The Success of an Alternative Startup
My name is Ruben and I have been an iOS Engineer at Mobile Jazz for about a year and a half. This past year, I had the opportunity to take a university course on Entrepreneurship Initiatives. As a part of the course, I was assigned the project of interviewing an entrepreneur and get to know their business.
I was supposed to interview an entrepreneur and then compare their business with the theories that we studied in the course.
I chose to interview Jordi at Mobile Jazz because I had a genuine interest in hearing the real story of how the company that I work for got started. I suspected that the Mobile Jazz model would challenge the principles of the course that I was studying—and I wasn’t wrong.
I knew something was different about Mobile Jazz, so I set out to figure out whether the MJ model fit with what I was learning in my entrepreneurship course.
Not All Startups are Built the Same
A lot of startups seem to depend on huge investments, venture capital, unexpectedly rapid growth predictions, plus a lot of tireless work. I find this style of workplace to be highly pressurised and often not enjoyable.
The course I took was largely based on starting and growing a business in a traditional sense of having an idea, obtaining investment, hiring and growing at a rapid rate.
But having worked for Mobile Jazz, I sensed that they did something a little bit different—so I asked Jordi Giménez, co-founder of MJ, if he would sit for an interview.
The Beginnings of Mobile Jazz
Mobile Jazz isn’t your average business and it doesn’t follow the rules. They are entirely bootstrapped and have no external investments. They took the time to do things properly, and they grew organically—mostly by word of mouth.
But before I get ahead of myself, let’s do some introductions:
Jordi started his business 7 years ago at 28. He was a computer engineer without any prior business knowledge. He started working as a freelancer because he had a job that required him to freelance on the side. Jordi believes that his first experience as freelancer gave him the knowledge that he needed to start a business later on.
During this time as a freelancer, he learned to:
- Manage money, save, and pay taxes
- Find a suitable accountant
- Obtain things like the European VAT number
He initially never considered that MJ could be a business in its own right. His family wasn’t supportive in the beginning because they were worried he wouldn’t earn enough money. Being a freelancer in Spain is not looked upon kindly because of the common difficulties that entrepreneurs face when starting up. Jordi had to deal with some snide remarks and frequent discouragements, but he continued on.
About Mobile Jazz
Mobile Jazz is a boutique app and web development company providing design, software engineering, and consultancy services for clients ranging from solopreneurs to Fortune 500 companies. Their mission is to help clients succeed by not only creating user-friendly apps and websites, but also by providing expertise through advising clients on both internal processes and technology choices.
They consult and assist with the entire process: from developing the initial idea to the design, development, deployment—and even ongoing maintenance.
Mobile Jazz currently has around 20 employees and just over $1 million in annual revenue.
The Backstory: Founding Mobile Jazz
A few years before they founded MJ, Jordi worked with Stefan and a third person (Alex) for a big startup in Spain. They were just employees and had never considered starting their own business.
At this company they were required to provide freelance consulting work (advice about various technologies), etc. Unfortunately, their proactive and performance enhancing suggestions weren’t always appreciated or understood by a delivery-focused company. The three of them would often spend lunch discussing how frustrating it was to not be able to apply their knowledge to projects that actually needed it.
They started to ask themselves if there were any other companies out there who were also willing to pay them for their advice and development skills. Between them, they decided to create a basic portfolio and send it out to some companies to see if they received any interest.
In this portfolio, they didn’t demonstrate any big marketing research. Instead, they just displayed their tech awareness and the growing importance of companies having an app.
They were pretty sure that they could contribute something of value. Their aim was just to get one client to prove it was possible.
This was the “fake it until you make it” stage. And there were people who responded to their inquiries. When they were first contacted with a project, they didn’t even have a company name yet.
It was at this time that Jordi, Stefan, and Alex left their jobs and started the process of founding a company.
Incorporating a Tech Company in Spain
They didn’t have a plan to create a disruptive tech company. Their primary idea was just to obtain enough work to live a comfortable lifestyle.
After finishing their first job, they still hadn’t completed the paperwork required for the business and as a result couldn’t get paid for the job until 6 months later.
They began the paperwork in January by applying to register their company name. This process takes two weeks by old school snail mail. Whilst they expected it to be slow (two months was a reasonable time), they had no idea it would take nearly 5 months.
“Agencia tributaria” in Spain was afraid that software companies make for easy fraud cases, but they didn’t have any specific process to validate fair companies. So to verify that companies were real, their only process was to check and verify the people creating the company. In this case, Jordi and Stefan had just started, and so they didn’t have any previous experience to show such as an office or clients, and so unfortunately, the inspector forgot about their file.
After several months and some persistence from Stefan, Jordi, and Alex, the company’s file was finally officially approved by the Agencia tributaria.
Setting Goals and Finding a Niche
The first goal of the company was to earn about 100K per year, enabling the co-founders to get incomes equal to their previous jobs. They didn’t have any technology goals; they just started developing iOS and Android apps.
They quickly hit this goal in the first couple months when they landed two clients. Unfortunately, the clients weren’t experts in their fields and the scope of these projects was too loose. The scope changed repeatedly during the development and the income wasn’t coming in quickly enough.
