icon-folder-black Entrepreneurship

Foundation For Success - Know The Importance Of Business Backend

icon-calendar 2020-11-16 | icon-microphone 21m 47s Listening Time | icon-user Joseph Ianni

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There are two parts to every business, the front end and the back end. Today, we're going to learn about the foundations of the backend.

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Tags: #Backend #Frontend #DigitalMarketing #Ecommerce #E-commerce #OnlineBusiness #WorkFromHome #BusinessDevelopment #Debutify

Good to have you here. I’d like to tell you a story, one where out of privacy concerns several details are left to your imagination. During my time as a freelancer, which technically isn’t over I’m just not seeking at the moment, I picked up a variety of clientele from a variety of sources; Upwork, Fiverr though nothing there took, word of mouth, as in, I used my words to persuade people to get in to it, craigslist. This client in particular reached out to me on Craigslist and the people he connected through to me liked me enough that other jobs sprung up as a result. Craigslist has a B+ batting average for me based on my results. While the client was not a guest, people who worked through him would be booked. One guest arrived at our undisclosed studio location for her episode and thought there were going to be a team of a dozen folk running the production. Seeing as it was just me and the host, I took that as a compliment. After all I had several jobs to do, booking the space, setup/takedown, recording, guiding the episode creatively, and then post production to edit the audio afterwards. Although I never considered all of the backend work as such, it’s such an essential component to a business operation, you’re doing it with or without your conscious knowledge. The success of the front end, where all the sales and service takes place, is directly related to the efficiency of the back end. I’ll tell you another story that was rather effective at putting me in my place. The first time I did background acting was at a film studio. I know that sounds obvious but oftentimes shoots are done on location so it’s a tossup. Not really knowing my place, so to speak, I wandered around until I found the main production office for the show, a room full of paperwork and files, but no people, I had myself a seat at the couch, ready for duty… yeahhhh… I'm an actor…. 5 minutes pass and I start to suspect I’m in the wrong spot, so I wander around some more until I see a sign pointing to holding for my show. I wander over and see a room full of people hanging out waiting to be called on set. That’s when I realise background actors are, by design, not that special. It depends on the production, but the amount of people working in the backend can be more than 50 staff members between Assistant Directors, Camera Operators, Sound, Gaffer, Craft services, people who kept background from wandering into traffic, and that’s just for a scene where someone is walking through a subway station. Knowing what I know about film, my jaw dropped when I saw 1917, the film itself is a marvel but I was in awe of just how many people had to work on it. 


In case I need to beleaguer the point, your backend is a critical component to running a successful business in the long run. As defined by businessdictionary.com, the backend is the “behind the scene” (heh how about that?) operations center of a business with which the customer rarely comes in contact,, these are many positions that depend on what kind of operation you’re running, according to marketbusinessnews.com, a few positions might be accounting, communications data processing, document handling and administration. For posterity, the counterpart would be frontend, where the marketing, public relations, sales and service are conducted. As an Ecommerce platform, our backend members include developers, IT specialists, social media managers, graphic designers, product managers and producers, our front end includes fellas like myself, who host the podcast and my counterpart on Youtube, as well as customer support specialists and sales. Because our company operates remotely, we depend on effective software to keep everyone in touch, as well as keep a consistent dialogue across 12 or so timezones we operate among. Since we’re about transparency here, I’ll give you a rundown on what we use, as far as I know; For communication we rely on Slack, it gives us the ability to have persistent dialogues with other team members, we can easily set up new chat rooms by pinging other members. With solid backend support, it allows your company to maintain a clear record of activity, and the ability to refer to that activity down the line takes the necessary labor involved and turns it into a resource/asset. So for instance if I’m trying to recall some feedback, if I remember so much as a keyword, I’m able to hit up the integrated search function and away I go. For project organization we use Trello, outside of business it would make a fine community hub. Any activity we do is posted as a card on Trello, and it allows us to notify one another of updates, as well as have conversations when necessary. As someone who hadn’t used Trello before, it took me all of ten minutes to understand it. A far cry from the two weeks I needed to understand my grocery job. Trello is connected to our time tracker Hubstaff, which allows up to the second record keeping of our activity. Something to keep in mind in case you’ve never used it, in order to ensure legitimacy on the part of the employee, it regularly captures the screen of the user. Not a big deal but something to be mindful of, if I turn that time tracker on, I best be busy. I’ve been a participant in a number of payment structures, including one I made up myself. I’ve been compensated by the hour, but productivity was not entirely dependent on me, no customers, no sales. I’ve had commission, which was great, and as independently minded as I am, I have to say, team commission usually works out better for everyone, builds camaraderie and keeps everyone on their toes. No one wants to be the unlucky one that just couldn’t get a sale when someone else seems to be rifling through them with little friction. I also had to figure out my own compensation structure as a freelancer, the best method I felt was to charge a flat rate based on how much content I receive. With the incentive on my side to work effectively to save on time. And of course, we fall back on Google to handle our inboxes, online storage, group meetings (in case someone isn’t slack adjacent) and file sharing. We have zencaster as our recording service, which lets us provide a link to our guests and no software is needed on their end. We reserve time using scheduleonce, a booking service that integrates dates in to google calendar, meaning as soon as our guests are ready, they pick the time and were good to go. Our company is an evolving one, a necessity, to keep pace with the rapid change of ecommerce, so don’t be surprised if we make major changes in the future. In fact we’re talking about them so, for sure don’t be surprised. 


