Going Global from the Edge of the World | Adii Pienaar, Woothemes | BoS USA 2012

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Adii Pienaar has built a very unusual business. He says by accident, but this talk reveals that there is a good deal more to it than that. This is a story about the pros and cons of building a global business from the edge of the world.

Video & Transcript below

My favourite line was in the Q&A in answer to a question about how he deals with software piracy:

“I don’t deal with it. I think piracy is one of those things that if someone wants to pirate your software then they should do it. If they email you for support, you laugh at them.”

Video

 

Transcript

Adii Pienaar: So I’ve never been afraid of much in my life but having that kind of introduction and a standing ovation before I even start, that’s you know, scary as hell. So the first thing I’d like to say is thank you so much for having me Mark, Neil. I’m going to tell everyone else I was invited to speak last year and since I have about a 3 hour transit to get to any place in the States I decided not to come because it was too close to the birth of my son. So I was bummed to miss out but you know that’s one of the best things or best reasons to miss out on a conference. And then secondly today is also a significant day for me personally. My wife and I are celebrating. I’m getting emotional. We’re celebrating our second wedding anniversary and she doesn’t follow me along physically that often so she doesn’t get to see me speak at conferences. But, I’m so happy she’s here and she can actually see me and share this privilege and honor to speak with you guys today. Happy Wedding Anniversary!

BoS2012 Business of Software 117

So you guys is my thingy supposed to work? First thing you’ll see is you’ll see me moving up and around the stage. I walk a lot with a Nike fuel band. I’ve got fuel points to earn. And the second thing I can tell you about myself before I get into the actual presentation is, I’m really bad at memorizing anything. So I’ve not memorized much in terms of my presentation but, I think I’m pretty good at telling stories and that’s what I hope to do today. I literally just hope to share a few little bits of my journey that got me to where I am today. So, my talk is titled “Creating A Global Business From the Tip of Africa.” And for those that don’t know. Okay, so that doesn’t work.

For those that don’t know, I’m CEO and co-founder of Woothemes. We build products built on or powered by WordPress in the end and we hope just to help businesses be better when they’re using WordPress in various different ways. We started out in 2007. I designed and developed the very first product and the scary thing is, I knew nothing back then. So, stuff like MVP was something I learned much later so that didn’t apply. I literally took every single feature that I thought someone would want and I tried to jack it in there. For technical minded people in the audience, my biggest challenge with the first product was figuring out why a jQuery script that I had jacked into the product wouldn’t work with a script and it took me hours and hours to figure out that the two will never work together but, I did the first product which meant that it was just in the back end of 2007 when I was finishing my business studies at Varsity and it also kind of meant that I had initial revenue. Then came 2008 and I got into my corporate job and my sole purpose at the corporate job that I took, it with a kind of medium sized media firm. And my sole purpose was to take this company who had roots in print and print led marketing and take them into what they would term to be new media. And I figured this was the perfect opportunity, with my love for technology and all things online with kind of having to do articles for my business studies.

Six weeks in I sat the MD of the company down as he had asked me in. I pitched this idea of WooThemes to him. At that stage we were about three months old, we were making pretty good revenue and in fact the revenue or profits we were making was matching the salary I was getting at my corporate gig. So I sat the MD down, he had a look at the business plan and he said look at my cash flow cost which we all know is bullshit and he said well anyone can put numbers on a piece of paper. And I said yes, I know that and the irony of all that is by the end of that year the annual revenue that I had full costed we actually made that in one month by the end of the year so egg on his face. In 2008 what happened is I met my co-founders online. I was always based or have always been based in Capetown South Africa, they were based in the UK and Norway at the time and we started working together more elaborately and then around about the middle of the year or July that year we formed what  – it didn’t have a name then, but it became WooThemes and we formalized the company. And the significance of that is but the end of the year we actually made our first full $1M in revenue. So it took us about 13 months to do that.

In 2009, and this is significant, because I never met my co-founders in person and we were working together for about 16 months before we actually met together in person and I’ll touch on this later on in the talk because talking a lot about what has been said about culture. And I think this is a case of accidental culture because we had never planned for that very fact that we were working remotely to ever influence the way we were building the company. It was just something that happened. It was never a conscious decision to do it and it influenced the way we built the company significantly. We hired the first people so that meant in 2009 we actually became a company. 2009 was kind of all about just kicking off. So where we are today, we’re just a little bit over 4 years old.

We have 25 people on the team at this stage. We’ve exceeded 300,000 users and we’re making a tiny sum of profits. That fact that I’m very proud of is that we’ve taken zero funding and we’ve 100% bootstrapped and this too is one of those kind of accidental things that I’ll get into a little bit later. So, that the kind of story and that’s where we are today.

