Situation Cards: First 3 Months
Absolutely everything I did to launch a product and a business from July to September 2022.
This post is a journal of the entire process, from start to launch, making sales, and next steps.
My business (Building Better Teams) aims to coach and support Engineering Leaders to improve their own companies and overcome common but big challenges. In the first three months I focused on getting “Situation Cards” to market, and I postponed other content, services, and products to focus on this.
About me: I was formerly a Senior Engineering Manager taking care of multiple teams and multiple complex non-team topics. I was also an Application Architect before that for a large ecommerce framework. I wrote my first program at the age of 7.
In terms of success I am only in a place where there are “signs this product might work”, but I haven’t proven strong enough market fit. In other words, this first quarter is marked by the curse of “moderate success,” good enough to keep going but possibly the wrong place to focus
Why did I want to make these cards?
In a proposal to a prospect, it came out that one of their biggest challenges was a lack of experience in their management team. Lots of people were recently promoted or hired into a Engineering Management role. They needed to rapidly hire or promote more than 10 EMs. To make things more complex, CTO and existing senior tech leaders were unsure what a good EM does, meaning the hiring decisions for new EMs were at a high risk for being of poor quality.
This team needed a way to gain experience quickly if they were going to succeed. One core hypothesis in engineering careers is that we should avoid “repeating the same year of experience”, so what if we break that interval down to months? Can we do it in weeks? Is days possible? Can we deliver a synthetic form of experience?
Following some Design Thinking best practices, I asked myself a “How Might We?” question. I had some personal bias that solving many real-world situations is a crucial key to building a stronger skill set and being more effective.
How might we accelerate the experience and skill development of an EM with minimal investment?
Foundations, Ideation, Research
I spent some time thinking about ways experience is already simulated: workshops, 1:1 coaching sessions, video courses, etc… but overall I realised these ultimately feed answers to the participant. In real life the situations that we have to deal with are “just there”. Nobody tells you they exist, nobody tasks you to go solve it and reach a specific outcome, nobody tells you how to feel about it. I wanted the prompt for gaining experience to be limited to “you saw something", and not “please reach this outcome“ or “this is how you feel about it“, or even having a “right answer”.
(By the way, this last one frustrates a lot of first time players of my Situation Cards. They read the card, they don’t know how to start, and so they flip the card over hoping the answer is on the back — it’s not).
The key to it all was starting with a situation a manager would encounter in real life. After that, you need to handle it, just like in real life. Tools, frameworks, analysis practices, and “just do it because I said so“ can be applied without me telling EMs what to do. It’s entirely up to the EM and their level of skill and the different management techniques/frameworks they know. This does create a challenge on the feedback side: it’s tricky to know how you did if there’s no partner to provide feedback. To handle this I produced evaluation tools (I call them “4 levels“ and “evaluation rubric“) to provide deep context on how different players will respond so the self-evaluator can get some idea of what better answers looked like. (This will come up later as it was still a weak point).
Similar Products
I searched on Amazon and other websites for similar concepts. Lots of cards for therapy and self-care, lots for managing team retrospectives and doing planning poker too. I didn’t find anything targeted at leading teams which means this would be a niche product — but does that niche exist?
In general I found the prices were anywhere between 10 and 65 Euros. Some of the more expensive cards had bad reviews — if the content was not amazing but the price was premium, customers were not happy.
I probably spent 6-8 hours in total going through every single item in detail to understand the issues customers had, what these companies tried, and what was generally available.
I also took advantage of Amazon telling you the sales rank to estimate the market viability of any given product. Some cards might pull in a few hundred thousand Euros a year, and some will only sell 1 or 2 decks per year. In general, the more reviews the higher the number of sales.
As an anecdote: There were two very similar cards, but one had better images that connected the sale to a purpose (like giving them as a gift), where as the others were floating in a lifeless white void. The ones with better marketing are selling well over 20x more.
Pip Decks
Long after I did all of this research (actually, after I designed ordered the physical decks from the printer) I was sent a link to “Pip Decks“ by a friend. It seems the product has been very successful. A high quality deck of cards with great lessons about marketing, writing copy and delivering value. I was initially concerned I was creating a clone, but actually they’re solving some entirely different problem and marketing to a different audience. They offer tools and frameworks for workshops, where are Situation Cards are case studies and a training regimine.
Empathy Toy (from Twenty One Toys)
Very late in the game when I was collecting customer feedback, one customer shared this physical “toy” with me. It was an interesting concept for helping facilitate workshops to help understand the relationship between communication and empathy. It was interesting to me because it was also “not a book of answers”, but a tool for discovery and triggering genuine “A-ha” moments. This is something I want to keep.
Competitors
I didn’t really see any exact competitors for my approach and goal, but for sure lots of products that compete for management training budgets and what an individual might spend on their own personal development, including courses, mentorship programs, etc.
Numbers you see here are outdated and wildly inaccurate from the final stage, but it illustrate an early snapshot of the process.
Can I make a profit?
I opened up GSheets and ran some numbers to check what kind of sales I needed to make a profit. I evaluated the different deals on per-unit costs I could get, printing in batches of 100 or 1000, effective unit cost per item, number I needed to sell to break-even, sales-per-week needed, fees like maintaining the website or getting legal work done to verify I did not violate EU product laws.
I allocated a small budget for a graphic designer to help me for an hour or two (I didn’t need this at the end) and a lawyer if needed.
To be honest, early on I wasn’t convinced I could make any money here and debated writing the project off as a marketing tool to gain clients. A form of “loss leader”.
My mistakes were: not understanding the pricing my customers expect, and overlooking good marketing expenses.
Pricing Feedback
As I went around showing the cards to different groups I had a huge range of feedback about pricing.
