avoid suddenly seeing a lock screen on your computer while you’re talking!

Good Housekeeping

If there’s even a chance you’ll be sharing your screen during your presentation, you should clean up your desktop icons (you should really do this anyway) and swap in a solid color desktop background, which can actually reduce video compression artifacts (all of that weird stuff you see on the screen when your connection is bad).

In your browser, make sure to close out applications and web browser tabs you don’t need for your presentation and turn off notifications so the whole office doesn’t see you playing Buzzword Bingo during your next video conference!

Turn off notifications on a Mac: Option-Click on notifications in the menu bar.

Camouflage on Apple App Store.

Camera’s Ready, Set… Rolling!

Those tiny cameras in laptops, phones and tablets sit on the edge of the device, but since you tend to look at the middle of your screen during a web conference where your colleagues’ faces are, you’ll want to raise your laptop so that the camera is on eye level while you’re speaking. This way, you’re not looking down on, or up to everyone else in the conference. When you’re talking or presenting, speak to the camera as if it actually is the person you’re speaking to; it may help to put a smiley face on a Post-it under your camera to help you remember.

Or, you can actually use your iPhone or iPad as an external camera instead of using the one in your laptop thanks to some clever apps like EpocCam by Kinoni. As long as your iPhone is on the same WiFi network as your laptop, or connected via your USB cable, you can select it as a new camera in your video conferencing app.

For the best results possible, add a dedicated external camera. While some go for purpose-built webcams like the Logitech P220, or even action cameras like the GoPro Hero, you might be able to turn your existing DSLR camera into a TV studio quality workhorse by mounting it on a mini-tripod on your desk, connecting it to your laptop with an HDMI cable, and putting the camera into streaming mode. You may also need to download an app from your camera’s manufacturer to put it in streaming mode; specific steps vary for each camera platform.

The new breed of mirrorless DSLRs make a fantastic external camera for your video conferencing needs. They also double as a full-featured still photo and movie camera you can take anywhere.

YouTube and Twitch streaming stars find this to be the single best investment to make their streaming look as professional as possible. Some popular choices here are the Canon M200 and the Canon M6 Mark II, and Nikon and Sony have similar offerings. And when not connected to your laptop for conferencing, you have an amazing still and video camera. (Which you can’t say with dedicated streaming video cameras.)

Soundcheck

For the most part, the sound and microphone in your laptop does a great job of picking up your voice and playing back the conference audio. If you’re in a noisy environment, you’ll want to use your headphones to isolate the conference audio, and be sure to hit that mute button when you’re not speaking. Run a test with a friend and check for room audio problems like the background noise of a fan or refrigerator, or boominess. Moving just a few feet to a different location could make a world of difference.

Podcaster style microphones plug into your laptop’s USB port and deliver warm, rich radio-style sound.

But to really upgrade the sound of your voice, you’ll want a much better microphone than the tiny one buried in your laptop or phone. Here, we take a top tip from podcasters and make a modest investment in podcast style microphones. Blue makes superb microphones such as the Yeti and Snowball that help make you sound like a radio star.

Blue Microphones.

Check Your Six

Just like TV studio set designers, it pays to think about what else you’re showing on the screen. What’s behind you? To keep the focus on you and what you’re saying, situate yourself against a plain background and reduce visible clutter. Some find that room divider or Shoji-style screens work well, too. Or, you may want to decorate your office “stage” with a more professional background, like a bookcase tastefully arranged with awards and recognition. For the most part, a simple, non-distracting background is what you’re going for.

Digital backgrounds can drop in a professional background, or transform your image into any number of fun avatars—just be sure to practice how to toggle it on and off before your next big video conference!

Or, make the leap into digital set design. Some conferencing apps like Zoom let you swap in a picture to replace your background, digitally. (Just be sure to practice turning it off and on at the risk of delivering your next status report as a potato.)

If you have the room, you can pair a simple photographer’s backdrop and frame to turn your home office into a home studio suitable for filming testimonials and interviews. If you also add a greenscreen, your Zoom backgrounds will look as good as the cable news channels.

Zoom Virtual Backgrounds.

Snap Camera to choose custom backgrounds and filters that work for Zoom, Google Hangouts, etc.

How to Set Up Your Collapsible Background.

Lights

Good lighting takes your web conference video from flat to dramatic. Your room’s interior lights are designed to light your room, not your face. Any lights beaming directly into your laptop camera will confuse it and it will shift constantly to try to compensate for video hot spots.

If you have good natural daylight available from a window, try repositioning your laptop with different angles to make sure that the sun shines on you, and not in your viewer’s eyes. An indirect angle on your face works best. Sheer drapes will soften any harsh light.

Inexpensive LED ring lights have many uses and help deliver studio-quality face lighting.

Even with good daylight, a large LED light ring can deliver “I’m ready for my close-up” lighting. For the most flattering image that really pops on-screen, you can easily adopt a classic two or three light photographer’s setup. You can arrange desk lamps and floor lamps, or buy inexpensive clamp lights to create a high key light angled at your face, a lower angled fill or low key light, and optionally, another light behind you that shines up to help fill your background.

The results with even common household lights are dramatic. For modest expense, you can add clamp lights with fluorescent or LED “daylight” bulbs, and you can easily soften shadows by clamping translucent paper over the front of the bulb.

Entry level three point lighting kits are surprisingly inexpensive and give your video conferencing or video blogging setup a dramatic look.

If you’ll be doing a lot of streaming, you can get an inexpensive three point lighting kit that can be moved and set up anywhere quickly.

RocketJump’s excellent eight minute Lighting 101 Tutorial:

Ready for Your Close-Up?

Now, what to wear? One top tip: don’t wear black at the risk of appearing as a floating head. Try to position your camera far enough away so that your head fills about two thirds of the screen and the tops of your shoulders are visible. Now pull your shirt down in the back to smooth out wrinkles.

And finally, for the full TV star treatment, eye-brightening or allergy relief drops will make your eyes their whitest, simple bronzer or self-tanner will add color to your face, and if you see lights bouncing off bright spots on your forehead, video producers everywhere swear by Neutrogena Matte finish applied with foam wedges.

How to Apply Camera-Ready Makeup for Men and Women.

PhotoJoseph’s Makeup Tutorial:

3, 2, 1…

Finally, it’s good practice to prepare for the unexpected. Write down important dial in codes or URLs in case your internet or power conks out and you have to rejoin quickly from your phone. Have a glass of water handy just within reach and place a note on your door that you’re in a conference.

And, Action!

Yet no matter how carefully we prepare, life happens. So when your dog jumps in your lap, or your suddenly homeschooled office mate gives you their art project to look at—it’s ok! We’re all going through it too, and we’re all in it together!

What tips or stories can you share? Comment below!

The post TV Insider Tips to Upscale Your Next Video Conference appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Launching a Zero-Infrastructure Media Business

Post Syndicated from Janet Lafleur original https://www.backblaze.com/blog/launching-a-zero-infrastructure-media-business/

two men in a front of a music mixing board in a studio

Who hasn’t considered starting their own online business?

Do a quick internet search for “how to start an online business” and you’ll find a wealth of platforms available to help get you started—Shopify, Squarespace, and the list goes on and on. But if your business idea is centered around video, audio, or images, you’ll need to search beyond the standard tools. Something built for a standard consumer-focused storefront almost certainly wasn’t built to manage large numbers of huge files.

Here at Backblaze we’re working with a growing number of entrepreneurs who are scaling their dreams by using Backblaze B2 Cloud Storage to fuel media-oriented online businesses. And today, we’re sharing a conversation we had with Backblaze customer Andrew Knox, who built the industry’s largest independent music licensing marketplace using cloud services.

A performer and composer in his own right, Andrew worked for years as a matchmaker between artists who wanted to be discovered, and filmmakers, ad agencies, and other creatives searching for the perfect music for their next production. After seeing an opportunity in the music licensing market and finding media-capable cloud services, he launched Kontent Core, a music service that not only connects musicians, music labels and creatives, but also helps them navigate complex licensing negotiations—all built without him having to buy and maintain any servers or storage of his own.


Choosing To Launch a Business with Zero CapEx


Janet Lafleur: Many thanks for taking the time, Andrew. So, to start, tell us what music licensing was like in the dark ages, that is: before Kontent Core?

Andrew Knox: It was a heavy paper pushing, phone calling, CD filing and brain hurting task that took a lot of time. The entire music catalogue from over 15 publishers from the past 30 years was logged in my head. Now I can access 80 different catalogues with over 2.5M tracks without having to remember which CD number the track I’m thinking of was on. It makes it a lot easier to do my job quickly and efficiently: Now, you can get licensing rates as well as find the perfect track even when your head is a little foggy trying to remember where you stumbled upon it yesterday.

JL: Sounds like a huge improvement, but take us from point A to B. What pushed you to launch the business? Was it how manual everything was in the past? Or something else?

AK: It was competition. There was a platform that was launched that disrupted the industry in a negative way. All of my friends and clients (and friends who are also clients) said that I should create my own platform. They were familiar with my process, and knew I could develop a better system that would be more business friendly for artists and publishers and users.

JL: Okay, let’s talk about the early days of Kontent Core. We understand that your friends were urging you to launch this service. How did you know that you wanted it to be a cloud-based operation?

AK: It had to be cloud-based because there’s no other efficient way to deliver a ton of content to the user. In the old days, people used hard drives that they had to update themselves. I knew we had to be flexible so our clients could access content from anywhere in the world. For early stage companies the answer is pretty simple: Cloud is inexpensive and you don’t have to worry about anything breaking. I had a server for my studio and it lasted 5 years, then crashed. It was a waste of money.

Cloud is inexpensive and you don’t have to worry about anything breaking. I had a server for my studio and it lasted 5 years, then crashed. It was a waste of money.

JL: That makes sense. But there are a lot of cloud storage services out there, why did you choose Backblaze?

AK: Cloud storage is important because we have a lot of music that is sent to us every month and we need to easily keep it updated. Backblaze not only has great customer service but it is also very affordable, which is obviously valuable for our tight-margin business. We can keep costs down for our clients and we don’t have to charge our artists to be on Kontent Core because the costs work for us and our business model. Because of Backblaze, we can offer a free marketplace for our artists. That’s key because artists don’t have a lot of cash to pay for monthly storage to get their music heard by decision makers.

JL: So how do the artists actually get discovered? How does a potential licensee search for music on the site and share it with their team?

AK: There are several options. They can choose individual tracks, create playlists, or create a link to downloadable playlists and share all of the above via email. Many of our clients want to send downloadable links to their decision makers, but we need to make sure that the sharing stops there. We don’t want the music to get spread all throughout the universe. We are very protective of the content that is on our platform. Other sharing systems don’t have the security or care about the content that is being shared. We do because we are a professional platform.

JL: Once the licensee decides they like something enough to use it in production, how does Kontent Core manage the licensing and permissions?

AK: We act as agent for the music publishing companies that live on Kontent Core. The license is on our paper. All licensing and administration is managed via our patent-pending administration system. Everything is buttoned up. We are not an aggregator—we have agreements with all of the Kontent Core content creators. We also offer E&O insurance on every license so our clients can trust that every track is protected and we have their back if there’s ever any issue.

Because of Backblaze, we can offer a free marketplace for our artists. That’s key because artists don’t have a lot of cash to pay for monthly storage to get their music heard by decision makers.

JL: What does the marketplace actually look like? How many choices does a licensee have? How many artists and labels have you signed on?

AK: We have over 2.5M music and SFX tracks on our platform from over 70 professional and well known providers. Indie labels, Production Music, Individual artists and soon we will be adding beats and loops from reputable producers.

JL: Since you founded Kontent Core, you’ve also founded a remastering service to give clients’ audio content greater depth, definition, clarity and stereo imaging. Does ReMasterMedia also use cloud storage and cloud compute services?

AK: ReMasterMedia is a cloud-based audio mastering service we are providing for Kontent Core content creators to master their music tracks as well as other clients that want to master their music, podcasts, or commercials specifically for internet and broadcast distribution. Recently we partnered up with a radio station that uses our online service to optimize digital downloads before they play the songs on the air. We are looking into implementing storage capabilities with Backblaze for our ReMasterMedia clients to store their mastered files as well as leveraging it for other machine learning and AI capabilities.

JL: With cloud services you don’t have to predict how much storage or compute power your business will need because you’re not buying hardware. How important was that for you? Did you have any idea how much content you’d be hosting?

AK: We never know at a given time how much content we will be receiving from our content providers so knowing that we can easily scale up or down depending on the storage needs is very important. From a cost point of view, we don’t want to invest in storage that is just sitting there waiting for us to utilize it nor do we want to maintain it.

Knowing that we can easily scale up or down depending on storage needs is very important. From a cost point of view, we don’t want to invest in storage that is just sitting there, waiting for us to utilize it.

JL: And are your cloud costs predictable and affordable? Have there been any surprises?

AK: They are pretty stable. No surprises yet!

JL: What’s the most popular feature that you didn’t expect?

AK: Our budget search is amazing. Clients have certain budgets they need to work within and all they need to do is put in the data parameters and then start a search. Only music that will fit within their budget will be returned. We also have statistics directly connected to the front end of our platform so users can check and see anonymously what genres are popular, what type of clearances are being licensed the most, what are popular search words, etc. Data is king and we don’t hide it up in the castle.

JL: We’re definitely with you on that front. Keeping data available and useful is at the core of our service. But of course we’re dying to know, what’s next for Kontent Core?

AK: That’s top secret! Invest in us and we will tell you. We are currently raising funds to build version 2 of our platform which will increase our scalability, UI/UX, and provide more versatile content for different markets.

JL: All right, all right we’ll wait and see. What about what’s next for you? You’re a talented performer and composer, when you get done with your workday, what instrument do you pick up? And what are you working on?

AK: My main instrument is my voice. So I carry it with me all day and sing a lot of different themes. There’s always an original tune or two that I’m noodling around in my head so when I do have time one day to sit down and compose, my symphony will just easily pour out… or maybe it will be an opera or musical… who knows. I’m still noodling.

JL: What about us, then? If Backblaze wants to license a theme song, do you have any recommendations?

AK: Oh, what a great question. Here’s an easy answer: “Just Like Fire” by Pink, featured in the movie “Alice Through The Looking Glass.”

JL: Excellent, we’ll kick that around and see if people here are ready to adopt it. We have already had one song written in our honor, so there is a precedent for it…

The post Launching a Zero-Infrastructure Media Business appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

To Buy, Or Not to Buy? CapEx Versus OpEx is the Question

Post Syndicated from Patrick Thomas original https://www.backblaze.com/blog/capex-vs-opex/

Debating CapEx and Opex: How to Make the Decision

When you work in a resource-constricted business or organization, committing to any kind of investment that doesn’t directly contribute to your mission, your bottom line (or both) is incredibly hard. You only have a certain amount of cash, and if you’re not using it to build something that immediately returns value to your bottom line, you feel like you’re stealing from your own growth.

This is the reality for many nonprofits, media companies, foundations, production houses, and arts organizations. They often invest in cash-intensive products—music, video, literature, plays, service efforts, and/or historical or cultural preservation—that take months, if not years, to turn back into cash or grants the company can use for future efforts. Which means that, when it’s time to make investments in the company’s infrastructure, the decision making process can be brutal.

Do you invest in your office: the metaphorical leaking roof over your head? New technology that might (or might not) make your job easier? And how do you invest? Do you buy or rent? It all feels like a distraction from what you’re supposed to be working on, and possibly a misallocation of funds that could be supporting your core mission.

We want to help you with the decision.

A growing reality for businesses is the cost of protecting their legacy: All of the video, audio, text, and other files that their organization has created over the years came at great expense, so there’s no question that it needs to be appropriately stored and archived.

But, while the size of this data is growing, your budget to protect that data is most likely not. You have a decision to make: Try to manage this growth with an on-prem investment, or pay a cloud-based service to take care of it for you. In more simple terms, you’re making an age-old budgeting decision:

Whether to make an extensive capital investment, or to commit to an ongoing operational expense. In financial jargon, you’re debating “CapEx” vs. “OpEx”—and you’re not alone.

Let’s break down the decision one step at a time. First things first, let’s hammer out some terms in case you’re already lost. (If you’re roughly familiar with basic accounting principals, you can skip the following section. Otherwise, read on…)


Capital Expense (CapEx) vs. Operating Expense (OpEx)

NAS box

What is CapEx?

Capital Expense (CapEx) (or expenditure, if you want to be fancy) is the price of buying or fixing an asset that will hold its value over time—think: vehicles, buildings, equipment, land, or say… a network-attached server (NAS) or some other piece of technology. You’re buying something that you will use over some period of time (often called its “useful life”).

What’s important to note is that this “expense” does not immediately hit your operating budget. At first, this is entirely a balance sheet item: the cash you spent for it simply moves from “Current Assets” on your balance sheet to “Equipment” under your “Long-term Assets.”

Nice deal, right? No net change! My hardware is now “free” for me except for the upkeep and power expenses. Not so fast.

Every type of capital asset has a “depreciation schedule.” This is accountant lingo for: Things fall apart and aren’t worth what you paid for them. So, the depreciation schedule is an estimation for how quickly or slowly an item loses its value to your business.

Technology typically depreciates on a 3 or 5 year basis. What this means is, if you buy a $10,000 NAS on January 1st, and your auditor determines its useful life to be 3 years, then your depreciation schedule will recognize a loss of $3,333.33 in value for the asset at the end of the year for the next three years. Once you reach three years the asset can be removed from your depreciation schedule and it isn’t “worth” anything on your balance sheet anymore (though it may still be quite functional and an essential part of your IT infrastructure).

But, as we know: The whole idea in a balance sheet is that it “balances” right? So if your assets are decreasing in value, you need to acknowledge that loss somewhere or your finances will be out of whack. So where does the decrease go? Into your operating budget! You have to acknowledge depreciation as an operating expense.

This is where your Capital Expense becomes an Operating Expense: The depreciation value has to go somewhere, and that somewhere is your bottom line. Accounting principles dictate that you have to incorporate the amount your assets have depreciated into your operating budget as an expense.

And that’s how Capital Expense works (at least, from a very simple perspective). You buy something—often pulling directly from your cash—and then you acknowledge its expense incrementally, over a set schedule, in your operating budget.

Side note: Some companies account for depreciation on a monthly basis, to avoid year-end surprises in heavy depreciation bills.

What is OpEx?

Operating Expense (OpEx) is typically easier for folks to wrap their head around. These are the ongoing costs you incur to run your business or organization. Think: rent, internet, office supplies, kibble for the office cat—that sort of thing. Unlike your capital expenses, the operating expenses hit your bottom line immediately, typically flowing through your general or administrative lines. No smoke and mirrors here—you spend the money, you get what you paid for, your monthly financials reflect the expense, and hopefully it contributes positively to your bottom line!


Backblaze cloud banner

Why Do CapEx and Opex Matter for Data Storage?

We get it, the ins and outs of a balance sheet are tantalizing to a small number of people (sheepishly, I count myself amongst them). BUT: The implications of the difference between CapEx and OpEx can be hugely impactful when it comes to fulfilling your organization’s mission or your businesses’ goals.

Let’s see if we can bring the implications into more useful perspective:

Let’s say that you’re an organization with a growing archive of data, and you have a reliable projection for your data growth rate over the coming years. Maybe you’re a music education nonprofit, and part of your mission is archiving the performance recordings of all of your students for their use in future school applications or tryouts.

You have around 200TB worth of data that you need to get onto a more reliable, accessible storage media ASAP (your volunteer librarian just retired and now nobody knows how she organized the tape archive… bummer). What do you do?

You call your freelance IT consultant, and they give you two options:

1) An On-Prem Storage Solution: The simplest way to describe an on-premises solution is: A machine that is visible. It’s in a space you own or rent, it is “bought and paid for,” and your auditor or bookkeeper flagged that it should be depreciated.

Data storage comes in “on-prem” shapes and sizes too. Whether it’s a Network Attached Server (NAS) or a Storage Area Network (SAN), your IT guy will quote out something for you to plug in onsite that will take care of your archiving issue. This type of storage is a capital expense.

2) A Cloud Storage Solution: The “cloud” is often described as “someone else’s computer.” It’s a pretty apt description in this case. In a cloud storage solution, you pay another company—typically on a monthly basis—to store, protect, and maintain your data. So if on-prem is a “visible” solution, this is an “invisible” solution. And because it’s a service, it’s a simple monthly operating expense. Cloud storage doesn’t depreciate because the company providing is constantly paying to maintain.


What is This Really Going to Cost?

A Question of Clouds

Let’s say you have roughly 200TB you need to get into a better archiving solution. This is about 25 years worth of content, so you’re expecting (with a little room for data inflation) to add around 30 Terabytes a year of data. What will your two options really cost you, once we pull apart the financial jargon?

On-Prem Storage Solution:

For your server hardware, your hard drives, and a reliable power supply unit, you’ll likely end up paying around $25,000. Let’s assume your audit determines a useful life of three years for the server, that means you’ll have a depreciation of $694 per month.

Don’t forget, however, that you’ll need to pay for power and possibly cooling (estimated around $100 per month for this size of server), some IT assistance to help with upgrades and maintenance (let’s say $50 per month), and you have to pay for the space to hold it. We’ll leave the latter at zero—you probably have a closet somewhere.

So all in, you’ll need to lay out $25K in cash at the outset, and then you’ll be recognizing the expense in your operating expense to the tune of $850 every month for the next 3 years.

Cloud Storage Solution:

The biggest expense on the front end of a cloud solution is the expense of ingesting data. There are a number of services you can use, but it’s easiest for us to quote out our own: B2 Cloud Storage. If you want to move quickly, you can rent our Fireballs, which we’ll ship to you at a price of $550 per month, and you can upload 70TB at a time and ship them back to us for upload. So, all together, you’d pay $1,650 for the trouble of moving the data at the speed of FedEx, which is typically far faster than the internet. (If you have the time to let your data upload over the internet for months, then you can do that for far less). We’ll spread this expense across 3 years to make our comparison more apples-to-apples. So let’s say $46 a month.

After this initial expense, you simply have to pay a monthly data storage bill. We’ll use Backblaze B2 for estimating. At 200TB, you’ll be paying $1,000 a month, right now, but that number will grow along with your data, at $5/TB.

So you’re laying out $1,500 in your first month, then $1,000 a month, growing at $5/TB per month.

Balance Sheet Implications and Monthly Operating Budget Implications tables


Side note: you can calculate your own costs using the B2 cloud storage calculator.

What’s the Real Difference? Or, What Are a Few Hundred Dollars Worth?

To emerge from the weeds for a moment: The simple difference between these two options is a few hundred dollars on a month to month basis. Let’s explore what those hundreds get you when it comes to your cash flow, long-term flexibility, maintenance, and your real estate bill.

Cash Flow

On-Prem Storage Solution: On day one working with your NAS or SAN, you’re out $25,000. And unless the hardware is defective, you will never be able to get that full value back.