Before I get into the rest of the talk, are there any South Africans that live or have lived in South Africa in the last 5 to 10 years in the audience. I know about Lee. Anybody else? Okay, that’ good. So, please call me on my bullshit if I’m mistaken about South Africa. The title of my talk is “Building a Global Business From the Tip of South Africa.” So, that is Capetown. That’s not a bad tip at all if you’re into nature. Another picture, really not a bad tip and we even have semitropical beaches and I promise you that it’s actually in Capetown. It’s not somewhere in Asia and on top of that, my first love good wine. So all in all Capetown is actually a fantastic place to live and build a business. So you might ask me, what is actually different with Capetown.

So, the first thing that is important in terms of figuring out what Capetown isn’t, since it’s so great otherwise. It’s not a take over. We always talk about tech hub these days like Silicon Valley, the original tech hub. Does tech hub actually have a definition by the way. I’m just mentioning media words. So, obviously Silicon Valley, New York, Boston these days Berlin and Europe, London. I don’t even know. We see more global cities kind of piggy backing, well not piggy backing but, kind of taking these sort of start up mentalities especially in regard to technology, Capetown isn’t that. Which means we have very few entrepreneurs working in our space. We have very little mentors, advisors, investors. We very recently started seeing funding has actually become available for the companies that actually need that. Which in my opinion [….] kind of things are kind of critical requirements for them to actually be a take out. It has to be an environment that is conducive so that the start ups can grow especially in the technology space.

The thing is, and this is going to sound really pompous for me is its really difficult walking into a local room back home and feeling like I’m the smallest person in the room because I’m not. That’s why, and I’ll get into that a little later. That’s why I travel. That’s why I come to conferences like this. Where it’s very obvious that I am not the smallest person in the room.

That’s how you learn. But, not having that and not having an easy way and not having that ability to just pop into a coffee shop and have a coffee and just meet with a fellow entrepreneur, that makes things a little bit more difficult. We had no start up culture. I mean I told you guys that I took a corporate job so that is what we are kind of brought up to do. We’re very traditional in that sense. you’ve got to find the best corporate gig with the longest corporate ladder and you climb the hell out of that corporate ladder. There is absolutely no culture and I’m going to take a risk and instead of doing varsity I will just do a start up. I will try and be my own person. I will try and be an entrepreneur. That kind of entrepreneurial spirit doesn’t flow throughout our society back home. Which then means, it becomes kind of an issue of a shortage of skills. I can’t hire locally easily because all of the sort of Computer Science students, they prefer working for banks. They like crunching numbers and doing financial things all day, which sounds fantastic to me. [laughs]

It’s not criticism its just that every one, I see every single person could be great working way back in service or they’re sort of [xxx] or what ever the case is. They could be great but they’re so conditioned not to do that so its extremely difficult hiring locally. And then obviously there’s that it takes about 3 or 4 months for us to get anything. It takes a while to get down to South Africa. On the plane over from Amsterdam I was reading “Launchpad,” by Randal Stross. It was this quote by Paul Graham and you can read it and what it basically comes down to is he called out Houston and Chicago and he basically calls out those cities and I’ve never been to those cities but I could bet you that they are probably superior to Capetown in terms of being a sort of start up economy. And then again I’m not super-pro what is a start up and what isn’t but, that stood out to me. It kind of felt, reading that and my own experience that our journey of building a business up until now has been against all odds. If I had to kind of just very black and white look at what other companies have tried or what people have tried back home, it is difficult. But, they’re all challenges and what I would like to share with you today is just a couple of the lessons that I’ve learned in kind of overcoming those challenges. I’m the kind of person that likes a challenge and I think these things are all hindsight. It’s funny how while you’re going through these things, it never occurred to me that this was actually a challenge. I just got on with the job and 4 and half years later we have a really great and sustainable business. And I don’t think it’s a case of luck necessarily.

I believe in a great South African golfer who said, “the more In practice, the luckier I’ll get.” But, I am saying, these things they weren’t as conscious at the time. They weren’t very purpose driven, very conscious driven decisions at eh time so I’m hoping that what you guys will take away from this is maybe be more conscious in making these decisions and realizing that again, against all odds as an entrepreneur in the room, we can actually succeed. That actually is the very definition of probably of being an entrepreneur. Seizing an opportunity against all odds, making it work and succeeding with that. So the first one and this is one I am absolutely passionate about these days. And the only reason why that is buck and […] the other word because my wife’s in the audience. I truly believe in this.