I saw that 35 is market average for a “production ready” and a “final” card product (but this wasn’t very helpful: they are all marketed to different consumers with different problems)
With my earliest paper prototype I received feedback that the cards should be 12 Euros. This person later updated their view to something much higher after seeing an ad for PipDecks selling for over 70.
I sold my first three decks at 25 Euros to friends and people I knew. I don’t know if this means they want to support me or if it is a true buying signal above 0.
I had a very enthusiastic product manager tell me they wanted to buy them (before they were available) without knowing the price. One thing that came out of the conversation is that because it can be expensed under a Learning & Development budget the price was less important. After looking through the cards and being “hooked” on them they later said they wanted the entire management team to get these cards.
Two people got some cards before they were released for sale and told me they would buy them or get their company to expense them, but this never happened. On the up side I’m sure they’ve given them some publicity.
I received feedback (twice) that the cards were way too low priced and I should move the price closer to 250, with the reasoning that CXOs sense that the product is cheap/low-quality/junk at a lower price. I increased the price to 125. Some of the 125-paying customers said the price was still too low, so I increased it further to 175 at the end of September.
One CXO told me that they need to be “free” for private consumers because they never buy things like this, but at the 150-300 euro point this fits into the category of “Toy” for a Director/VP/CTO and worth a try to see if it can help.
Generating Content
Content Sourcing
I needed to generate really important situations. I pulled together my own experiences, stories from colleagues, plus every management framework, blog or book I had a high opinion of. I began to use it as the background for brainstorming what kinds of challenges that were real-life situations.
For every “situation” I wrote a short tag-line. After a few days this ended up being hundreds.
Generate Ideas
As I read through the frameworks and theories to think of experiences I would create a new note for each one. I think I created a lot of duplicates. Over a few days I reached reached 130 good ones. I started talking to colleagues about my project and that got another ball rolling. The list grew up to nearly 200 situations. I found I could enter a state of “empathetic flow” where I could put myself into the shoes of other people I had observed over the last 12 years to generate even more cards about their situations too.
At this stage, these are all just short 5-10 word short-form ideas.
GPT-3 Assistance
In my product research I found lots of really angry Amazon reviews for other coaching cards. Customers demand that the content must be great to ensure that customers didn’t feel ripped off (even on the 15 Euro cards!). Generating 200 nicely written cards is quite the challenge, especially given the task requires a high rate of context-switching when every card is a new topic with a new history. It’s really hard to enter a state of flow like this.
To accelerate the process of writing real text, I did the first 10-20 on my own, but then feed that and a subject prompt into GPT-3 with only a tiny bit of code. The ones GPT-3 generated could not be used, but it helped me a lot in a different way that I explain in the next section (“speed boost”) in the next section below.
By the way, I’m not even using the tool correctly, I entirely ignored the feature where I could train the model more directly with a different API, but I was in a fast hacking mood and this is how I did it in real life.
By the way, if you write python and don’t know about TQDM, go check it out.
Speed Boost
GPT-3 was able to help me overcome the cost of context-switching and writers block by pre-generating text that had similar (but not always right) context and sounded similar to me.
I didn’t end up directly using GPT-3 text, but it did help me quickly come up with real prompts. “Oh yeah, I have a story just like that“ was a common statement while I was working on this. I then wrote the real text for each card after having been inspired by 3 (some good, some bad) prompts. It was like having a much more advanced “rubber duck” to discuss ideas with.
This changed the average time it took me to get to a first-draft of each card. Down from 20 minutes with a standard deviation of 30 minutes (those context switches were brutal) down to just 5 minutes with a standard deviation of 5 minutes. A huge speedup compressing what would normally take 2 weeks down to a few working days by eliminating the exhaustion of context switching between different cases rapidly.
One challenge with the GPT-3 text was that it frequently implied the reason for a problem (and sometimes a solution and an outcome). A core design goal was to make the cards simple statements and observations of what is going on, not an analysis or judgement. That’s a job for the player. I wasn’t able to convince GPT-3 to avoid solutioning.
Examples of my prompts and 3 variants from GPT-3
Text-to-speech
Self-review is hard. I used Google Cloud to verbally read all of my cards back to me. Hearing it in another voice with my eyes closed (instead of reading it) helped me find things that were awkwardly phrased or just silly typos that spell check can’t find (e.g. double words: “I found the the typo“).
After that, I had it proof-read by other people like my wife who found even more errors.
Despite all of this there is one small tiny little error on one card which was only caught after printing. It broke my heart, but I moved on. I think next time I will hire a professional copywriter and proofreader to help me.
Visual Design
Finding Inspiration
I need some nice graphics for the cards to make them more interesting.
I was looking on stock photo websites for some images that I thought might be a good look on the cards, evaluating different ideas. I ended up not using any of them because the license was not clear enough for me and the prices were too high for the “just play it safe” license. I decided I could just make something on my own with some boxes and triangles and a gradient.
Early Feedback
I ran a virtual feedback session to see what problems existed with a smaller batch (50) cards before I went through with the entire batch. I looked for feedback on content and visual design. An interesting point about design: many people told me they wanted some kind of image here. They don’t even know what the image should be, but they just feel it should be there. I was instantly reminded of every customer request causing scope creep. I still don’t understand why people ask for it but it seems they see the value as more “worth it” when it’s there, almost a “reason not to buy”. This might be why I see abstract lines and doodles on other cards on the market.
This virtual session gave me an opportunity to course-correct content early, expand the concept and figure out what instructions are needed, and generally it was really worth it.
Amateur Hour
My graphics design skills are limited to a course I took in grade 10 and years of playing around on my own. It took me nearly 3 to 5 days to get all these graphics together and designed right. I used one of those online pallet generators and clicked through fonts until it felt right. I feel it worked out “mostly fine” but I know a professional designer can probably see a million things I’m blind to.