Let me talk a bit about why having an inefficient backend was bad for me in the long run, it’s an unusual insight but I think it will be a big help to you if you get this right. Privacy is a big deal for me, and I don’t just mean the shut the door kind, I also mean giving people permission to occupy my thoughts. The majority of notifications on my phone are turned off, that include emails, whatsapp chats, discord, my army in clash is ready to go, I do allow direct messages from slack because its that important. When the majority of my workload was client based, I formed different relationships with them, some would text, some would email, some would use Upwork, which sent messages to my email. Because I didn’t consolidate work related communication to one work specific email like I should have, I found myself switching gears in my brain rapidly between something work related and something not. Every time I’d get a text, email in one of my two inboxes or a chat message, it was a tossup as to whether or not I was about to get an update from a client, or if I was ready to meet Christian singles in my area. Now, one thing I talk about is that working with clientele is a more personable relationship, and some of the people I’ve worked with have become a part of my social circle. Or were in my circle and became colleagues. It’s all well and good, but one thing I did right was remind them that anything work related like notes, updates, or scheduling should be archived on an email for reference. That way I knew if I was getting a text, it was to give me a 6 digit password so I can access my crypto wallet, just as nature intended. 


It’s important that, when devising your master plan for global domination, you consider backend research as well as the front end. It might be obvious when studying Google, to look at the layout, what apps are available, and what the user experience is like, but you should also be studying their backend. According to fourweekmba.com, here’s some interesting insights into some of the heaviest hitters you might not know about. 

-Facebook, which by the way also owns whatsapp and instagram, and therefore takes up 9.46% of my day, in 2017, 98% of facebook’s revenue was advertising, in 2018 92% of those ads were from mobile. The two ad forms are the display ads, which we’ve talked about previously on our Advertising episode, but the other one I hadn’t mentioned on that episode were performance based, where advertisers look for specific user behaviours such as clicks from search results, responding to an ad with specific content or a purchase they made online. An additional layer to this is the distinction between viewed impressions and served impressions. Fourweekmba.com refers to Facebook’s own clarification from 2015, if the ad is served, that means it’s been displayed, but it could have ended up at the bottom of a web page where visibility is minimal. A viewed impression is the one companies seem to me more eager to use as a barometer of success, since a viewed ad has to appear on the screen. One other quirk about facebook and Google too while I’m at it is that this is an engineer’s game, they made the platforms and as such, determined what are the important metrics, which is what they sell to the marketers, so while it’s reasonable for a marketer to believe the algorithms are data driven, that data is based on how it’s been engineered. To sum this point up in a way that’s digestible, even if the data was 100% accurate, and I assume it’s pretty close anyways, it doesn’t tell the full story of the human beings behind the data.