I wrote a blog post about a month ago that said, start ups shouldn’t follow trends. And this is really is, this doesn’t sit well with me. I think we are seeing so many great people working on really crappy ideas because we want to be the next Instagram and we want to be the next Facebook and we want to be on tech crunch. It’s not about not doing that. For me it’s just about figuring out why you are doing those things. So because I was kind of ignorant back home initially, I didn’t know much. In fact tech crunch was my bible when I started reading and learning about start-ups. That was my only point of reference but, I didn’t have the opportunity to come onto stage and meet really great people and learn. So there’s an element sort of kind of that ignorance is bliss. I sat here a day in Hoff and I listened to different spacers say different things, contradicting things. Not in a wrong way but, I sit there and try to figure out how the hell should I balance out all these things and sometimes, ignorance is just bliss. And I think that’s what we had, kind of being in Capetown. Not having much of what they call a group thing these days. Seriously, if I see another social idea coming out of San Francisco that’s getting millions of dollars worth of funding, I will literally cry. And I know every single time I say that happens, a kitten somewhere in the world is dying. [laughter]

Okay. I know that. My heart tells me that. But, that is a group thing. I saw a tweet earlier in the week where there’s an article that says, never in our history have we had so many great people and entrepreneurs working to solve problems the only thing is we’re not really solving any problems. Like seriously, do you see instagram always solving a problem. Not dissing instagram just saying, that kind of group thing. That’s what worked well for them but just kind of following or copying onto their train just because that ti what is trendy, I think that is very dangerous. And my best example of this is, again I’ve got a four year degree in business. I should know these things right but, when we started the company I didn’t know that taking VC was an option. I just didn’t know. In fact, what we did was we just made money from day one, very simple. We didn’t even think we were bootstrapping. I just, I didn’t realize that. Obviously I knew what VC was and I knew what bootstrapping was but, it just wasn’t important. And that for me is why it’s important just to buck trends.

Seriously, if you want to do either of those things and again there’s a multitude of ways of growing a business and marketing and all those things but just figure out why you are doing it.

Don’t just do it because some famous person put up a blog post and said this is the way. Help. Don’t even buck trends just because I’m up here saying this is the way to do it. If you want o buck trends do it because you understand why you’re doing it. I see so many teams that are not in one of the tech hubs that feel the need to relocate. I know why sort of commentator is a big example sort of believer in moving their teams. Being very close to the [xxx] office in [xxx] And there’s nothing wrong with that but, that is most definitely not the determining factor of your success. In fact, I think it’s kind of refreshing if you come from outside of those. It touches on the group thing and just not following trends. I think it’s refreshing when you come from a smaller town. We have a different perspective about things. A new angle, a different solution to old problems. What I’ve learned is, that is really okay but in terms of building a global business from the tip of Africa just misses something out of international quality. If you really want to be in international business build something out of international quality. The internet allows you to compete on an international stage. There’s no reason why you shouldn’t just take that opportunity.

And the way I think that we’ve done that is first and foremost, we’ve really invested in our branding. I always seem to use branding and I’ve listened to so many great speakers speak about culture and I think there’s something about that branding and culture that fits together because for me branding has always been. It’s not the visual it’s not the logo it’s not the mascot, it’s not the style guide it’s not the colors we use. It’s all those things as well but, it’s the way that I actually portray myself. And it’s myself as well. Every single individual in the company the way that they portray themselves, the way they represent the brand is what the branding is about. And again I think it’s very very important that you know why you are doing those things. It’s not just about when you get an angry email saying, I’m really very sorry about that. You need to know why you are doing those things. And the basic part of about branding, it is really free and it doesn’t cost you any money. I think there’s sort of so many great things you can do with marketing. You can sort of pay a PR agency for example. I don’t think that’ll get bang for you buck. Compared to if you really did marketing well. The second thing in terms of establishing that’s kind of a company that is on [….] internationally. With competitors and the rest of the companies in the ecosystem are doing is casting servers. I truly believe that it is cheap marketing.

I always believe that if I walk into a restaurant and I order a steak and I wanted rare and they really screw it up and gee me a burnt well done steak, that’s not where that kind of customer service ends. For me it’s about the way they react to that. If they get me sorted out and they get me sort of straight within 5 minutes that’s a lasting impression. That’s actually the kind of experience that could make you go back tot eh same restaurant instead of the screw up an issue. I think that’s what customer service. Every single time you get an angry email from a customer, that’s the opportunity they’ve given you to sort of market to them and by license to market just sort of fix frustration. You can actually save that relationship and the way you fix that relationship is much more important in the long term than not making the mistake in the first place. And I’ll just say something about this because again this is a new service. I can’t provide customer service to users that haven’t paid me and that’s something I’ve learned the hard way in the last 4 and a half years. There was no way. We are just educating customers just generally and this is slightly off topic but, we are educating customers to expect things for free. So the same applies to free plans. As soon as you do it once, you give them a pinky they want the whole hand. Customer service is not for free customers. And I’m not saying no completely I’m just saying that it’s a very difficult thing to do and you need to think about that. All of this comes down to, nobody really cares where you’re from.