Cloud Storage Solution: By the end of “month one” for Cloud, you might be out $1,000, maybe $2,000, depending on the upload service you use and the upload speeds you achieve.

So the question here is: How important is cash flow to you? What’s the opportunity cost of not being able to use that $22K for something else?

Long-Term Flexibility

How good of a forecaster are you? It may sound like an odd question but it’s actually critical to choosing the right solution. If you can accurately forecast the data needs of your company for the next five years you should be able to pick an on-prem solution that will match those needs. On the other hand if you are off in either direction you will end up spending money inefficiently. Let’s take a look at how both scenarios play out.

Overestimating Data Needs:

On-Prem Storage Solution: On day two working with your NAS or SAN, you are locked in to your investment of $25,000. You can’t return it, you can’t make it smaller. And the decrease in cash is only the beginning of your commitment. On an annual or monthly basis, going forward, you will need to recognize your investment’s depreciation, which will be a fixed amount no matter how long the hardware is in operation.

Cloud Storage Solution: On day two working in the cloud, you could choose to deprecate some of your data or recategorize it, and decrease your monthly spend. Alternatively, you could change cloud services if your existing arrangement isn’t working. The important thing is, you are not locked in to investment, and you can exit the arrangement at any time.

Underestimating Data Needs:

On-Prem Storage Solution: On day 425 you might realize that your NAS or SAN isn’t going to be enough storage for your operations. Most organizations make budgets for their operations, and most of them wouldn’t mind beating those projections. The problem is, if you’re able to achieve more in a given year, you will likely also generate more data in that year. If your business takes off and you’re locked into an on-prem solution, your only remedy will be to invest in higher capacity drives, or even to add an additional storage solution, both of which incur additional upfront cash outlays.

Cloud Storage Solution: If you reach day 425 and your organization is unexpectedly beating projections by a significant margin, your cloud storage service can easily scale to match your needs. Your monthly expense will increase but only at a fractional percentage since no new equipment will need to be purchased.

The questions here are: Are you ready to project how your data will scale over the next three to five years? And are you ready to cover the costs if you’re wrong?

Upkeep, Updates, and Repairs

On-Prem Storage Solution: On day 483, your NAS or SAN may not keep up with technology, or it may disagree with some other tech you need. But you’re stuck with it, and you’re stuck with the tab of paying to maintain and troubleshoot the aging technology. Whether you have your own IT staff, or hire consultants or an IT service, this could add significant cost to your overall on-prem storage budget. And it goes without saying that your server could simply cease functioning at any time.

Cloud Storage Solution: A cloud storage service will continue to run. It will always be improved. It will always be maintained. And in some cases, depending on how you’re uploading the data, it can even be self-healing. Some cloud storage solutions will perform checks to ensure that the data they’re storing is not degrading or hasn’t been lost. As such, these services are considered “self-healing,” because when they discover an inconsistency, they’ll call the users files to re-upload or use their own built-in redundancies to fix or replace the affected files.

And, of course, a cloud solution will have a staff of people—experts, often—working day in and day out to maintain and improve your storage. You don’t pay anything additional for their services. You don’t have to recruit, train, or manage them. They’re on the job entirely to ensure your service is never disrupted.

Real Estate, Energy, and Security

On-Prem Storage Solution: As your data grows, so will your need to maintain the space for it. You will need to devote increasingly large amounts of real estate to the footprint of your on site storage. You’ll have to provide adequate cooling and energy, and you’ll need to think differently about your approach to security. If you don’t have the space on site, that means you’ll need to expand or find additional real-estate elsewhere to make more room for servers. Depending on the real estate market you’re in, the costs for such an expansion could be well more than the monthly depreciation for your hardware.

Cloud Storage Solution: Cloud storage services are in the business of providing real estate, climate control, and over-the-top security for your data. Most cloud storage service providers have multiple data centers in order to quickly scale to meet your growing storage needs.

Projected Costs Comparison: On-Prem Vs. Cloud


Final Thoughts on CapEx vs. OpEx

Viewed simply, setting up an on-prem archiving solution seems like a good deal. You’ve got your asset on site, the immediate budget implications are shunted off to your balance sheet, and everything else is IT’s problem. But, when you look past day one of your purchase, it might be less attractive: You have cash tied up in a vulnerable asset. You have a financial commitment that you can’t easily scale up or down. You have a tool that is only going to be maintained or improved when something goes very wrong. You have another presence in your office that is a space and energy hog.

On the flip side, with cloud storage, you have a monthly payment that takes care of all of this for you. Your cash is more available and flexible. You have zero concerns about scaling issues. Security, reliability, durability, upgrades, up-time, energy use, file maintenance—all of these are part of what you’re paying for on a monthly basis.

Maybe you love tinkering with hardware and being able to see where your data is resting. If that’s you, well, then CapEx is your jam. But if all of the concerns listed above are things you’d rather not worry about (I mean, you probably have more interesting things to work on, right?), then cloud storage is probably a better deal. CapEx vs. OpEx, that is the question—which is wiser? We’ll leave the answer up to you.

The post To Buy, Or Not to Buy? CapEx Versus OpEx is the Question appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

The Argument Against Commission: Why Backblaze Pays Sales a Full Salary

Post Syndicated from Patrick Thomas original https://www.backblaze.com/blog/no-commission-sales-model/

runners with the Backblaze logo racing towards a finish line

We’ve all been there: You enter some kind of retail environment—a clothing shop, an electronics big box store, or even a software company’s website—you get a few seconds of peace to look around, and then suddenly you’re being swarmed by extremely helpful sales people. That isn’t the worst thing in the world at face value, but somehow the “helpful” attitude feels like a pretty thin cover for the salesperson’s need to sell you something (ideally an expensive something) fast. It’s not a good feeling—you’ve gone from being a potential customer to acting as data point on that employee’s pay stub.

Many of us have been on the other side, too: we’ve been hired to move product, but the only way we can reach a salary that will pay the bills is to push hard on the customer, even in situations where they don’t necessarily need what we’re selling. I’ve been on both sides, and it’s hard to say which feels worse.

It’s commission sales—and it’s the norm across the majority of businesses, but especially in tech, where it’s standard for salespeople to earn a base salary of just 50 – 60% of their on-target earnings (OTE). OTE is essentially HR-speak for what a person should be paid given their experience, the industry they are working in, and what they’re selling—in other words, their current “market rate.”

This means that most salespeople you speak to have to earn back 40 – 50% of their salary, every year. No matter the state of the economy, manufacturing issues, natural disasters, or any other unforeseeable challenges, sales teams working on commission still need to meet strict benchmarks—just to earn what they’re worth.

Well, that’s the norm pretty much everywhere else. But at Backblaze, our sales team is paid 100% of their salary. Sounds weird, right? Well, we don’t think so. Everyone else in our shop earns a salary based on the market for their skills—and we think our teammates on the sales team should too. Here’s why.

A Good Idea

Humans Are Not Coin Operated

Nilay Patel, Backblaze’s Vice President of Sales, got his start in tech as a Sales Engineer. “SEs,” as they’re often called, use technical expertise to help sales representatives explain how a product will work for a specific potential customer. The main difference between SEs and Sales Reps is that Sales Engineers typically are not commission-based. But they are on the front lines to witness the odd effects that commission-based compensation has on organizations and individuals.

In a recent interview, Nilay related how, at one of his early jobs, the VP of Sales often referred to “coin-operated” sales departments. What Nilay’s colleague meant, in short, was that if you wanted more sales, you simply needed either more draconian, or more lucrative commission structures to incentivize higher sales. Nilay was immediately struck by how disrespectful this phrasing was and what a manipulative managerial structure it suggested. As he sat in on management conversations and hiring panels, he saw the “coin-operated” philosophy evoked again and again, seemingly suggesting that, to motivate a sales team, you just had to dangle their paycheck a few feet ahead of them.

At the end of the day, these conversations weren’t about the mission, or serving customers, or achieving some greater business goal—they were solely about money. Over time, Nilay came to accept that this was just how sales worked across the industry, but he never felt particularly comfortable with the practice.

Teamwork in Sales

Commission Impossible

When Nilay returned to Backblaze in 2015 to lead sales of our new product, Backblaze B2 Cloud Storage, he opened up a conversation with Gleb Budman, Backblaze’s CEO, about how commission would work in his new role. He assumed that, because compensation for pretty much every other job in Silicon Valley was commission-based, this one would be too. But Gleb responded with a straightforward, “That sounds complicated, sure you want to go that route?” And the more Nilay thought about it, he realized he didn’t.

Hindsight is 20/20, but even at the beginning, Nilay knew some of the weaknesses that a commission-based sales force would create. The rest, he’s learned with time. And now, at the five year mark of running a no-commission shop, he’s convinced he made the right call. These are the reasons he believed, and continues to believe, it was the right one:

It’s Good for Trust Among the Backblaze Team

We pride ourselves on being a supportive, collaborative workplace, and we succeed: last year, all 133 of us were surveyed and rated the company a 99% great place to work. Partially, this is because we all trust that everyone is pulling in the same direction. When the sales team asks engineering for help with a customer issue, or they need materials from marketing, nobody wonders whether they’re asking for selfish reasons. Because we’re all paid standard salaries, we know that everyone’s working to serve the customer and ensure that all of Backblaze is successful.

“When I ask for help from engineering and marketing, I want folks to feel like my requests are rooted in wanting to help our customers—not to line my pockets.”
James Fleishman, Backblaze Partner Manager

It’s Good for Innovation

In a traditional sales operation, new products are more of something to fear, rather than celebrate. Something new, unproven, and not known to the customer could cut into a team’s sales success, and therefore also their salary. As a result, innovation often encounters friction when it hits the marketplace. Not so at Backblaze, where the sales team is far more likely to get excited about how a new offering might enhance the experience of their customers.

It’s Good for Our Business

Committing to a cloud storage provider is a shockingly big deal. Companies aren’t just buying new software, they’re moving priceless intellectual property into a solution that they need to be able to trust to work, and to last. We’ve provided backup and storage for well over a decade now, and we manage nearly an exabyte of customer data, so there’s little question of our ability to stand the test of time.

But customers also need to know that we’ll aid them in the process of transitioning to our service and that we’ll stand by them as their needs grow and evolve over time. Because our sales force doesn’t have to worry about their paycheck or “closing” a sale, they’re unleashed to give customers the level of care they need to set their business up right and to build a long-lasting, productive working relationship.

When we’re dealing with prospects, we don’t look at them and immediately see dollar signs, but rather an opportunity to better the situation for both parties: they get a solution that works, and we continue to grow our business.
Daniel Lloyd Pias, Backblaze Sales Manager

It’s Good for the Sales staff

One of Nilay’s early managers had previously worked for IBM on the typewriter sales team when the PC was launched. Nobody in the computer sales division wanted to risk their commission on “Personal” computers because they assumed the product would never succeed. So the typewriter sales team got the job… and they were wildly successful. For their first reporting period, they all got to take home a king’s ransom in commission. But once they showed what they could do, their commissions were restructured to ensure they never saw commission rates like that again.

The fact is, no company is going to intentionally create big commission payouts. And when big payouts do happen, they’re going to change the rules as fast as possible to ensure it doesn’t happen again. So, while conventional assumptions would suggest that commissions draw top talent, our results don’t support those assumptions. Nilay believed that smart sales staffers would understand that being able to count on 100% of a competitively indexed OTE is a much better deal than having to contend with unpredictable commission payouts. And the composition of our sales team bears out his belief.

Today, we have a highly collaborative team of people who work together to ensure that our customers receive functional, long-term solutions that work for them. But the collaboration doesn’t end with sales prospects. The team also works cross-functionally among one another, and across the full company, to learn and grow their professional capacity. All of this, and they’re also a hell of a lot of fun to spend time with!

It’s Good for the Customer

Working on commission can be very stressful for employees, especially when they are counting on hitting their OTE to make ends meet. This means the team is focused on their paycheck, rather than their customer’s challenges. According to James Fleishman, our Partner Manager, “the sales team appreciates working in an environment that encourages them to focus on meeting the customer’s needs and not their own.”

A no-commission policy carries many other benefits. It allows Sales employees to utilize the same benefits as other employees. I can go on a real paid vacation, or get an important medical procedure done, without losing 60% of my income to do so.
Crystal Matina, Backblaze Account Executive

It’s The Right Thing to Do

In the “Mission & Values” document every new hire at Backblaze receives, value #1 is “Fair & Good.” We try really hard to be the good guys in everything we do, and part of that is being equitable and fair in our pay structure. It isn’t any more complicated than that. Backblaze doesn’t do anything because “it’s just the way it’s done,” we do it because it’s the right way to do it. (And it just so happens that being “Cleverly Unconventional” is value #5).

Headed the Right Direction

Focusing on the Long View

Nilay freely admits that the no-commission model probably won’t work for everyone, but the leadership team at Backblaze is committed to it for the long term. Another one of our five company values is to build a sustainable business that is set up for long-term success. Sadly, this also does not always seem to be the norm in tech. But for us, fulfilling our values requires building a sales team that wants to work together to move our mission forward over the long term, and that means paying people what they’re worth, in full.

So the next time you land on the B2 Cloud Storage page and Victoria or Vincent strike up a chat with you; or when you’re looped into a call with Shaneika, James, Crystal, Mike M., or Alex; or you’re working through a solution with Mike F., Udara, or Pavithra, and you’re wondering—why are these people so kind and patient? Well, now you know.

And if you’re in the process of setting up your own business, maybe Nilay’s perspective will help you think differently about how your sales team’s compensation structure might affect your brand, and your bottom line.

The post The Argument Against Commission: Why Backblaze Pays Sales a Full Salary appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

A Sandbox in the Clouds: Software Testing and Development in Cloud Storage

Post Syndicated from Patrick Thomas original https://www.backblaze.com/blog/a-sandbox-in-the-clouds-software-testing-and-development-in-cloud-storage/

A Sandbox full of App Icons in the Clouds

“What is Cloud Storage?” is a series of posts for business leaders and entrepreneurs interested in using the cloud to scale their business without wasting millions of capital on infrastructure. Despite being relatively simple, information about “the Cloud” is overrun with frustratingly unclear jargon. These guides aim to cut through the hype and give you the information you need to convince stakeholders that scaling your business in the cloud is an essential next step. We hope you find them useful, and will let us know what additional insight you might need.”
–The Editors

The words “testing and development” bring to mind engineers in white lab coats marking clipboards as they hover over a buzzing, whirring machine. The reality in app development is more often a DevOps team in a rented room virtually poking and prodding at something living on a server somewhere. But how does that really work?

Think of testing in the cloud like taking your app or software program to train at an Olympic-sized facility instead of your neighbor’s pool. In app development, building the infrastructure for testing in a local environment can be costly and time-consuming. Cloud-based software development, on the other hand, gives you the ability to scale up resources when needed without investing in the infrastructure to, say, simulate thousands of users.

But first things first…

What Is Cloud Software Testing?

Cloud software testing uses cloud environments and infrastructure to simulate realistic user traffic scenarios to measure software performance, functionality, and security. In cloud testing, someone else owns the hardware, runs the test, and delivers the test results. On-premise testing is limited by budgets, deadlines, and capacity, especially when that capacity may not be needed in the future.

An App Waiting in a Cloud Storage Sandbox

Types of Software Testing

Any software testing done in a local test environment can be done in the cloud, some much more efficiently. The cloud is a big sandbox, and software testing tools are the shovels and rakes and little toy dump trucks you need to create a well-functioning app. Here are a few examples of how to test software. Keep in mind, this is by no means an exhaustive list.

Stress Testing

Stress tests measure how software responds under heavy traffic. They show what happens when traffic spikes (a spike test) or when high traffic lasts a long time (a soak test). Imagine putting your app on a treadmill to run a marathon with no training, then forcing it to sprint for the finish. Stress testing software in an on-premise environment involves a significant amount of capital build-out—servers, software, dedicated networks. Cloud testing is a cost-effective and scalable way to truly push your app to the limit. Companies that deal with big spikes in traffic find stress testing particularly useful. After experiencing ticketing issues, the Royal Opera House in London turned to cloud stress testing to prepare for ticket releases when traffic can spike to 3,000 concurrent users. Stress testing in the cloud enables them to make sure their website and ticketing app can handle the traffic on sales days.

Load Testing

If stress testing is a treadmill, load testing is a bench press. Like stress testing, load testing measures performance. Unlike stress testing, where the software is tested beyond the breaking point, load testing finds that breaking point by steadily increasing demands on the system until it reaches a limit. You keep adding weight until your app can’t possibly do another rep. Blue Ridge Networks, a cybersecurity solutions provider based in Virginia, needed a way to test one of their products against traffic in the millions. They could already load test in the hundreds of thousands but looked to the cloud to scale up. With cloud testing, they found that their product could handle up to 25 million new users and up to 80 million updates per hour.

Performance Testing

Stress and load tests are subsets of software performance testing—the physical fitness of the testing world. The goal of performance testing is not to find bugs or defects, but rather to set benchmarks for functionality (i.e., load speed, response time, data throughput, and breaking points). Cloud testing is particularly well-suited to software performance testing because it allows testers to create high-traffic simulations without building the infrastructure to do so from scratch. Piksel, a video asset management company serving the broadcast media industry, runs performance tests each night and for every new release of their software. By testing in the cloud, they can simulate higher loads and more concurrent users than they could on-premise to ensure stability.

Latency Testing

If stress testing is like training on a treadmill, latency testing is race day. It measures the time it takes an app to perform specific functions under different operating conditions. For example, how long it takes to load a page under different connection speeds. You want your app to be first across the finish line, even under less than ideal conditions. The American Red Cross relies on its websites to get critical information to relief workers on the ground in emergencies. They need to know those sites are responsive, especially in places where connection speeds may not be very fast. They employ a cloud-based monitoring system to notify them when latency lags.

Functional Testing

If performance testing is like physical training, functional testing is like a routine physical. It checks to see if things are working as expected. When a user logs in, functional testing makes sure their account is displayed correctly, for example. It focuses on user experience and business requirements. Healthcare software provider Care Logistics employs automated functional testing to test the functionality of their software whenever updates are rolled out. By moving to the cloud and automating their testing, they reduced their testing time by 50 percent. Functional testing in the cloud is especially useful when business requirements change frequently because the resources to run new tests are instantly available.

Compatibility Testing

Compatibility testing checks to see if software works across different operating systems and browsers. In cloud testing, as opposed to on-premise testing, you can simulate more browsers and operating systems to ensure your app works no matter who uses it. Mobile meeting provider LogMeIn uses the cloud to test it’s GoToMeeting app on 60 different kinds of mobile devices and test their web-based apps daily across multiple browsers.

Smoke Testing

In the early days of technology development, a piece of hardware passed the smoke test if it didn’t catch on fire (hence, smoke). Today, smoke testing in software testing makes sure the most critical functions of an app work before moving on to more specific testing. The grocery chain Supervalu turned to cloud testing to reduce the time they spent smoke testing by 93 percent. And event management platform Eventbrite uses the cloud to run 20 smoke tests on every software build before running an additional 700 automated tests.

An App Waiting in a Cloud Storage Sandbox

Advantages of Cloud Development vs. Traditional Software Development (and Some Drawbacks)

  • Savings – Only pay for the resources you need rather than investing in infrastructure build-out and maintenance, saving money and time spent developing a local test environment.
  • Scope – Broaden the number of different scenarios you can test — more browsers, more operating systems — to make sure your software works for as many users as possible.
  • Scalability – Effortlessly scale your resources up or down based on testing needs from initial smoke testing to enterprise software development in the cloud.
  • Speed – Test software on different operating systems, platforms, browsers, and devices simultaneously, reducing testing time.
  • Automation – Easily employ automated software testing tools rather than dedicating an employee or team to test software manually.
  • Collaboration – As more and more companies abandon waterfall in favor of agile software development, the role of development, operations, and QA continues to blend. In the cloud, developers can push out new configurations or features, and QA can run tests against them right away, making agile development more manageable. For example, cloud testing allowed the Georgia Lottery System to transition from releasing one to two software updates per year with waterfall development to 10+ releases each quarter with agile.

Moving your testing to the cloud is not without some drawbacks. Before you make the move, consider the following:

  • Outages – In March of 2019, Amazon Web Services (AWS) suffered an outage at one of their data centers in Virginia. The blackout affected major companies like Slack, Atlassian, and Capital One. For a few hours, not only were their services affected, those companies couldn’t test any web properties or apps running on AWS.
  • Access – The nature of cloud services means that companies pay for the access they need. It’s an advantage to building infrastructure on-site, but it puts the onus on companies to determine who needs access to the testing environments housed on the cloud and what level of access they need to keep cloud testing affordable.
  • Lack of universal processes – Because each cloud provider develops its own infrastructure and systems (and most are very hush-hush about it), companies who want to switch providers face the burden of reconfiguring their internal systems and data to meet new provider requirements.

An App Waiting in a Cloud Storage Sandbox

What Does Cloud Testing Cost?

Most cloud service providers offer a tiered pricing structure. Providers might charge per device minute (in mobile testing) or a flat fee for unlimited testing. Flat fees start around $100 per month up to $500 per month or more. Many also offer private testing at a higher rate. Start by determining what kind of testing you need and what tier makes the most sense for you.

Who Uses the Cloud for Software Testing?

As shown in the examples above, organizations that use the cloud for testing are as varied as they come. From nonprofits to grocery chains to state lottery systems, any company that wants to provide a software application to improve customer service or user experience can benefit from testing in the cloud.

No longer limited to tech start-ups and industry insiders, testing in the cloud makes good business sense for more and more companies working to bring their apps and software solutions to the world.

The post A Sandbox in the Clouds: Software Testing and Development in Cloud Storage appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

The STEMs of Backblaze: How We Got Here

Post Syndicated from Nicole Perry original https://www.backblaze.com/blog/celebrating-national-stem-day/

Science, Technology, Engineering and Math acronym (STEM) paired with graphic representations of each field and a photo of a young girl holding a statistics book.

November 8th marks the celebration of National STEM day, calling attention to the importance of Science, Technology, Engineering, and Math (STEM) in young peoples’ education. Without these programs encouraging young minds to enter STEM fields, we would be hard-pressed to find the Backblaze staffers of the future. As such, a day like this is something we have to celebrate here in our office.

Many of our teammates missed out on the educational initiatives around tech that exist today, but they did not let age, gender, or socioeconomic status stop them from reaching the top of their respective fields. So in honor of the day, we decided to share some of their STEM-related stories with an eye toward inspiring you. Whether they rouse you to dig into your own mid-career shift, or to encourage your kids to consider STEM, or to send an application our way, we hope these stories add to your understanding of how helpful STEM can be in any life.