There’s a few online card and box template generators that can help get everything printed right but you have to really play with the settings of every tool to make sure you don’t goof it up (some of my home-printer prints came out 20% smaller than expected). By the way, if you go to a professional printer they might not accept some random PDF template off the internet.
Auto-generate
To reduce manual work I used the python-fu feature of gimp to automatically draw the card text in the right place. I still needed to tweak each one a bit afterwards but in general this saved me hours of time. I wanted to verify if I can sell any cards before spending a lot of money, so the initially printed product will be only 30 cards that have a range of problems. However, if successful, I want to expand the product and offer 255 cards, which means I’ll need to edit 255 cards in an editor, or, just one python-fu script job.
Physical Prototype
I picked 18 cards and printed them off with my home inkjet printer. I found some old real playing cards and glued the new faces on with a glue stick while watching a movie. I created a new box for them out of a stiff magazine backing and packaged everything up. It felt like Grade-2 arts-and-crafts time.
The next day I had lunch with a former co-worker and immediately looked for feedback and ideas. I would use this deck again 5 more times for getting first impressions. I think a lot of people liked it but were also afraid of damaging it so they didn’t want to handle it too much. In retrospect: I had elastic bands wrapped around it which might have signaled to them “hey this is going to break”.
Digital Prototype
At the same time, I took some cliche “product images” with my camera. I threw together a shopify demo site and send the private link out to former co-workers looking for feedback and thoughts on the product and concept in general. Bonus discovery: some people think my wooden coffee table is actually my floor.
This step helped me think through my plan
It made me ask questions like:
How would I ensure legal compliance with GDPR, taxes, and selling physical goods (refund laws, safety, copyright, trademarks, etc)?
Where would I warehouse my unshipped goods?
How will I actually ship the product?
How much will postage cost and is my product in a cost-effective format for the post?
Are there import/export regulations?
Can I collect pre-orders to optimise cost-effectiveness?
What kind of marketing would I need?
What kind of advertising could I run?
What if I just sold the IP to some other “agile consultancy” that already printed different cards?
I ended up not using Shopify because the pricing equations didn’t allow for it (this ended up being a poorly informed decision, one of my goals for Oct-Dec is to move onto Shopify). I already had a squarespace site which I could increase for an effective $6/mo rate to get an editable store. Shopify offered a $5/mo store but didn’t allow any customization on that plan. So I went with Squarespace which is not as advanced but for sure more cost effective in my situation. There’s a number of things with Squarespace that just really annoy me and I’m kind of exhausted from fighting against the platform for small layout changes, or UI issues, or feeling like I’m on a constant upsell hamster wheel.
Sourcing a Printer
This was perhaps the easiest of all my tasks. I searched online for someone who can print playing cards. I was scared away from some major online publishers due to reviews.
I eventually decided to look for more local printers inside my country and discovered the prices and service were way better too. When pricing out the printing I was concerned the costs would be too high, but using a local printer put my 30-cards @100-decks project back into the realm of possible again.
Verifying
The printer was really a great help, they provided template files for their system and called me to offer some support as they knew I was not a professional in the print media industry.
They even provided 3D renderings of my graphics files to verify that the boxes would all be cut and folded correctly.
Overall they were really responsive, reasonable, and easy to work with.
Cards Delivered
I was so excited when I finally got my cards I posted it on my LinkedIn. I’m not quite comfortable with social media. I even deleted my Facebook and deactivated my LinkedIn for several months prior to this. For some reason, I woke up at 3AM, felt awkward about making a post like this and deleted the post. I don’t know why. No other post I made after this received the same number of likes and re-shares.
Marketing
Marketing Plan
I know about managing teams, coaching leaders, and even architecting software. But marketing? I don’t like marketing, I just want to create nice stuff that helps people. This will be a serious learning curve for me.
Taking the observation that “marketing is my biggest skillset shortcoming”, I doubled down on it. I looked for a process, I tried to stick to it, and constantly refine it as my marketing skills grew. I kept pushing to narrow my scope, look for alignments, examples from how other people did it (lots of great stuff from Charles Burdett of PipDecks by the way), and kept refining this plan. I was using the “1 Page Marketing Plan“ format. I haven’t fully tried other marketing frameworks before, but this helped a lot and the explanations from the author’s book made sense to me.
Note: a lot of the ideas on the 3x3 grid is not what I ended up with. It was just a snapshot from my first day or two trying to figure out how to build a plan.
Marketing Materials
I’ve been struggling but capable with free tools like Gimp and Inkscape. I started using Miro to do some basic marketing materials too. Eventually I got a recommendation to give Canva a try and it was a real game-changer for me. In what felt like no time I was making detailed, quality videos, PDFs, and other kinds of visuals in a few days.
Audio Quality
I was making a short video advertisement, and longer video course. I was trying everything to get good audio quality at home. I watched hours and hours of youtube videos on voice-over acting. I got a legitimate microphone, a pop shield, a foam sound absorber, but no matter what I did everything sounded like it was recorded inside my bathroom. To add to the situation: my Macbook’s fan is horrible, it winds up to some “jet engine” noise that is really noticeable in the recordings.
I decided to take the microphone off the chair that was standing on the kitchen table, and remove the blankets hanging off the walls, and I went down to a recording studio. One of the perks of living in Berlin (where every 2nd person is a DJ): there’s just spaces hidden everywhere for professional audio work. I went to a place called “Pirate.com“ which seems to be an international chain of studios.
At the studio I was troubleshooting the mixing board for a half hour only to find out it wasn’t compatible with the SD card I bought a half hour before, so I had to record onto my “jet engine macbook”. I ran an extra-long USB cable to the other end of the studio and put my backpack on top of it to muffle out the sound. The next week I bought the “right SD card brand” that was approved for that studio’s specific mixer. Because it was so easy (after I bought the right SD Card) I would end up going back to the studio many times for other audio recordings.