To this day, I’d bet that 99% of our users don’t know that we are form South Africa because it’s just never mattered. They don’t care. We get odd customers and they email us and they say can we get your phone number and we’re like no, we don’t have a phone number that you can call but, you can email us. But, that’s closet we’ve actually got to people saying, we want to know where you’re based we want to know what you’re address is. I don’t think people care. They really don’t care where you’re from. And that takes away some sort of mindset. It takes a big sort of barrier in terms of not doing a start up from a city that’s not regarded as a tech hub. So I spoke about the way in which my co-founders and I started working together remotely and I think that in studying the lesson, all the lessons related that you need to trust in people and this got even better. I went for a run on the treadmill at eh Amsterdam hotel and they had this CNN show about entrepreneurs that share their stories which is a little [xxx] They had this one snippet that I don’t even know who it is but, he said leadership is that what would happen when you are not there.

And that’s why I loved what Mikey said about not being there and then the team actually flourished. I don’t think that’s predictive of you skills by the way but, that is trusting people. That is kind of saying that I will put the right structures the right processes the right culture all those things in place to allow the team to flourish. And the reason why this has been very important for us is because that is a map and that’s where we’re based. We only have one office with 8 of us in Capetown. The rest of the guys don’t meet up. Most of those guys haven’t even met each other ever, ever, ever, ever. In fact last year June the whole trip where we got everyone together in London and that was 11 of us. We’ve got another trip at the end of this month in South Africa where there’s 25 of us which means that in a little more than a years time we’ve little double the company. They’ve not met each other. So, trusting the people that you work with is of that most importance. And it’s not just me trusting them. It’s also the installing the kind of confidence in the team to also trust each other to know that when I go to bed and I shift a really bad bit of code that the guy that’s waking up in the states that is supposed to support that, will be able to support that. And it’s okay because I’ve had a long day and I can;t really look at this any further. It’s that kind of trust in people. What that has also made for us is because we can;t hire locally, we actually don;t have that limitation of well we have an office and we can only get people to work in the office which means we can hire the best regardless of where they are. What we tend to do generally, we love hiring within our community. We’ve hired so many of our customers to do customer support for example.

So many of our initial users have become developers on the team and that’s been fantastic and we’ve been able to do that because they know that there’s no kind of bricks and motors sort of limitation of hiring people where your office is at or where you’re located. And it goes along with trusting the structures but it also has the advantages of not worrying about those things. So when we started the company there was only the 3 of us co founders. I spoke about the very first product that I did and it was a really big case of doing everything. I couldn’t rely on a team to help me out. In fact, interns of our technical ability my co-founders and I were pretty much the same level and we could help each other out but, it was like if we really had a problem, we we’re stuck on it. What it actually meant was that our initial interactions weren’t that technical and we just kind of ideated to our own limitations. It meant that we had to do everything ourselves. And what I learned from that is simply diving ingot he deep end is absolutely the best way to learn that. I get this question from many upcoming learning entrepreneurs that would ask me, I’ve got this idea, what am I supposed to do? And generally my advice is to just do it. i think there’s no way of learning if you’re not doing it. You cannot learn about running a company in theory. You can read as many articles as you want and then you just got to do it and if you fail that’s fine. You just got to try again. I’m also a big believer in doing something and feeding in a little pain because if you feel that pain you’ll be compelled to put a band aid on it. We’re compelled to fix it. We’re compelled to learn faster. All of those things. That is diving into the deep end and it’s just survival. It’s about that primal instinct to just survive which is fascinating. And again coming from Capetown, not having mentors not having advisors just getting on with it. Diving into it and learning everyday. It is possible that’s why I mentioned it. It is actually possible.

What I’ve also learned the hard way is that there’s no way to suceed unless you actually work harder than anybody else.

I bring up a lot stuff with peripheral force. Stuff like work life balance and passion and personal passion and personal purpose and all those things but, in terms of just looking at the success of your company or the success of your idea there’s no way to do that unless you’re working harder than someone else because I can promise you that if you’re not doing it, someone else is executing a very similar idea and they are working harder than you. This becomes a big differentiating factor between companies that do succeed and don’t succeed. I think if you have followed Ryan Carson who did Carsonified and Pink Vitamin and tree house these days, he’s been a big proponent of a 4 day work week and that’s fantastic. I can remember he was one of those kind of idles when I started out. I said to myself, from day one when I created my company, we will only work 4 days a week, And I soon realized that we’d given that privilege to our employees but, owners of that business, we never had the same opportunity. [laughter]

