Didacte is a small business in Quebec City that currently has 11 employees. We are far from being on the Silicon Valley model!
Good management becomes more and more critical to support the organizational mission and vision as the business grows. Staying agile in a changing industry requires organization and coordination.
Is it challenging to be a small team? How do we adapt to this reality?
Mathieu and Jean-Philippe share their opinion and experience with us in managing a small business!
Mathieu Dumont is president and shareholder at Didacte. Entrepreneur, podcaster and mentor in entrepreneurship, he is a preacher of good team management and good practices in administering a growing business.
Jean-Philippe Doyle is a back-end developer and shareholder at Didacte. He participates in the company’s management, where he is in charge of finances. He also sits on various boards of directors such as Québec Numérique and Le Haricot Magique.
Is being a small business advantage or disadvantage in the online training industry?
(Jean-Philippe) It sure looks like it is a disadvantage to be small if you have in mind a rapid expansion in Silicon Valley, but that is not our vision.
By targeting a smaller market, we can respond well to our small team and our great product. We manage to be competitive with our agility and proximity to our customers.
Online training is a large market where there are massive players, and it is indeed more difficult with a small team to have a product as complete as some of our competitors. You can't always compete with companies that have millions in investments and dozens of programmers!
Our clients are fewer, but they are still very satisfied or even more satisfied than among these big players thanks to the attention paid to the success of their project.
(Mathieu) I have always liked the underdog stories. I love being in a position where we don't always have the means to achieve our ambitions. It forces us to be creative and understand what sets us apart from others.
I fundamentally believe that ease leads to complacency in business. For me, being a small business is neither an advantage nor a disadvantage; it’s the vision.
While this may seem at odds with what is popular in our industry, the business grows to benefit the people who make it up.
This is called a lifestyle business.
The company must enable us to provide our employees with the lifestyle that we collectively desire and not have a lifestyle dictated by the company’s needs.
When we say that Didacte puts the human in technology, it is one of the many ways that we concretize this statement. We do our best to optimize and grow from the inside before going into hiring and “grow to grow.”
Our customers greatly appreciate this philosophy, and it allows us to maintain and nurture a closeness with each person who enters our universe.
As the big guys fight for numbers and throw pluses and minuses in spreadsheets to the detriment of the customer experience, we focus on solidifying our relationships and ensuring that every customer stays with us the longest possible.
What are the challenges and opportunities that Didacte encountered as an SMB from a financial point of view?
(Jean-Philippe) Being an independent SMB allowed us to decide pretty quickly to invest in Didacte and to add product development to our existing web development consulting activities almost on a whim.
Since we had a partner-investor, we had to create a new joint venture with separate accounting, which resulted in some duplication of administrative tasks. We still have this double structure with which we have learned to live better, but we are still considering simplifying the system when our funding agreements allow it.
We also went through an entire buyout process from the original partners in 2018, which was both an opportunity to control our fate and a pivotal financial moment. The ins and outs of this takeover had to be carefully considered and negotiated.
We reached a good agreement with a moratorium on capital payments which allowed us to continue investing in Didacte at the start. Then we achieved a growth rate before starting to repay—not having needed new external financing for this buyout also allowed us to maintain our independence, which is an essential value for us.
Another challenge for technology SMBs is the tax environment in which we must evolve and compete.
Large companies have much easier access to all kinds of subsidies than SMBs like Didacte. They have teams dedicated to obtaining grants, whereas in an SMB, it is often necessary that the shareholders themselves take care of this burden or that they hire external consultants.
Several tax measures such as the credit for electronic business development, where a minimum of 6 employees is required, also disadvantage small businesses. It doesn't seem like much, but it's a figure that is often slow to reach for a startup. And the exclusion of employee shareholder salaries from the measure is disadvantageous for the technical founders.
I think this program deserves to be updated by our politicians to encourage technology startups, even if it means making access to the measure more progressive if the objective is to promote growth. We just got it to celebrate our 5th birthday, and I'm delighted with it, but I would have liked to have had this money earlier to help us invest more quickly in the product during our first five years.
I want to say that I do not want our company's vision to be guided by subsidies, but we cannot ignore it to be competitive in our environment.
(Mathieu) To follow what Jean-Philippe mentioned, there are different ways to develop and grow a business.
For us, the desire to develop the company in complete financial independence was fundamental. Every dollar generated by the company is fed back into it; this is called being bootstrap.
This approach comes with slower growth, and unsurprisingly, our industry is changing very quickly. Therefore, we had to decline opportunities and markets in the past five years to develop the product with our limited resources.
Without saying that we will never go into external financing, it was both symbolic and philosophical to succeed in our product and company positioning organically to ensure that it meets a real need in the market, and not just on paper.
Unlike the increasingly popular approach of relying on VC (Venture Capital) growth financing to accelerate growth blindly, the bootstrap approach forces us to remain agile and listen to our clients.
While that requires us to regularly say no to minor changes that don't fit into our vision, it also has the excellent side of generating many conversations with our ideal clients. We can thus take the pulse of the needs that arise from the most urgent and essential challenges for them.
How has the size of the company influenced the evolution of the business model?
(Jean-Philippe) I'm going to let Mathieu elaborate more on that, but being smaller, we have realized over time that we have to target a more precise market than what we initially thought we would do. When we created Didacte, we dreamed of conquering the world and becoming the Shopify of training, but we realized that it was not realistic nor what we wanted as a model.