The STEMs of Backblaze

From Crash Bandicoot to Front End Developer

Steven Peniche, Front End Developer at Backblaze
Steven Peniche, Front End Developer at Backblaze

Steven, a front end developer at Backblaze, started out as a bellman at the Greenwich Hotel in New York City, but his love for digital media—beginning with games like Naughty Dog’s work of art, “Crash Bandicoot”—encouraged him to sign up for a boot camp for web development called Bloc. After 6 months, Steven launched into the work force with one mission: To make the world a better place, one product at a time.

“That love for video games became a love for technology and software,” said Steven, reflecting on his early years in tech. “As I grew older, played more games, discovered the joys of dial-up internet and witnessed cable TV move into the high definition era, my interest for what powered all of these sources of entertainment peaked.”

Tina Cessna, Backblaze's VP of Engineering, holding a Storage Pod Vent
Tina Cessna, Backblaze VP of Engineering

Taking the Leap to Director of Engineering

Not everyone is as confident as Steven, though. Would you just walk into a coding bootcamp with no experience? Intimidation can be a big reason why someone shies away from working in a STEM related field. Our Vice President of Engineering, Tina, believes that you should not shy away from intimidation. She believes that embracing your jump into the unknown will help you find the fun in your field of work.

“Never think that you are not good enough or smart enough to learn anything,” said Tina, when asked what advice she would give to young engineers. “I feel like there is a misconception that engineering is boring or for geeks or whatever and that’s not true at all. And also, just because it is a male dominated industry doesn’t mean other women shouldn’t just go for it. It’s actually really fun once you start doing it. Essentially, just don’t let the intimidation get to you. Anyone can learn it.”

And she speaks from experience: Tina was the only woman in her Electronic and Computer Engineering classes at California State Polytechnic University-Pomona, but now she’s running Backblaze’s engineering efforts. Without her, our engineering team would not run as smoothly and efficiently or have projects like extending your version history release on time!

A photo of Sona, Sales Operations Executive
Sona Patel, Backblaze Sales Operations and Enablement Manager

From Microbiology to Backblaze Sales Operations and Enablement Manager

Tina makes a good point that most people tend to miss: the difference between the impossible and something that just makes you uncomfortable. Sona, our Sales Operations and Enablement Manager, spent her undergrad years preparing to attend med school. But when it came around to applying for post-grad programs or applying for jobs, she realized that her biological sciences degree qualified her for a range of different positions beyond the medical field.

“Do something that makes you uncomfortable,” said Sona, reflecting on what she would tell her younger self when starting out. “Because if you fail you fail, but if you don’t fail you might be opening up a door to something that you didn’t even know you wanted to do.” Embracing her discomfort allowed Sona to explore other careers, like working as a microbiologist at Shasta Beverages, Inc. and, now, being our go-to person for implementing software to supercharge our sales efforts here at Backblaze.

Chris Bergeron, our Technical Operations Director
Chris Bergeron, Director of Technical Operations at Backblaze

Experimenting with Technical Operations

This is true for our Director of Technical Operations, Chris, who started as a system administrator after stepping away from the college path because he felt more comfortable with a hands-on learning experience. Chris had always tinkered with computers and software during his summer breaks from school so he felt confident that this field was the right place for him.

“Try things. Experiment. The sooner you get plugged into a social network of some kind in your field, like a group or a club or an open-source project, the sooner the world will open up for you,” said Chris. “Because the people you meet will come from all different walks of life you will see all the different things they do and some of them might be interesting and different than what you initially thought of doing.”

Whether it’s toying with computer motherboards like Chris did, stargazing, app building, or even setting up your shot in basketball, chances are that your hobbies have roots in STEM. The average person indulges in these related activities without even knowing it.

Amanda Beach, Senior Accountant at Backblaze
Amanda Beach, Senior Accountant at Backblaze

Art, Dance, and Programming Sequences

Amanda is our Senior Accountant and her father, Brian, is our Distinguished Engineer. When she was younger her hobbies were art, dance, and… learning about programming sequences.

“I feel like [doing math] came very naturally,” said Amanda. “I grew up in a very math-friendly household. My dad started teaching me algebra really early. They were excited about it so they both did software engineering and programming. They would, ‘just for fun,’ teach me programming problems and I would be asking them about matrices and things like that.”

Of course, we don’t all have brilliant engineers for parents, but that doesn’t mean that Amanda’s experience isn’t useful. STEM programming is all about giving young people exposure to science, technology, engineering, and math in ways they can relate to. With Amanda, that was programming problems. But school systems all over have adapted STEM programs to their curriculum to build enthusiasm for kids who like to tinker with robots or treat math problems like a competition. You can even bring it home for your own family. The trick is to find fun, science-related activities that help kids continue to expand their excitement for these fields.

It might seem hokey, but it can be fun. For instance, at Backblaze, we still do STEM style experiments, like the day we used bubbles and a fog machine to test the air flow in the office (as seen in the video below).

Do you have an interesting story of how you came to be in the STEM field of work? Or resources for how you passed your enthusiasm on? Share them in the comments below!

The post The STEMs of Backblaze: How We Got Here appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

The Entrepreneur’s Guide to Backing Up: Startup Edition

Post Syndicated from Patrick Thomas original https://www.backblaze.com/blog/entrepreneurs-guide-to-backing-up/

a vault with Backblaze Storage Pods inside

Editor’s Note: At Backblaze, the entrepreneurial spirit is in our DNA: Our founders started out in a cramped Palo Alto apartment, worked two years without pay, and bootstrapped their way to the stable, thriving startup we are today. We’ve even written a series about some of the lessons we learned along the way.

But Backblaze is a sample size of one, so we periodically reach out to other experts to expand our startup test cases and offer more insights for you. In that regard, we’re happy to invite Lars Lofgren to the blog.

As the CEO of Quick Sprout—a business focused on helping founders launch and optimize their businesses—Lars is a wellspring of case studies on how businesses both do and do not succeed. We asked Lars for advice on one subject near and dear to our hearts: Business Backup. He’s boiled down his learnings into a quick guide for backing up your business today. We hope you find Lars’ guidance and stories useful—if you have any tips or experience with business backup please share them in the comments below.

Proof of Backblaze's start in a Palo Alto Apartment
Backblaze’s first office. All computers pictured were definitely backed up.

How to Make Your Business Unbreakable

by Lars Lofgren, CEO, Quick Sprout

Launching a new business is thrilling. As someone who has been in on the ground floor of several startups, there’s nothing else like it: You’re eager to get started and growth seemingly can’t come soon enough.

But in the midst of all of this excitement, there’s a to-do list that’s one-thousand tasks deep. You’ve already gone through the tedious process of registering your business, applying for an EIN, opening new bank accounts, and launching your website. So many entrepreneurs want to dive right into generating revenue, but there’s still a ton to do.

Backing anything up is usually the last thing anyone wants to think about. But backups need to be a priority for every new business owner, because losing precious data or records could be beyond detrimental to your success. A computer accident, office fire, flood, ransomware attack, or some other unforeseen calamity could set you back months, years, or in many cases, end your business entirely. Earlier this week, I watched a fire in my neighborhood completely engulf a building. Three businesses went up in smoke and the fire department declared a total loss for all three. I hope they had backups.

Spending a little time on backups in the early stages of your launch won’t just save your company from disaster, it will make your business unbreakable.

Even if your company has been in business for a while, there’s still time for you to implement a data backup plan before it’s too late. And knowing what to back up will save you time, money, and countless headaches. Here are six simple steps to guide you:

Backing Up Hard Drives

Hard drives are like lightbulbs. It’s not a matter of if they will go out, it’s a matter of when.

Drives Have 3 Distinct Failure Rates

As more time passes, there becomes a greater chance that your hard drives will fail. For those of you who are interested in learning more about hard drive failures, Andy Klein, Backblaze’s Director of Compliance, recently published the most recent hard drive statistics here.

Take a moment to think about all of the crucial information that’s been compiled on your hard drive over the last few months. Now, imagine that information getting wiped clean. One morning you wake up and it’s just gone without a trace. In the blink of an eye, you’re starting from nothing. It’s a scary thought and I’ve seen it happen to too many people. Losing files at the wrong moment could cause you to miss out on a critical deal or delay major projects indefinitely. Timing is everything.

So when it comes to your hard drives, you need to set up some type of daily backups as soon as possible. Whatever backup tool you decide to go with, just make sure you’re fully covered and prepared for the worst. The goal is to be able to fully recover a hard drive at a moment’s notice.

Once you’ve covered that first step, consider adding a cloud backup solution. Cloud storage is much more reliable than a series of physical backup drives.

Backing Up Email

I would be lost without email.

For me, this might actually be the most important part of my business to back up. My email includes all of my contacts, my entire work history, and the logins for all of my accounts. Everything I do on a day-to-day basis stems from my email. You might not rely on it as heavily as I do, but I’m sure that email still plays a crucial role in your business.

Today, most of us are already using cloud services, like G Suite, so we rarely think about backing up our email. And it’s true that your email won’t be lost if your computer gets damaged or your hard drive fails. But if you lost access to your login or your email account was corrupted, it would be devastating.

And it does happen. I’ve come across a few folks who were locked out of their email accounts by Google with no explanation. I’m sure there are bad actors out there abusing Google’s tools, but it’s also very possible for accounts to be accidentally shut down, too.

Even normal business operations result in lost email and documents. If your business has employees, put this at the top of your priority list. Any turnover usually results in losing that employee’s email history. For the most part, their emails will be deleted when the user is removed from your system, but there’s a good chance that you’re going to need access to those emails. Just because that employee is gone, it doesn’t mean that their responsibilities disappear.

While it’s possible to export your G Suite data, you’d then be on the hook for doing this regularly and storing your exports securely. In my opinion, this requires too much manual work and leaves room for error.

I’d recommend going through the G Suite Marketplace to find an app that can handle all of your backups automatically in the cloud. (Editor’s note: For the easiest, most reliable solution, we recommend Google Vault.) Once you set this up, you’ll never have to worry about your G Suite data again. Even if it somehow gets corrupted, you’ll always be able to restore it quickly.

What about Office 365 and Outlook? It’s easy to backup Outlook manually by exporting your entire inbox. There are also ways to back up your company’s email with Exchange Online. The best method will depend on your exact implementation of Outlook at your company.

For those of you managing email on your own network who don’t plan to move to a cloud-based email service, just ensure your existing backups cover your email or find a way to ensure they do as soon as possible.

Backing Up Your Website

If your website goes down, or, even worse, you become a victim of malware, you’ll lose the lifeblood of your business: new customers.

People hack websites all the time in order to spread viruses and malware. Small businesses and startups are an easy target for cybercriminals because their sites often aren’t protected as well as those of larger companies. If something horrible like this happens, you’ll need to reset your entire site to protect your business, customers, and website visitors.

This process is a whole lot easier when you have website backups. So, when you create your website, make daily backups a priority from the outset. Start with your web host. Contact them to see what kind of backups they offer. Their answer could ultimately sway you to use one web host over another. For those of you who are using WordPress, there are lots of different plugins that offer regular backups. I’ve reviewed the best options and covered this topic more extensively here.

Generally speaking, website backups will not be free. But paying for a high-quality backup solution is well worth the cost, and far less expensive than the price of recovering from a total loss without backups.

This will also protect you and your employees from the fallout of launching a bug that accidentally brings the whole website down. Unfortunately, this happens more often than any of us would like to admit. Backups make this an embarrassing error, rather than a fatal one.

Backing Up Paperwork

Being 100% paper-free isn’t always an option. Even though the vast majority of documentation has transitioned to digital, there are still some forms that stubbornly remain in paper. No matter how hard I try, I still get stuck with paper documents for physical receipts, some tax filings, and some government paperwork.

When you launch your business, you will generate a batch of paper records that will slowly grow over time. Keeping these papers neatly organized in a filing cabinet is important, but this only helps with storage. Paper documents are still vulnerable to theft, flooding, fire, and other physical damage. So why not just digitize them quickly and be done with it? Not only will this free up extra space around the office, but it will also give you peace of mind about losing your files in a catastrophe.

The easiest way to back up your paperwork is to get a scanner, scan your documents, and then upload them to the cloud with the rest of your files. You can forget about them until they’re necessary.

It’s in your best interest to do this with your existing paper files immediately. Then make it part of your process whenever you get physical paperwork. If you wait too long, not only are you susceptible to losing important files, but the task will only grow more tedious and time-consuming.

Backing Up Processes

Not many companies think about it, but not backing up processes has easily caused me the most grief out of any other item in this post. In a perfect world, all of your staff will give you plenty of notice before they leave. This will give you time to fill the position and have that employee train the next person in their remaining weeks. But you and I both know that the world isn’t perfect.

Things happen. Employees leave on the spot or do something egregious that results in an immediate firing. Not everyone leaving your business will end on good terms, so you can’t bank on them being helpful during a transitional period. And when people leave your company, their knowledge is lost forever.

If those processes aren’t written down, training someone else can be extremely difficult, and nearly impossible if a top-tier employee leaves. The only way to prevent this is by turning all processes into standard operating procedures, better known as SOPs. Then you just need to store these SOPs somewhere that is also backed up, whether that is your hard drive (as mentioned above) or in a project management tool like Confluence, Notion, or even a folder in your Google Drive. As long as you have your SOPs saved on some sort of cloud backup solution, they’ll always be there when you need to access them.

Backing Up Software Databases

If you run a software business or use software for any internal tools, you need to get backups set up for all of your databases. Similar to your hard drives, sooner or later one of them will go down.

When I was at KISSmetrics, we had an engineer shut down our core database for the entire product by accident. When someone makes a mistake like that they don’t always act rationally. Instead of notifying management immediately, this engineer walked away and went to bed. The database was down overnight until the following morning. While we had some backups, we still lost about twelve hours worth of customer data. Without those backups, it would have been even worse.

The more critical the database, the more robust the backup solution needs to be. As I said before, you need to plan for the worst. Sometimes a daily backup might not be good enough if the database is super critical. If you can’t afford to lose 24 hours worth of information, then you’ll need a solution that backs up at the frequency your business requires.

Work with your engineering team to make sure all core functionality is completely redundant. Customers can tolerate their login page being down for a short period, but they won’t tolerate permanent data loss.

Final Thoughts on Business Backup

I know, your list of things to do when you start a new business just got longer! But backing up your data, files, and other important information is crucial for every business across all industries. You can’t operate under the assumption that you’re immune from these pitfalls. Sooner or later, they happen to all of us. Whether it be physical damage to a hard drive, theft to a computer, human error, or a malicious attack against your website, you must limit your exposure.

But good news: Once your backups are in place, your business will be unbreakable.


Editor’s Note: If you’ve read this far, you’re likely very serious about backing up your business—or maybe you’re just passionate about the process? Either way, Lars has outlined a lot of the “whys” and plenty of good “hows” for you here, but we’d love to help you tick a few things off of your list. Here are a few notes for how you can implement Lars’ advice using Backblaze:

Backing up your…

…Hard Drives:

This is an easy one: backup is the core of what we do, and backing up your computers, and your hard drives are the easiest first step you’ll take. And now, if you opt for Forever Version History, you only need to hook up your older drives once.

…Email… and Paperwork, Process, and Database:

If your email is already with a cloud service, you’ve got one backup, but if you are using Outlook, Apple Mail, or other applications storing email locally on your computer, Backblaze will automatically back those up.

…Website:

As Lars mentioned, a lot of hosting services offer backup options. But especially if you’re looking for WordPress backups, we have you covered.

Another option to consider is using Cloudflare or other caching services to prevent “soft downtime.” If you’ve engaged with Backblaze, we have a partnership with Cloudflare to make this solution easier.

Now that you’re all backed up and have some extra time and peace of mind, we’d love to hear more about your business: How does your infrastructure help you succeed?

The post The Entrepreneur’s Guide to Backing Up: Startup Edition appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Raising Prices is Hard

Post Syndicated from Yev original https://www.backblaze.com/blog/raising-prices-is-hard/

computer and a crossed out $5 replaced by 6

Raising prices should not be an 18-month project.

Everyone is faced with the decision to raise prices at some point. It sucks, but in some cases you have to do it. Most companies, especially SaaS businesses, will look at their revenue forecasts, see a dip, run a calculation predicting the difference between the revenue increase and how many customers might leave, and then raise prices if the math looks favorable. Backblaze is not most companies — here’s how we did it.

In February of 2019, we made the announcement that one month later, our prices for our Personal Backup and Business Backup services would be going up by $1: our first price increase for our Computer Backup service since launching the service over a decade ago. What was announced in February 2019 actually started in December 2016, more than two years before the actual price increase would take effect. Why the long wait? We wanted to make sure that we did it right, not just mechanically (there’s a lot of billing code that has to change), but also in how we communicated to our customers and and took them through the process. Oh, and a big reason for the delay was our main competitor leaving the consumer space, but more on that later.

In this post I’ll dive in to our process for how we wanted the price increase to go, why we decided to build the extension program for existing customers, what went in to our communication strategy, and what the reactions were to the price increase, including looking at churn numbers.

Is Raising Prices a Smart Move?

Raising prices, especially on a SaaS product where you’ve built a following, is never an easy decision. There are a ton of factors that come into play when considering what, if any, is the best course of action. Each factor needs to be considered individually and then as a whole to determine whether the price increase will actually benefit the business long term.

Why Raise Prices?

There are many reasons why companies raise prices. Typically it’s to either increase revenue or adjust to the market costs (the total cost associated with providing goods or services) in their sector. In our case it was the latter. In the price increase announcement, we discussed our reasoning in-depth, but it boiled down to two things: 1) adjusting to the market cost of storage (it was no longer decreasing at the rate it was when we first launched the product), and 2) we had spent years enhancing the service and making it easier for people to store more and more data with us, thereby increasing our costs.

Backblaze Average Cost per Drive Size
Cost Per Drive (2009-2017) — No Longer Decreasing Rapidly

One of the core values of Backblaze is to make backup astonishingly easy and affordable. Maintaining a service that is easy to use, has predictable pricing, and takes care of the heavy lifting for our customers was and is very important to us. When we started considering increasing prices we knew that we were going to be messing with the affordable part of that equation, but it was time for us to adjust to the market.

How to Raise Prices?

Most companies say that they love their customers, and many actually do. When we first started discussing exactly how we were going to raise prices we rejected the easiest path, which was to create a pricing table, update the website, and flip a switch. That was the easy way, but it was important for us to do something for the customers who have trusted us with their important files and memories throughout the years. We would still need to build out the pricing table (fun fact: from 2008 to 2017 our prices were hard-coded) but we started thinking about creating an extension program for our existing customers and fans.

The Extension Program

The extension program was a way for existing Backblaze users to prepay for one year of service, essentially delaying their price increase. They would buy 12 months of backup credits for $50 for each computer on their account, and after those credits were used up, the new prices would go into effect on their next renewal. It was a way to say thank you to our existing customers, but there was just one problem — it didn’t exist.

Building the extension program became a six month project in and of itself. First we needed to build a crediting system. Then, we needed to build the mechanism for our customers to actually buy that block of credits and have them applied to their account. Afterwards, we’d need FAQs, confirmation emails, and website changes to help explain the program to our customers. This became a full-time job for a handful of our most senior engineers, and resulted in a six month project before we were ready to put it through our QA testing. The long development time of the project was a large point of consideration, but there were also financial implications that we had to consider.

The extension program was great for customers, but good/bad for Backblaze. Why? By allowing folks to sign up for an extension we were essentially delaying their price increase, therefore delaying our ability to collect the additional revenue. While that was not ideal, the extension program brought in additional revenue from people purchasing those extensions, which was good. However, since those purchases were for credits, that additional revenue was deferred, and we still had to provide the service. So, while good from a cash flow perspective (we moved up about $2M in cash), we had to be very careful about how we accounted for and earmarked that money.

Continuing to Provide Value

Extensions were only part of the puzzle. We didn’t want customers to feel like we were simply raising prices to line our pockets. Our goal is to continue making backup easy and affordable, and we wanted to show our fans that we were still actively developing the service. The simplest way to show forward progress is to make…forward progress. We decided that before the announcement date we needed to have a product release that substantially improved the backup service, and that’s when we started to plan Backblaze Version 5.0, what we dubbed the Rapid Access Release.

Adding to the development time of creating extensions were the projects to speed up both the backup and restore functions of the Backblaze app (those changes were good for customers, but actually increased our cost of providing the service). In addition, customers could now preview, access, and share backed up files by leveraging our B2 Cloud Storage product. To top it off we strengthened our security by adding ToTP as a two-factor verification method. All those features were rolled up into the 5.0 release and were released a few weeks before we were set to announce our price increase, which was scheduled to be announced on August 22nd, 2017.

Oversharing

Another of our core values is open communication, which we equate to being as open as possible. If you have followed Backblaze over the years, you know that we’ve open sourced our storage pod design, shared our hard drive failure statistics, and have told entertaining stories about how we survived the Thailand drive crisis, and the time we were almost acquired. Most companies would never talk about topics like these, but we don’t shy away from hard conversations. In keeping with that tradition, we made the decision to be honest in our announcement about why we were raising prices (market costs and our own enhancements). We also made the decision to not mention one valid reason: inflation.

Our price back in 2008 was $5/month. With the inflation rate, in 2019 that would be around $5.96, so our price increase to $6 was right in-line with the inflation rate. So why not talk about it? We wanted the conversation to be about our business and the benefits that we’re providing for our customers in building a service that they feel is a good value. Bringing up global economics seemed like an odd tactic, considering that we weren’t even keeping up with inflation and ultimately customers got there on their own.

Disaster and Opportunity Strike

We started down the increase path in 2016. In 2017, we designed and released version 5.0, we built and tested our extension program, we lined up our blog post, we wrote up FAQs, and we created customer service emails to let people know what was happening. After all that, we were ready to announce the following month’s price increase at 10am Pacific Time on August 22nd, 2017.

On August 22nd, at 8am, we pulled the plug and cancelled the announcement.

What Happened?

Early that morning news broke that our main competitor, Crashplan, was leaving the consumer backup space. You may be saying: Wait a minute, a main competitor is leaving the market and you have a mechanism to increase your prices in place — that sounds like the perfect day to raise prices! Nope. Another one of our values, is to be fair and good. Raising prices on a day when consumers found out that there were fewer choices in the market felt predatory and ultimately gross. Once we saw the news, we got in a room, quickly decided that we couldn’t raise prices for at least 6 months, and instead we would write a quick blog post inviting orphaned customers to give us a try.

The year following Crashplan’s announcement we saw a huge increase in customers, which is simultaneously good and bad. It was good because of the increased revenue from our newfound customers, but less ideal from an operations perspective, as we were not anticipating an influx of customers. In fact, we were anticipating an increase in churn coinciding with our cancelled price increase announcement. That meant we had to scramble to deploy enough storage to house all of the new incoming data.

We wouldn’t revisit the price increase until a year after the Crashplan announcement.

