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Software Developer 1E Uses Culture, Killer Case Studies to Sell Savings (Page 1 of 3)

1E,  a software developer based in London and New York, did $40 million in sales last year, up from $30 million in 2009. Founded in 1997, 1E now has 200 employees; about 65% of those are in the U.S., with the balance in the U.K,

But, says 1E founder and CEO Sumir Karayi, money and growth shouldn't be the primary drivers for a successful software company; his focus is on having fun.

When we spoke with him recently, Karayi emphasized the importance of fun, and offered some great tips for software entrepreneurs (while owning up to his past mistakes).

Tip #1: Don't just talk culture; live it.

"One of the things we've found really effective is cultural aspects of the business," Karayi says. "We have this term called 'sunshine.' I want to enjoy my time in the company. I want to laugh and smile and share the joy. I know it sounds a bit whimsical, but there's a really strong point behind it. 

"We try to go away once a year, with everyone in the company. On our last trip,  -- we did a sailing weekend off Southampton, with 15 boats -- all the guys from the U.S. flew over. The idea was to have nothing fundamentally work-related; it was just people getting to  know each other.

"Some of the people who've left our business are still our best friends. We started this company with $2,500 in initial funding, from the three founders' pockets. I later bought the others out. One still works for us -- he leads our research team -- and the other one went off to be an organic farmer, but we're very good friends, and he writes a blog for us."

Tip #2: Use events to share your culture with your customers.

"Your clients will really enjoy this focus as well," Karayi says, "if you truly invest in your culture and have the whole company behind you. 

"Last week we went to a conference and organized a party. We had 520 people at that party, and had an entire nightclub to ourselves. All we do is get people to talking to each other -- selling is absolutely banned. It's just an aspect of the 'sunshine' effect, and it's created an extremely long-term relationship with our clients.

"We're willing to spend money on this, but it's based on being a community -- something that's bigger than money. We spend around $600K to $700K a year [on culture-related activities], and don't have direct measures for the outcomes; we don't even try. 

"There is marketing follow-on, of course, but there's nothing directly related to the events; we'd be talking to these customers anyway."

Tip #3: Extend your culture to good deeds outside the industry.

"About seven years ago I got involved with an orphanage in India," says Karayi. "We brought in some teachers, five of them, then we persuaded the monks who were running the orphanage to go out to other proper schools.

"What happened over time is that these kids started excelling. Last year, one of the kids came in fourth in an all-India physics competition. This is a child who seven years ago had no formal education whatsoever. 

"You'll find that the business itself and the community are really paid back in spades in terms of the 'sunshine' aspect. It's something that people intrinsically care about. 

"We're looking at extending this, but we don't link charitable donations to business profits, because the organizations that need this help need the money every month. A lot of small businesses believe they can't afford it, but they can; it's just a line item."

Tip #4: Geography can determine software developer styles.

1E's office in the U.S. is devoted to pre-sales, sales, and post-sales, while the vast majority of employees in the U.K, are in development. This has created some staffing challenges, says Karayi.

"We wanted to develop everything in one place, using the Agile method," he says. "This allowed us to have everyone on one floor, in one place. We create working spaces with organic desks: 10 people around one space.

"But, there is a bit of a problem finding tech people in the U.K. They're extraordinarily gifted and creative, but they tend to be less commercial than those in the U.S. They're not as focused on whether something will make money. 

"Over time, it's likely we'll establish a U.S. development team as well. We want to wait until there's enough momentum -- I think you need a minimum mass of about 20 people to make it work."

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