The Early Days of Insanity

21/05/2014 13:34 BST | Updated 20/07/2014 10:59 BST

A recent Essay by Paul Graham took me back to the beginnings of PeoplePerHour. I read it with nostalgia remembering those early days of insanity, of doing things that don't scale and make little sense at the time. Yet make all the sense in the world today.

PPH began as an experiment from an older business I started which was in essence an offline version of what we do today. We were an old fashioned 'outsourcing shop'. Initially for consumer services and later for business. We'd go to companies (mainly small businesses) and say "give us all the stuff you don't want to do and we'll do it for you". We charged £25 per hour. The model was simple: I hired ex-secretaries, and as long as I kept them busy for 70% of their time I covered their costs. The 30% was my profit.

One day, I had an insane idea. I thought "why am I paying for these people and hiring them out instead of creating a website for them to hire themselves out directly?". It was one of those profound ideas where your next thought is "why on earth didn't I think of this before".

Within a week I had our in-house engineer create a one pager online with two columns: looking for services - provider of services. People would submit their requests which would come straight to my inbox. Yes - in outlook! I'd then look through the list of service providers to find people with relevant skills. I'd shortlist the top 10 and email them directly asking them to bid for this job. From those, I would shortlist the top 3 bids that made most sense and send them to the buyer to decide. When there was a 'match' I created an invoice manually on excel charging 50% deposit upfront and the remainder on completion. I kept 10% as my fee.

This is how insane that period was. The average job value was £250, which remains the case today. So all that work was to make £25. I was a master micro broker doing something that was on the face of it totally insane. It was not scalable and made no commercial sense. Yet that was without a doubt the most important period of the business. That's when the original concept was formed, of how it should all work, what the demand was, what the supply was like, how the matching worked. It gave me a sense of what it is our technology today should do.

I was basically a manual version doing a handful of what PeoplePerHour does by the thousands today. It was crazy but, looking back it was beautiful and critically important. I made a mental note reading this essay that I should reflect back to those days more often when defining our product roadmap.

Much like what Paul Graham says in his article the things I did by accident were the things that helped get PeoplePerHour off the ground. I focused on a narrow niche which was what my old business did - personal assistant and organisational services. In fact our first name was Which of course reads 'paper' - 'hour' - arguably the worst url in history. But its what in Paul Graham's words made us catch fire. Focussing on a narrow niche.

I remember going to an exhibition by the Sunday Times for secretaries and handed out fliers. I was surprised at how many secretaries loved the concept straight away and said they'd quit their job and do this full time if they could, working from home and being their own boss. It was early signs of a market waiting to happen.

Today of course that's our mission. We help people much like those secretaries but also designers, engineers, accountants, writers, copywriters - you name it - pursue their financial independence, set up their business and build it up literally one hour at a time. We empower people with the tools and means to live their dream and be entrepreneurs. And we help small businesses across the world stay lean and agile, build their company up by tapping into a vast resource of skills across the globe accessible at a click.

Back then in the days of insanity the signs that I should carry on doing what I started was that I got some 200 people signing up in 2 weeks mostly after attending that exhibition. Today we get that within a few hours. Our online workforce is now over half a million people across 120 countries. That's larger than HSBC's, Tescos, and Ford's. That's the power a small business has today: they can access a workforce larger than the worlds biggest multinationals that have amassed it over decades and billions of dollars invested. We empower the little folks that collectively drive most of the worlds employment, innovation and change.

I didn't know it then but those early beginnings of doing things that don't scale were what defined our business for years to come. It's amazing how doing a handful of things manually versus automated in the thousands using technology, has some 'constants' that don't change. Today we have complex algorithms, matching engines with relevance scores, quality scores, notification systems based on skills and tags etc. Yet I closed roughly the same % of jobs doing it manually as our technology does today. Just in much larger volumes of course. The average job value was the same as it is today. The average number of bids per job the same.

Yet without the technology that automates this we wouldn't be able to scale and get to where we are today. Technology gives us scalability but doesn't substitute or improve human intelligence. At best it replicates it. It creates convenience for the customers and a much wider reach and variety. Ultimately that makes the model economical and functional.

The biggest lesson for entrepreneurs from this is just to try doing whatever it is their technology will eventually do or they aspire it to do, manually at first. Get a real hand on understanding the customers need, do it the hard way in what seems on the face of it an insane way. That period of insanity is what will give you sanity for years to come.