That decision was not without financial repercussions. Put simply, we gave up $10 per customer per year. And, the decision affected not only our existing customers on August 22nd, but also all of those we would gain over the coming months and years. While this doesn’t factor in potential churn and other variables, when the size of our customer base is fully accounted for, the revenue left on the table was significant. In purely financial terms, raising prices on the day when the industry started having fewer options would have been the right financial decision, but not the right Backblaze decision.

Hindsight Is 20/20

Looking back, releasing version 5.0 earlier that month was a happy accident. What originally was intended to show forward progress to our existing customers was now being looked at by a lot of new customers and prospects as well. The speed increase that we built into the app as part of the release made it possible for people exiting Crashplan’s service to transition to us and get fully backed up more quickly. Because these were people who understood the importance of keeping a backup, having no downtime in their coverage was a huge benefit.

Picking Up Where We Left Off — The Price Increase

Around August of 2018, we decided that enough time had passed and we were comfortable dusting off our price increase playbook. The process proved harder than we thought as we uncovered edge-cases that we had missed the first time around — another happy accident.

The Problem With Long Development Gaps

The new plan was to announce the price increase in December and raise prices in January 2019. When we started unpacking our playbook and going over the plan, we realized that the simple decisions we had made over a year ago were either flawed or outdated. A good example of this was how we would treat two-year licenses. At one point in the original project spec, we decided that we were simply going to slide the renewal date by one year for anyone with a two-year license that purchased an extension, pushing their actual renewal date out a year. Upon thinking about it again, we realized this would cause a lot of customer issues and had to re-do the entire plan for two-year customers, a large part of our install base.

While we did have project sheets and spec documents, we also realized that we had lost a lot of the in the moment knowledge that comes in project development. We found ourselves constantly saying things like, “why did we make this choice,” and “are we sure that’s what we meant here?” The long gap between the original project start date and the day we picked it back up meant that the ramp-up time for the extension program was a lot longer than we expected. We realized that we wouldn’t be able to announce the price increase in December, with prices going up at the start of the year: we needed more time, both to QA the extension program and create version 6.0.

Version 6.0

Part of the original playbook was to provide value for customers by releasing version 5.0, and we wanted to stick to the original plan. We started thinking about what it would take to have another meaningful release and version 6.0, the Larger Longer Faster Better release was born.

First, we doubled the size of physical media restores, allowing people to get back more of their data more quickly and affordably (this was an oft-requested change, and one that is an example of a good-for-the-customer feature that incurs Backblaze extra costs). We leveraged B2 Cloud Storage again and built in functionality that would allow people to save their backed up data to B2, building off of the previous year’s preview and share capabilities. We made the service more efficient, increased backup speeds again, and also added network management tools. Looking past the Mac and PC apps, we also revamped our mobile offerings by refreshing our iOS and Android apps. All of that added development time again, and our new time table for the price increase was a February 2019 announcement, with the price increase going into effect in March.

Wait a Minute…

You might be saying, you released version 5.0 in a run-up to a price increase, then scrapped it, and then released version 6.0 in a run-up to a price increase. Does that mean that every new version number increase will be followed by a price increase? Absolutely not. The first five versions of Backblaze didn’t precipitate a price increase, and we’re already hard at work on version 7.0 with no planned price increases on the horizon.

Price Increase Announcement

We’ve all been subjected to price increases that were clandestine, then abruptly announced and put into effect the same day, or were not well explained. That never feels great and we really wanted to give customers one month of warning before the prices actually increased. That would give people time to buy the extensions that we worked so hard to build. Conversely, if people were on monthly licenses, or had a renewal date coming up after the price increase went into effect, it would give them an opportunity to cancel their service ahead of the increase. Of course we didn’t want anyone to leave, but realized that any change in our subscription plans would cause a stir and people who were more price-sensitive would likely have second thoughts about renewing.

Another goal was to be as communicative as possible. We wanted our customers to know exactly what we were doing, why we were doing it, and we didn’t want anyone to fall through the cracks of not knowing that this was happening. That meant writing a blog post, creating emails for all Personal Backup customers and Group administrators, and even briefing some members of the press and reviews sites who’d need to update their pricing tables. It might seem silly to pitch the press on a price increase (something that is usually a negative event), but we’ve had some wonderful relationships develop with journalists over the years and it felt like the right thing to do to let them know ahead of time.

Once all of those things were in back in place, it was time to press go, this time for real. The price increase was announced on February 12th and went into effect March 12th.

The Reaction & Churn Analysis

Customer Reaction — Plan for the Worst, Hope for the Best

We didn’t expect the response to be positive. Planning is great, but you never know exactly what’s going to happen until it’s actually happening. We were ready with support responses, FAQs, and a communications plan in case the response was overwhelmingly negative, but were lucky and that didn’t turn out to be the case.

Customers wrote to us and said, finally. Some people went out of their way to express how relieved they were that we were finally going to raise prices, concerned that we had been burning cash over the years. Other sentiments made it clear that we communicated the necessity for the increase and priced it correctly, saying that a $1 increase after 12 years is more than fair.

When the press picked up the story, they had similar sentiments. Yes, it was news that Backblaze was increasing prices, but the reports were positive and very fair. One of the press members that we sent the news to early responded with: “Seems reasonable…”

There were of course some people who were angry and annoyed, and while some of our customers did come to our defense, we did see an increase in churn.

Churn Rate Analysis

Over the next few months we monitored churn carefully to see the true impact on our existing customers from the price increase.

Every time a person leaves Backblaze we send one final email thanking them for their time with us, wishing them well, and asking if they have any feedback. Those emails go directly into our ticketing system where I read all of them every month to get a picture of why people are leaving Backblaze. Sometimes they are reasons we cannot address, but if we can, they go on our roadmap. After the price increase we’ve seen about a 30 percent increase in people saying that they are leaving for billing reasons. It makes sense that more people are citing the price increase as they leave Backblaze, but we’ve had a lot of positive feedback as well from the issues we addressed in versions 5.0 and 6.0.

What about the people who didn’t necessarily write back to our email? We dove deep into the analytics and found that our typical consumer backup service churn rate six months before announcing the price increase was about 5.38 percent. The six months after announcement saw a churn rate of 5.75 percent, which indicates an increase in churn of about 7 percent. In our estimates we anticipated that number being a bit higher for the first year and then coming back down to historical averages after the bulk of our customers had their first renewal at the new price.

Annualized churn rate
Increase in churn of about 7 percent from Jan 2018 to July 2019

New Customer Acquisition

People leaving the service after you increase prices is only half of the equation. The other half lies in your new customer acquisition. Due to the market having competition, raising prices can cause prospective customers to look elsewhere when comparing products. This number was a bit hard for us to calculate since the year prior our biggest competitor for our consumer service went out of business. The best comparable we had was to look at 2017 versus. 2019. We went back to 2017 to look at the historical data and found that even with the increase, and six months afterwards, two year growth rate of our Personal Backup service was a healthy 42 percent.

Lessons Learned From Raising Prices

We learned a lot during this whole process. One of the most important lessons is treating your customers well and not taking them for granted. At the outset we’d sometimes say things like, “it’s only a dollar, who is going to care,” and we’d quickly nip those remarks in the bud and take the process seriously. A dollar may not seem like much, but to a lot of people and our global customers, it was an increase that they felt and that was evidenced in the churn going up by 7 percent.

Some might think, well a 7 percent increase in churn isn’t so bad, you could have raised prices even more, but that’s the wrong lesson to take away. Any changes to the plan we had in place could have yielded very different results.

Extensions

The extension program was a hit for our existing customers and a welcome option for many. Taking the time to build it resulted in over 30,000 Backblaze Personal Backup accounts buying extensions, which resulted in about $1.8M in revenue. There is a flip-side to this. If those 30,000 accounts had simply renewed at the increased price, we would have made $2.2M, resulting in $366,000 of lost revenue. But that’s only if you assume that all of those customers would have renewed. Some may have churned, and by buying an extension they signaled to us that they were willing to stay with us, even after the price increase goes into effect for them.

Being Engaged Helps

Having a good foundation of community and an open dialog with your customers is helpful. When we made the announcement, we weren’t met with the anger that we were somewhat anticipating. In large part this was due to our customers trusting us, and knowing that this was not something we were doing because we simply wanted to make a few extra bucks.

When your community trusts you, they are willing to hear you out even when the news is not great. Build a good rapport with your customers and it will hopefully buy you the benefit of the doubt once or twice, but be careful not to abuse that privilege.

Over-Sharing Helps

Similar to having a good community relationship, explaining the why of what is happening helps educate customers and continues to strengthen your connection with them. When I was on reddit and in the blog post comments discussing the price increase, the people on reddit and on our blog who have grown accustomed to our answering questions were comfortable asking some pretty hard ones, and appreciated when we would respond with thoughtful and long-form answers. I cannot stress enough how much we enjoy the conversations we have on these platforms. We learn a lot about who is using Backblaze, what their pain points are, and if there’s something we can do to help them. These conversations really do affect how we create and consider our product roadmap.

Final Thoughts on Raising Prices

Rarely does anyone want to increase their prices — especially when it affects customers who have been with them for a decade. Many companies don’t want to discuss their decision making process or playbooks, but there are a lot of organizations that face the need to raise prices. Unfortunately, there are few resources to help them thread the needle between something they have to do, and something that their current and future customers will understand and accept.

I wanted to share our journey through our price increase process in hopes that people find it both informative and interesting. Thinking about your customers first may sound like a trope, but if you spend the time to really sit back and consider their reactions and what you can do as a way to thank your existing customers or clients, you can be successful, or at the very least mitigate some of the downside.

If you’ve ever raised prices at your company, or have examples of companies that have done a great job (or a bad job), we’d love to hear those examples in the comments below!

The post Raising Prices is Hard appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Creating Great Content Marketing

Post Syndicated from Roderick Bauer original https://www.backblaze.com/blog/creating-great-content-marketing/

In Cinema | Coming Soon: Content Marketing

Once the hot new marketing strategy, content marketing has lost some of its luster. If you follow marketing newsletters and blogs, you’ve likely even seen the claim that content marketing is dead. Some say it’s no longer effective because consumers are oversaturated with content. Others feel that much of content marketing is too broad a strategy and it’s more effective to target those who can directly affect the behavior of others using influencer marketing. Still others think that the hoopla over content marketing is over and money is better spent on keyword purchases, social media, SEO, and other techniques to direct customers into the top of the marketing funnel.

Backblaze has had its own journey of discovery in figuring out which kind of marketing would help it grow from a small backup and cloud storage business to a serious competitor to Amazon, Google, and Microsoft and other storage and cloud companies. Backblaze’s story provides a useful example of how a company came to content marketing after rejecting or not finding success using a number of other marketing approaches. Content marketing worked for Backblaze in large part due to the culture of the company, which will reinforce our argument a little bit later that content marketing is a lot about your company culture. But first things first: what exactly is content marketing?

What is Content Marketing?

Content marketing is the practice of creating, publishing, and sharing content with the goal of building the reputation and visibility of your brand.

The goal of content marketing is to get customers to come to you by providing them with something they need or enjoy. Once you have their attention, you can promote (overtly or covertly) whatever it is you wish to sell to them.

Conceptually, content marketing is similar to running a movie theatre. The movie gets people into the theatre where they can be sold soft drinks, popcorn, Mike & Ikes and Raisinets, which is how theatre owners make most of their money, not from ticket sales. Now you know why movie theatre snacks and drinks are so expensive; they have to cover the cost of the loss leader, the movie itself, as well as give the owner some profit.

Movie theatre concession stand
The movie gets the audience in the theater, but the theater owner’s profit comes from the popcorn.
Movie theatre snack concession. Image from Wikipedia.

The Growth of Content Marketing

Marketing in recent years has increasingly become a game of metrics. Marketers today have access to a wealth of data about customer and marketing behavior and an ever growing number of apps and tools to quantify and interpret that data. We have all this data because marketing has become largely an online game and it’s fairly easy to collect behavioral data when users interact with websites, emails, webinars, videos, and podcasts. Metrics existed before for conventional mail campaigns and the like, and focus groups provided some confirmation of what marketers guessed was true, but it was generally a matter of manually counting heads, responses, and sales. Now that we’re online, just adding snippets of code to websites, apps, and emails can provide a wealth of information about consumers’ behavior. Conversion, funnel, nurturing, and keyword ranking are in the daily lexicon of marketers who look to numbers to demystify consumer behavior and justify the funding of their programs.

A trend contrary to marketing metrics grew in importance alongside the metrics binge and that trend is modern content marketing. While modern content marketing takes advantage of the immediacy and delivery vehicles of the internet, content marketing itself is as old as any marketing technique. It isn’t close to being the world’s oldest profession, but it does go back to the first attempts by humans to lure consumers to products and services with a better or more polished pitch than the next guy.

Benjamin Franklin used his annual Poor Richard’s Almanack as early as 1732 to promote his printing business and made sure readers knew where his printing shop was located. Farming equipment manufacturer John Deere put out the first issue of The Furrow in 1895. Today it has a circulation of 1.5 million in 40 countries and 12 different languages.

Benjamin Franklin’s Poor Richard’s Almanac from 1739
Benjamin Franklin’s Poor Richard’s Almanac from 1739
Ben’s conversion pitch -- The location of his printing office “near the Market”
Ben’s conversion pitch — The location of his printing office “near the Market”

John Deere's The Furrow, started in 1895
John Deere’s The Furrow, started in 1895

One might argue that long before these examples, stained glass windows in medieval cathedrals were another example of content marketing. They presented stories that entertained and educated and were an enticement to bring people to services.

Much later, the arrival of the internet and the web, and along with them, fast and easy content creation and easy consumer targeting, fueled the rapid growth of content marketing. We now have many more types of media beyond print suitable for content marketing, including social media, blogs, video, photos, podcasts and the like, which enabled content marketing to gain even more power and importance.

What’s the Problem With So Much Content Marketing?

If content marketing is so great, why are we hearing so many statements about content marketing being dead? My view is that content marketing isn’t any more dead now than in was in Benjamin Franklin’s time, and people aren’t going to stop buying popcorn at movie theaters. The problem is that there is so much content marketing that doesn’t reach its potential because it is empty and meaningless.

Unfortunately, too many people who are running content marketing programs have the same mindset as the people running poor metrics marketing programs. They look at what’s worked in the past for themselves or others and assume that repeating an earlier campaign will be as successful as the original. The approach that’s deadly for content marketing is to think that since a little is good, more must be better, and more of the very same thing.

When content marketing isn’t working, it’s usually not the marketing vehicle that’s to blame, it’s the content itself. Hollywood produces some great and creative content that gets people into theaters, but it also produces a lot of formulaic, repetitive garbage that falls flat. If a content marketing campaign is just following a formula and counting on repeating a past success, no amount of obscure performance metric optimization is going to make the content itself any better. That applies just as much to marketing technology products as it does to marketing Hollywood movies.

When content marketing isn’t working, it’s usually not the marketing vehicle that’s to blame, it’s the content itself.

The screenwriter William Goldman (Butch Cassidy and the Sundance Kid, All the President’s Men, Marathon Man, The Princess Bride) once famously said, “In Hollywood, no one knows anything.” He meant that no matter how much experience a producer or studio might have, it’s hard to predict what’s going to resonate with an audience because what always resonates is what is fresh and authentic, which are the hardest qualities to judge in any content and eludes simple formulas. Movie remakes sometimes work, but more often they fail to capture something that audiences responded to in the original: a fresh concept, great performances by engaged actors, an inspired director, and a great script. Just reproducing the elements in a previous success doesn’t guarantee success. The experience in the new version has to capture the magic in the original that appealed to the audience.

The Dissatisfaction With So Much Content

A lot of content just dangles an attractive hook to entice content consumers to click, and that’s all it does. Anyone can post a cute animal video or a suggestive or revealing photo, but it doesn’t do anything to help your audience understand who you are or help solve their problems.

Unfortunately for media consumers, clickbait works in simply getting users to click, which is the reason it hasn’t disappeared. As long as people click on the enticing image, celebrity reference, or promised secret revelation, we’ll have to suffer with clickbait. Even worse, clickbait is often used to tip the scales of value from the reader, where it belongs, to the publisher. Many viral tests, quizzes and celebrity slideshows plant advertising cookies that benefit the publisher by increasing the cost and perceived value of advertising on their site, leaving the consumer feeling that they’ve been used, which of course is exactly what has happened.

Another, and I think more important reason that content marketing isn’t succeeding for many is not that it’s not interesting or even useful, but that the content isn’t connected in a meaningful way with the content publisher. Just posting memes, how-tos, thought pieces, and stories unrelated to who you are as a business, or not reflecting who your employees are and the values you hold as a company, doesn’t do anything to connect your visitors to you. Empty content is like empty calories in junk food; it doesn’t nourish and strengthen the relationship you should be building with your audience.

Is SEO the Enemy?

SEO is not the enemy, but focusing on only some superficial SEO tactics above other approaches is not going to create a long term bond with your visitors. Keyword stuffing and optimization can damage the user experience if the user feels manipulated. Google might still bring people to your content as a result of these techniques, but it’s a hollow relationship that has no staying power. When you create quality content that your audience will like and will recommend to others, you produce backlinks and social signals what will improve your search rankings, which is the way to win in SEO.

Despite all the supposed secret formulas and tricks to get high search engine ranking, the real secret is that Google loves quality content and will reward it, so that’s the smart SEO strategy to follow.

What is Good Content Marketing?

Similar to coming up with an idea for the next movie blockbuster to get people into theaters, content marketing is about creating good and useful content that entertains, educates, creates interest, or is useful in some way. It works best when it is the kind of content that people want to share with others. The viral effect will compound the audience you earn. That’s why content marketing has really taken off in the age of social media. Word-of-mouth and good write-ups have always propelled good content, but they are nothing compared to the effect viral online sharing can have on a good blog post, video, photograph, meme or other content.

How do you create this great content? We’re going to cover three steps that will take you from ho-hum content marketing to good and possibly even great content marketing. If you follow these three steps, you’ll be ahead of 90 percent of the businesses out there that are trying to crack the how-to of content marketing.

First — Start with Why You Do What You Do

Simon Sinek in his book, Start with Why, and in his presentations, especially his TED Talk, How Great Leaders Inspire Action, argues that people don’t base their purchasing decisions primarily on what a company does, but on why they do it. This might be hard to envision for some products, like toothpaste or laundry detergent, but I think it does apply to every purchase we make, even if in some cases it’s to a small degree. For some things it’s much more apparent. People identify with iOS or Android, Ford or Chevy, Ducati or Suzuki, based on much more than practical considerations of price, effectiveness, and other qualities. People want to use products and services that bolster their image of who they are, or who they want to be. Some companies are great at using this desire (Apple, BMW, Nike, Sephora, Ikea, Whole Foods, REI) and have a distinct identity that is the foundation for every message they put out.

Golden Circle: Why? How? What?
From Simon Sinek, Start With Why

To communicate the why of your products and services, you can’t just put out generic content that works for anyone. You have to produce content that shows specifically who you are. The best content marketing is cultural. The content you deliver tells your audience what kind of company you are, what your values are, who are the people in the company, and why they work there and do the things they do. That means you must be authentic and transparent. That takes courage, and isn’t easy, which is why so few companies are good at it. It takes vision, leadership, and a constant reminder from company leaders of what you’re doing and why it matters.

Unfortunately, this is hard to maintain as companies grow. The organizations that have grown dramatically and yet successfully maintained the core company values have either had a charismatic leader who represented and reiterated the company’s values at every opportunity (Apple), or have built them into every communication, event, and presentation by the company, no matter who is delivering them (Salesforce).

If your company isn’t good at this, don’t despair. These skills can be learned, so if your company needs to get better at understanding and communicating the why of who they are, there’s still hope that with some effort, it can still happen.

Second — Put Yourself in Your Customers’ Shoes

You not only need to understand yourself and your company and present yourself authentically, you have to really understand your customer — really, really understand your customer. That takes time, research, and empathy to walk a mile in their shoes. You need to visit your customers, spend a day fielding support calls or working customer service, go places, do things, and ask questions that you’ve never asked. Are they well off with cash to burn, or do they count every penny? Do they live for themselves, their parents, their children, their community, their church, their livelihood? How could your company help them solve their problems or make their lives better?

The best marketers have imagination and empathy. They, like novelists, playwrights, and poets, are able to imagine what it would be like to live like someone else. Some marketing organizations formalize this function by having one person who is assigned to represent the customers and always advocate for their interests. This can help prevent falling into the mindset of thinking of the customer only as a source of revenue or problems that have to be solved.

One common marketing technique is to create a persona or personas that represent your ideal customer(s). What is their age, sex, occupation? What are their interests, fears, etc.? This can help make sure that the customer is never just an unknown face or potential revenue source, but instead is a real person whom you need to be close to and understand as deeply as possible.

Once you’ve made the commitment to understand your customers, you’re ready to help solve their problems.

Third — Focus on Solving Your Customers’ Problems

Once you have your authentic voice down and you really know who your customer is and how they think, the third thing you need to do is focus on providing useful content. Useful content for your customers is content that solves a real problem they have. What’s causing them pain or what’s impeding them doing what they need or want to do? The customer may or may not know they have this pain. You might be creating a new need or desire for them by telling a story about how their life will be if they only had this thing, service, or experience. Help them dream of being on a riverboat in Europe, enjoying the pool in their backyard on a summer’s day, or showing off a new mobile phone to their friends at work.

By speaking to the needs of your customers, you’re helping them solve problems, but also forging a bond of trust and usefulness that will go forward in your relationship with them.

Mastering Blogging for Content Marketing

There are many ways to create and deliver content that is authentic and serves a need. Podcasts, Vlogs, events, publications, words, pictures, music, and videos all can be effective delivery vehicles for quality content. Let’s focus on one vehicle that can return exceptional results when done right, and that is blogging, which has worked well for Backblaze.

Backblaze didn’t just create a blog that then turned into an overnight success. Backblaze tried a number of marketing approaches that didn’t perform as the company hoped. The company wrote about these efforts on its blog, which is a major reason why the blog became a marketing success — it showed that the company was willing to talk about both its successes and its failures. You can read about some of these marketing adventures at As Seen on Ellen and How to Save Marketing Money by Being Nice. Forbes wrote about Backblaze’s marketing history in an article in 2013, One Startup Tried Every Marketing Ploy From ‘Ellen’ To Twitter: Here’s What Worked.

Blendtec on the Ellen Show

Backblaze on the Ellen Show

Backblaze billboard on Highway 101 in Silicon Valley, 2011

Backblaze billboard on Highway 101 in Silicon Valley

Backblaze decided early on that it would be as transparent as possible in its business practices. That meant that if there were no good reason not to release information, the company should release it, and the blog became the place where the company made that information public. Backblaze’s CEO Gleb Budman wrote about this commitment to transparency, and the results from it, in a blog post in 2017, The Decision on Transparency. An early example of this transparency is a 2010 post in which Backblaze analyzed why a proposed acquisition of the company failed, Backblaze online backup almost acquired — Breaking down the breakup. Companies rarely write about acquisitions that fall through.

