37signals recently interviewed Bill Hamilton, the President of TechSmith, for a series on their blog called, "Bootstrapped, Profitable, & Proud: TechSmith, Litmus, iData, and A Small Orange". It was a great article. I thought I'd share all of 37signal's questions with Bill's answers so you could have a more in-depth look inside TechSmith. I hope you enjoy it! What do you think? Any questions for Bill?
How successful is TechSmith Corporation? Any numbers you're willing to share?
BH: We've grown from approximately $1.8 million in 1999 to just over $34 million in 2009. And we've been profitable every year. We've also launched several new products along the way, including several products that have been localized into German, French, Korean and Japanese. We've also gone from about a dozen people in 1999 to about 210 people now.
How did you fund yourself at first?
BH: We were boot strapped! In the beginning, we took on contract programming and consulting projects until we were completely product financed in 1994. Before then, we contracted ourselves out.
How many employees do you have? What do you look for in people you hire?
BH: We have 210 employees. When we're looking for talent, we first look for people who are honest and can stay open to new information and requirements that it takes to keep up in this industry. We look for those who naturally commit to lifelong learning. We also emphasize personal skills as well as being able to work effectively in teams.
We have a very stable workforce. For many of our team members, TechSmith has been their only employer since finishing college! This allows us institutional continuity in both development and other parts of the organization.
What is your culture/work environment like at TechSmith?
BH: The culture of TechSmith is that we try to be a company that engages in long term conversations with our customers and we base all of our internal decisions around that focus. We are very open and honest internally; we share business and financial information with staff who are then able to engage, understand and influence decisions, as well as their own development.
We are also very much a family. We're a great example of a company that has grown relatively quickly but has been able to maintain the close-knit, family feel. It's a fun company to work for. We work hard and play hard together. We push for creativity and sharing of ideas. For example, we have a company-wide Monday Morning Meeting each week where we share learning, ideas, what we did over the weekend, opinions, family news, insights and experiences. This is important because work/ life balance is very important to TechSmith and the productivity of our family.
So you share all business and financial information with staff? What do you say to other companies who feel this is impossible to do? Any surprising pros and cons to being that open?
BH: It can be a bit disquieting, especially during economic downturns and for people given a sugar-coated story by previous employers. We believe in the powerful liberation of the truth. Be it sales or customer feedback.
210 people sharing what they did over the weekend sounds overwhelming. How do you get everyone to feel included while not bogging the company down in hours of meeting time?
BH: Well, we draw names and ask for volunteers. We did a round-robin when we had fewer people.
You've mentioned that in a small company everyone has to wear many hats. Why is that? What are the different hats you've worn?
BH: To be a functioning company, there are essential tasks that have to be done- whether you're 1 or 1000. You just do what needs to be done. I've worn the hat of doing payroll, programming, marketing, managing development teams. I also clean the break room from time to time!
Were there mistakes you made in payroll, hiring, firing, marketing at first? Any examples come to mind? What did you learn?
BH: Made hundreds of mistakes of almost every color, luckily. I hired a man I didn't really trust because I needed his experience on the industry. Big mistake. I should have used him in a consulting capacity but don't bring a person lacking integrity inside your company. The point of mistakes is to recognize them, analyze the cause, adjust and move along. The only way to avoid mistakes is to be a sitting duck, which is fatal in our industry.
Firing someone should always be painful. It is, after all, an acknowledgement of your failure. So do it and learn from it. But not firing someone that should not continue is a disservice to the company, all of the other employees and to the person who should have left and learned.
Has being outside Silicon Valley helped or hurt your business?
BH: Yes. Both. Not being in Silicon Valley has its advantages and disadvantages.
Advantages include having more continuity in our workforce than we would probably have if we were in Silicon Valley. I also think that an advantage is a better work/ life balance which offers long term advantages. Also, since we are located very close to Michigan State University, we are able to get the international experience we want as well as those that are very gifted in computer sciences and other crucial skills to TechSmith.
The disadvantages would include the lack of other peers to interact with which would probably take place in Silicon Valley. That informal networking and opportunity to bounce ideas off peers is missing. But we work hard to try to make this available and happen whenever we can. We've also found that sometimes we have to develop people from within to fill specialized gaps in our talent pool, rather than recruiting externally, as there may not be anyone locally who can fill that gap.
Is developing people from within to fill those gaps something you suggest other companies pursue (as opposed to hiring from the outside)? Why?
BH: We did it from necessity. If I had more of a choice, I would do a blend of outsiders and grow-your-own. I think that would actually be more powerful than either alternative alone.
What hiring advice do you have for other firms?
BH: Look for core values. Integrity is so, so important. And don't ignore those nagging warning signs and feeling of discomfort - trust your gut. On the other hand, you need people who won't just fit in.
How do you differentiate yourself from competitors?
BH: Truthfully, we don't spend a lot of time differentiating ourselves from competitors. We spend a lot of time trying to talk to our customers about the issues and product features they like, want, etc. We don't want to get into a 'Me Too' situation with competitors.
What's your goal with the company?
BH: This is a hard question for us. Our goal really is to satisfy our customers. We really focus on trying to understand the convergence of unsolved problems with community issues. Where that will take us, I don't know. This industry is too dynamic to guess. If I look back 10 years, there's no way we could have predicted where the adventure has led us so far.
What advice do you have for someone considering starting a business?
BH: I think it's important to learn a lot about what the components of a business are. There is a lot of value to be gained by working for other small businesses before starting your own, if that isn't naturally part of your background. If you have no experience in payroll, hiring, firing, marketing, etc, it can be very valuable to learn from others first. I didn't have this background.
And many have very successfully ignored this! Whatever works best for you.
Are there other aspects of your company that would be interesting to readers?
BH: I think it's very important to always try to engage in experiments. You have no idea if they will work or not, but use the retrospectives to discover what you did learn from it and move forward. Lots of these experiments will be failures, but will contribute to the success of the company over time.
In other words, don't be afraid to fail.
Someone once asked me what an entrepreneur is. I said 'Someone who's almost lost their home twice'. I qualify! But don't let that discourage you. It's all part of the process.
What are some experiments that have worked out (or not) for TechSmith?
BH: One of our first products (a DDE development library) was obliterated by Microsoft. They released a DDE library that wasn't as good but was from MS and free. Such is life under the feet of the elephant. Long live elephants.
Tagged as:
Tweet This | 
Del.icio.us
| 
Digg This
| 
Reddit
