SW engineering, engineering management and the business of software

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Some Magic Numbers

I call them magic numbers, but they are really rough thresholds where you judge viability or success. Having these thresholds in mind can often clarify surrounding strategy or tactics. In many cases, they can act as a simple filter: Will my efforts get me closer to or over this magic threshold?

5.9% monthly growth

https://twitter.com/nathanbarry/status/1187132191207149570

A good SaaS or web app business will sustain 30% month over month and the best sustain 50%.

$199 a month SaaS apps

For a single founder, if you can build a business that charges $200 a month, you only need 100 customers to roughly replace the annual salary of a Silicon Valley engineer.

This is not easy obviously, but 100 customers is a number that can be found without building a sales team.

The trick obviously is to build something that is worth 200 a month to someone or some company.

After that, you manage cashflow with annual plans to get more cash upfront (Usually a free month or two). This early access to your time-locked money should compound into accelerated growth.

https://vimeo.com/74338272

There’s a similar one for info products by Amy Hoy: 30x500 => $30 times 500 customers.

https://30x500.com/academy/

Ten minutes a day

If you are saving time, ten minutes a day adds up to about a week over the course of a year.

If you are investing time, ten minutes a day is enough to get good or great at a musical instrument over the course of a year.

3 or 4% a year safe withdrawal rate

There’s an entire subreddit on early retirement based around this number: https://www.reddit.com/r/Fire/

Basically it means that if you have X million dollars, you can safely withdraw 3% or so annually forever. This takes inflation into account and means

So a 3% 10 million should give you about 300k annually for life, with the actual number increasing to keep up with inflation.

Engineering manager capacity

If you are an engineering manager, but you still want to code, you can manage up to 4-5 people, depending on how much experience you have as a manager and how much experience your reports have.

If you are manager 5-10 people you are a full time manager.

If you are managing 10+ people you probably should start thinking about becoming a manager of managers.

If you get to or end up with 15+ direct reports means I’ve usually waited too long and some of those people should be split out.

Hiring Engineers and good funnel conversion numbers

Typically for every two engineering I bring in for an onsite interview, one should get an offer. More than that and I’m not bringing enough. early filters are too strong. Less than that and I am wasting a ton of time on interviews that don’t become offers. early filters are too weak.

For every offer I send out, Offer Acceptance Rate should be in the 50-70% range. If it’s up past 90%, I’m probably not giving out enough offers or my earlier stage filters are too strict.

https://twitter.com/amattn/status/963806561872248832

https://twitter.com/amattn/status/983382135473147907

How often should you have 1:1s?

Here’s a general guide on one on one cadence:

  • more frequent if they are your direct reports
  • Just let people know you exist? Less often works.
  • Coaching and feedback? More often is going to be better. C/F seems less important if you aren’t the direct supervisor.

As an manager or director, here’s where I start.

  • my boss: weekly or bi-weekly
  • my reports: bi-weekly
  • my reports’ reports: 1/month or once every other month
  • peers: bi or tri-weekly
  • everyone else: once/qtr

For any individual, the cadence can be increased or decreased depending on need. Do they need more support or are strugging in some way? more often. Do they run fairly automonously and are happy? less often.

Compound interest in general

The magic of compound interest is real. If you’ve ever been to a 401k presentation, you’ve likely heard how small growth can lead to outsized returns over time.

As a numerical example the difference between capturing a 1% improvement a day and remaining static is significant. Mathematically speaking, 1.01365 is about 37.7.

If a 40x rate of improvement isn’t enough for you, then contrast a small improvement with a small regression. The difference is stunning: 0.99365 is 0.0188. That’s a tremendously impactful three orders of magnitude.

A daily 1% improvement over the course of a year ends up two thousand times higher than a daily 1% regression.



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