Backblaze’s blog really took off in 2015 when the company decided to publish the statistics it had collected on the failure rate of hard drives in its data centers, Reliability Data Set For 41,000 Hard Drives Now Open Source. While many cloud companies routinely collected this kind of data, including Amazon, Google, and Microsoft, none had ever made it public. It turned out that readers were tremendously hungry for data on how hard drives performed, and Backblaze’s blog readership subsequently increased by hundreds of thousands of readers. Readers analyzed the drive failure data and debated which drives were the best for their own purposes. This was despite Backblaze’s disclaimer that how Backblaze used hard drives in its data centers didn’t really reflect how the drives would perform in other applications, including homes and businesses. Customers didn’t care. They were starved for the information and waited anxiously for the release of each new Drive Stats post.

It Turns Out That Blogging with Authenticity and Transparency is Rewarded

As Gilmore and Pine wrote in their book, Authenticity, “People increasingly see the world in terms of real and fake, and want to buy something real from someone genuine, not a fake from some phony.” How do you convince your customers that you’re real and genuine? The simple answer is to communicate honestly about who you are, which means sometimes telling them about your failures and mistakes and owning up to less than stellar performances by yourself or your company. Consider lifting the veil occasionally to reveal who you are. If you put the customer first, that shouldn’t be too hard even when you fall short. If your intentions are good, being transparent will almost always be rewarded with forgiveness and greater trust and loyalty from your customers.

Many companies created blogs thinking they had to because everyone else was and they started posting articles by their executives and product marketers going on about how great their products were. Then they were surprised when they got little traffic. These people didn’t get the message about how content should be used to help customers with their problems and build a relationship with them through authenticity and transparency.

If you have a blog, you could use that as a place to write about how you do business, the lessons you’ve learned, and yes, even the mistakes you’ve made. Don’t assume that all your company information needs to be protected. If at all possible, write about the tough issues and why you made the decisions you did. Your customers will respond because they don’t see that kind of frankness elsewhere and because they appreciate understanding the kind of company they’re paying for the product or service.

Your Blog Isn’t One Audience of Thousands or Millions, But Many Audiences of One

Don’t be afraid to write to a specific audience or group on your blog. You might have multiple audiences, but you might have specialized ones, as well. When you’re writing to an audience with specialized vocabulary or acronyms, don’t be afraid to use them. Other readers will recognize that the post is not for them and skip over it, or they’ll use it as an entry to a new area that interests them. If you try to make all your posts suitable for a homogeneous reader, you’ll end up with many readers leaving because you’re not speaking directly to them using their language.

If the piece is aimed at a novice or general audience, definitely take the time to explain unfamiliar concepts and spell out abbreviations and acronyms that might not be familiar to the reader. However, if the piece is aimed at a professional audience, you should avoid doing that because the reader might think that the post isn’t aimed at professionals and they could dismiss the post and the blog thinking it’s not suitable for them.

Strive to match the content, vocabulary, graphics, technical argot, and level of reading to the intended market segment. The goal is to make each reader feel that the piece was written specifically for him or her.

Taking Just OK Content Marketing and Making It Great

Authenticity, honesty, frankness, and sincerity are all qualities that to some degree or other are present in the best content. Unfortunately, marketers have the reputation for producing content that’s at the opposite end of the spectrum. Comedian George Burns could have been parodying a modern marketing course when he wrote, “To be a fine actor, you’ve got to be honest. And if you can fake that, you’ve got it made.”

There’s a reason that the recommendation to be authentic sounds like advice you’d get from your mom or dad about how to behave on your first date. We all learn sooner or later that if someone doesn’t like you for who you are, there’s no amount of faking being someone else that will make them like you for more than just a little while.

Be yourself, say something that really means something to you, and tell a story that connects with your audience and gives them some value. Those intangibles are hard to measure in metrics, but, when done well, might earn you an honest response, some respect, and perhaps a repeat visit.

The post Creating Great Content Marketing appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Bootstrapping to $30 Million ARR

Post Syndicated from Yev original https://www.backblaze.com/blog/startup-tips-bootstrapping-to-30-million-arr/

Backblaze Billboard on Highway 101 in Silicon Valley, 2011
Backblaze will be celebrating its 12th year in business this coming April 20th. We’ve steadily grown over the years, and this year have reached $30 million ARR (annual recurring revenue). We’ve accomplished this with only $3.1 million in funding over the years, having successfully bootstrapped the company with founder contributions and cash flow since the very beginning.

Last year our CEO and co-founder Gleb Budman wrote a series of posts on entrepreneurship that detailed our early years and some lessons learned that entrepreneurs can apply for themselves.

Recently, Gleb did a follow-on webinar on BrightTALK covering many of the series’ main points.
Given the time constraints most entrepreneurs face, I’ll highlight what I consider some of the key lessons for startups that Gleb outlined in both the entrepreneurial series and the webinar.

Gleb Budman on BrightTALK Founders Series

Gleb’s webinar on BrightTALK

Creating Your Product

Gleb’s first article, How Backblaze Got Started: The Problem, The Solution, and the Stuff In-Between, starts with one of the most critical aspects for any successful company: defining the real problem you’re trying to solve. In Gleb’s words, “The entrepreneur builds things to solve problems — your own or someone else’s.”

So the question is how do you go about defining the problem? The most obvious place to start is to look at pain points you’re trying to address and then defining the specific elements that contribute to them. Can you solve the problem by taking away or changing one of those elements or multiple elements? Or, is it a matter of adding in new elements to shift away the pain points?

In our case, there was an obvious need in the market for backing up computers. There were already solutions on the market that, at least in theory, provided a backup solution, yet the majority of people still didn’t use one. The question was why?

Just because solutions exist doesn’t mean the problem is solved. After a series of deep dives into why people weren’t backing up, we discovered that the major problem was that backup solutions were too complicated for most people. They recognized they should be backing up, but weren’t willing to invest the time to learn how to use one of the existing services. So the problem Backblaze was originally solving wasn’t backup in general, it was taking away the learning curve to use a backup solution.

Once you have the problem clearly defined, you can proceed to design a solution that will solve it. Of course the solution itself will likely be defined by market forces, most notably, price. As Gleb touches on in the following video clip, pricing needs to be built into the solution from the outset.

Surviving Your First Year

Once you’ve determined the problem you want to solve, the next step is to create the infrastructure, i.e. the company, in order to build the solution. With that in mind, your primary goals for that first year should be: set up the company correctly, build and launch your minimal viable product, and most importantly, survive.

Setting up the company correctly is critical. A company is only as successful as the people in it. At all stages of growth, it’s critical that people have clear definitions of what is expected of them, but in the beginning it’s especially important to make sure people know what they need to do and the vision that’s driving the business.

From the start you need to determine the company, product, and development resources you need, define roles to be filled, and assign responsibilities once key players start joining your team. It’s very common in the early stages of a startup for everyone to be working on the same tasks in a democratic process. That might be good for morale in the beginning, but can result in a lack of focused direction. Leadership must emerge and help steer the company towards the shared vision. With clearly defined roles and responsibilities, team members can collaborate on achieving specific milestones, ensuring forward momentum.

A far less exciting but equally important foundation for a startup is the legal entity. It’s easy to get caught up in the excitement of building a product and put off the less exciting legal aspects until you are ready to launch. However, trying to retroactively get all the legal requirements in place is far more difficult.

Ownership (equity) ratios need be locked in near the start of the company. Having this hammered down can avoid a lot of potential infighting down the line. If you plan on raising money, you will need to incorporate and issue stock. You may also want to create a Proprietary Information and Inventions Assignment (PIIA) document, which states that what you are all working on is owned by the company.

Once the (admittedly not terribly exciting) legal aspects are taken care of, the focus truly shifts to building your minimal viable product (MVP) and launching it. It’s natural to want to build the perfect product, but in today’s market it’s better to focus on what you think are the most important features and launch. As Gleb writes in Surviving Your First Year, “Launching forces a scoping of the feature set to what’s critical, rallies the company around a goal, starts building awareness of your company and solution, and pushes forward the learning process.” Once you launch your MVP, you’ll start receiving feedback and then the iteration process can start: more on that later.

Lastly, when it comes to surviving your first year, always make an effort to conserve your cash. It might be tempting to scale as quickly as you can by hiring a lot more employees and building out your infrastructure, but minimizing your burn rate is usually more important for long term success. For example, Backblaze spent only $94k to build and launch its beta online backup service. If you scale your startup’s people and infrastructure too fast, you might have to rush to find more funding, which typically means more dilution and more outsiders telling you what you should be doing — not great when you’re first starting out and trying to achieve your vision.

Gleb goes into more detail in this video clip:

Getting Your First Customers

When you’re finally ready to go, you should target people who will give you lots of feedback as your first customers. Often, this means friends and even family members that are willing to give you their opinions on what you’re doing. It’s important to press the people close to you to give you honest feedback, as sugar-coating comments might actually lead you to make incorrect conclusions about your product.

Once you have a chance to evaluate the initial feedback and iterate on it, consider a private beta launch. Backblaze’s initial launch target was to get 1,000 people to use the service. In his article, How to Get Your First 1,000 Customers, Gleb goes into detail on how Backblaze successfully used PR outreach to achieve the beta launch goal.

One of the PR tactics used was to give publications, such as Techcrunch, ArsTechnica, and SimpleHelp, a limited number of beta invites. This not only raised awareness, but it gave early beta users a feeling of exclusivity, which helped in getting beta users to provide honest feedback.

Equally important is to have a system in place to collect contact information from everyone that expresses interest, even if you can’t service them at the time. You always want to be building your customer pipeline and having mechanisms in place to collect leads is important for sustained growth.

Startup Highs and Lows

It’s unavoidable that every startup entrepreneur will have to face a number of unexpected lows that will supplant what seem as increasingly infrequent highs. Dealing with both is vital to sustain your business (and your mental health). Often times, what at first appears to be a low point can inspire actions that ultimately help drive your business to new highs.

In the following clip Gleb gives several examples of seemingly low points that Backblaze was ultimately able to turn into wins, or as Gleb says “turning lemons into lemonade.” Note: I recently wrote a post about similar turnarounds on the social media front, Making Lemonade: The Importance of Social Media and Community.

Building Culture

It might not be foremost in your mind at the start, but from day one of your startup you are building your company culture. Culture is a little more nebulous than product design (maybe a lot more nebulous), but it is equally important in the long run. Culture affects every aspect of how your company operates because it has a day to day effect on every employee and the decisions they make, as Gleb points out in this short clip.

A prime example of how company culture affects your business is Backblaze’s emphasis on transparency. One of the first major wins for Backblaze was the release of our first Storage Pod design back in 2009. Most companies would keep proprietary design IP (intellectual property), like the Storage Pod, under lock and key, because they provide a major competitive pricing advantage. Yet the cultural importance of transparency led to a decision to open source the Storage Pod design despite the risk of competitors taking the designs and copying them. It also enabled us to answer a common question, “How can you provide this service at this low a price?” by writing one blog post with specifications, photos, and a parts inventory showing exactly how we do it.

The result of that very risky decision was a massive increase in brand awareness. Hundreds of articles were written about Backblaze comprised of not just general-interest and news articles, but also business case studies examining the rare business decision to be so transparent about our IP.

All of this attention ultimately positioned Backblaze as a thought leader in the cloud backup space (later, also in cloud storage), allowing us to be mentioned in the same articles and to compete against far bigger companies, including Amazon, Google, and Microsoft.

I hope you enjoyed this TL:DR version of Gleb’s entrepreneurial series and would love to hear your thoughts in the comments section below. I highly encourage anyone involved in a startup to take the time to read the original series as time permits and watch the entire webinar on BrightTALK, Founders Spotlight: Gleb Budman, CEO, Backblaze.

Gleb Budman’s Series on Entrepreneurship on the Backblaze Blog:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants
  7. The Decision on Transparency
  8. Early Challenges: Managing Cash Flow
  9. Early Challenges: Making Critical Hires

The post Bootstrapping to $30 Million ARR appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Making Lemonade: The Importance of Social Media and Community

Post Syndicated from Yev original https://www.backblaze.com/blog/social-media-marketing-strategy/

Social media manager Yev at his desk at Backblaze

Spending all day on Twitter and Reddit shouldn’t really be a job, but here we are. With every organization from a local coffee shop to mutli-billion dollar enterprise having a social media presence, community and social media management has become not only a job, but a career path that tens of thousands of people have adopted in the last two decades.

Many still question the value, if any, of KPIs (key performance indicators) for tracking social media, and the overall return on investment of a dedicated social media presence. With that in mind, I wanted to share why Backblaze continues to invest in maintaining strong community and social relationships.

Having a strong social presence has not only helped us build a community of fans and advocates, but it has also helped drive serious growth, playing a large part in helping us achieve nearly 50% growth and an ARR of over $30M.

Spoilers — Key Takeaways

In this post I’ll discuss the takeaways below and dive in to two case-studies where bringing all these together helped Backblaze navigate some tricky situations (more on those below):

  • Social media can be fickle. Finding the right balance for your brand between being funny, informative, and helpful can be hard but it is paramount if you want to cultivate the right kind of audience and community.
  • Empathy is important, especially if you provide social tech support — people writing into support are usually not having a great day. Very few of our support tickets are simple praise (and when they are, we share them with the whole company). Being empathetic can help craft your responses in a way that does not put your customers on the defensive, and even if you can’t help them, being understanding of their situation goes a long way in helping them feel heard.
  • Do not use standard answers. As much as I can, I try to use hand-crafted, artisanal responses for every person that writes in. Even if you get a flurry of similar questions that require the same steps to solve (say there’s an outage, or there’s a popular blog post that yields identical questions), addressing people by their names and individualizing responses helps immensely and puts a more approachable face on your company.
  • Some days are going to be bad: not all news is good news. Sometimes there will be a particularly bad day on the horizon that you see coming and start dreading. Know that it’ll pass and get yourself mentally prepared for the onslaught. Sometimes knowing that there will be controversy will help you craft your messaging in advance. Try to think through the edge cases and if you don’t have a good answer, tell people that you’ll find one and get back to them.
  • Follow up. If you are in the middle of a busy day, try to get to everyone within a few hours. If you cannot, flag them and reply later. You want people to have warm and fuzzies when they think about you. Hearing back from you on social, even a day later, can absolutely have that effect. Making sure no one falls through the cracks helps people feel heard and a part of your community, and shows that community members are valued.

Backblaze’s Social Philosophy — Branding First, KPIs Last

Contrary to popular belief, Backblaze is not a large organization (though we keep staffing up, check out our backblaze.com/jobs page!) Our social media team consists of an army of one, Yev (me), and a few folks on staff who also have logins and can act as backups in case I go on vacation. It’s good to have backups.

How did I get involved with the social side of Backblaze? I joined Backblaze in 2011 as part of our Customer Support team. Natasha, a former contractor (and now one of our product marketers) ran our social media efforts — essentially responding to questions and posting new blog entries and interesting tidbits. A few months into the job I took over the outbound social media posts for the company from Natasha, and a little while later took over both aspects of our social channels. Natasha still helps out as one of the people on the social backup rotation.

My philosophy on social and community stems from my strong belief in customer service. I’ve always encouraged having a support aspect to our social channels, which means being communicative when we have issues and often handling simple support cases before referring folks to our customer support team. Since backup and data storage are serious business, every opportunity to offer support is a good one. Twitter, Reddit, Facebook, and other platforms can also act as an early detection canary when people are having issues. That said, I try to avoid debugging issues in a public forum and have found that a lot of people prefer a relevant knowledge base link or a shortcut over going into details about their computer on Twitter. Being receptive to people on different social platforms and giving them individualized answers shows that real people are paying attention to them and that they’re not just talking to a brick wall. I consider these efforts to help customers less about customer support and more about brand-building, but ultimately, it’s just the kind of company that we want Backblaze to be.

Is There Value in Measuring Social Media KPIs?

We’ve historically focused our social efforts more on the brand than on KPIs for several reasons. A common mistake people make is to view social media as just another direct response channel. While social can certainly drive traffic and sales, it has the potential to be far more important for overall business growth and brand building. Focusing too narrowly on direct response KPIs not only undervalues social’s overall benefit but can also move focus onto the wrong activities.

That said, KPIs are not entirely worthless. Some of the most common KPIs include: clicks, views, mentions, trackable purchases, as well as a host of other more narrowly focused engagement metrics. While it’s great to have tracking and to know how many folks are purchasing as a result of your social activities, using those metrics as the sole arbiter of whether or not your social strategy is working is, I believe, a bit short-sighted. Plus, if you’re a shrewd social media manager, you can easily manipulate the KPIs. Need to goose your click numbers for the month? Here come the brand-relevant kitten gifs, but how is that good for your business? You know what is good for your business? Getting people to recommend you.

The Real Value of Social Media

Social proof is one of the single biggest influencers on a customer’s purchase decision. Regardless of whether your product is consumer-focused or enterprise-driven, your social channels are building out your community. That building of community, in turn, builds brand awareness and positive vibes. The better the community and social interactions are with your company, the more your message gets amplified. When things are good that means recommending your service, and when things are bad it means that they’ll be more willing to give you the benefit of the doubt.

Your social channels’ worth is hard to measure day to day, but don’t listen to people who say it can’t be measured at all. Measuring growth takes understanding what your goals are and whether your community can help attain them. You can start to see the benefits when people in various online places stand up for you, or field questions on your behalf in public forums (bonus points if they field them correctly). All those things mean you are doing a good job of educating your fans. Having customers and fans who help get your point across is a wonderful thing, and as I go into a bit later, can lead directly to revenue.

Cloud Backup Suggestions on Reddit

Reddit Recommendations

Comment on Twitter: "We use Backblaze. Love it!"

Unsolicited Twitter Recommendations Are Great

Insight #1

Focus on the customer impact and business results, then determine the right metrics for your business, knowing there may not be any. A branding-first approach of using social media as an extension of your support organization can make customers happier and can reduce complaints. The fewer help tickets coming in, the more kudos you get from your support team (and it lowers your operating expenses). Plus, being outwardly communicative and having quick response times can ease the customer’s anxiety in times of stress. If you can successfully do all that, it can lead to customers who are truly brand advocates and are more likely to amplify your message, recommending you, or giving you the benefit of the doubt.

My Daily Social Media Tools

I’ve covered the importance of engaging community and the strategy we take to make sure those community needs are met. That still leaves the question of how to actually do it. To that end, I’d like to take you through a typical day of mine.

My day starts by checking Twitter. It is the most real-time firehose of information and can act as a harbinger for how the day is going to go. I use the Fenix app on my phone to separate my personal account from my work account. All the Backblaze tweets go to Fenix, while my personal Twitter is tied to the default app. This separation helps prevent me from accidentally posting to the corporate stream. The other benefit is that the notifications become separate so I know whether to investigate quickly if it’s a Fenix notification, or let it slide for a personal one. Once Twitter has been scanned, I respond to the people who need help, either by sending them a helpful link or routing them to our support team.

When I arrive in the office, TweetDeck takes over. If you’ve never seen it, to some it looks a bit overwhelming. There is a series of columns, each one keeping track of separate lookups and keywords. I have streams set to follow @Backblaze, the term “Backblaze,” and some of the hashtags that we use frequently. It’s also a great way to see what competitors are up to, and see if you can add any helpful information to conversations that might be about your organization (e.g. someone is considering you and your competitors and is asking for opinions). An additional benefit is that you can gauge the general sentiment that customers have towards you. If most of the tweets mentioning your competitors are positive, that’s great and you have some work to do in making sure you’re thought of in the same way. If most of the mentions are negative, that can be a great time to jump in and try to win some people over, especially if their issue is with something that you excel in — just be nice.

While TweetDeck acts as a general firehose for Twitter, it can’t monitor what’s happening elsewhere in cyberspace. For that, I use Mention. It’s essentially an aggregator for the mentions that your keywords receive all over the internet. It is pretty close to real-time, only lagging by a few minutes. There are more robust tools available (Hootsuite, Sprout Social, and Buffer are all good robust tools), but for the money, Mention does a great job finding keywords from social media sites, blogs, news articles, and forums. It’s a great way to get an overview of where your organization was mentioned, and even has some analytics tools to help you parse through it all and see where and how folks are talking about you.

Mentions over time

Mentions Over Time

Hard drive stats word cloud

Hard Drive Stats Word Cloud

Thoughts on Twitter

More than any other social media platform, Twitter has become the place where people go when they have an issue, need information, or just want to ask a question. Being responsive and making sure each person is responded to builds a rapport with your followers and encourages a sense of community. Having a temporary unplanned outage? Make sure you tweet it so that folks know you’re on top of it and they aren’t feeling left out of the loop. Have a new feature to announce? Let the masses know so they can update to the latest and greatest version. Getting questions about your service? Respond quickly and with relevant information. Someone taking out their frustration on you? Respond with compassion and empathy; make sure they understand that you have heard their feedback and that it’s understood, even if there is nothing you can do.

This leads to a more cohesive community where no one feels left out and everyone feels like they’re a part of the group. If someone is having a bad day and takes it out on you, that’s the perfect time to try and bring them in for a soft landing. Very few people ever reach out to Customer Support because they’re having the best day ever. For the customer where something has gone wrong, the way that you treat them dictates how the community at large will view your brand and company. Being empathetic does not have any downsides in these cases and builds trust over time.

Insight #2

One of the reasons I use multiple services to track mentions is to make sure that people don’t fall through the cracks. It’s important that folks are responded to when they write us with a question or frustration. Even if the interaction with us is not positive, the goal is to make sure everyone feels heard. That helps establish the positive brand and good vibes I am trying to cultivate and results in brand amplification and customer lead recommendations.

Where Social Fits In At Backblaze

Venture capital backed companies tend to be built around hypergrowth, spending money to acquire customers while honing the product and finding their niche. In the almost thirteen years Backblaze has been around, we’ve raised less than $3M. We’re funded by our own operations; this is known as being a bootstrapped company. Being bootstrapped brings with it a lot of benefits, like the freedom to make our own decisions, but it does also mean we can’t spend a lot of money buying Facebook ads, much less buying radio and TV time. So we have to be creative with how we attract people and keep them happy once we earn their business. We want the Backblaze brand to reflect our culture: transparent, empathetic, and efficient. Compared to our competition, we believe that offers a unique and different proposition to people deciding where they want to store their data. Not only that, but those beliefs also reflect who we are as people.

To attract customers and educate the masses without breaking the bank, we focused on writing interesting blog posts, open-sourcing technology, and being generally available to our customers. Being available is what we think truly sets us apart from the competition. For us, availability and being social means being good internet citizens, responding to hails from around the web, and joining in on conversations about the industry. That means going to where folks are talking about us and sharing some of our insights, like our hard drive stats posts. All of that, plus listening to our customers when making product decisions (like adding much-requested file sharing in version 5.0), helps move the product forward while bringing our customers along for the ride.