-Netflix is another interesting case as it’s a profitable company, but it has a negative cash flow. In 2018 it raked in 1.2 billion, which was 116% more than what they earned in 2017. The problem is twofold, as the user base increases, so does the operating cost and infrastructure. As they expand into other markets, they run into licensing quarrels based on the content, leading people to get VPNs so they can watch certain TV shows. The main reason why it has negative cash flow is because it continues to reinvest money into the business to acquire new licenses and as well create original content. Over time, the original content becomes their best asset since they never need to fight amongst themselves to continue to offer it, and also create a unifying talking point for it’s users regardless of their geographic location. Fourweekmba.com goes on to reflect on their business model, while monetizing it is important to it’s livelihood, what’s also important is the value it creates. Some people think of it as the streaming service, but others for the original programming. And there’s a value proposition on the part of the user as well. Since users can allow up to five people to share an account, the user could ask everyone to chip in a few bucks. If you want to get really grimy, and I don’t recommend this because your friends and family will give you the stink eye, but you could cost out how much you pay for the subscription, and then ask for an amount that while lower than the cost, is high enough that if all four other users agree to it, you’d break even or get a small profit. I’m definitely not saying you should do this, at aaaalll….. 

-The third case, Amazon, another one we talk about quite a bit on this program. Honestly, how could we not? While we mainly focus on the market, it’s important to point out that strategically, Amazon’s margins on their products are minimal, they generate a lot of revenue, granted, but there is also a ton of infrastructure as well, from fulfillment to delivery. Where Amazon’s real money comes from are their services, AWS the storage service, Advertising Services and Amazon Prime, because there’s no physical media involved, it’s easier to justify a higher margin. I have to admit, this is the first I heard of Amazon’s advertising, it’s not like I wasn’t digging around for information all this time, it just hadn’t crossed my radar until now. And because Amazon is highly disruptive in whatever market they get in to with their strategy of combining operations that are either high results low yield or low results high yield, they have the capital to go after anyone they want, in this case that’s Facebook and Google. As of 2018 their advertising operation generated more than six billion dollars in revenue. 


Now, I did want to find some back-end insights for smaller businesses too, as I do try to make a conscious effort to lift up smaller businesses as well as pay my dues to the big boys, but that information was a bit too hard to find, so I invite any ecommerce seller or company, either you’re currently small or have been at one point, to let us know what your backend looks like and what you did to make it run smooth and efficient. But for aspiring entrepreneurs and upstarts, I’ve found some guidelines that any small business would want to know to achieve an ideal level of efficiency, credit to cloudtweaks.com. 1. Nail the strategy. Once an idea transfers from the mind to a document, it becomes a goal. Something tangible and clear that you can look at gives you legitimacy to yourself, but also makes you more appealing to potential early investors and customers. They recommend product roadmap software such as AHA or Asana. What makes software like this helpful is they give you a big picture view of your project. 2. Collaboration. With companies going remote, whether by design or by circumstance, being engaged in the creative process is probably easier now than it was in offices, when people had to arrange meetings. The two pieces of software they recommend are Slack and Trello, so we nailed this one already. But one tiny observation I made is that, where office work has a tendency to stay at the office, if I happen to feel like checking in on my off hours, and I often do, it’s easier to participate in the conversation knowing that all I can do is post on a board or message someone on Slack. I’m not personally against physical gathering by the way, some of the best ideas come from that kind of environment, but even in that case, get this software anyways. 3. Ditch the post it notes. To keep yourself focused and motivated, they recommend Google Keep and Evernote. Personally this is one I disagree with, my system has been to buy a yearly agenda. I’ve been doing this for the last seven years. I plan my days as far in advance as I can. I have a friend’s wedding coming up next May, I told him, as soon as I get the 2021 agenda, I’m writing that bad boy down. I’ve found that writing what I need to do on physical media adds a layer of importance that I just dont get from writing things on my phone, or on my tablet, or on my pc, or on my laptop, or on my other tablet, or my other phone… Instead, anytime I’m having trouble falling asleep, and by that I mean 3 times a week, I can sit up and jot down what I need to do Tuesday, wednesday, Thursday is a writeoff, etc. I’m so meticulous about this I even plan when I intend to relax. Now.. that’s a personal agenda. For company wide efforts we’ve done pretty well on Trello so I’m going to recommend that for this as well. 4. Data Management must be handled on all sides. At first, google and dropbox are free and effective, you get 15 gigabytes for free on google, and can make multiple gmail accounts if you want to be like that. But as your storage needs grow, cloudtweaks.com recommends storage by Amazon, Oracle and Microsoft. 5. Consolidate Social Media. We have numerous experts for each of the social platforms, but depending on how many people you have handling socials relative to how many socials you have, you may want to look at Agorapulse or Hootsuite to condense that activity into one UI. Now, I’m a bit of a stickler for format, so there’s one thing I advise you to consider. One of my earlier clients needed me to deal with social media, which wasn’t my strong suit then, and it aint my strong suit now, and we signed up for hootsuite and what I found was it encouraged me to reuse one message on different platforms, such as a promo message for both Twitter and Facebook. As a creatively minded fella, I respect each platform as its own entity, and I encourage you to approach your messaging in a way that’s specific to each one. I think it shows more authenticity to the unique user bases of each. But that’s my opinion and mine alone. 6. Keep your eye on the money. Eventually you’ll need an accountant, and probably a lawyer. But to start, there are entry level bookkeeping software choices such as Wave and Freshbooks. Cards on the table, not my area of expertise. 

