Lessons From a Startup: Adapt to What the Market is Telling You

This the latest installment of our Q&A Series – short interviews with talented, experienced, and successful entrepreneurs who are on the front lines of running online businesses. I’ve always believed that it’s a big mistake to not at least listen to those who have worn the same shoes that we are putting on every day. I hope these interviews prove to be as informative to you as they have been for me.

Today’s guest is Wray Rives, founder of NeedaCFO. I had a chance to chat with Wray recently. He had a lot of great insight’s about year one of his newest venture.

Here’s our discussion:

B5: Talk a little bit about what NeedaCFO is all about.
WR: For several years I have worked with medium-to-large companies providing C-Level management support, mostly in the financial (CFO/COO/Controller) type roles.  At the same time, I have had a few fairly small business clients that I mostly do tax compliance work for.  I saw the need with the small business owners to have a senior level business advisor like a CFO or COO, but most of them cannot afford a full time person. Even if they have in-house accounting and finance staff, many small business owners end up performing the CFO role themselves, because the in-house staff is focused on day to day accounting duties and is not really looking at the business in a “big picture” way.

In my experience, small business owners tend to fall into two groups a) really good at some technical skill or b) really good sales people.  Very few of them are really good CFO’s. I felt like they needed somewhere to go and get solid business advice.

B5: How do you make money?
WR: I charge a set fee or hourly rate for services provided.

B5: How long has NeedaCFO been in business? And how long have you been associated with it?
WR: NeedaCFO has been in existence for about a year, and I have been involved from day one.

B5: Is this your first entrepreneurial venture? If not, what else have you worked on?
WR: No, I have been a partner in or owner of public accounting practices since 1993.

B5: Talk a little bit about your desire to be an entrepreneur. Is it something you’ve always had? Or did it happen all of a sudden?
WR: I think I have always had the desire to be an entrepreneur.  I tend to be very results oriented and become impatient when I have to deal with people who throw up roadblocks to moving forward.  I guess you would say I am a “get on the bus or get out of the way” type person.

B5: Tell us about the most valuable learning experience(s) you’ve had with the business.
WR: I learned that I have to adapt to what the market is telling me and not solely focus on my personal vision for the business.  NeedaCFO has expanded my own brand and early on I started getting inbound requests about doing tax work.  Although I do tax compliance work as a CPA, at first I was resistant because doing tax returns was not what I had envisioned for NeedaCFO.  I guess the lesson is you need to be true to your vision, but also be adaptable and willing to listen to what the marketplace tells you it needs.

B5: Is NeedaCFO backed by any investors, or is it bootstrapped?
WR: It is totally bootstrapped by me.  The nature of the business is that there have been several peaks and valleys with revenue.  I do think the current economy has helped me because
1)businesses are looking for the services we offer whether they are an established business needing to control costs or startups that just need advice, and
2)there have been plenty of talented finance and accounting people who are unemployed or underemployed and willing to work on a contract basis when I have needed to ramp up and then move to something else if the work trails off.

B5: A lot of our readers face the dilemma of how to properly fund their ventures. Can you talk a little about why you took the company in that direction?
WR: I bootstrapped the venture, because you can’t find funding for a startup whose revenue stream is based on providing a personal service.  Funny thing is if you look to buy an existing service business, you can have people lined up around the block to fund you, because there is a concrete history of cash flow they can point to and get comfortable with the deal, but no one is going to fund a personal service startup.

B5: Knowing what you know now about financing, what advice would you give a new startup trying to figure out the best option to finance their idea?
WR: My advice would be to try and understand the wants and needs of the person providing the financing.  If you can show how your idea is going to meet the needs of the money people, they will be much more willing to work with you, but remember no one is going to be as enamored with your idea as you are.

B5: How much of your marketing strategy is organic search versus PPC?
WR: Almost all of my strategy is organic.  When I started out I tried a lot of PPC options, but I kept getting more response from the organic efforts.

B5: What can you tell us about your strategy for each?
WR: I think if you have something concrete that people want to buy, PPC can be very effective because you just need them to find out where to get your widget.  But if you are selling a service, people are looking at whose behind the service and PPC can actually work against you because you risk looking like you are trying too hard. Actually we recently moved our website over to be a Ning network trying to make it more of an interactive experience rather than visitors just getting a marketing spiel from the business.

It takes time and effort to build an online reputation and you have to be willing to show that you can provide value to build trust with people.

B5: What tips can you share with our readers about traffic acquisition? What have you learned that you didn’t know when you started the business?
WR: I try to stick with an 80/20 rule in social media.  80% is providing value and 20% is asking for something in return.

There are folks who are a lot smarter than me about building SEO, and I probably could have saved some time and effort by consulting with them starting out. Luckily I took a shotgun approach in the beginning and it was really not that hard to start identifying things that were working and those that were not, so I could start focusing my efforts where I was getting return.  I also keep listening to those folks who are smarter than me and pick up little nuggets every now and then.

B5: How much of entrepreneurial success is skill versus luck?
WR: I think everyone has skills and entrepreneurial success is about attitude.  With any startup, there are going to be hundreds of times that you are going to question should you be doing this, especially when people you love and respect ask if you should be doing this.  You have to have an attitude of perseverance and willingness to keep pushing ahead.  Plus a healthy dose of luck never hurts.