One of the tangible side benefits of being present on other platforms is that sometimes being involved in the conversation elsewhere can help stave off support tickets before they enter our system. We have a great Customer Support department and they handle all of our tickets in-house, so being able to head off potential issues on other platforms where currently and possibly future customers are chatting, not only helps us stay engaged in the conversation, but can also reduce the number of tickets coming in.

Insight #3

Community building is paramount. What is community? For me, it means any place where Backblaze is mentioned and anyone who engages with our company. Perception being reality, your company will be judged by its public actions. For better or worse, mindshare on the internet is driven by social interactions. Those interactions have to be genuine and not just lip-service with canned missives written by lawyers. While sometimes review is necessary, honest conversation in real-time is the standard I strive for. A company that does not invest in some form of social presence is actively not investing in its brand.

The Social Media Strategy

The strategy for our social efforts is simple: stay engaged. There’s a literal time component to this — we try to respond quickly, ideally within a few hours. Responding quickly is great, but if you’re responding fast with an automated message, you risk infuriating your customers. Ideally the response is quick and has relevant information. How do you maintain relevance? You do it by sending out useful, topical, or interesting tidbits that are industry related, and by participating in the comments wherever they come up. If you aren’t sure of the right answer or don’t have the necessary information at your fingertips, reply and let them know that you’ll work on getting them the right answer — then follow up.

Participation is one of our most important tactics. If you aren’t shy of wading into the comments, whether they be positive or negative, the community learns to ask questions and expects to receive answers. That, in turn, leads to trust, which is immeasurably important.

That’s especially true when something goes awry, for example when an Adobe issue ate some Backblaze files, or if you want to capitalize on an opportunity, as when we were able to move quickly and gain customers when CrashPlan’s exit of the consumer business was announced. Backblaze is in the data storage business, which makes it important to strike a balance between being funny, informative, and helpful. It’s difficult, but relentless participation is paramount for cultivating the kind of community you want your brand to have.

I am lucky enough to have the latitude to make decisions about what to explore and expand upon in public forums. That means that if something is happening in real-time, I don’t have to wait for an hour and a half to get approval about what I can and cannot say. This isn’t all improv (though I did do that in high school). We create this environment by having honest internal conversations that assume we are going to be discussing things with our customers. We are constantly calibrating and communicating so that when things happen in real-time we can react quickly. Do mistakes happen? Sometimes they do, but the benefits of being able to move quickly in an informed way have thus far outweighed any downsides we occasionally see.

Another thing to consider is that there are a lot of SaaS companies offering ready-made community platforms that allow you to manage your own online community. Platforms such as Vanilla, Chaordix, and CMNTY all help brands build and design their own online spaces. I’ve found that in general, these are great for large companies with huge brand awareness, and while Backblaze is large, I do not need such robust tools (not yet anyway). Instead I look for where people are discussing Backblaze already and join the conversations there. Places like Reddit, HackerNews, Twitter, Facebook, MangoLassi, SpiceWorks, and the comments sections of blogs or articles, are all places where Backblaze gets mentioned. Jumping into those conversations provides for a more natural flow and proves to folks that we really are paying attention, instead of letting the news come to us.

Insight #4

Think there isn’t much community in your B2B space or that joining one isn’t a big deal? If there is no community, or no one talking about your product, then there’s no market. If there’s no market, you should start polishing your resume. As long as your business has customers, there’s likely a community element as well. The trick is to find where they congregate, or if no such place exists, create one. Once established, work with your team to come up with guidelines for communication that will free you up should the need to move quickly arises.

Bringing It All Together: Tales of Disaster and Making Lemonade

We’ve had a lot of interesting experiences that have played out on social media over the years, and I’ll give two real-world examples of how being transparent, empathetic, and efficient has helped us navigate those events.

Adobe Deletes Data — Transparency and Legwork

In February of 2016, Adobe introduced a bug into their Creative Cloud program that deleted data. Specifically, files were deleted from the user’s root directory. Backblaze has a file, .bzvol, that we place on every one of our customers’ hard drives to keep track of the drive and whether it is plugged in or not. If we detect that the .bzvol file is no longer on the computer, we display a pop-up, asking folks to contact support. On the evening of February 10th, 2016, we started receiving a lot of tickets related to disappearing .bzvol files. Twitter also started to light up with people posting screenshots of the pop-up and asking what was going on. While all this happened, I was at a conference and was able to stay plugged into our internal conversations via Slack while we tried to figure out what was happening.

We caught a break the next morning. Our designer and co-founder, Casey, got hit with the error. Our lead Mac developer ran over to his desk, grabbed his logs, and started digging to see what the cause was. The only thing out of the ordinary was that Adobe Creative Cloud software had updated about an hour before he got hit with this error, so we were off to the races chasing things down.

Throughout this whole ordeal we had been tweeting updates and letting people know how they could fix the .bzvol issue. Once we realized that it was tied to Creative Cloud, we communicated that it was not a bug, but that Backblaze was simply a piece of software affected by the Adobe issue. Why was that? It turned out that the files Creative Cloud was deleting were the first files alphabetically found in the root directory. Because .bzvol is a hidden file that started with a “b,” odds were pretty good that if you had Backblaze installed, our .bzvol would be the file that was deleted and the resulting error would alert you of the problem. Backblaze was serving as a canary for a larger problem happening on machines everywhere.

Adobe warning tweet

Adobe Twitter Warnings

We also realized that it wasn’t just Backblaze customers experiencing this. Anyone using Creative Cloud would be affected. They just might not have known their files were deleted silently, since they wouldn’t get the .bzvol pop-up that our customers got.

As the week wore on, our social and support channels were blowing up. We started creating and tweeting videos of how the issue was manifesting and how people could avoid it, and we contacted Adobe with our videos, trying to explain to them what was going on.

Spike in mentions

Spike In Mentions

Mentions around Adobe

Mentions Around Adobe

What did we gain by being proactive and communicative? By February 14th, Adobe had both acknowledged and fixed the issue, releasing an update that wouldn’t silently delete data. We even got a mention in their FAQ on the subject. Plus, because we are lucky enough to have active followers who pay attention to what we post, they were gracious enough to help us spread the message more quickly. In the end we gained the appreciation of our customers and blog readers. While that’s not necessarily a monetary victory, it did reinforce the core strengths of our brand: transparency, empathy, and efficiency. The comments on that post confirmed that we did the right thing by being communicative.

Community response

Community Response On The Blog

CrashPlan’s Exits Consumer — A Strong Community Drives Your Business

On August 22nd, 2017, CrashPlan announced the end of their consumer backup service, shifting focus to their enterprise and SMB offerings. This was rather shocking news to us since CrashPlan was our largest competitor in the online backup space and one that we would send folks to when we weren’t a good fit for their particular need. The news broke early in the morning and our team started to scramble, brainstorming on how we could put ourselves in the best position possible for all of the CrashPlan refugees who were waking up to news of their online backup service going away.

To their credit, CrashPlan tried to communicate with their customers, giving them a couple different options, including a discounted first-year rate with a competitor. We had to move quickly if we wanted to win over some of the people who were going to start looking for alternatives. We did the only thing that made sense: we wrote a blog post.

Within hours of the announcement, we were able to write and publish our post, an Invitation for CrashPlan Customers. It reaffirmed our commitment to unlimited online backup for consumers (something that we see less and less of as tiered and complicated services sprout up) and listed the reasons we thought we’d be a good match for individuals who had used CrashPlan in the past. The initial post highlighted some of our favorite features, the reasons why people love us, and touched on the difference between syncing and backup. We felt that last part was important because we had seen a few tweets that morning of people stating “well at least I have Dropbox” and we wanted to make sure they were aware of the differences before making a possibly costly mistake.

CrashPlan blog post readership

CrashPlan Blog Post Readership

The blog post was widely circulated almost immediately, with over 60,000 people reading it in the first month (it still receives hundreds of visits per day). Once the blog post was rolling we got to work on the next phase of our plan. Phase two was putting the blog post front and center on our computer backup website, creating FAQs based on common questions we were seeing, and writing a guide on how to migrate data from CrashPlan. We also added the ability for folks to create a reminder for themselves once their existing CrashPlan license was started expiring, with instructions on migrating.

While phase two was proceeding, I was hard at work on the social. It was my job to stoke the fire while being respectful. That meant not piling on and being a good community steward by sharing the CrashPlan post and our Version 5.0 release notes (fortuitously released a few weeks prior), which touted faster backup speeds and file sharing. While Twitter was heating up, I was also actively involved in threads on HackerNews and Reddit. Backblaze’s CTO Brian Wilson and I were hard at work making sure that anyone who had questions on the web was responded to.

It’s important to be gracious to your competitors. There’s always someone on the other end of the screen and it was paramount to remember that while we were having a good day, others were having a bad day. To that end, I sent an edible arrangement that day to CrashPlan’s support team, because I knew what it felt like to be having a horrible day in the court of public opinion. Again, we’re all on the same team: get people’s data backed up. I was later told that the gesture was greatly appreciated.

The following are some examples of my Twitter efforts trying to attract customers, having fun, but also being gracious:

What was the benefit? We’ve seen almost a 2x increase in the number of sign-ups that we get for our computer backup service. Not only that, but it has also helped drive almost 50% annual revenue growth this year.

In time sensitive situations, being agile, efficient, and having the ability to execute surgically on a series of tasks can have tremendous impact on the overall business. It’s all about catching the wave at the right time. I’m lucky enough to have the latitude to make decisions about how best to approach things when in the thick of it. That lets me move quickly without having to go up the chain and wait a long time for approvals, which helps the conversation flow more naturally and allows me to stay engaged.

Insight #5

Here’s some advice on competition — it’s important not to pile on. When competitors are having a bad day, attempting to pour gasoline on their fire is considered distasteful and will likely not be taken well by your community. It’s one thing to see and interact with people mentioning or asking questions about you in the comments. It’s entirely different to rub a competitor’s nose in the dirt. Being a jerk online is not only mean but reflects poorly on a company’s brand. Remember that on the other end of every computer is a person who has to deal with their own corporate and social fallout. Treat them the way you’d want to be treated in a crisis situation. We’re all in this together.

Fin

Congratulations on making it to the end! I hope this post was not just verbose, but also helpful. Do you have any social media tips or tricks that have helped you grow your brand? Have questions about our approach? Let’s chat below in the comments!

The post Making Lemonade: The Importance of Social Media and Community appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Tackling climate change and helping the community

Post Syndicated from Alex Bate original https://www.raspberrypi.org/blog/fair-haven-weather-station/

In today’s guest post, seventh-grade students Evan Callas, Will Ross, Tyler Fallon, and Kyle Fugate share their story of using the Raspberry Pi Oracle Weather Station in their Innovation Lab class, headed by Raspberry Pi Certified Educator Chris Aviles.

Raspberry Pi Certified Educator Chris Aviles Innovation Lab Oracle Weather Station

United Nations Sustainable Goals

The past couple of weeks in our Innovation Lab class, our teacher, Mr Aviles, has challenged us students to design a project that helps solve one of the United Nations Sustainable Goals. We chose Climate Action. Innovation Lab is a class that gives students the opportunity to learn about where the crossroads of technology, the environment, and entrepreneurship meet. Everyone takes their own paths in innovation and learns about the environment using project-based learning.

Raspberry Pi Certified Educator Chris Aviles Innovation Lab Oracle Weather Station

Raspberry Pi Oracle Weather Station

For our climate change challenge, we decided to build a Raspberry Pi Oracle Weather Station. Tackling the issues of climate change in a way that helps our community stood out to us because we knew with the help of this weather station we can send the local data to farmers and fishermen in town. Recent changes in climate have been affecting farmers’ crops. Unexpected rain, heat, and other unusual weather patterns can completely destabilize the natural growth of the plants and destroy their crops altogether. The amount of labour output needed by farmers has also significantly increased, forcing farmers to grow more food on less resources. By using our Raspberry Pi Oracle Weather Station to alert local farmers, they can be more prepared and aware of the weather, leading to better crops and safe boating.

Raspberry Pi Certified Educator Chris Aviles Innovation Lab Oracle Weather Station

Growing teamwork and coding skills

The process of setting up our weather station was fun and simple. Raspberry Pi made the instructions very easy to understand and read, which was very helpful for our team who had little experience in coding or physical computing. We enjoyed working together as a team and were happy to be growing our teamwork skills.

Once we constructed and coded the weather station, we learned that we needed to support the station with PVC pipes. After we completed these steps, we brought the weather station up to the roof of the school and began collecting data. Our information is currently being sent to the Initial State dashboard so that we can share the information with anyone interested. This information will also be recorded and seen by other schools, businesses, and others from around the world who are using the weather station. For example, we can see the weather in countries such as France, Greece and Italy.

Raspberry Pi Certified Educator Chris Aviles Innovation Lab Oracle Weather Station

Raspberry Pi allows us to build these amazing projects that help us to enjoy coding and physical computing in a fun, engaging, and impactful way. We picked climate change because we care about our community and would like to make a substantial contribution to our town, Fair Haven, New Jersey. It is not every day that kids are given these kinds of opportunities, and we are very lucky and grateful to go to a school and learn from a teacher where these opportunities are given to us. Thanks, Mr Aviles!

To see more awesome projects by Mr Avile’s class, you can keep up with him on his blog and follow him on Twitter.

The post Tackling climate change and helping the community appeared first on Raspberry Pi.

Early Challenges: Making Critical Hires

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/early-challenges-making-critical-hires/

row of potential employee hires sitting waiting for an interview

In 2009, Google disclosed that they had 400 recruiters on staff working to hire nearly 10,000 people. Someday, that might be your challenge, but most companies in their early days are looking to hire a handful of people — the right people — each year. Assuming you are closer to startup stage than Google stage, let’s look at who you need to hire, when to hire them, where to find them (and how to help them find you), and how to get them to join your company.

Who Should Be Your First Hires

In later stage companies, the roles in the company have been well fleshed out, don’t change often, and each role can be segmented to focus on a specific area. A large company may have an entire department focused on just cubicle layout; at a smaller company you may not have a single person whose actual job encompasses all of facilities. At Backblaze, our CTO has a passion and knack for facilities and mostly led that charge. Also, the needs of a smaller company are quick to change. One of our first hires was a QA person, Sean, who ended up being 100% focused on data center infrastructure. In the early stage, things can shift quite a bit and you need people that are broadly capable, flexible, and most of all willing to pitch in where needed.

That said, there are times you may need an expert. At a previous company we hired Jon, a PhD in Bayesian statistics, because we needed algorithmic analysis for spam fighting. However, even that person was not only able and willing to do the math, but also code, and to not only focus on Bayesian statistics but explore a plethora of spam fighting options.

When To Hire

If you’ve raised a lot of cash and are willing to burn it with mistakes, you can guess at all the roles you might need and start hiring for them. No judgement: that’s a reasonable strategy if you’re cash-rich and time-poor.

If your cash is limited, try to see what you and your team are already doing and then hire people to take those jobs. It may sound counterintuitive, but if you’re already doing it presumably it needs to be done, you have a good sense of the type of skills required to do it, and you can bring someone on-board and get them up to speed quickly. That then frees you up to focus on tasks that can’t be done by someone else. At Backblaze, I ran marketing internally for years before hiring a VP of Marketing, making it easier for me to know what we needed. Once I was hiring, my primary goal was to find someone I could trust to take that role completely off of me so I could focus solely on my CEO duties

Where To Find the Right People

Finding great people is always difficult, particularly when the skillsets you’re looking for are highly in-demand by larger companies with lots of cash and cachet. You, however, have one massive advantage: you need to hire 5 people, not 5,000.

People You Worked With

The absolutely best people to hire are ones you’ve worked with before that you already know are good in a work situation. Consider your last job, the one before, and the one before that. A significant number of the people we recruited at Backblaze came from our previous startup MailFrontier. We knew what they could do and how they would fit into the culture, and they knew us and thus could quickly meld into the environment. If you didn’t have a previous job, consider people you went to school with or perhaps individuals with whom you’ve done projects previously.

People You Know

Hiring friends, family, and others can be risky, but should be considered. Sometimes a friend can be a “great buddy,” but is not able to do the job or isn’t a good fit for the organization. Having to let go of someone who is a friend or family member can be rough. Have the conversation up front with them about that possibility, so you have the ability to stay friends if the position doesn’t work out. Having said that, if you get along with someone as a friend, that’s one critical component of succeeding together at work. At Backblaze we’ve hired a number of people successfully that were friends of someone in the organization.

Friends Of People You Know

Your network is likely larger than you imagine. Your employees, investors, advisors, spouses, friends, and other folks all know people who might be a great fit for you. Make sure they know the roles you’re hiring for and ask them if they know anyone that would fit. Search LinkedIn for the titles you’re looking for and see who comes up; if they’re a 2nd degree connection, ask your connection for an introduction.

People You Know About

Sometimes the person you want isn’t someone anyone knows, but you may have read something they wrote, used a product they’ve built, or seen a video of a presentation they gave. Reach out. You may get a great hire: worst case, you’ll let them know they were appreciated, and make them aware of your organization.

Other Places to Find People

There are a million other places to find people, including job sites, community groups, Facebook/Twitter, GitHub, and more. Consider where the people you’re looking for are likely to congregate online and in person.

A Comment on Diversity

Hiring “People You Know” can often result in “Hiring People Like You” with the same workplace experiences, culture, background, and perceptions. Some studies have shown [1, 2, 3, 4] that homogeneous groups deliver faster, while heterogeneous groups are more creative. Also, “Hiring People Like You” often propagates the lack of women and minorities in tech and leadership positions in general. When looking for people you know, keep an eye to not discount people you know who don’t have the same cultural background as you.

Helping People To Find You

Reaching out proactively to people is the most direct way to find someone, but you want potential hires coming to you as well. To do this, they have to a) be aware of you, b) know you have a role they’re interested in, and c) think they would want to work there. Let’s tackle a) and b) first below.

Your Blog

I started writing our blog before we launched the product and talked about anything I found interesting related to our space. For several years now our team has owned the content on the blog and in 2017 over 1.5 million people read it. Each time we have a position open it’s published to the blog. If someone finds reading about backup and storage interesting, perhaps they’d want to dig in deeper from the inside. Many of the people we’ve recruited have mentioned reading the blog as either how they found us or as a factor in why they wanted to work here.
[BTW, this is Gleb’s 200th post on Backblaze’s blog. The first was in 2008. — Editor]

Your Email List

In addition to the emails our blog subscribers receive, we send regular emails to our customers, partners, and prospects. These are largely focused on content we think is directly useful or interesting for them. However, once every few months we include a small mention that we’re hiring, and the positions we’re looking for. Often a small blurb is all you need to capture people’s imaginations whether they might find the jobs interesting or can think of someone that might fit the bill.

Your Social Involvement

Whether it’s Twitter or Facebook, Hacker News or Slashdot, your potential hires are engaging in various communities. Being socially involved helps make people aware of you, reminds them of you when they’re considering a job, and paints a picture of what working with you and your company would be like. Adam was in a Reddit thread where we were discussing our Storage Pods, and that interaction was ultimately part of the reason he left Apple to come to Backblaze.

Convincing People To Join

Once you’ve found someone or they’ve found you, how do you convince them to join? They may be currently employed, have other offers, or have to relocate. Again, while the biggest companies have a number of advantages, you might have more unique advantages than you realize.

Why Should They Join You

Here are a set of items that you may be able to offer which larger organizations might not:

Role: Consider the strengths of the role. Perhaps it will have broader scope? More visibility at the executive level? No micromanagement? Ability to take risks? Option to create their own role?

Compensation: In addition to salary, will their options potentially be worth more since they’re getting in early? Can they trade-off salary for more options? Do they get option refreshes?

Benefits: In addition to healthcare, food, and 401(k) plans, are there unique benefits of your company? One company I knew took the entire team for a one-month working retreat abroad each year.

Location: Most people prefer to work close to home. If you’re located outside of the San Francisco Bay Area, you might be at a disadvantage for not being in the heart of tech. But if you find employees close to you you’ve got a huge advantage. Sometimes it’s micro; even in the Bay Area the difference of 5 miles can save 20 minutes each way every day. We located the Backblaze headquarters in San Mateo, a middle-ground that made it accessible to those coming from San Jose and San Francisco. We also chose a downtown location near a train, restaurants, and cafes: all to make it easier and more pleasant. Also, are you flexible in letting your employees work remotely? Our systems administrator Elliott is about to embark on a long-term cross-country journey working from an RV.

Environment: Open office, cubicle, cafe, work-from-home? Loud/quiet? Social or focused? 24×7 or work-life balance? Different environments appeal to different people.

Team: Who will they be working with? A company with 100,000 people might have 100 brilliant ones you’d want to work with, but ultimately we work with our core team. Who will your prospective hires be working with?

Market: Some people are passionate about gaming, others biotech, still others food. The market you’re targeting will get different people excited.

Product: Have an amazing product people love? Highlight that. If you’re lucky, your potential hire is already a fan.

Mission: Curing cancer, making people happy, and other company missions inspire people to strive to be part of the journey. Our mission is to make storing data astonishingly easy and low-cost. If you care about data, information, knowledge, and progress, our mission helps drive all of them.

Culture: I left this for last, but believe it’s the most important. What is the culture of your company? Finding people who want to work in the culture of your organization is critical. If they like the culture, they’ll fit and continue it. We’ve worked hard to build a culture that’s collaborative, friendly, supportive, and open; one in which people like coming to work. For example, the five founders started with (and still have) the same compensation and equity. That started a culture of “we’re all in this together.” Build a culture that will attract the people you want, and convey what the culture is.

Writing The Job Description

Most job descriptions focus on the all the requirements the candidate must meet. While important to communicate, the job description should first sell the job. Why would the appropriate candidate want the job? Then share some of the requirements you think are critical. Remember that people read not just what you say but how you say it. Try to write in a way that conveys what it is like to actually be at the company. Ahin, our VP of Marketing, said the job description itself was one of the things that attracted him to the company.

Orchestrating Interviews

Much can be said about interviewing well. I’m just going to say this: make sure that everyone who is interviewing knows that their job is not only to evaluate the candidate, but give them a sense of the culture, and sell them on the company. At Backblaze, we often have one person interview core prospects solely for company/culture fit.

Onboarding

Hiring success shouldn’t be defined by finding and hiring the right person, but instead by the right person being successful and happy within the organization. Ensure someone (usually their manager) provides them guidance on what they should be concentrating on doing during their first day, first week, and thereafter. Giving new employees opportunities and guidance so that they can achieve early wins and feel socially integrated into the company does wonders for bringing people on board smoothly

In Closing

Our Director of Production Systems, Chris, said to me the other day that he looks for companies where he can work on “interesting problems with nice people.” I’m hoping you’ll find your own version of that and find this post useful in looking for your early and critical hires.