I can promise you, I was working the other 3 days out the week just to make up for lost time but, that is what it comes down to. And I think there are educators where that actually works and I think it’s kind of fantastic to have that kind of culture and that opportunity but, in most cases especially with a very new start up and especially when you are doing everything yourself, it is literally about working harder than everybody else. The funny thing is as you kind of grow and learn more about these this things, this is something that I’ve found immensely challenging over the years is eventually there needs to be a time where you need to work smarter than anybody else, where it’s not about the time anymore. These days I find myself so often, after a long day, I literally just sit in front of my computer and I’m literally toning about. Clicking, opening this. Shall I respond to no, I’m not going to respond to this email now, doing that kind of thing. That’s not smart working. Not delegating, not trusting your team. That’s not working smart. And I think I said initially that sort of primal instinct initially when doing a start up is we need to work incredibly hard. We need to stay sane where there’s got to be that progression where you are working smarter. Not necessarily working less but, you have to work smarter. That’s at least what I’ve found for myself. So when we started the company in 2007, I think we were still kind of, well I think that the greater of my community was still reeling from the last little effects of, we can’t really pay for stuff and then obviously that kind of world wide recession happened about the same time. I can’t remember exactly that kind of subprime stuff in the U.S. but, it was around about 2007 and 2008 if I’m not mistaken.

And a that time, I can just back track one step. I got into the idea of doing a product on top of WordPress because I was actually doing consulting and doing custom design development work on WordPress at the time. And on my kind of hiring projects, I was charging about $3,000 from design to deployment on the client’s side and then I had this idea of doing the product. Doing exactly that and charging $17 for it. So, it was kind of a huge difference in price and the whole recession and kind of uncertainty with the way either of things are going online and even though that was massively improving at the time that really worked to our advantage and the reason I kind of, except for democratizing something that had previously been very expensive. Let’s say $3000 and up and $70 for that but, I think it’s a case of we have always allowed our customers to be better at something. Borrowing from Cathy’s talk yesterday morning, we made them bad ass developers to some extent. We did stuff that they couldn’t do themselves but they could now get a better foundation to work from so they can pay us 70 bucks and they can still charge their customers 3000 bucks but, that was perfect because they could save so much time and they could do a better job which meant for longer term benefits for them as well. That kind of enabling someone to make money based on your product/tool/service. That is recession proof, right. That is one of main reason why I prefer being more of a business to business kind of model, than a business consumer, right?

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It’s just easier in terms of Maslow’s hierarchy, if a business is obviously buying a product that is, it becomes integral to the way they make money and things go bad financially then they aren’t that likely to cancel that because they need that very thing that they’re paying you for to actually stay in that business and get out of the hold and that’s been fantastic. Just business to business. In fact enterprise kind of business models fascinate me for that exact same reason. I was also kind of scared to that but, enabling other people to make money generally is a much safer business model then trying to sell to millions of people. Sixth lesson, travel. I love travelling by the way even though it’s kind of tough when you’re very far from everything else but, this was integral for me. I don’t think it’s necessarily about the distance and geography with regards to that. Even if you’re in a smaller state or city within the U.S. I think it’s important to kind of get out of that environment and just go out and meet minute people. Why that is important is, by travelling, I’ve made so many entrepreneurial friends and I’ve actually met mentors through this. I have met friends that I could bring on Skype and say listen you guys, this is what I’m struggling with, can you help. I have met mentors that are in the cities that I’m located in that I will always see when I am visiting those cities and for me, that’s kind been one of the enablers of running a business from South Africa. It’s just meeting people. Meeting people that can fuel you. This graph can kind of show you. It looks like this sort of roller coaster. If you could show me a company or start up that hasn’t had that same experience, I would be very surprised because as an entrepreneur that is what it’s all about. It’s a hell of a lot of lows and a few highs and then luckily the highs in the long term or in the average just kind of outweighs the lows. But, having friends, having mentors really helps with that and I said if you are not from a tech hub or not from a city where it’s accessible to network and meet those like-minded people, the only way of doing it is travelling. Obviously the easiest way of doing that is attending conferences like this. That’s been just the easiest way for me to just meet like-minded people. And for the fascinating thing about it is generally not the talks just sitting about and having some conversations around all of it. Just meeting other people. For me that’s me so stimulating for me I’ve destroyed so many problems just in random conversations with people that have less experience more experience. That doesn’t matter it’s just like-minded people. Having those conversations at conferences.