Ultimately I don't know if it's the company’s size that led to this change if it's more simply that we found an agreement between our product and the market different from the one we initially thought and which is more suited to our size and values.
(Mathieu) Matching the business model with the vision and available resources is quite a contract. I joined the company a few months after its creation.
When someone told me about Didacte, the aim was to be on the international market as quickly as possible and conquer the world.
The problem with that is that if it is the absolute goal, it takes sizeable and non-negotiable prerequisites. It takes human resources to do it, money to get significant visibility, the right time to launch an aggressive market penetration offensive, etc.
We simply couldn't fight on equal terms for the English-speaking markets in terms of the marketing budget. This is why we decided to readjust the focus to capitalize on the competitive advantages that these big players did not offer: human proximity, a bilingual customer experience at all levels, consulting service, etc.
To dominate the world, it takes a giant war machine with many people on board to operate it and right now, that's not specifically of interest to us. There is still a lot of room to grow and optimize from within.
Hiring is the last resort when we can no longer optimize processes or develop our current resources.
So that puts us in a position where, as an employer, we must prioritize and value each member of the team’s climate and working conditions. Then, you get the best out of your employees without doing it to the detriment of their happiness.
We have customers from all over the world, and the long-term goal is to gain more market share. But in the short term, we prefer to focus on directly impacting local businesses and solidifying our positioning as the # 1 platform for Quebec SMBs before going to other markets more seriously.
Is it difficult to remain agile in decision-making as the team and clientele continue to grow?
(Jean-Philippe) Surprisingly, I think we are doing quite well on this!
In recent years, we have better segmented our customers, and this greatly helps in decision-making. Growing the customer base and the team also forced us to improve our internal processes.
We managed to better segment decision-making between the board, discuss the long-term vision, and call our "decision table," where we choose the projects to prioritize in more detail. Then we dropped the major annual roadmaps to focus on a more agile development planning and choice method.
But there is always room for improvement and, among other things, I would like us to involve our active customers more directly and regularly. We are very attentive to our customers with all the support we offer, but I would like us to go even more ahead of future needs.
I'm not sure what the right way is yet, but I like the idea that customers can more readily ask, comment, or vote on upcoming improvements and features.
It’s a double-edged sword because it can also create frustration for clients whose needs are less aligned with our vision or make us less agile if we feel constrained by the popularity of requests. These are certainly ideas that we will be checking out to stay well connected with the needs of our growing clientele.
(Mathieu) I wouldn't say it's hard. Being agile is a way of being in my eyes. Yes, you can learn it, but I think it's innate for those who perform well in agility.
The team is growing, but we have control over who enters the company. The clientele is growing, but we have the power to influence who we attract.
We can no longer manage the business today like we did when we had five employees.
Since January, we have reviewed the organization’s structure: we have reassessed roles and responsibilities. We have changed the decision-making method for elements that concern the product. We will soon have to revise the pace of specific meetings to a higher level.
A company is a living entity in my eyes, constantly evolving. So it's always changing, and that's what makes it fun. What made you successful yesterday may be what kills you tomorrow, so you always have to be questioning.
By remaining transparent with the entire team and customers, they can better understand or even contribute to management improvements. We must never lose sight of the fact that the decisions we make are for the good of the company and the good of the employees who make it up, and the customers who benefit from them.
As long as you stick to this trilogy, things are going well.
If Didacte continues to grow at the same pace in the following years, what impact will it have on the management practices?
(Jean-Philippe) We have just changed our approach to development management and day-to-day operations management practices, as discussed in a previous article. This new way of doing things will work well even with promising future growth, both for the clientele and the team.
It’s the end of long and heavy roadmaps; let’s be more agile in our decisions and have a more productive team!
Regarding HR, administrative and financial management practices, we are still managing growth. We are not yet at a size where it is viable to have people dedicated to these tasks, so we still share them among ourselves, but we are getting closer and closer to a size where it would be.
Given this, we are starting to document more, standardize more and even gradually delegate elements with less added value when done internally by our team.
For example, accounting is a task that I did previously, but which is now almost entirely delegated to our external supplier (Mallette, not to mention them - hello to Gisèle, Émilie and Mélissa!).
(Mathieu) Even though we have a structure with fixed roles and responsibilities, the reality is that we include quite a bit of everyone in the significant reflections of the company so everyone can have their say.
The more the company grows, the more I see the need to set up a possible first management level to better divide and delegate tasks. While maintaining this transparency, management by the department will allow us to gain efficiency during more strategic meetings over the long term.
As Jean-Philippe mentioned, some people still wear several hats simultaneously, which is not necessarily optimal. Some tasks are done out of necessity and sometimes at the expense of the time available to do things that could add value.
In a very personal way, I would like to come to have a structure that would allow me to be exclusively in a position to coach the directors and let them be better than me in their respective niches. I'm lucky to have a fantastic team; I wouldn't be doing my job if I didn't tap into everyone's organic interests.
There is also a great sense of pride from seeing your employees grow and develop personally within their company.
Beyond profit margins and percentage growth in turnover, this element is more important than anything else. I will make sure that the company’s growth always supports the happiness of our people as much daily.