Of course, I’d be remiss if I didn’t say, if you know of anyone looking for a place with “interesting problems with nice people,” Backblaze is hiring. 😉

The post Early Challenges: Making Critical Hires appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Early Challenges: Managing Cash Flow

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/managing-cash-flow/

Cash flow projection charts

This post by Backblaze’s CEO and co-founder Gleb Budman is the eighth in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants
  7. The Decision on Transparency
  8. Early Challenges: Managing Cash Flow

Use the Join button above to receive notification of new posts in this series.

Running out of cash is one of the quickest ways for a startup to go out of business. When you are starting a company the question of where to get cash is usually the top priority, but managing cash flow is critical for every stage in the lifecycle of a company. As a primarily bootstrapped but capital-intensive business, managing cash flow at Backblaze was and still is a key element of our success and requires continued focus. Let’s look at what we learned over the years.

Raising Your Initial Funding

When starting a tech business in Silicon Valley, the default assumption is that you will immediately try to raise venture funding. There are certainly many advantages to raising funding — not the least of which is that you don’t need to be cash-flow positive since you have cash in the bank and the expectation is that you will have a “burn rate,” i.e. you’ll be spending more than you make.

Note: While you’re not expected to be cash-flow positive, that doesn’t mean you don’t have to worry about cash. Cash-flow management will determine your burn rate. Whether you can get to cash-flow breakeven or need to raise another round of funding is a direct byproduct of your cash flow management.

Also, raising funding takes time (most successful fundraising cycles take 3-6 months start-to-finish), and time at a startup is in short supply. Constantly trying to raise funding can take away from product development and pursuing growth opportunities. If you’re not successful in raising funding, you then have to either shut down or find an alternate method of funding the business.

Sources of Funding

Depending on the stage of the company, type of company, and other factors, you may have access to different sources of funding. Let’s list a number of them:

Customers

Sales — the best kind of funding. It is non-dilutive, doesn’t have to be paid back, and is a direct metric of the success of your company.

Pre-Sales — some customers may be willing to pay you for a product in beta, a test, or pre-pay for a product they’ll receive when finished. Pre-Sales income also is great because it shares the characteristics of cash from sales, but you get the cash early. It also can be a good sign that the product you’re building fills a market need. We started charging for Backblaze computer backup while it was still in private beta, which allowed us to not only collect cash from customers, but also test the billing experience and users’ real desire for the service.

Services — if you’re a service company and customers are paying you for that, great. You can effectively scale for the number of hours available in a day. As demand grows, you can add more employees to increase the total number of billable hours.

Note: If you’re a product company and customers are paying you to consult, that can provide much needed cash, and could provide feedback toward the right product. However, it can also distract from your core business, send you down a path where you’re building a product for a single customer, and addict you to a path that prevents you from building a scalable business.

Investors

Yourself — you likely are putting your time into the business, and deferring salary in the process. You may also put your own cash into the business either as an investment or a loan.

Angels — angels are ideal as early investors since they are used to investing in businesses with little to no traction. AngelList is a good place to find them, though finding people you’re connected with through someone that knows you well is best.

Crowdfunding — a component of the JOBS Act permitted entrepreneurs to raise money from nearly anyone since May 2016. The SEC imposes limits on both investors and the companies. This article goes into some depth on the options and sites available.

VCs — VCs are ideal for companies that need to raise at least a few million dollars and intend to build a business that will be worth over $1 billion.

Debt

Friends & Family — F&F are often the first people to give you money because they are investing in you. It’s great to have some early supporters, but it also can be risky to take money from people who aren’t used to the risks. The key advice here is to only take money from people who won’t mind losing it. If someone is talking about using their children’s college funds or borrowing from their 401k, say ‘no thank you’ — even if they’re sure they want to loan you money.

Bank Loans — a variety of loan types exist, but most either require the company to have been operational for a couple years, be able to borrow against money the company has or is making, or be able to get a personal guarantee from the founders whereby their own credit is on the line. Fundera provides a good overview of loan options and can help secure some, but most will not be an option for a brand new startup.

Grants

Government — in some areas there is the potential for government grants to facilitate research. The SBIR program facilitates some such grants.

At Backblaze, we used a number of these options:

• Investors/Yourself
We loaned a cumulative total of a couple hundred thousand dollars to the company and invested our time by going without a salary for a year and a half.
• Customers/Pre-Sales
We started selling the Backblaze service while it was still in beta.
• Customers/Sales
We launched v1.0 and kept selling.
• Investors/Angels
After a year and a half, we raised $370k from 11 angels. All of them were either people whom we knew personally or were a strong recommendation from a mutual friend.
• Debt/Loans
After a couple years we were able to get equipment leases whereby the Storage Pods and hard drives were used as collateral to secure the lease on them.
• Investors/VCs
Ater five years we raised $5m from TMT Investments to add to the balance sheet and invest in growth.

The variety and quantity of sources we used is by no means uncommon.

GAAP vs. Cash

Most companies start tracking financials based on cash, and as they scale they switch to GAAP (Generally Accepted Accounting Principles). Cash is easier to track — we got paid $XXXX and spent $YYY — and as often mentioned, is required for the business to stay alive. GAAP has more subtlety and complexity, but provides a clearer picture of how the business is really doing. Backblaze was on a ‘cash’ system for the first few years, then switched to GAAP. For this post, I’m going to focus on things that help cash flow, not GAAP profitability.

Stages of Cash Flow Management

All-spend

In a pure service business (e.g. solo proprietor law firm), you may have no expenses other than your time, so this stage doesn’t exist. However, in a product business there is a period of time where you are building the product and have nothing to sell. You have zero cash coming in, but have cash going out. Your cash-flow is completely negative and you need funds to cover that.

Sales-generating

Starting to see cash come in from customers is thrilling. I initially had our system set up to email me with every $5 payment we received. You’re making sales, but not covering expenses.

Ramen-profitable

But it takes a lot of $5 payments to pay for servers and salaries, so for a while expenses are likely to outstrip sales. Getting to ramen-profitable is a critical stage where sales cover the business expenses and are “paying enough for the founders to eat ramen.” This extends the runway for a business, but is not completely sustainable, since presumably the founders can’t (or won’t) live forever on a subsistence salary.

Business-profitable

This is the ultimate stage whereby the business is truly profitable, including paying everyone market-rate salaries. A business at this stage is self-sustaining. (Of course, market shifts and plenty of other challenges can kill the business, but cash-flow issues alone will not.)

Note, I’m using the word ‘profitable’ here to mean this is still on a cash-basis.

Backblaze was in the all-spend stage for just over a year, during which time we built the service and hadn’t yet made the service available to customers. Backblaze was in the sales-generating stage for nearly another year before the company was barely ramen-profitable where sales were covering the company expenses and paying the founders minimum wage. (I say ‘barely’ since minimum wage in the SF Bay Area is arguably never subsistence.) It took almost three more years before the company was business-profitable, paying everyone including the founders market-rate.

Cash Flow Forecasting

When raising funding it’s helpful to think of milestones reached. You don’t necessarily need enough cash on day one to last for the next 100 years of the company. Some good milestones to consider are how much cash you need to prove there is a market need, prove you can build a product to meet that need, or get to ramen-profitable.

Two things to consider:

1) Unit Economics (COGS)

If your product is 100% software, this may not be relevant. Once software is built it costs effectively nothing to deliver the product to one customer or one million customers. However, in most businesses there is some incremental cost to provide the product. If you’re selling a hardware device, perhaps you sell it for $100 but it costs you $50 to make it. This is called “COGS” (Cost of Goods Sold).

Many products rely on cloud services where the costs scale with growth. That model works great, but it’s still important to understand what the costs are for the cloud service you use per unit of product you sell.

Support is often done by the founders early-on in a business, but that is another real cost to factor in and estimate on a per-user basis. Taking all of the per unit costs combined, you may charge $10/month/user for your service, but if it costs you $7/month/user in cloud services, you’re only netting $3/month/user.

2) Operating Expenses (OpEx)

These are expenses that don’t scale with the number of product units you sell. Typically this includes research & development, sales & marketing, and general & administrative expenses. Presumably there is a certain level of these functions required to build the product, market it, sell it, and run the organization. You can choose to invest or cut back on these, but you’ll still make the same amount per product unit.

Incremental Net Profit Per Unit

If you’ve calculated your COGS and your unit economics are “upside down,” where the amount you charge is less than that it costs you to provide your service, it’s worth thinking hard about how that’s going to change over time. If it will not change, there is no scale that will make the business work. Presuming you do make money on each unit of product you sell — what is sometimes referred to as “Contribution Margin” — consider how many of those product units you need to sell to cover your operating expenses as described above.

Calculating Your Profit

The math on getting to ramen-profitable is simple:

(Number of Product Units Sold x Contribution Margin) - Operating Expenses = Profit

If your operating expenses include subsistence salaries for the founders and profit > $0, you’re ramen-profitable.

Improving Cash Flow

Having access to sources of cash, whether from selling to customers or other methods, is excellent. But needing less cash gives you more choices and allows you to either dilute less, owe less, or invest more.

There are two ways to improve cash flow:

1) Collect More Cash

The best way to collect more cash is to provide more value to your customers and as a result have them pay you more. Additional features/products/services can allow this. However, you can also collect more cash by changing how you charge for your product. If you have a subscription, changing from charging monthly to yearly dramatically improves your cash flow. If you have a product that customers use up, selling a year’s supply instead of selling them one-by-one can help.

2) Spend Less Cash

Reducing COGS is a fantastic way to spend less cash in a scalable way. If you can do this without harming the product or customer experience, you win. There are a myriad of ways to also reduce operating expenses, including taking sub-market salaries, using your home instead of renting office space, staying focused on your core product, etc.

Ultimately, collecting more and spending less cash dramatically simplifies the process of getting to ramen-profitable and later to business-profitable.

Be Careful (Why GAAP Matters)

A word of caution: while running out of cash will put you out of business immediately, overextending yourself will likely put you out of business not much later. GAAP shows how a business is really doing; cash doesn’t. If you only focus on cash, it is possible to commit yourself to both delivering products and repaying loans in the future in an unsustainable fashion. If you’re taking out loans, watch the total balance and monthly payments you’re committing to. If you’re asking customers for pre-payment, make sure you believe you can deliver on what they’ve paid for.

Summary

There are numerous challenges to building a business, and ensuring you have enough cash is amongst the most important. Having the cash to keep going lets you keep working on all of the other challenges. The frameworks above were critical for maintaining Backblaze’s cash flow and cash balance. Hopefully you can take some of the lessons we learned and apply them to your business. Let us know what works for you in the comments below.

The post Early Challenges: Managing Cash Flow appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

The Decision on Transparency

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/transparency-in-business/

Backblaze transparency

This post by Backblaze’s CEO and co-founder Gleb Budman is the seventh in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants
  7. The Decision on Transparency

Use the Join button above to receive notification of new posts in this series.

“Are you crazy?” “Why would you do that?!” “You shouldn’t share that!”

These are just a few of the common questions and comments we heard after posting some of the information we have shared over the years. So was it crazy? Misguided? Should you do it?

With that background I’d like to dig into the decision to become so transparent, from releasing stats on hard drive failures, to storage pod specs, to publishing our cloud storage costs, and open sourcing the Reed-Solomon code. What was the thought process behind becoming so transparent when most companies work so hard to hide their inner workings, especially information such as the Storage Pod specs that would normally be considered a proprietary advantage? Most importantly I’d like to explore the positives and negatives of being so transparent.

Sharing Intellectual Property

The first “transparency” that garnered a flurry of “why would you share that?!” came as a result of us deciding to open source our Storage Pod design: publishing the specs, parts, prices, and how to build it yourself. The Storage Pod was a key component of our infrastructure, gave us a cost (and thus competitive) advantage, took significant effort to develop, and had a fair bit of intellectual property: the “IP.”

The negatives of sharing this are obvious: it allows our competitors to use the design to reduce our cost advantage, and it gives away the IP, which could be patentable or have value as a trade secret.

The positives were certainly less obvious, and at the time we couldn’t have guessed how massive they would be.

We wrestled with the decision: prospective users and others online didn’t believe we could offer our service for such a low price, thinking that we would burn through some cash hoard and then go out of business. We wanted to reassure them, but how?

This is how our response evolved:

We’ve built a lower cost storage platform.
But why would anyone believe us?
Because, we’ve designed our own servers and they’re less expensive.
But why would anyone believe they were so low cost and efficient?
Because here’s how much they cost versus others.
But why would anyone believe they cost that little and still enabled us to efficiently store data?
Because here are all the components they’re made of, this is how to build them, and this is how they work.
Ok, you can’t argue with that.

Great — so that would reassure people. But should we do this? Is it worth it?

This was 2009, we were a tiny company of seven people working from our co-founder’s one-bedroom apartment. We decided that the risk of not having potential customers trust us was more impactful than the risk of our competitors possibly deciding to use our server architecture. The former might kill the company in short order; the latter might make it harder for us to compete in the future. Moreover, we figured that most competitors were established on their own platforms and were unlikely to switch to ours, even if it were better.

Takeaway: Build your brand today. There are no assurances you will make it to tomorrow if you can’t make people believe in you today.

A Sharing Success Story — The Backblaze Storage Pod

So with that, we decided to publish everything about the Storage Pod. As for deciding to actually open source it? That was a ‘thank you’ to the open source community upon whose shoulders we stood as we used software such as Linux, Tomcat, etc.

With eight years of hindsight, here’s what happened:

As best as I can tell, none of our direct competitors ever used our Storage Pod design, opting instead to continue paying more for commercial solutions.

  • Hundreds of press articles have been written about Backblaze as a direct result of sharing the Storage Pod design.
  • Millions of people have read press articles or our blog posts about the Storage Pods.
  • Backblaze was established as a storage tech thought leader, and a resource for those looking for information in the space.
  • Our blog became viewed as a resource, not a corporate mouthpiece.
  • Recruiting has been made easier through the awareness of Backblaze, the appreciation for us taking on challenging tech problems in interesting ways, and for our openness.
  • Sourcing for our Storage Pods has become easier because we can point potential vendors to our blog posts and say, “here’s what we need.”

And those are just the direct benefits for us. One of the things that warms my heart is that doing this has helped others:

  • Several companies have started selling servers based on our Storage Pod designs.
  • Netflix credits Backblaze with being the inspiration behind their CDN servers.
  • Many schools, labs, and others have shared that they’ve been able to do what they didn’t think was possible because using our Storage Pod designs provided lower-cost storage.
  • And I want to believe that in general we pushed forward the development of low-cost storage servers in the industry.

So overall, the decision on being transparent and sharing our Storage Pod designs was a clear win.

Takeaway: Never underestimate the value of goodwill. It can help build new markets that fuel your future growth and create new ecosystems.

Sharing An “Almost Acquisition”

Acquisition announcements are par for the course. No company, however, talks about the acquisition that fell through. If rumors appear in the press, the company’s response is always, “no comment.” But in 2010, when Backblaze was almost, but not acquired, we wrote about it in detail. Crazy?

The negatives of sharing this are slightly less obvious, but the two issues most people worried about were, 1) the fact that the company could be acquired would spook customers, and 2) the fact that it wasn’t would signal to potential acquirers that something was wrong.

So, why share this at all? No one was asking “did you almost get acquired?”

First, we had established a culture of transparency and this was a significant event that occurred for us, thus we defaulted to assuming we would share. Second, we learned that acquisitions fall through all the time, not just during the early fishing stage, but even after term sheets are signed, diligence is done, and all the paperwork is complete. I felt we had learned some things about the process that would be valuable to others that were going through it.

As it turned out, we received emails from startup founders saying they saved the post for the future, and from lawyers, VCs, and advisors saying they shared them with their portfolio companies. Among the most touching emails I received was from a founder who said that after an acquisition fell through she felt so alone that she became incredibly depressed, and that reading our post helped her see that this happens and that things could be OK after. Being transparent about almost getting acquired was worth it just to help that one founder.

And what about the concerns? As for spooking customers, maybe some were — but our sign-ups went up, not down, afterward. Any company can be acquired, and many of the world’s largest have been. That we were being both thoughtful about where to go with it, and open about it, I believe gave customers a sense that we would do the right thing if it happened. And as for signaling to potential acquirers? The ones I’ve spoken with all knew this happens regularly enough that it’s not a factor.

Takeaway: Being open and transparent is also a form of giving back to others.

Sharing Strategic Data

For years people have been desperate to know how reliable are hard drives. They could go to Amazon for individual reviews, but someone saying “this drive died for me” doesn’t provide statistical insight. Google published a study that showed annualized drive failure rates, but didn’t break down the results by manufacturer or model. Since Backblaze has deployed about 100,000 hard drives to store customer data, we have been able to collect a wealth of data on the reliability of the drives by make, model, and size. Was Backblaze the only one with this data? Of course not — Google, Amazon, Microsoft, and any other cloud-scale storage provider tracked it. Yet none would publish. Should Backblaze?

Again, starting with the main negatives: 1) sharing which drives we liked could increase demand for them, thus reducing availability or increasing prices, and 2) publishing the data might make the drive vendors unhappy with us, thereby making it difficult for us to buy drives.

But we felt that the largest drive purchasers (Amazon, Google, etc.) already had their own stats and would buy the drives they chose, and if individuals or smaller companies used our stats, they wouldn’t sufficiently move the overall market demand. Also, we hoped that the drive companies would see that we were being fair in our analysis and, if anything, would leverage our data to make drives even better.

Again, publishing the data resulted in tremendous value for Backblaze, with millions of people having read the analysis that we put out quarterly. Also, becoming known as the place to go for drive reliability information is a natural fit with being a backup and storage provider. In addition, in a twist from many people’s expectations, some of the drive companies actually started working closer with us, seeing that we could be a good source of data for them as feedback. We’ve also seen many individuals and companies make more data-based decisions on which drives to buy, and researchers have used the data for a variety of analyses.

traffic spike from hard drive reliability post

Backblaze blog analytics showing spike in readership after a hard drive stats post

Takeaway: Being open and transparent is rarely as risky as it seems.

Sharing Revenue (And Other Metrics)

Journalists always want to publish company revenue and other metrics, and private companies always shy away from sharing. For a long time we did, too. Then, we opened up about that, as well.

The negatives of sharing these numbers are: 1) external parties may otherwise perceive you’re doing better than you are, 2) if you share numbers often, you may show that growth has slowed or worse, 3) it gives your competitors info to compare their own business too.

We decided that, while some may have perceived we were bigger, our scale was plenty significant. Since we choose what we share and when, it’s up to us whether to disclose at any point. And if our competitors compare, what will they actually change that would affect us?

I did wait to share revenue until I felt I had the right person to write about it. At one point a journalist said she wouldn’t write about us unless I disclosed revenue. I suggested we had a lot to offer for the story, but didn’t want to share revenue yet. She refused to budge and I walked away from the article. Several year later, I reached out to a journalist who had covered Backblaze before and I felt understood our business and offered to share revenue with him. He wrote a deep-dive about the company, with revenue being one of the components of the story.

Sharing these metrics showed that we were at scale and running a real business, one with positive unit economics and margins, but not one where we were gouging customers.

Takeaway: Being open with the press about items typically not shared can be uncomfortable, but the press can amplify your story.

Should You Share?

For Backblaze, I believe the results of transparency have been staggering. However, it’s not for everyone. Apple has, clearly, been wildly successful taking secrecy to the extreme. In their case, early disclosure combined with the long cycle of hardware releases could significantly impact sales of current products.

“For Backblaze, I believe the results of transparency have been staggering.” — Gleb Budman

I will argue, however, that for most startups transparency wins. Most startups need to establish credibility and trust, build awareness and a fan base, show that they understand what their customers need and be useful to them, and show the soul and passion behind the company. Some startup companies try to buy these virtues with investor money, and sometimes amplifying your brand via paid marketing helps. But, authentic transparency can build awareness and trust not only less expensively, but more deeply than money can buy.

Backblaze was open from the beginning. With no outside investors, as founders we were able to express ourselves and make our decisions. And it’s easier to be a company that shares if you do it from the start, but for any company, here are a few suggestions:

  1. Ask about sharing: If something significant happens — good or bad — ask “should we share this?” If you made a tough decision, ask “should we share the thinking behind the decision and why it was tough?”
  2. Default to yes: It’s often scary to share, but look for the reasons to say ‘yes,’ not the reasons to say ‘no.’ That doesn’t mean you won’t sometimes decide not to, but make that the high bar.
  3. Minimize reviews: Press releases tend to be sanitized and boring because they’ve been endlessly wordsmithed by committee. Establish the few things you don’t want shared, but minimize the number of people that have to see anything else before it can go out. Teach, then trust.
  4. Engage: Sharing will result in comments on your blog, social, articles, etc. Reply to people’s questions and engage. It’ll make the readers more engaged and give you a better understanding of what they’re looking for.
  5. Accept mistakes: Things will become public that aren’t perfectly sanitized. Accept that and don’t punish people for oversharing.

Building a culture of a company that is open to sharing takes time, but continuous practice will build that, and over time the company will navigate its voice and approach to sharing.

The post The Decision on Transparency appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Improved Search for Backblaze’s Blog

Post Syndicated from Roderick Bauer original https://www.backblaze.com/blog/using-relevannssi-wordpress-search/

Improved Search for Backblaze's Blog
Search has become the most powerful method to find content on the Web, both for finding websites themselves and for discovering information within websites. Our blog readers find content in both ways — using Google, Bing, Yahoo, Ask, DuckDuckGo, and other search engines to follow search results directly to our blog, and using the site search function once on our blog to find content in the blog posts themselves.

There’s a Lot of Great Content on the Backblaze Blog

Backblaze’s CEO Gleb Budman wrote the first post for this blog in March of 2008. Since that post there have been 612 more. There’s a lot of great content on this blog, as evidenced by the more than two million page views we’ve had since the beginning of this year. We typically publish two blog posts per week on a variety of topics, but we focus primarily on cloud storage technology and data backup, company news, and how-to articles on how to use cloud storage and various hardware and software solutions.

Earlier this year we initiated a series of posts on entrepreneurship by our CEO and co-founder, Gleb Budman, which has proven tremendously popular. We also occasionally publish something a little lighter, such as our current Halloween video contest — there’s still time to enter!

Blog search box

The Site Search Box — Your gateway to Backblaze blog content

We Could do a Better Job of Helping You Find It

I joined Backblaze as Content Director in July of this year. During the application process, I spent quite a bit of time reading through the blog to understand the company, the market, and its customers. That’s a lot of reading. I used the site search many times to uncover topics and posts, and discovered that site search had a number of weaknesses that made it less-than-easy to find what I was looking for.