So this is the last lesson that I have to share and it’s something that’s been kind of close to my heart forever. Firstly because I’m a bit of a closet designer and if I wasn’t an entrepreneur I would be a designer even though I’m a really bad artist. But, what attracted me to that is and obviously I’m a lover of beautiful things. You see my wife and you’ll probably agree. [applause] But what attracted me to designing was that I could make my own reality and I think from day one the way that we established the company is all 3 co-founders had those roots. Just to take it back we were all doing consulting work at the time and we all had some kind of involvement with design. So, we literally took the approach of designing everything the way we wanted it to be. As I said before as I show you the lessons, I think loads of those things weren’t that conscious. In hindsight we did those things because they suited us. They suited the company. They suited our personalities but, we designed everything. And the best way for me to explain that to you is, I hate being put into a box. In fact if your going to put me in a box and say Adii is in that box, I’m going to prove to you that I can build a bigger better different box. Challenge accepted. And it’s just that mentality. As an entrepreneur I believe we have an opportunity to literally make our own reality. Not just for ourselves but, the people on our teams, our customers and the greater ecosystem that we work in. And I think that kind of design angle to it is what is important today. It’s just envisioning because what does a designer do? They see a problem and they have that knack to kind of envision what point B needs to look like and they also have the knack of actually executing, sketching designing, whatever what A to B needs to look like. But, they have that kind of vision of where things need to go. That’s the new reality, moving towards that. Taking everything that I’ve learned is that I’m sure none of you would have criticized me if I had went the corporate route and I decided not to do WooThemes because that is what my status quo was in Capetown. That was the law of averages for me. And taking all the challenges, all the different things that I didn’t have. Those are just constraints but, ultimately constraints breed creativity. And it’s taking that creative approach to actually solving a problem. If you don’t have customers. I can’t thing of a good reason [laughter]

Sorry. I haven’t had that problem in a while. So if you don’t have customers that’s some kind of constraint. Think creatively. Design that. Don’t be put into a box. Don’t be put into that start up box that says start up X, no customers or start up Y, no revenue. It shouldn’t be like that and I hope that, that’s the message you take away. That is that message of hope. As entrepreneurs we have all the skills, all the personality and we have ideas the attitude, the mindset to actually make these things happen. Just go out and make your own box. Don’t be put into someone else’s box. Thank you.[applause] So I was very conservative consider the times and we’ve got 19 odd minutes to answer the questions. I don’t know where they are or will there be so many questions but, shoot, I love interacting.

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Audience member: So, I have a business and that’s actually we’re based in Washington DC but most of our customers or most of our users are actually in Africa or places like that so I’ve got a bit of the opposite situation as you but, I’m kind of curious about the mechanics of it. I’m interested in building this sort of a global team and interested in kind of the nuts and bolts of how you do that. How you hire and what you sort of what your technological tool kit is for keeping everybody on the same page in being productive and that sort of distributive setting.

Adii Pienaar: So the first thing in hiring in terms of the faltering at least, we try to hire inside of our company. I think that’s the easiest and most scalable way for us to actually do that. Probably because we have more of a history of the person before we actually got the point where we need to do final interviews and we can go back on that. And that’s been our easiest thing. We’ve had success with in regards to advertising on job boards as well but generally, 90% of the time it’s been within our community. In terms of our tool kit, we use a variety of things. We used to use BaseCamp very diligently and we’ve kind of veered away from that and focused on either, more static which is kind of was emails and kind of moralistic updates that kind of needs to go back and forth. And then we used P2 which is actually just a theme built on WordPress. It does the same thing as kind of a Yammer or a HipChat which we do just to keep everyone updated on what I’m doing just in terms of what I’m working on right now and then the guys have just started using Skype and having different Skype conversations for the different projects they’re working on and that’s working out relatively well. The one thing that we have changed recently and recently as in the last 3 months, was we were very informal when we first set up the company and we were very flat firstly and we had no sort of real communication processes it was just sort of kind of everyone for themselves. But then what we did was we installed 3 team leaders. # different teams leaders for the aspects of our business and we now have weekly meetings where everyone needs to be involved even if it’s just a Skype text chat. It’s almost like a re-synching thing just once a week and the whole team actually just gets together because that’s actually been our biggest challenge in having such a distributed team is the collaboration because everyone tends to kind of wake up when they want to and work when they want to and just kind of re-synching. We’ve actually done that in a very sort of traditional setting which is a meeting. A simple meeting regardless of the tool. So, did I answer the question.

Audience member: Can I ask, hiring and and kind of build on that mindset. Hiring from a distance is scary enough. Forming a company with people you’ve never met before is a terrifying concept for me. I’m interested in how long did it take before you really gelled as a family team and what did you do to get there.

