We’re expanding our team this year to help with some of our 2025 and beyond plans, and I wanted to make sure that our internal training was up-to-date. Chōwa is a big part of this training because it’s our business culture that “rejects micromanagement, fosters safety, encourages curiosity, and sparks innovation.” 

Although the pillars of Chōwa are timeless, the context I wrote them in was totally wrong. These days, we aren’t trying to scale Inedo, or even grow. Instead, we listen to our users and build tools that solve their problems. If growth comes from that, then it’s a good sign we’re building the right things. 

This wasn’t always our mindset: scaling was The Goal. However, it didn’t quite go as I planned. Some might call that failure, but Inedo is doing better than ever and, most importantly, we discovered a much more interesting and fulfilling path than scaling. 

The Need to Scale 

In early 2018, I embarked on a five-year plan to rapidly scale Inedo into a large organization. I would then gracefully step away from it with a Big Exit. It was the dream of so many founders, but one that was actually within my grasp. Not only did we have healthy revenue to start, but a multi-million-dollar investment on top of that to build our runway. 

In March of 2020, everything was on track, and we were scaling like crazy. I was putting the final touches on Chōwa, Inedo’s book on business culture, and I wrote this passage about why we needed to scale. 

Thirty-five percent year-over-year growth is great for every industry on the planet except IT. This is because the industry grows 90% year over year. One of our direct competitors ballooned from $1 million in annual revenues to $250 million in venture capital funding in four years. If you’re not growing at the top pace, then it is just a matter of time before you get outpaced.  

In the same way that car sales are too big for a “boutique car manufacturer,” our market had simply grown too large for a company of our size. To be successful in the mid-term, we needed to grow and mature just as fast, if not faster, than the market to stay relevant.  

I truly believed that. If we didn’t scale up, we’d be left behind and ultimately fail. 

As I reflect on this five years later – sitting in the same chair in the same office, but in a remarkably scaled-down version of Inedo – it doesn’t feel like we were left behind. And I don’t really feel like we failed either. 

Objectively, if we look at Inedo’s business metrics like customer retention, upsell ratio, revenue growth, customer satisfaction, product innovation, and so on, the only thing that dropped since then is headcount. Certainly, that doesn’t mean failure, does it? 

Failing into Success  

Just because Inedo’s numbers look good doesn’t mean that we’re successful. In fact, using the March of 2020 rubric, we failed. Our business plan was modeled on the rapid growth of several competitors, including “Leaders” in the Gartner Magic Quadrant. They were the trailblazers that I was certain would leave us in the dust if we didn’t catch up. 

We never caught up. There were several reasons for that, but it turned out there was nothing to catch up to. Despite hundreds of millions in venture capital, all of those Leaders failed. Hard. Their once-great products and services decayed over the years and were eventually sold off for scraps. Nearly everyone involved in those companies – founders, engineers, customers, even the investors – lost out. 

It wasn’t just poor strategy and poor execution on their part, but the entire market niche shifted. They were simply too bloated and sales-heavy to pivot their products, and that’s what ultimately led to their collapse. 

In retrospect, this is just the nature of our industry. Even Microsoft, with its army of world-class engineers, lost countless billions with its failed Windows phone. The reasons were the same: poor strategy, poor execution, and an inability to change course fast enough. 

Success and failure are relative, but instead of using that March 2020 rubric, we simply changed the rules of the game. We pivoted. 

Inedo’s Pivot: Practical and Personal 

Like many in this generation, Inedo has a pandemic chapter that lead to some profound changes to the company and my perspective. 

Practically speaking, our business plan was unworkable. It relied on so many things that were impossible in those days, from filling our office with new marketing and sales members to expanding our conference presence across the world. And of course, customer growth and more venture capital investment to fund all of this. 

Personally speaking, growing Inedo into a “Big Business” no longer appealed to me. It’s hard to articulate why, but focusing on “investor goals” and “scaling milestones” instead of “customer needs” and “great products” didn’t make me happy, nor drive most of the team I liked working with. 

I used to dream about the financial rewards from a “Big Exit” in selling Inedo, but I never really thought past that. I mean, what was there to think about?  One could do anything with that kind of money! 