These site search weaknesses included:

Searches were case sensitive
Visitor could easily miss content capitalized differently than the search terms
Results showed no date or author information
Visitor couldn’t tell how recent the post was or who wrote it
Search terms were not highlighted in context
Visitor had to scrutinize the results to find the terms in the post
No indication of the number of results or number of pages of results
Visitor didn’t know how fruitful the search was
No record of search terms used by visitors
We couldn’t tell what our visitors were searching for!

I wanted to make it easier for blog visitors to find all the great content on the Backblaze blog and help me understand what our visitors are searching for. To do that, we needed to upgrade our site search.

I started with a list of goals I wanted for site search.

  1. Make it easier to find content on the blog
  2. Provide a summary of what was found
  3. Search the comments as well as the posts
  4. Highlight the search terms in the results to help find them in context
  5. Provide a record of searches to help me understand what interests our readers

I had the goals, now how could I find a solution to achieve them?

Our blog is built on WordPress, which has a built-in site search function that could be described as simply adequate. The most obvious of its limitations is that search results are listed chronologically, not based on “most popular,” most occurring,” or any other metric that might make the result more relevant to your interests.

The Search for Improved (Site) Search

An obvious choice to improve site search would be to adopt Google Site Search, as many websites and blogs have done. Unfortunately, I quickly discovered that Google is sunsetting Site Search by April of 2018. That left the choice among a number of third-party services or WordPress-specific solutions. My immediate inclination was to see what is available specifically for WordPress.

There are a handful of search plugins for WordPress. One stood out to me for the number of installations (100,000+) and overwhelmingly high reviews: Relevanssi. Still, I had a number of questions. The first question was whether the plugin retained any search data from our site — I wanted to make sure that the privacy of our visitors is maintained, and even harvesting anonymous search data would not be acceptable to Backblaze. I wrote to the developer and was pleased by the responsiveness from Relevanssi’s creator, Mikko Saari. He explained to me that Relevanssi doesn’t have access to any of the search data from the sites using his plugin. Receiving a quick response from a developer is always a good sign. Other signs of a good WordPress plugin are recent updates and an active support forum.

Our solution: Relevanssi for Site Search

The WordPress plugin Relevanssi met all of our criteria, so we installed the plugin and switched to using it for site search in September.

In addition to solving the problems listed above, our search results are now displayed based on relevance instead of date, which is the default behavior of WordPress search. That capability is very useful on our blog where a lot of the content from years ago is still valuable — often called evergreen content. The new site search also enables visitors to search using the boolean expressions AND and OR. For example, a visitor can search for “seagate AND drive,” and see results that only include both words. Alternatively, a visitor can search for “seagate OR drive” and see results that include either word.

screenshot of relevannssi wordpress search results

Search results showing total number of results, hits and their location, and highlighted search terms in context

Visitors can put search terms in quotation marks to search for an entire phrase. For example, a visitor can search for “2016 drive stats” and see results that include only that exact phrase. In addition, the site search results come with a summary, showing where the results were found (title, post, or comments). Search terms are highlighted in yellow in the content, showing exactly where the search result was found.

Here’s an example of a popular post that shows up in searches. Hard Drive Stats for Q1 2017 was published on May 9, 2017. Since September 4, it has shown up over 150 times in site searches and in the last 90 days in has been viewed over 53,000 times on our blog.

Hard Drive Stats for Q1 2017

The Results Tell the Story

Since initiating the new search on our blog on September 4, there have been almost 23,000 site searches conducted, so we know you are using it. We’ve implemented pagination for the blog feed and search results so you know how many pages of results there are and made it easier to navigate to them.

Now that we have this site search data, you likely are wondering which are the most popular search terms on our blog. Here are some of the top searches:

What Do You Search For?

Please tell us how you use site search and whether there are any other capabilities you’d like to see that would make it easier to find content on our blog.

The post Improved Search for Backblaze’s Blog appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

How to Compete with Giants

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/how-to-compete-with-giants/

How to Compete with Giants

This post by Backblaze’s CEO and co-founder Gleb Budman is the sixth in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants

Use the Join button above to receive notification of new posts in this series.

Perhaps your business is competing in a brand new space free from established competitors. Most of us, though, start companies that compete with existing offerings from large, established companies. You need to come up with a better mousetrap — not the first mousetrap.

That’s the challenge Backblaze faced. In this post, I’d like to share some of the lessons I learned from that experience.

Backblaze vs. Giants

Competing with established companies that are orders of magnitude larger can be daunting. How can you succeed?

I’ll set the stage by offering a few sets of giants we compete with:

  • When we started Backblaze, we offered online backup in a market where companies had been offering “online backup” for at least a decade, and even the newer entrants had raised tens of millions of dollars.
  • When we built our storage servers, the alternatives were EMC, NetApp, and Dell — each of which had a market cap of over $10 billion.
  • When we introduced our cloud storage offering, B2, our direct competitors were Amazon, Google, and Microsoft. You might have heard of them.

What did we learn by competing with these giants on a bootstrapped budget? Let’s take a look.

Determine What Success Means

For a long time Apple considered Apple TV to be a hobby, not a real product worth focusing on, because it did not generate a billion in revenue. For a $10 billion per year revenue company, a new business that generates $50 million won’t move the needle and often isn’t worth putting focus on. However, for a startup, getting to $50 million in revenue can be the start of a wildly successful business.

Lesson Learned: Don’t let the giants set your success metrics.

The Advantages Startups Have

The giants have a lot of advantages: more money, people, scale, resources, access, etc. Following their playbook and attacking head-on means you’re simply outgunned. Common paths to failure are trying to build more features, enter more markets, outspend on marketing, and other similar approaches where scale and resources are the primary determinants of success.

But being a startup affords many advantages most giants would salivate over. As a nimble startup you can leverage those to succeed. Let’s breakdown nine competitive advantages we’ve used that you can too.

1. Drive Focus

It’s hard to build a $10 billion revenue business doing just one thing, and most giants have a broad portfolio of businesses, numerous products for each, and targeting a variety of customer segments in multiple markets. That adds complexity and distributes management attention.

Startups get the benefit of having everyone in the company be extremely focused, often on a singular mission, product, customer segment, and market. While our competitors sell everything from advertising to Zantac, and are investing in groceries and shipping, Backblaze has focused exclusively on cloud storage. This means all of our best people (i.e. everyone) is focused on our cloud storage business. Where is all of your focus going?

Lesson Learned: Align everyone in your company to a singular focus to dramatically out-perform larger teams.

2. Use Lack-of-Scale as an Advantage

You may have heard Paul Graham say “Do things that don’t scale.” There are a host of things you can do specifically because you don’t have the same scale as the giants. Use that as an advantage.

When we look for data center space, we have more options than our largest competitors because there are simply more spaces available with room for 100 cabinets than for 1,000 cabinets. With some searching, we can find data center space that is better/cheaper.

When a flood in Thailand destroyed factories, causing the world’s supply of hard drives to plummet and prices to triple, we started drive farming. The giants certainly couldn’t. It was a bit crazy, but it let us keep prices unchanged for our customers.

Our Chief Cloud Officer, Tim, used to work at Adobe. Because of their size, any new product needed to always launch in a multitude of languages and in global markets. Once launched, they had scale. But getting any new product launched was incredibly challenging.

Lesson Learned: Use lack-of-scale to exploit opportunities that are closed to giants.

3. Build a Better Product

This one is probably obvious. If you’re going to provide the same product, at the same price, to the same customers — why do it? Remember that better does not always mean more features. Here’s one way we built a better product that didn’t require being a bigger company.

All online backup services required customers to choose what to include in their backup. We found that this was complicated for users since they often didn’t know what needed to be backed up. We flipped the model to back up everything and allow users to exclude if they wanted to, but it was not required. This reduced the number of features/options, while making it easier and better for the user.

This didn’t require the resources of a huge company; it just required understanding customers a bit deeper and thinking about the solution differently. Building a better product is the most classic startup competitive advantage.

Lesson Learned: Dig deep with your customers to understand and deliver a better mousetrap.

4. Provide Better Service

How can you provide better service? Use your advantages. Escalations from your customer care folks to engineering can go through fewer hoops. Fixing an issue and shipping can be quicker. Access to real answers on Twitter or Facebook can be more effective.

A strategic decision we made was to have all customer support people as full-time employees in our headquarters. This ensures they are in close contact to the whole company for feedback to quickly go both ways.

Having a smaller team and fewer layers enables faster internal communication, which increases customer happiness. And the option to do things that don’t scale — such as help a customer in a unique situation — can go a long way in building customer loyalty.

Lesson Learned: Service your customers better by establishing clear internal communications.

5. Remove The Unnecessary

After determining that the industry standard EMC/NetApp/Dell storage servers would be too expensive to build our own cloud storage upon, we decided to build our own infrastructure. Many said we were crazy to compete with these multi-billion dollar companies and that it would be impossible to build a lower cost storage server. However, not only did it prove to not be impossible — it wasn’t even that hard.

One key trick? Remove the unnecessary. While EMC and others built servers to sell to other companies for a wide variety of use cases, Backblaze needed servers that only Backblaze would run, and for a single use case. As a result we could tailor the servers for our needs by removing redundancy from each server (since we would run redundant servers), and using lower-performance components (since we would get high-performance by running parallel servers).

What do your customers and use cases not need? This can trim costs and complexity while often improving the product for your use case.

Lesson Learned: Don’t think “what can we add” to what the giants offer — think “what can we remove.”

6. Be Easy

How many times have you visited a large company website, particularly one that’s not consumer-focused, only to leave saying, “Huh? I don’t understand what you do.” Keeping your website clear, and your product and pricing simple, will dramatically increase conversion and customer satisfaction. If you’re able to make it 2x easier and thus increasing your conversion by 2x, you’ve just allowed yourself to spend ½ as much acquiring a customer.

Providing unlimited data backup wasn’t specifically about providing more storage — it was about making it easier. Since users didn’t know how much data they needed to back up, charging per gigabyte meant they wouldn’t know the cost. Providing unlimited data backup meant they could just relax.

Customers love easy — and being smaller makes easy easier to deliver. Use that as an advantage in your website, marketing materials, pricing, product, and in every other customer interaction.

Lesson Learned: Ease-of-use isn’t a slogan: it’s a competitive advantage. Treat it as seriously as any other feature of your product

7. Don’t Be Afraid of Risk

Obviously unnecessary risks are unnecessary, and some risks aren’t worth taking. However, large companies that have given guidance to Wall Street with a $0.01 range on their earning-per-share are inherently going to be very risk-averse. Use risk-tolerance to open up opportunities, and adjust your tolerance level as you scale. In your first year, there are likely an infinite number of ways your business may vaporize; don’t be too worried about taking a risk that might have a 20% downside when the upside is hockey stick growth.

Using consumer-grade hard drives in our servers may have caused pain and suffering for us years down-the-line, but they were priced at approximately 50% of enterprise drives. Giants wouldn’t have considered the option. Turns out, the consumer drives performed great for us.

Lesson Learned: Use calculated risks as an advantage.

8. Be Open

The larger a company grows, the more it wants to hide information. Some of this is driven by regulatory requirements as a public company. But most of this is cultural. Sharing something might cause a problem, so let’s not. All external communication is treated as a critical press release, with rounds and rounds of editing by multiple teams and approvals. However, customers are often desperate for information. Moreover, sharing information builds trust, understanding, and advocates.

I started blogging at Backblaze before we launched. When we blogged about our Storage Pod and open-sourced the design, many thought we were crazy to share this information. But it was transformative for us, establishing Backblaze as a tech thought leader in storage and giving people a sense of how we were able to provide our service at such a low cost.

Over the years we’ve developed a culture of being open internally and externally, on our blog and with the press, and in communities such as Hacker News and Reddit. Often we’ve been asked, “why would you share that!?” — but it’s the continual openness that builds trust. And that culture of openness is incredibly challenging for the giants.

Lesson Learned: Overshare to build trust and brand where giants won’t.

9. Be Human

As companies scale, typically a smaller percent of founders and executives interact with customers. The people who build the company become more hidden, the language feels “corporate,” and customers start to feel they’re interacting with the cliche “faceless, nameless corporation.” Use your humanity to your advantage. From day one the Backblaze About page listed all the founders, and my email address. While contacting us shouldn’t be the first path for a customer support question, I wanted it to be clear that we stand behind the service we offer; if we’re doing something wrong — I want to know it.

To scale it’s important to have processes and procedures, but sometimes a situation falls outside of a well-established process. While we want our employees to follow processes, they’re still encouraged to be human and “try to do the right thing.” How to you strike this balance? Simon Sinek gives a good talk about it: make your employees feel safe. If employees feel safe they’ll be human.

If your customer is a consumer, they’ll appreciate being treated as a human. Even if your customer is a corporation, the purchasing decision-makers are still people.

Lesson Learned: Being human is the ultimate antithesis to the faceless corporation.

Build Culture to Sustain Your Advantages at Scale

Presumably the goal is not to always be competing with giants, but to one day become a giant. Does this mean you’ll lose all of these advantages? Some, yes — but not all. Some of these advantages are cultural, and if you build these into the culture from the beginning, and fight to keep them as you scale, you can keep them as you become a giant.

Tesla still comes across as human, with Elon Musk frequently interacting with people on Twitter. Apple continues to provide great service through their Genius Bar. And, worst case, if you lose these at scale, you’ll still have the other advantages of being a giant such as money, people, scale, resources, and access.

Of course, some new startup will be gunning for you with grand ambitions, so just be sure not to get complacent. 😉

The post How to Compete with Giants appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Surviving Your First Year

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/startup-stages-surviving-your-first-year/

Surviving Your First Year

This post by Backblaze’s CEO and co-founder Gleb Budman is the fifth in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year

Use the Join button above to receive notification of new posts in this series.

In my previous posts, I talked about coming up with an idea, determining the solution, and getting your first customers. But you’re building a company, not a product. Let’s talk about what the first year should look like.

The primary goals for that first year are to: 1) set up the company; 2) build, launch, and learn; and 3) survive.

Setting Up the Company

The company you’re building is more than the product itself, and you’re not going to do it alone. You don’t want to spend too much time on this since getting customers is key, but if you don’t set up the basics, there are all sorts of issues down the line.

startup idea board

Find Your Co-Founders & Determine Roles

You may already have the idea, but who do you need to execute it? At Backblaze, we needed people to build the web experience, the client backup application, and the server/storage side. We also needed someone to handle the business/marketing aspects, and we felt that the design and user experience were critical. As a result, we started with five co-founders: three engineers, a designer, and me for the business and marketing.

Of course not every role needs to be filled by a co-founder. You can hire employees for positions as well. But think through the strategic skills you’ll need to launch and consider co-founders with those skill sets.

Too many people think they can just “work together” on everything. Don’t. Determine roles as quickly as possible so that it’s clear who is responsible for what work and which decisions. We were lucky in that we had worked together and thus knew what each person would do, but even so we assigned titles early on to clarify roles.

Takeaway:   Fill critical roles and explicitly split roles and responsibilities.

Get Your Legal Basics In Place

When we’re excited about building a product, legal basics are often the last thing we want to deal with. You don’t need to go overboard, but it’s critical to get certain things done.

  1. Determine ownership split. What is the percentage breakdown of the company that each of the founders will own? It can be a tough discussion, but it only becomes more difficult later when there is more value and people have put more time into it. At Backblaze we split the equity equally five ways. This is uncommon. The benefit of this is that all the founders feel valued and “in it together.” The benefit of the more common split where someone has a dominant share is that person is typically empowered to be the ultimate decision-maker. Slicing Pie provides some guidance on how to think about splitting equity. Regardless of which way you want you go, don’t put it off.
  2. Incorporate. Hard to be a company if you’re not. There are various formats, but if you plan to raise angel/venture funding, a Delaware-based C-corp is standard.
  3. Deal With Stock. At a minimum, issue stock to the founders, have each one buy their shares, and file an 83(b). Buying your shares at this stage might be $100. Filing the 83(b) election marks the date at which you purchased your shares, and shows that you bought them for what they were worth. This one piece of paper paper can make the difference between paying long-term capital gains rates (~20%) or income tax rates (~40%).
  4. Assign Intellectual Property. Ask everyone to sign a Proprietary Information and Inventions Assignment (“PIIA”). This document says that what they do at the company is owned by the company. Early on we had a friend who came by and brainstormed ideas. We thought of it as interesting banter. He later said he owned part of our storage design. While we worked it out together, a PIIA makes ownership clear.

The ownership split can be worked out by the founders directly. For the other items, I would involve lawyers. Some law firms will set up the basics and defer payment until you raise money or the business can pay for services out of operations. Gunderson Dettmer did that for us (ask for Bennett Yee). Cooley will do this on a casey-by-case basis as well.

Takeaway:  Don’t let the excitement of building a company distract you from filing the basic legal documents required to protect and grow your company.

Get Health Insurance

This item may seem out of place, but not having health insurance can easily bankrupt you personally, and that certainly won’t bode well for your company. While you can buy individual health insurance, it will often be less expensive to buy it as a company. Also, it will make recruiting employees more difficult if you do not offer healthcare. When we contacted brokers they asked us to send the W-2 of each employee that wanted coverage, but the founders weren’t taking a salary at first. To work around this, make the founders ‘officers’ of the company, and the healthcare brokers can then insure them. (Of course, you need to be ok with your co-founders being officers, but hopefully, that is logical anyway.)

Takeaway:  Don’t take your co-founders’ physical and financial health for granted. Health insurance can serve as both individual protection and a recruiting tool for future employees.

Building, Launching & Learning

Getting the company set up gives you the foundation, but ultimately a company with no product and no customers isn’t very interesting.

Build

Ideally, you have one person on the team focusing on all of the items above and everyone else can be heads-down building product. There is a lot to say about building product, but for this post, I’ll just say that your goal is to get something out the door that is good enough to start collecting feedback. It doesn’t have to have every feature you dream of and doesn’t have to support 1 billion users on day one.

Launch

If you’re building a car or rocket, that may take some time. But with the availability of open-source software and cloud services, most startups should launch inside of a year.

Launching forces a scoping of the feature set to what’s critical, rallies the company around a goal, starts building awareness of your company and solution, and pushes forward the learning process. Backblaze launched in public beta on June 2, 2008, eight months after the founders all started working on it full-time.

Takeaway:  Focus on the most important features and launch.

Learn & Iterate

As much as we think we know about the customers and their needs, the launch process and beyond opens up all sorts of insights. This early period is critical to collect feedback and iterate, especially while both the product and company are still quite malleable. We initially planned on building peer-to-peer and local backup immediately on the heels of our online offering, but after launching found minimal demand for those features. On the other hand, there was tremendous demand from companies and resellers.

Takeaway:  Use the critical post-launch period to collect feedback and iterate.

Surviving

“Live to fight another day.” If the company doesn’t survive, it’s hard to change the world. Let’s talk about some of the survival components.

Consider What You As A Founding Team Want & How You Work

Are you doing this because you hope to get rich? See yourself on the cover of Fortune? Make your own decisions? Work from home all the time? Founder fighting is the number one reason companies fail; the founders need to be on the same page as much as possible.

At Backblaze we agreed very early on that we wanted three things:

  1. Build products we were proud of
  2. Have fun
  3. Make money

This has driven various decisions over the years and has evolved into being part of the culture. For example, while Backblaze is absolutely a company with a profit motive, we do not compromise the product to make more money. Other directions are not bad; they’re just different.

Do you want a lifestyle business? Or want to build a billion dollar business? Want to run it forever or build it for a couple years and do something else?

Pretend you’re getting married to each other. Do some introspection and talk about your vision of the future a lot. Do you expect everyone to work 20 or 100 hours every week? In the office or remote? How do you like to work? What pet peeves do you have?

When getting married each person brings the “life they’ve known,” often influenced by the life their parents lived. Together they need to decide which aspects of their previous lives they want to keep, toss, or change. As founders coming together, you have the same opportunity for your new company.

Takeaway:  In order for a company to survive, the founders must agree on what they want the company to be. Have the discussions early.

Determine How You Will Fund Your Business

Raising venture capital is often seen as the only path, and considered the most important thing to start doing on day one. However, there are a variety of options for funding your business, including using money from savings, part-time work, friends & family money, loans, angels, and customers. Consider the right option for you, your founding team, and your business.

Conserve Cash

Whichever option you choose for funding your business, chances are high that you will not be flush with cash on day one. In certain situations, you actually don’t want to conserve cash because you’ve raised $100m and now you want to run as fast as you can to capture a market — cash is plentiful and time is not. However, with the exception of founder struggles, running out of cash is the most common way companies go under. There are many ways to conserve cash — limit hiring of employees and consultants, use lawyers and accountants sparingly, don’t spend on advertising, work from a home office, etc. The most important way is to simply ensure that you and your team are cash conscious, challenging decisions that commit you to spending cash.

Backblaze spent a total of $94,122 to get to public beta launch. That included building the backup application, our own server infrastructure, the website with account/billing/restore functionality, the marketing involved in getting to launch, and all the steps above in setting up the company, paying for healthcare, etc. The five founders took no salary during this time (which, of course, would have cost dramatically more), so most of this money went to computers, servers, hard drives, and other infrastructure.

Takeaway:  Minimize cash burn — it extends your runway and gives you options.

Slowly Flesh Out Your Team

We started with five co-founders, and thus a fairly fleshed-out team. A year in, we only added one person, a Mac architect. Three months later we shipped a beta of our Mac version, which has resulted in more than 50% of our revenue.

Minimizing hiring is key to cash conservation, and hiring ahead of getting market feedback is risky since you may realize that the talent you need will change. However, once you start getting feedback, think about the key people that you need to move your company forward. But be rigorous in determining whether they’re critical. We didn’t hire our first customer support person until all five founders were spending 20% of their time on it.

Takeaway:  Don’t hire in anticipation of market growth; hire to fuel the growth.

Keep Your Spirits Up

Startups are roller coasters of emotion. There have been some serious articles about founders suffering from depression and worse. The idea phase is exhilarating, then there is the slog of building. The launch is a blast, but the week after there are crickets.

On June 2, 2008, we launched in public beta with great press and hordes of customers. But a few months later we were signing up only about 10 new customers per month. That’s $50 new monthly recurring revenue (MRR) after a year of work and no salary.

On August 25, 2008, we brought on our Mac architect. Two months later, on October 26, 2008, Apple launched Time Machine — completely free and built-in backup for all Macs.

There were plenty of times when our prospects looked bleak. In the rearview mirror it’s easy to say, “well sure, but now you have lots of customers,” or “yes, but Time Machine doesn’t do cloud backup.” But at the time neither of these were a given.

Takeaway:  Getting up each day and believing that as a team you’ll figure it out will let you get to the point where you can look in the rearview mirror and say, “It looked bleak back then.”

Succeeding in Your First Year

I titled the post “Surviving Your First Year,” but if you manage to, 1) set up the company; 2) build, launch, and learn; and 3) survive, you will have done more than survive: you’ll have truly succeeded in your first year.

The post Surviving Your First Year appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.