Silly concerns, changes, problems
tl;dr: I have massive imposter syndrome, despite receiving positive feedback, and taking care that I have a financial safety net to start this business.
Constant self doubt. Every single step of the process (especially at the very start) I questioned if I was just “goofing around” instead of doing something serious. I doubted if anyone would actually buy cards. I doubted anyone would see this as a real problem. I doubted I could get enough attention to even make 1 sale. I doubted I had enough skills to do it right. I doubted that the product would be seen as credible because I’m not some famous twitter personality. I was especially concerned my friends and family would buy all the cards in an effort to support me, which would prevent me from validating if the idea worked or not. Thankfully none of my family bought them. Some friends did, and some of them found the cards useful because they were also my target customer type (which I didn’t think of at first).
Not bringing in an income. I started this project relatively soon to my final working day of my full-time job. They had asked if I would come back. Colleagues at other companies asked me to join them. Recruiters were asking me to work at some new unicorn. Inside my business, many potential clients often wanted me to work for them directly instead of “being a freelancer”. Having some savings helps take the edge off but the fundamental notion of not having any “secured” income made me feel a heavy sense of stress and a mindset that “this product cannot fail”. To add to the situation, I my first child on the way and I questioned: will I able to provide for my family too, or am I just goofing around? All of this worrying and anxiety was also silly because my wife and I had planned and set money aside specifically to put ourselves into a situation where I could try this.
I knew I had runway in the bank, and multiple backup plans to land on my feet for multiple worse-case “game over“ scenarios. So why was I so freaked out? I don’t know! As the project got closer to being ready to sell, I was more comfortable with the overall situation and not so stressed out. A month after I started making sales I was more comfortable despite the sales revenue from cards not being close to my old salary. There’s a meme going around on twitter right now that resonates with me: “I quit my 10k/mo job to make 2k/yr“.
Is this the right focus? I was constantly asking “why am I working on this instead of my other project that I wanted to do?” Should I just pay someone to do the cards for me? Should I work on content now or should I work on designs? Having a project plan in place helped a lot with this (see next image).
Always have a plan
Every small step towards completion was thought out as a dependency chart, and updated daily as the vision became more clear and it became obvious what was missing in my plan to get “fully live”.
I don’t like burn down charts or todo lists, I like raw dependency “this task unlocks that task“ charts.
The screenshot here is from the first few weeks of planning, towards the end the plan had covered about 9x more tasks by volume, representing smaller and more detailed tasks, but also new topics I didn’t think of originally.
Skipping meals. In the start of the quarter I would go heads down into my laptop for hours and the entire day would roll by without me noticing I haven’t eaten all day. Something weird happens to your appetite when you are “zoned in”. This got better after 6 weeks.
How will it be perceived? I found that there was an ultra valuable subgroup who could provide extremely specific feedback that dug in deep, and they helped me the most with getting this to a better state, or taking a second look at options I quickly dismissed at first.
I noticed that as the product progressed and went from “just an idea” to “this is very real“ support from people around me got a lot louder and more specific. Some people gravitated towards me with great feedback and support, others didn’t, and the thing I underestimated: there wasn’t a very strong correlation in good feedback based on people being strangers or friends.
I’ve nearly entirely quit coffee. For some reason drinking coffee made me absurdly nervous/paranoid/anxious. It was like a wave that came over me and I could feel it coming. Cutting out coffee basically solved this. I can only handle a teaspoon of ground coffee every week now. I don’t know what changed, I’ve always been someone who drank several fancy-bean coffees per day. In my mid 20s I had to increase the font size because I drank so much it would make my vision blurry. Possibly related.
COVID. I caught it for the first time. It knocked me down like a sack of potatoes going down the up-escalator. I was coughing for five weeks after I tested negative and was fatigued for seven weeks. I think I caught it in the sound recording studio. Probably someone before me in one of the rooms was sick, and it’s a room designed for hours of talking.
Customer Delight. I tried really hard to keep the product very transparent and avoid anything misleading on the product page, so there should be no surprises or misrepresentations. With each of my first five sales I was deeply concerned that the customer would hate the product or feel ripped off at delivery. As the cards crossed 500 Euros in sales and I was printing the shipping label, I kept having a feeling of anxiousness as that the customer would be upset with me or underwhelmed with the product. Months later, reality would prove that not a single customer told me or signaled they were disappointed with the purchase.
Accounting
Virtual Shoebox
I just didn’t find any online service that I liked or wanted to pay for at this very small stage, so I made a folder for cash outflows (“Accounts Payable“) for the last 2 months and stuffed all my paid invoices in there, and every month forward would get its own folder.
My plan was that later on I’ll spend time getting set up efficiently, or hire an accountant to sort out my “digital shoebox”.
Fun fact: I spent over 400 Euros before I even received a business certificate from the government.
Google Sheet Finance
As August had started to approach it was clear I needed to get more organised. I cobbled together a few sheets and started entering my AR (I really had one!) and AP to understand cash-flow because I had no idea where I was and what was coming up. I even made a nice dashboard page that was powered by pivot tables (who doesn’t love a good pivot table?). It turns out before I sold my first deck of cards I was already down 1900 EUR and 1 month without any income.
This helped me a lot because I had to submit an Umsatzsteuervoranmeldung to government every month, but it could mostly be taken from a pivot table and processed in a few minutes.
Logistics
How will I send them? How will I print shipping labels and pay for postage effectively? This took some figuring out but it wasn’t so hard at the end. For everything inside Germany I could send a regular bubble envelope with the mail, but for anything that went outside (including to other EU countries) the “goods” had to be sent in a package.
I had one really bad experience where US customs authority held up a package for 2-3 weeks for one of my customers there. I was glad I paid for tracking (it was my first shipment to the US) but adding tracking also cost me 50 Euro.
Everything
Pre- Packed
100 decks packed into 100 padded envelopes, ready for a shipping label.