But the pandemic forced me to reflect on what I really wanted to do. It wasn’t buying a yacht, nor retiring on a private beach. Instead, I just wanted to start a new company that looked like a “pre-scaling” Inedo. My day-to-day would involve building software while leading the company towards growth and exploring some other interesting side projects. 

In other words, my dream was to go where I already had been. 

Writing Inedo’s Next Chapter 

Turning around and heading back is not a regression. I had no desire to revert to the younger version of myself or Inedo.  

Instead, I wanted to return to operating a small business, being hands-on with our products, and working closely with the team and our users. But this time, with wisdom, experience, and the principles of Chōwa to guide me. 

There were a few technical hurdles in scaling down, especially when investment is involved. But once I got past those and became the sole owner of Inedo again, I needed to create a long-term, strategic business plan for Inedo.  

Following Chōwa, the first step is carefully rethinking and articulating the shareholder goals. This time it was all on me and, since a “Big Exit” wasn’t on the table, I came up with these. 

• Simple, sustainable growth over the long-term. Instead of focusing on high-growth, short-term gains in complex, investor-minded performance metrics, take simple, modest risks while achieving modest profit without putting the company in jeopardy.  

• Maintain Tokyo and Berea headquarters. Inedo’s dual headquarters are as integral to the business as the products we build and should continue to be incorporated in work planning and international travel. 

• Interesting & fulfilling opportunities afforded through business. Many opportunities we could pursue will inherently represent a moderate risk that may not yield success, if they’re even measurable. When in doubt, strive for interesting and fulfilling. At least it’ll be a fun story at the end. 

I was hesitant to write down that last goal. It’s rather subjective and perhaps eccentric. But reflecting on my career as an entrepreneur, “interesting and fulfilling” was clearly a driving force behind many of my decisions. 

Failing in Interesting & Fulfilling Ways 

Failure is one of the best lessons, and every successful company will have a closet filled with the skeletons of failed projects. Inedo is no different, but many of our mistakes are proudly on display. 

Like that one time we made “Release!”; a trick-taking card game about releasing software. We launched it on Kickstarter as a “backdoor” way to build brand awareness, which would ultimately lead towards more sales of our software.  

In retrospect, it was obviously a bad idea. Creative, but a bad one nonetheless. I can say that now, not only because it didn’t work, but because we’ve since learned a lot more about complex, B2B software sales in our niche.  

This bad marketing idea cost us time, money, and opportunity. But that’s also the cost of other bad marketing ideas, like a poorly-written whitepaper targeting the wrong persona.   

A card game though? It’s much more interesting and fulfilling to create and, to this day, it’s proudly displayed on our shelves. 

Quarry Workspaces: An Interesting Side Project 

Fast forward to 2021, or a year after establishing these new shareholder goals, we were faced with a difficult decision regarding the Berea headquarters. Our lease was coming up, and that meant we had to cancel, renew, or change it. 

With our scale-up business plan gone, Inedo had absolutely no use for the entire first floor of our building. We didn’t even need most of the second floor, and it seemed unlikely that our office space needs would change in the foreseeable future. 

The obvious and most pragmatic decision would have been to relocate our offices. Or at the very least, stop leasing the first floor. But that would run counter to each of those top-level shareholder goals. So instead, we bought the building and built out a coworking and shared office space on the unused first floor. 

Unlike the card game, I had no illusions that Quarry Workspaces would help Inedo sell software. In fact, even if every coworking desk was rented, it wouldn’t even be all that profitable.  

But buying the building and creating Quarry Workspaces checked all the right boxes: 

• Modest risk, modest profit 

• Strengthened Berea headquarters 

• Interesting and fulfilling 

It was a lot of work, but most of the space is rented now and we have happy tenants. 

In the end, creating satisfied customers from a new “product” that we built from scratch was not only fulfilling, but it gave everyone a new-found sense of confidence. And as with most new work, we leveled up our skills in unexpected ways on a low-stakes project.  

There were also some unexpected wins, such as strengthening our ties with the local Berea community. There will certainly be more to come. Overall, Quarry Workspaces was a success. 

Inedo Snack box: Another Interesting Side Project 

We wrote about the Inedo Snackboxes earlier, but this was another interesting and fulfilling project. The idea came about when we received an unexpected gift basket from one of our vendors. 