One important take I found on privatelabelmastery.com is that they draw a different distinction between front and backend I’d like to mention. In their perspective, the difference is front-end is the product offering used to entice customers, which can oftentimes be the best selling product in your company. Where the backend starts is when you start to add up the customer acquisition cost; what with the money you need to spend on ads and marketing, be that emails, Facebook ads, etc. By the time you’ve spent all this money to get the customer, the money they spend on the business can end up mitigating the money from the sales. So they refer to backend sales, the practise of maximizing the Lifetime Value of the customer, how to continue selling to them once they’ve become a recurring customer. They recommend three strategies for this; 1. Subscriptions. They claim that we live in a subscription economy, and I can scarcely dispute that. Once a customer has demonstrated a continued need for your product, the money you save on the CAC should outweigh the value you give them through a subscription model. Some are physical, like a diaper delivery service, where customer demand tracks like a bell curve, some are digital like the coveted Amazon Kindle Unlimited, which gives Kindle users more material than they could possibly read for 9.99 a month. I’ve gone back and forth on subscription models in previous episodes, in particular I’ve been a user of Netflix for five years before another family member took over. In those five years, I can’t say I watched it enough to get my value out of it, that’s on me. I would prefer the ability to download a set amount of content per subscription cycle so at least I can take some content with me, I realise that causes licensing issues, just a thought. Number 2 is Cross selling, once you’ve acquired the customer, a questionnaire could give you valuable insight into what other products would be complementary to the one they usually buy. They don’t outright suggest an upsell, but don’t take that off the table either. Number 3 is Bundling, which is a value proposition similar to cross selling, only you put together a buy 2 get 1 free style offer, this is great for reading material. Getting back to the original observation, the idea of “behind the scenes” can apply to customers in the sense that while they might get one view of the operation from a first glance, they can be brought in to the operation in a more mutually beneficial manner by giving them more agency. We talk about consumer advocacy a lot and it’s just as important to mention here, the difference between a casual buyer and a passionate fan is the difference between spending money to acquire new customers, and saving money by turning customers into assets. 

This is just a taste of what’s to come in the backend sector, on the to do list will be to dig in to the backend of an ecommerce platform and what you need to run it well, the least of which is.. Alot of what we talked about today. Have any of you current or former backend workers got an interesting experience? Feel free to share it with us, I’m looking forward to your insights, you can email podcast@debutify.com 










Written by

Joseph Ianni

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