One question I had to solve before I ordered anything was “Where am I going to store the cards?” I calculated the volume of 100 decks and can store easily in my home (seen in photo here), 1000 is extremely inconvenient but in the realm of possible, and if for some reason I need 10000 decks I need to find a proper storage facility.
I looked at some options like fulfillment services who store and ship the goods for a fee (some even pack for you). I calculated (using bad pricing assumptions) that selling every deck would only net me a few thousand Euros, so that really wasn’t the best option.
Figuring out
how to ship Internationally
I got my first order from outside of Germany. Success! On the down side, the German postal service will not send “goods” internationally since 2019, so I have to use DHL’s “XS package“ and their package shipping fees, instead of the international postage rate I had anticipated. Fine I can do that.
By the way, this receipt is the 50 Euro cost of shipping something from Germany to the US with tracking. I was also shocked. If I ship without tracking it’s only 10 Euro.
By the way, I found a fantastic website that explains everything you need to know to make the customs authority happy on this website (in German) https://www.paketda.de/zoll/zollinhaltserklaerung.html#formular . One of the tasks was to figure out what my customs HS code would be, which was a bit tricky because it was “a deck of cards” but also “not a toy” (you’ll see why that’s important later), so I opted for “49119900 - Printed, matter“, which seemed the most accurate of all options. I also had to take a short crash course on international shipping to prepare an invoice for customs that could be stuck on the side, and all those other bits of paper and codes related to handling of customs fees.
Moving forward, there’s a feature of DHL where you can order everything online and they will print the labels for you at the post office. I started using this option moving forward,
And… Register with a Packaging Authority too?
Yes. I have to register my packaging in order to sell these physical goods in Germany. Not the box around the cards, but the shipping envelope itself. It looks like they’re pretty serious about it, they even consider coffee to-go cups or the paper wrapped around flowers as packaging that must be registered. They can fine you up to 200k Euros. They explicitly identify online retailers as someone who needs to register the to-consumer shipping packaging.
Rück die Kohle aus
(this expression is kind-of like saying “fork over the cash” in English)
The packaging law requires that I “take back“ what I introduced to the German market. There’s a number of companies you can go to for this service of “taking it back” (I had no idea how), and they’ll give you an XML file to upload to the LUCID database which they accept as proof that you comply. I had to pay about 46 Euros for the envelopes (which cost me 13 Euros for 100). What’s really annoying is I only have 1kg of packaging, and the price remains the same until I cross over to 230 kg, so in reality I paid the price of 230kg. On a prorated basis I only needed to pay about 18 cents, but none of the companies will charge anything lower than 46 Euro.
The whole packaging law is a fantastic idea, but the actual implementation of the law created some kind of strange situation where everyone offers the same service and price, and you are legally obliged to pay at-least one of them. The smallest companies (like mine) get the worst rates.
Legal
Conformité Européenne
This little logo is a kind of “self declaration” from a manufacturer that the goods conform to all regulations and will not endanger lives or property. I only noticed it because I was looking at a regular deck of cards which happened to have one on it. There EU might end up asking that I provide a bunch of documentation that I do indeed conform to the regulations. From Wikipedia: “It is a criminal offence to affix a CE mark to a product that is not compliant or offer it for sale”. But also, ”the CE marking cannot be placed on products which are not covered by the relevant European directives.”
I ended up spending hours researching what exactly they needed from me. I looked at existing declarations for other “games”. One source from the UK said that for “toys” I needed to state the product was not intended for children14-and-younger then I didn’t need the mark (I picked 16 to be “extra safe”). Is my product legally a “toy” or something else like a “book”? It is for sure nothing I intend children to pick up and play with. I saw there was an exception in the regulation describing what was “not a toy” including (lucky for me): “Educational products for teaching purposes.“ Yay.
Ultimately, I put a “not a toy” notice on the package because it wasn’t a toy, it is only for educational purposes, and I am not marketing towards children of any age.
Honestly the whole thing feels Kafkaesque for a bit of printed ink on paper. If it’s not expected and I put it on it’s illegal. If it’s expected and I don’t put it on it’s illegal. There’s nobody who approves or rejects putting it on the product either.
The product literally identifies the intended audience (“for Engineering Managers“, not children), and is printed by a company that is in the EU already and already prints game cards sold as toys, so in every case there is no actual consumer harm possible. I don’t know how the EU handles other small producers like an Etsy craft shop. I can only assume lawmakers turn a blind eye here because they are not large companies? I don’t know. The whole system is frustrating because it forces you to interpret grey zones in the directive.
Other topics I had to explore: What about refund rights? Consumer protection laws? Do I need a terms of use? What happens when I export the goods from the EU to somewhere over-sea?
More Regulations
I read though a bunch of pages from different EU authorities such as this one which includes things like requiring I do not prevent people from one EU region from getting access to every version of the website (like if I had a French page, someone in Spain should be able to get to it somehow). https://europa.eu/youreurope/business/selling-in-eu/selling-goods-services/selling-products-eu/index_en.htm
If I export more than a half million Euros I have to report it. I need to identify myself to customers. Consumer guarantees must be clear. Right of withdrawal needs to be supported. Also a bunch of other things too.
Free Education
On the plus side, there is an agency with online e-courses (and local in-person courses) for free targeted at SMEs to get them up-to-speed on all this legal mumbo jumbo.
https://www.consumerlawready.eu/SME/public-page
I think it said I’m in the UK because I used the English language part of the website instead of the German language one. Also, the website appears to be a bit… abandoned. I can’t find any local courses they advertise and there are many references to how the UK is part of the EU.
We have comparable regulations in my home country (Canada) so this wasn’t entirely unfamiliar, but it was a lot of extra reading and the level of effort here feels very disproportionate for something like “hey I want to sell a few cards online to see if this product has any merit in the education/training market“.