At this point the third partner left because they didn’t feel it was stable enough. Jordi and Stefan had some of their own savings and so they decided to keep trying for a bit longer. By earning just 1,000€ per month, they could pay their expenses and use their savings for the rest.
Inevitably, they were hit with a period of no clients. And it was during this time that they kept themselves busy with internal projects to grow their portfolio.
They also noticed that software consulting companies, unlike others types of businesses, have lower profits but the return is fast and you don’t need a big investment. All you need is a laptop and Wi-Fi connection.
In the beginning, Stefan and Jordi thought they would need to be highly specialized in order to provide valuable services, but they soon found that their clients needed the exact opposite. Instead of being specialized, their clients were looking for more holistic, 360-degree, complete tech advice. In areas where they lacked knowledge, MJ began to outsource work and hire freelancers themselves.
Q: Did you have commercial experience? How did you price your work?
A: We learned on the fly. We knew how to price our work based on the experience we had from the company where we previously worked. Advised by friends, we also thought that as a company we could charge higher rates than freelancers because we offered more.
It’s also worth noting that this was at a time when app stores had just launched, and the app development market wasn’t mature. Everybody was learning about it together! It was an optimal time to get into the business. In the same city you could find developers at $200 hour and others at $15 hour. You could on occasion even find developers working for free because they wanted to learn. Now of course, this is totally different. It’s matured and there are average prices.
We were such newbies that we didn’t even have a contract model, we used to just sign whatever contract that our clients offered to us.
We had a small network—a few contacts from previous jobs, university, and from our clients. Even today, most of our clients still come to us from this network: previous clients, friends of clients and ex-colleagues. True to this day, we put almost zero effort into sales.
Q: Have you ever planned to grow the team to more than 20 people?
A: Absolutely not, we never thought we would grow so fast. We just wanted to keep doing similar work but with better conditions.
As all good entrepreneurs, we decided on our first goals together as if we were writing them on a napkin:
- Pay our bills
- Live as well as possible after bills, for example maximize our wellness at work (ie: better a fun project bad paid than a boring project well paid).
- Only after these things, earn as much money as possible.
For me, it was a very important personal decision to use personal savings to bootstrap the company. Fortunately, my partner supported me and we had no kids to support. Even though it was an economic crisis time, there was a lot of work for developers. So I knew if nothing worked I could find another job.
Q: Which knowledge and skills do you think were necessary to start a successful business?
A: Well this is complicated because when you are an entrepreneur you have to do so many different things. What worked for us during that time was focusing ourselves and doing what we knew how to do well: coding. Also it was also great that Stefan, my business partner, was a more sociable person than me. He enjoyed dealing with people and I was better at thinking about the architecture of projects. But we had to outsource accounting and legal. We had to figure out HR by ourselves, and we started by hiring friends and then, their friends.
As time goes on, you realize that some people are better at some tasks than others, and when you can delegate work with trust, things become easier.
I have learned a lot about business during this journey. I read many books. I have many experiences and attended tons of webinars. I thought about completing an MBA, but honestly I have never been able to find the time to do it. I now know that if I had done it before I would have learned everything faster and in a more structured way, but at the same time I could not stop my business to learn how to manage it. So I don’t think this is either good or bad, it’s just the way it happened.
Q: Are you still coding?
I have very little time for coding now, but I still try to be as close as possible to the development process. My aim is to guarantee the communication between the team and the clients. Overall, I still consider myself to be an engineer.
Q: What advice do you have for entrepreneurs who are looking for business partners?
I was very lucky—though I had no idea at the beginning. My business partner, Stefan, is super optimistic and I’m very pessimistic. This works great for us, because we always find a great middle ground between his crazy optimistic forecasts and my pessimistic point of view. He is usually the creative, optimistic risk taker and I’m the planner and the executor.
It was also great that we had worked together before. This helped us understand how our day to day life would be, and ensured we would get along with each other—as you know, a lack of consensus between the founders is a common cause of premature death in companies.
Q: Do you have any advice for people who want to start a business? What kinds of skill sets do you need to possess to be successful?
Honestly, if you want to start a business, the key factor isn’t the skills you have; instead, it’s being able to find a balance of skill.
If you have a great vision but you can’t execute the work, you’ll have a big problem. Or if you are very optimistic but lose contact with reality then you will fail.
In the reverse, if you are too cautious you may never take any risk and you will not move forward. If you are an excellent executor but you have no direction, you’ll end up accomplishing nothing.
So the key is to surround yourself with people who make sure your strength has direction or who have the ability to give wings to your strong sense of direction.
While my course was useful and gave me some good information, Jordi’s experiences setting up Mobile Jazz contradicted the theories we studied. In practice, there is no one-size-fits-all method to starting a business and each and every detail will need to be tailored to your own industry, needs, and ideas of what kind of company you want to run.
The course provided me with tools to validate ideas to see if a business had grounds, but it wasn’t sufficient to really prepare me to start my own business. It also failed to take things into account like company happiness and company culture—which ultimately lead to retaining healthy happy staff.
For the record, I didn’t really intend for my interview to be published as a blog post, but I thought Jordi gave some information here that could be useful to other entrepreneurs or developers trying to understand alternatives to the big machine of the investor-run startup world.
What are your thoughts about starting a company? We’re curious to know what you think. Let us know in the comments below.
This post was co-authored by Sarabeth Flowers Lewis.