Now that the first quarter of 2010 is in the bank, this is a good time to follow Balsamiq’s model and look back on 2009 before we look ahead to where we’re going in the rest of 2010.

In short, 2009 was all about Learning, Adapting, and Executing.

Learning

Qworky was sparked by a conversation.

Jon Pincus had an idea for creating another startup. At the time he was heavily involved with Twitter as a social media activist; and he was intrigued by the possibilities Twitter brought forth.  I was looking for a chance to exercise some new strategy techniques and loved the opportunity to do consulting work for a mentor and friend.

Twitter: A New Communication Paradigm

After conducting a strategic analysis it was quickly evident; every startup under the sun would begin offering their own Twitter software or web application. It was also evident that Twitter was on to something. It touched on a new class of communication.

Deep thinking commenced over months. Initially, Jon focused on the cultural principles his new company would embody. Continuing his prior research effort he quickly decided Diversity would serve as the cultural foundation.

Think about it this way. Diverse teams have been proven to out innovate teams comprised of members with more similar backgrounds.  Yet I don’t think anyone would accuse the software industry of being diverse.

By taking an explicit focus towards diversity his goal was to build an organization that would identify opportunities to ‘Zag’ while the industry ‘Zigs’.

Adapting

Following this deep exploration into the cultural foundation of Qworky; the company adapted to a few environmental changes as well. For one- what to build? While the exploration began with twitter, it evolved towards collaborative writing- eventually culminated by focusing on meetings.

From there Sally joined as co-founder and sharpened our focus through research and a Qworky Experience (Qworky’s name for User Experience; QX) driven process. One of the major adaptations occurred in the continuous loop between consumer insights and user interaction development. Additional adaptations occurred as we shifted from an ambitious scope would’ve required significant seed funding- to closing in on our web product. Lastly, our original goal was to close funding by the end of 2009. After dipping our toe in the water it was clear that in today’s difficult funding environment, the right strategy was to be farther along with our community, product, and business model) for this to be the right strategy. Northwest Entrepreneur Network’s First Look Forum (2009) was a great prep for helping us identify where we needed to be.

Let’s review the company foundation

What we’ve done (2009):

• Defined our north star: Better Software / Better World
• Defined our core cultural philosophies
• Recruited a great foundation team (including two full time employees)
• Created a company brand (name + logo)
• Founded our business on principles of social responsibility
• Developed three iterations of a functional prototype
• Conducted research (in person, surveys, and observations) covering V1 and V2 products
• Identified our market opportunity

What we’ve learned (2009):

• That diversity is difficult . . . And something we’ll continue to focus and work on (blog post to follow)
• How to recruit talented people (hint it takes time – blog post to follow)
• How to work as a distributed team of part-timers
• How to work from broad base of advisors
• How to operate lean and bootstrap a company

In 2009 one of the most difficult adaptations that have occurred was that of diversity and recruiting. We’ve continued to reach into the well and recruit talented individuals to serve as a part of our advisor team and as a core of our team. In fact, at the close of 2010, we realized our shift in product focus  shed light on a skill gap on our team– therefore our number one 2010 recruiting priority was finding the right front end designer / developer.

Sidebar: Quick tip for recruiting

We’ve found LinkedIn, Craigslist, and Twitter great tools for recruiting. For example, let’s say you’re looking for a copywriter- which we have. A few searches on LinkedIn “expert copywriter” and a few searches on Twitter “#copywriting“” and you’ll be stumbling upon a list of potential thought leaders. Examine their websites and work, list them out in a spreadsheet, and reach out to the most interesting directly. It should lead to some great conversations at the least.

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Another area of lessons learned and quick adaptation was funding. Under Jon’s leadership Qworky explored paths to pursue funding with a bootstrapping alternative. As the difficult funding environment got clearer  we continued lean operations and accomplished a lot on a bootstrapped budget. In addition to the aforementioned accomplishments, we also executed.

Executing

When we look back on our expenses of 2009- Qworky operated quite lean.

• No office space
• Roughly $500 logo design
• Basic web hosting on an existing hosting account
• Utilized WordPress P2 and WetPaint for our internal communications
• As well as WordPress and Free WordPress themes for external blog

Real expenses such as Rack Space hosting didn’t occur until we began building our prototype in Q4 2009. Our two largest expenses were consulting work. Approximately:

• $1,000 for financial consulting related to developing a Microsoft Excel financial forecast
• $2,000 spent on prototype front end design, wire frames, and implementation.

All up Qworky’s burn rate was about $600 monthly for 2009 ($6,000-7,000 total); excluding coffee and dinners. Not bad for almost a year of startup work.

Having learned, adapted, and executed, we also calibrated ourselves heading into 2010. We were able to identify two unique objections when selling the company to investors: technological differentiation and go to market plan feasibility. As well as create a prototype that clearly communicates the product value.

By focusing on executing, Qworky closed out the year with a functional prototype, more than 200 Twitter followers, and a diverse team of contributors and advisors to carry us through to 2010.

In January 2010 I joined Qworky full time as CEO.

What are your 2009 or first quarter 2010 business lessons learned?