Becoming a real business in Germany
There’s a bit of a reputation Germans developed for having lots of paperwork. I had to register the business with a local “Citizen’s Office” (Bürgeramt) in the neighbourhood of Berlin I personally live in. Plus, I had to register with the Finanzamt to complete the process and pay taxes. Interesting fact: I live in the same area as the massive communist era Spy Agency (the “Stasi”) were headquartered in (those were the people who steamed open mail to read it, stuffed wires in the wall to listen to people in their homes, and used umbrellas that shot untraceable poison pellets).
Everyone at both offices were really nice to me and had fully digital webforms for everything. However, I had a number of issues completing these forms which I won’t really get into… but I will say you can probably make better choices than me if you contact a tax consultant before anyone else who will support you register the business.
At the end I finally got registered. It just took over 2 months to get everything done, which also means I wasn’t selling anything in this time either.
I found some great resources (In German) for registering a company. Be warned: they are not fully detailed and even skip some sections that I really needed help with. If you’re also forming a company in Germany here they are:
https://www.fuer-gruender.de/wissen/unternehmen-fuehren/buchhaltung/fragebogen-zur-steuerlichen-erfassung/
https://www.ihk.de/hamburg/produktmarken/beratung-service/gruendung/steuern-fuer-gruender/steuern-beachten-existenzgruender-1169702
https://www.youtube.com/watch?v=6O5Ser3DL0k
Special note: If you want to sell something online you are a Tradesperson (“Gewerbe”), it’s not just for electricians and plumbers and stuff, it’s for online retailers too.
Getting a “Real Address”
In order to operate a business in Germany you must have an address. The common advice and what is commonly understood is that an address used in the Impressum (in Germany, this details who owns the website) and invoices must be a “ladungsfähige Geschäftsadresse“, or somewhere the courts can send a legal summons to in order to drag me to court. The German authorities are of the opinion that a PO box is not suitable for this and even push a 5000 Euro fine for businesses that do not meet their requirements.
Interestingly, there is a case brought to the European Court of Justice in 2017 between an automotive company and the german tax authority where the ECJ makes these statements which I summarize a bit (on the right-hand column).
In a nutshell, the ECJ points out that the German view is incorrect and outdated, but we have to wait for it to play out in national German case law where German judges would have to come to this conclusion too. It’s been 5 years, but hopefully someone will solve it soon because every political party has put “Digitalisation“ in their campaign platform for decades.
I don’t have time or money to deal with a government agency in court that holds the position I can suddenly become an untraceable ghost with a PO box. Also, I absolutely do not want to use my personal home address. I once had an experience where someone from a chatroom I was active in got in a plane and flew 3000km (without announcing it) and showed up at my office. I absolutely do not want something like this happening in my home with my wife and child, or a disgruntled customer who takes it too far, or an angry internet commenter who wants to come fight me “1v1 IRL” because I have different opinions than they do on what good teamwork looks like.
That lead me to this “VirtualOfficeBerlin24“. I spent some money and have a “Not a PO Box“ address. The people behind this basically took outdated, kafkaesque, bureaucratic, irrationality and turned it into a gold mine. The company states they have the address for 1% of all new companies in Berlin for 2016 and 2017 (“VirtualOfficeBerlin24.de wurde im Jahr 2016 und im Jahr 2017 für 1%, aller Firmengründungen in Berlin“), and they’ve been working for 10 years. I assume the ARR from rent is conservatively anywhere between 5-15 million. Still cheaper and more practical than getting a traditional 9sqm office, and they helped me out with extremely fast high-quality service (36 hours to complete everything). Great people.
… did you notice the typo in my own company name? That was my fault. Thankfully they called me and asked about it before putting it on the mailbox.
This is part of the Legal Opinion of the European Court of Justice on this topic:
(full opinion of the Advocate General available here)
40. The obligation laid down in Article 226(5) of the VAT Directive to include the address of the issuer on the invoice has to be read in light of that double function of the invoice. The indication of the address of the issuer of the invoice serves — in combination with his name and VAT identification number — the purpose of establishing a link between a given economic transaction and a specific economic operator, the issuer of the invoice. (14) In other words, it allows the issuer of the invoice to be identified.
[…]
42. Against that background, I cannot share the view, expressed by the Austrian and German Governments, that the existence of actual economic activities, or a tangible presence of the trader’s business at the address indicated on the invoice, is necessary to enable a correct identification of the issuer of the invoice and to contact him […]
43. It should not be forgotten that, in order to obtain a VAT identification number, undertakings have to complete a registration process in which they are required to submit a local VAT registration form, along with supporting documentation. […] They clearly do not need to look — only or especially — at the address appearing on an invoice to identify the issuer and determine where and how he can be contacted.
4. Interpretation under present-day conditions
44. In the fourth place, the requirement to exercise economic activities (or, in the alternative, to have premises) at the address indicated on the invoice, is — as pointed out by the referring court — unconvincing in the light of the varied ways in which businesses are organised and economic activities are carried out nowadays. That is especially true in view of the recent developments in the economy due, inter alia, to e-commerce, office sharing and teleworking.
45. […] it is possible nowadays to run a business buying and reselling goods on an internet platform with only a computer and an internet connection from virtually anywhere in the world.
46. Accordingly, the requirement to exercise economic activities at the address indicated on the invoice (or to have premises) would be problematic with regard to those undertakings which do not carry out their business (wholly or mainly) from one specific place.
47. It cannot be argued that this ‘disconnection’ of the business premises from a certain place is a novel phenomenon that the EU legislature has not considered in the VAT Directive currently in force. […]
78. […] It is for the national court to assess whether the national procedural rules under which a taxable person may invoke his good faith regarding the integrity of the invoice are compatible with the principle of effectiveness, in the light in particular of the length, complexity and costs associated with the relevant procedures.
Phone Number
I had to get an additional phone number too, luckily I have a dual-card phone and the service I signed up for is 2.99/mo.