Adii Pienaar: That’s odd. I think we gelled from day 1. That was what was so interesting. I think maybe it was because when we set up to do this we didn’t really think long term. We didm;t think it was a company that was going to take us and be something that we would be doing in 5 years time. In fact all 3 of us kep freelancing and building. I was actually building up a design consulting agency at the same time but, the project worked at the same time so maybe it was because we took out all of the important things. All the risks of going into business with people that will steal from you for example. With those considerations, it just didm;t matter because we didm;t see it as a business. It was more of just a kind of collaboration on a fun project. But, obviously when revenue is coming in and you actually hire people then things become more serious. And for us it has been evolution just to look at the decision we made back then and just to make sure that we are maturing. Yes, we were informal but, not we need to put some things in place that most companies would have done from day 1. More questions on that side there’s a couple? The other guests are all about competition.

Audience member: I’m a young father too. I have a 1 and a half year old so can you tell me about how you balance family life with growing a business?

Adii Pienaar: So as I mentioned, the question is just balancing family life with my business and to be brutally honest, I’ve failed badly. My son is 10 months old now and most of the time I’ve felt badly because I think work has becomes a sanctuary and it become that kind of thing that you do because it’s the easiest thing to do. And I think sitting off, I can share this. The best decision I made was about 4 weeks ago when I decided to remove email from my iPhone and that’s been the most fantastic thing that I’ve done in the last year in terms of just hacking my life. And the reason, just to get back to your questions, I think at an online business, and having the ability to travel and be in a new city for example is not at all like actually running a business because you only need an iPhone or an iPad. It makes it really tough. I sometimes wish I had a corporate bricks and mortars business that could just go in 9 to 5, shut the door and not have to worry about that. So it’s hard and I think, like I said the first thing I did was I shut off email and what I’m trying to do now is not taking things more slowly because I’m too ambitious for that but, working smarter. So still achieving the same goals I would like without having to compromise on my day. And this for me has been an evolving thing, I struggle to shut down. I struggle to not be connected to my work because I absolutely love it. I love growing a business. I love all the interactions that happen around that but, when I go home I just try to go home. It sounds really simple. I find it very challenging but, I just try and go home every now and again. More questions. Yes?

Audience member: So, I’m a designer and I’m in the industry with you and I really respect the work that you guys do but, one of the things that makes me very sad is the number people that steal and pirate the stuff that you guys do so how do you deal with that?

Adii Pienaar: I don’t deal with it. I think piracy is one of those things that if someone wants to pirate your software then they should do it. If they email you for support, you laugh at them. [laughter]

About 2 or 3 years ago we got these emails every single week where one of our existing customers would email us and say they found our products on that piracy site and I would wonder why did they know these things but, we got these emails because they were obviously fishing for some kind of freebie and I always felt bad just telling them that this year I’m not worried. That’s what we do these days. I literally tell them that we are not worried. In fact our products is licensed with the GPL which means it;s open source which means we can’t even do anything about ti if we wanted to but, it was just that mentality that it doesn’t harm the business if someone wants to steal your products. I think it comes down to having that sort of defense able competitive advantage. For us, it;s not the code, the actual product. It’s everything that happens around that, the support the community and all those things. So interns of dealing with piracy we just don’t worry about it. Yes? There’s a mic on the way.

Audience member: How do you pay the people who are internationally distributed and what do you do about picking taxes?

Adii Pienaar: You said, how do we?

Audience member: Yeah. How do pay the distributed people mechanically and how do you deal with taxes? incorporation and stuff like that. Where are you based as a legal entity?

Adii Pienaar: As a legal entity we’ve registered and incorporated in South Africa and we gone trough the very painful process. So about 2 years ago I had a conversation with Paul about the exact same thing. I was scared shitless as he was but, he had gone through it so I decided that well, if he can do it then I can do it. So we went through the process of incorporating in the states which I can tell. I have a lot of respect for the U.S. on all things except this thing which is you’re allowed to register and incorporate in the states which is very easy. You pay 150 bucks I think, you get an agent and you get a corporation in Delaware, all that hunky dory, right? So the next thing and that took me took weeks, start it and it was easy. The next thing is, we now need a bank account. That took me exactly 9 months to figure out. Simply because you’re not allowed to have a bank account if you don’t have an address and stuff like that. We actually at one stage got a bank account opened and then 2 weeks later, it was a big retail bank, and they said, you guys don’t have an address in the U.S. we’re closing your bank account. I was like, well you allowed us. So, it was a little bit weird. But we eventually did that and as I said it’s been a tough process but we’ve now incorporated in the states as well who does payroll and taxes for our U.S. employees and the other employees before we did that we’d regard them or we’d pay them as independent contractors and our kind of legal and tax advice for that issue has been kind of accepted for the states that in most countries, that’s actually better for the guys to. Even though we have an employment contract with them by simply wording them differently and regarding them as contractors it’s tax beneficial for them as well and it makes no difference to us because we are obviously still just paying. So we don’t do, because I can tell that is obviously a peripheral question or the question that’s next. We don’t do benefits. I believe in paying someone a really good gross salary and they get to choose how they want to spend that. And the reason I do that is because I for example don’t believe in having any kind of retirement plan. I’m working on my retirement plan now. So I don’t want to enforce that kind of limitation or requirement on employees so just contractors. Does that answer your question?