It wasn’t all that special to be honest, other vendors often send us cookies, popcorn, and other snacks as appreciation gifts. I kind of remember who sends them, but no matter what, we always enjoy and appreciate them. 

Are we influenced by these gifts? Does it keep us loyal? Would we rather just receive a $50 discount on the service? I have no idea. But it’s obviously a thing that vendors do, and they probably did some analysis and decided it’s worthwhile from a business perspective. 

And that’s what got us thinking. Inedo should send customers an appreciation gift! 

Insincere Appreciation 

A few weeks later, our marketing team presented some options. It turns out that Customer Appreciation Gifts are a whole niche industry, and we basically just need to upload a spreadsheet, and they’ll take care of the rest! 

That didn’t sit right with me. I guess it wasn’t very interesting? 

It also didn’t feel very sincere. I very much appreciate our customers and picking a thing at CorporateGift.com just felt off. 

No, no. None of that would do. We needed to do something else. 

A Fulfilling and Interesting Customer Appreciation 

We eventually landed on the Inedo Japan Snackbox. It was a ton of work, especially compared to simply picking something from a website and uploading a spreadsheet. We had to source snacks, design the contents, and figure out how to mail a ton of parcels from Japan. 

From a business perspective, there’s no way to measure how much more effective this is than an ordinary customer appreciation gift. And our limited marketing resources could probably be used for other customer retention activities, or even more whitepapers and ads. 

But unlike the card game, this was obvious from the start. This was a much more interesting project for everyone involved, and it’s a much more fulfilling way of showing our sincere appreciation.  

Will anyone remember it differently than the popcorn or cookies from other vendors? 

Maybe. Maybe not. Similar to Quarry Workspaces, this is work we’re not used to, and we leveled up our skills in unexpected ways on a low-stakes project. Perhaps there will be some other unexpected wins down the line. 

Defining Success at Inedo 

Defining failure and success in a small business is not straightforward. Unlike an investor-funded startup, Inedo is not striving for valuations, revenue targets, EBITDA, or similar goals set by venture capitalists. 

Obviously, a business needs to have some kind of profit, and we all want to see some kind of growth. But neither of these drive us. Instead, profit and growth are validation that we’ve built something valuable. So valuable that people are willing to pay money for it. 

Although profit and growth are great success markers, they’re just numbers. And they’re relative, so who’s to say if 3%, 30%, or 300% are worth celebrating? 

Mid-term Success Markers 

Instead of trying to gauge success with specific numbers, we use success markers that are interesting and fulfilling. Some of these include: 

• Lease a dedicated floor of an interesting building for our Tokyo office 

• Increase team travel between our office locations 

• Have a presence at national events/conferences 

• Expand beyond the “Inedo product” brand through acquisition 

Like with any success marker, we could feign our accomplishments. For example, to “achieve” the event/conference presence marker, I could just buy a table at a few conferences, set up a booth, and hang out there myself. Or someone else on the team could. 

But that’s not an accomplishment. And worse, our team is currently focused on building and supporting our products, so this would be a major distraction and certainly harm the core business. Side projects are one thing, but this would be cheating. 

Instead, we need to hire a team whose job it is to research, recommend, and ultimately attend conferences. To do that, we need to have another team that can develop strong messaging and content assets, and then yet another team that can help the leads we meet at conferences sell our software to their company. 

Multi-year, Flexible Strategy 

These various success markers are aligned with a multi-year strategy. Following the principles of Chōwa, the strategy is devolved into initiatives and then into projects, each of which will be owned by an individual. 

Many of these projects will succeed, but several will fail. And that’s okay. No single project will put the company in jeopardy, and by remaining flexible in our strategy, we can simply adjust as needed.  

Sustainable, Long-term Success 

Inedo does not “need” to grow and that’s certainly not our goal. But it’s something we’ve done every year and, as long as we continue to focus on building products that customers find valuable, we will probably continue to grow. 

By redefining success along success markers instead of traditional growth metrics, we can control our growth journey. 

Although I love my job and have no intention of retiring anytime soon, I would like to look back and see that everyone involved with Inedo – myself, employees, customers, partners, etc.– will come out ahead. And, if we do things right, have an interesting and fulfilling experience along the way.