Breaking Through
57 Days From Idea to first sale
It took me 57 days to go from “I have an idea” to “wow, someone actually bought one!“.
In this time frame I had spent a week away from the task due to plans to visit a friend in Bavaria, and another 4 days to visit a wedding near Gdansk, plus a few days focused on organising the home to prepare for my newborn, plus a few days where I was mentally out of gas and needed to just do something else. So you could make the argument that I did it in 45 active days and 57 calendar days.
One really wild experience: The very first sale happened a few minutes after midnight while I was working on updating my Tax IDs in to the invoices and covering all my legal topics (returns, etc). The moment I completed it I turned on the store and someone just bought a deck without me expecting it. I don’t have a high traffic site but I think this person is in my extended circle, having worked at a former employer of mine. I still don’t know how they managed to buy it immediately within seconds of the page going live.
I went down to the post office and shipped the orders the next morning.
I made 0 sales the next day, which fed my imposter syndrome, but more sales would come for the next few weeks, followed by a lot of no sales, some sales, no sales…
Trying to scale-up sales
After I made a few sales and people were buying the cards happily at over 100 Euros per deck, I wanted to see how I could scale up my sales volume. This scaling up stage is something I started at the end of September, and something that I will continue trying into next my next quarter in parallel with different activities.
First I tried increasing my LinkedIn presence. This helped a lot with regards to the network effect, people trust products that are suggested by others. Unfortunately it was not sustainable and leads reached 0 over time.
Advertising
Next I approached the problem from the advertising side. Based on feedback I assumed the best way to market the cards was positioning them as a tool to help with interviews, because it requires minimal extra effort and selling. It’s almost possible to use the cards as-is and not think about the process of integrating them too much. So I created a custom landing page and tried to drive traffic to these pages.
I spent 100 Euro on LinkedIn ads which unfortunately lead to 0 sales, but did lead to 66 clicks. On Reddit I had a 100 dollar credit which was great but I’ve only started that campaign recently so there’s no measurement of the results.
Next month I’ll expand this with multiple more specific landing pages.
One of the Ads I ran on LinkedIn
Brand Building
One of the things I learned from reading marketing books is that I can improve my marketing by becoming known as a teacher and not a salesman. To this end I’ve created a youtube channel (Building Better Teams). I’m not aiming to be a youtuber or make income with youtube, but I do want to try and establish good content and gain some credibility this way.
First I released a free course related to my cards, the “Four levels of manager“ which helps clarify different levels of skill that are used when managers try to solve the situation cards.
I hope these videos are useful to any manager who wants to really progress from a “I am just guessing” and get to a more “I have a structure and a plan“ style of management.
Unfortunately they receive very minimal traffic and low engagement, part of which (I suspect) is due to the small audience.
On the hypothesis that my previous videos are just too long and too detailed for sharing easily, I’ve decided to take a different direction which also makes my life way, way easier. I’ve started making videos that are less than 3 minutes long and just short lessons about management. I have 7 more of these done and scheduled to publish one per week.
This is also nice because it frees me up a bit, I can get my head out of the space of constantly producing content and think about product development for a few weeks without disappearing.
I don’t know the results of this yet but I had some technical errors. I was aiming for the short tic-toc video format, but the videos are not less than 60 seconds so they render as traditional widescreen videos and don’t appear in the youtube shorts player. I’ll fix this if I do a second batch.
Real Feedback
From a Product Manager
Loving the cards! Read a bunch to the team, they laughed a lot and asked if they could wimp out, firing everybody was everyone's favourite solution 😂
Jokes aside, they were also forced to confront that these things are issues that need solving, so pretty cool to see everyone first acknowledging the issue, then thinking about how to solve it within our context.
I’m not quite sure why but it seems Product Managers are (on average) more excited about the cards than any other group I share this with. It might be that product people love to see people working on products (and shipping them), but also I think I made a strategic mistake by not making them a focus customer early on.
From Startup Founders
From one founder I was told the card quality was better than expected (this was a major concern of mine and I had previously communicated that I was concerned I did not pick the most expensive cardstock and box options). Nevertheless it was seen as good and one founder wanted to share the cards with other EMs.
Another founder (who has been a senior technical leader in many companies) directly confirmed for me that the problem (not necessarily product/solution) is addressing a massive headache for CTOs and managers of managers everywhere for many of the reasons I outline in my advertising video, specifically, managers are often just programmers who got promoted to do a different job (see: Peter Principle). There was helpful guidance about the lack of a detailed process I could offer to kind of ensure better results. The tool offered at the time was mostly just the tool itself but no instructions, no projects, no known outcomes, and while there was a grading schema and videos it wasn’t quite right for doing a self-evaluation.
From a Manager of managers
A manager of managers (about a 20 person hierarchy) told me one of their wishes was to get everyone together on the same page, share experiences and use the cards this way. This manager used the cards with peer managers and had over an hour of discussion about how they treat real situations and the different ways to solve them.
It was nice because this meeting was a meeting where managers knew they had to get together to discuss their topics but everything was either kind of quiet or operational focused (like “who is on call this week?”). The cards helped break the trend and turn it into a lively discussion.
There was also a question about how to use the cards to improve the hiring process which was presently not highly structured. While it was immediately obvious the cards can be used this way, the question wasn’t about how to make the cards a drop-in-replacement for their interview but something they could integrate with deeper thought. A request for a guide on how to introduce change and “make it their own” to an existing hiring process was one of the concrete asks.
From a New Engineering Manager
One recently promoted EM had challenges finding time to dedicate to training with the cards. A concrete ask for getting a discussion group or community going was a concrete ask.
From an Senior Engineering Manager
One really liked the cards but was instantly aware that solving any single card was probably an hour or more of dedicated thinking which made it hard to find the time and discipline to stick with it.