Audience member : Almost. How did you pay these people at the very beginning. Did you send them checks, paypal?

Adii Pienaar: Direct wire transfer.

Audience member: Just direct wire transfer?

Adii Pienaar: So again that’s the most traditional and slow way of doing it except for checks obviously but, it works.

Audience member: And, then you can just use that for taxes back in South Africa?

Adii Pienaar: Right.

Audience member: As a sole proprietorship or did you start with a corporation?

Adii Pienaar: No we are incorporated in South Africa. Question over there.

Audience member: I would assume in your business collaboration is very important because you’re very spread out so can you explain how you collaborate? The tooling you use? Services? That kind of thing.

Adii Pienaar: As I mentioned we used to rely on BaseCamp a lot for collaboration and we still do for somethings. For product related stuff, I think the best thing we’ve done actually is one of the leaders of our team is the product leader so all the conversation around all our product, because we have so many different products, is kind of consolidated with one person. That was the first important thing and in terms of using tools having that kind of leader that is accountable and responsible for the collaboration within the team means that he can pull strings. So interns of tools I think the newest tool that has worked out really great for us has been product development has been tread out which is fantastic and its free and Skype. What we do at Skype is a very corporate or more formal thing to do is, I now require summary emails from my leaders on those things so I know exactly what’s going on. And, I think in terms of collaboration that’s the most important thing is every person on the team needs to know what their individual task is given that day, that week or that month but they also need to understand the realistic picture of where that fits in and that’s it. That’s just the communication thing. Collaboration is generally easy and I guess we’re also a little luckier because non of our products are that big so that we need 5 guys solving one related problem at any given time. It’s more if they need to have the help of another team member. It’s normally a half an hour thing and those 2 guys can do it within an hour on Skype. They don’t need to involve the greater team to accomplish the small things. More questions. There’s one over here. We’ve still got another 5 minutes. If you want lunch just don’t ask anymore questions. [laughter]

Audience member: Do you have an example of a mistake you’ve made or something you’d do different with hindsight?

Adii Pienaar: One of the biggest mistakes that I’ve actually made and it’s more personally and related to WooThemes is, let’s get my bearing right. 2 years ago we hired to first employees for WooThemes. They were actually already working for me on the design concept at the time and we just kind of, because I knew them and we had a good relationship we moved them over to e-themes and I killed that company. But, I’ve always had that kind of feeling that I wanted to do something else. I wanted to experiment and obviously as a company grows the space for experiments becomes a little more different because your users, they expect something from you. What I did about a year after that, I kind of re-did/restarted/re-booted that company and it was kind of just building cool stuff. And I hired people to do that. I took on the immense challenge os being personally responsible for the kind of strategic direction of that company and that absolutely killed me. We ran for about 13 or 14 months. I had 2 people on the team and it was the hardest thing ever to shut them down but, we never made one dollar and I ended up losing about a quarter million dollars on that. And the lesson, that was a big mistake for me and the lesson I learned there was I will eventually in my life do another company, do another start up but, instead of trying to do them simultaneously I’ll do them consecutively. That’s it but, huge mistake. Yes? You just shoot. I’ll repeat.

Audience member: [inaudible]

Adii Pienaar: So the question is how do we protect ourselves from not provided support to free customers? So what we do is the help desk is just available to paying customers. We have a pre-sales and kind of account related sales or support channel which anyone can email and that’s support at WooThemes to come. But, what we do from there if anybody, regardless if they’re a customer or not and asks for customer assistance we say sorry, we’d love to help with this but, here’s the appropriate channel to do that. So I don’t even try to police that. I simply divert it. And yes, that’s not a great experience but, I’m a firm believer in we can’t do it otherwise because I’d end up losing money which means in long term the company won’t be around so I can’t support anyone. So we are kind of strict and particular.

Audience member: Yeah. That’s a good answer. We deal with the same thing because we found ourselves answering a number of emails recently where we discovered that the technical problem they were having was because they were pirates but, the fact. Luckily that particular issue made it very obvious and that is a really fun one to respond to, you know. [laughs] So we tell them the answer is go buy our software and this problem will go away. The crack you have is bad.

Adii Pienaar: Here’s your problem solved. [laughs]

Audience member: Yeah exactly. So, it’s a win/win. But, yeah, I appreciate the answer that’s a good one, thanks.

Adii Pienaar: We have one more quick question. Otherwise it’s lunch time. No questions, thank you everyone.

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