One hadn’t had time to use the cards because their main focus was studying for a different certification, but wanted to have the cards anyway.
From an Engineer
“I looked through them. The situations are real, that’s pretty much the whole feedback.”
(I don’t think this engineer took time to play with them)
Some “common ask” themes I saw in there:
A discussion group has been something in the back of my mind since the start, and I see this suggestion coming from other roles too. I see a long-term vision where the community can be much more than a simple discussion forum or weekly meeting, but I think the first step is just getting some people together. I have seen this model work elsewhere with platforms like Plato for example, but there is a bit of a kerfuffle on twitter recently over their economic model.
Offering better guidance in general. How to self-evaluate. How to pace yourself and a plan to stick to. A guide on integrating the cards into a hiring process. I did provide some tools and videos, but it seems they are missing the mark for the areas I was intending, and non-existant for other areas (like how to integrate them into a process).
Making time for training, or making training fit into time. The people I thought would use them the most were the ones who often didn’t have time to use it. I might solve it with the community, more ‘gamification’, better structure to solve it in increments, or something else. Possibly the sales method needs to be more integrated with their company (ie, all EMs are on the training program and get an hour dedicated to this in a workshop) and not a task they do on the side (like read a book at home).
Spoiler: In the next month (October), I created a much larger PDF instruction book to help solve some of these topics directly.
But why didn’t you…
Things people often think I should have done
Start With Digital Downloads?
I don’t think it delivers the same result. Scrolling through a bunch of cards in a PDF on a tab is something that will collect virtual dust. They’re less satisfying and you probably won’t use them in a social setting. I might make more sales but I'm not convinced it will make an impact because (I believe) it misses an element of “gamified learning”.
Piracy. I know there are companies with lots of money where the employees transfer around pirated PDFs because it’s easier than getting it expensed in their company.
Make an app?
This is also a lot of work. I would have to design and program the entire thing and get it approved for sale in the online stores. I don’t know how to correctly interact with cards in an app either. If I made “mobile cards” I would spend a lot of time researching other apps and skeuomorphic design concepts which feels like a rabbit hole. I haven’t done real app development before, so it would probably add a month or two into my “get to market” time-frame while I learn the entire stack and how to release it correctly/legally. I’m open to the idea but not convinced it is worth the investment this early on.
Pre-sell?
I was under the impression I couldn’t sell anything until the government issued me a VAT number. The number was the last thing that I got. I’d love to do it with upcoming products. I probably could have sold without a VAT but I don’t know enough about the taxation and invoicing rules.
Make a Waitlist?
I thought the initial product launch would get me some sales which would be lost conversions (this ended up not being true, it was a slow trickle). I was also focused on my goal of testing if/how 100 decks will sell, not if consumers say they want it.
Do a Kickstarter?
I don’t like the sounds of it and I don’t want to pay them a cut. Nothing personal, it’s just not for me. I saw a lot of “failed to launch” coaching card projects on there. I also saw really successful projects there (Pip Decks). Lots of consumers ended up losing money on the bad projects and that wasn’t something I wanted to risk be associated with. I also didn’t need funding to print, what I needed was to verify the consumer demand (which I believed I could do through my existing shop).
Start in another country?
I live in Germany, I will have to pay global income tax here in every case. I market to an (English speaking) German market, so I have to comply with German rules. I physically do business in Germany so I need to have a legal business here. I am not leaving my entire life behind to go to an environment that is more welcoming to small businesses.
Hire a designer/lawyer/copywriter/marketer/anyone ?
Money. That’s it. I want to start as lean as possible and grow into expenses as needed. I quit my job to do this, so I have time to do this, but I don’t have extra income to give out at this stage. I value the skills of all those people and trust they can do the job better than me, but I don’t have enough cash inflows to justify it, and I don’t have enough evidence that the product will be a success to justify the expense.
If I went for “maximal scale, just throw capital at it”, I would probably have spent 30k Euros in 30 days hiring one of every role, made a larger order of cards to reduce the unit cost, storage and fulfillment services, etc. I only spent 2k to get to a less risky situation with more information about the actual market in 60 days.
Just ignore a bunch of laws (like the packaging law)?
I care about my long-term future here. There are real consequences here for evading these things.
Make an entirely different product with similar content (book, newsletter, podcast, etc)?
I might make all of those, but they offer different amounts of reward/effort. I was aiming for a small training product I could get to market quickly and also try to leverage as a form of marketing for my team coaching business.
Start with heavy advertising?
I am a total beginner with advertising so I wanted to verify things step-by-step on a small scale before opening the floodgates. I gave myself a safer way to make small failures and adapt before ramping up. This was smart because my earliest ads were very ineffective, throwing money at it would have just been a waste.
Lessons Learned
Something a simple as a deck of cards can be serious work; it’s not really about the cards it’s about the problem the product is taking on.
Downscale. Downscale. Downscale. You might conjure up 100s of reasons why you wouldn’t dare approach the market with a rough copy of your final vision, but you need to do it to test that you aren't making a huge mistake. In my case, a 30 card deck (not 300) was a sellable product which helped me address and discuss the real issues my customers had. This was very different from what I was expecting. I anticipated 30 cards being seen as too little content to be worthwhile and I needed to make hundreds of cards to have a viable product. Actually, not a single customer mentioned it.
Figure out how to market and advertise better. Think of the entire customer lifecycle, not just the product offering. It sounds obvious when you say it, and it sounds obvious when you read it on some blog, but actually doing it to a high level of quality is seriously challenging.
It took 4 weeks of solid work from “oh, I have an idea” to ordering the cards from the printers, but the bigger challenge has been getting the company legally set up, and marketing the products successfully.
The Cards
If you’re interested, here’s the main landing page for the Situation Cards where you can see the most up-to-date version of the product page’s marketing, description, and even buy some for yourself if you’re interested.