In 2010, I was a first-time entrepreneur running a small e-commerce and digital asset management stock photography company, Cutcaster. Two years earlier, I left my job trading stocks on Wall Street. I wanted to follow my dreams of starting my own business and create a marketplace for buying and selling digital content like one could do on the stock market. I successfully launched a content marketplace and after the initial ups-and-downs that any new company and founder experiences, things were running smoothly. That was until I got an email out of the blue from an unfamiliar name.
The email address indicated that the sender worked at a competitor company. He got right to the point: he had hacked my site, and it had been pretty easy.
The sender turned out to be JD, a 19-year-old computer whiz and white knight hacker from Minsk, Belarus. JD explained that he had hacked our site for fun. He had no malicious plans and was willing to help fix the vulnerabilities in the site. True to his word, JD expertly patched up our site and once it was fixed, he proposed joining Cutcaster as the tech lead. As a non-technical founder, I was impressed by JD’s skills. I’d learned that JD had a passion for building hardware and writing software for websites. This was something he had been doing since he was 12. But more than that, it was his curiosity, the ability to both listen and tell it like it is, and willingness to help that prompted me to forge an unlikely partnership with a Belarusian teenager that changed both our lives.
From that first hack onward, JD has been my technical partner and one of my closest friends. Together we started a full-service software development agency in San Francisco called Spiral Scout almost 8 years ago with the help of Andrew K., who was our first hire and now our lead front-end engineers. Today, we have completed more than 260 projects, large and small, for more than 95 happy clients. Our first customer is a company we still work with to this day. eLearning Brothers has grown from one person (a true, one man wrecking crew) to more than 100 (awesome) employees over the years. Likewise, we’ve grown Spiral Scout from a two-man operation into a full service digital agency. We have more than 75 highly-skilled engineers, designers, project managers, quality assurance specialists, and sub-contractors.
Spiral Scout is successful because our values represent that first hack: we’re responsive and get to the point quickly (the good, the bad and the ugly), not sugar coating a situation, trust each other, focus on stellar engineering skills, and have just the right amount of fun.
How More PTO Led to Increased Productivity and the Competitive Edge
This post originally appeared on Forbes.
One of the smartest and most impactful strategies I’ve implemented for my business and team came from a gut decision. Sometimes you have to ditch the logic and analysis and simply go with a feeling. That’s what happened two years ago when I decided to mandate regular three-day weekends for everyone at our software development company. Turns out making three-day weekends a regular thing isn’t just good for company culture — it’s great for business, too.
Below, I am going to explain why that strategy of giving the team Fridays off as a mandatory benefit was one of the best business decisions we have ever made, and why you should consider doing the same.
Putting the "Yay!" in "FriaYays!"
The seed for our PTO policy was planted over drinks with a close buddy two years ago. We were talking about company culture and brainstorming ideas to differentiate our businesses from the “free snacks and happy hour” crowd. We wanted to find a way to better promote our values, positivity and performance among our team, and we knew the solution lay in the idea of work/life balance.
My friend mentioned how his company updates their PTO policy for the summer months and gives employees every other Friday off from June through August. I had heard of companies letting employees clock out early on summer Fridays, but giving them every other Friday off for three months seemed truly awesome.
I left drinks with my curiosity piqued. What if we did something like this for our software development company? I talked to my cofounder/CTO about giving our team Fridays off, and we defined three priorities:
- Promote a culture of caring by practicing the Golden Rule and treating our team the way we wanted to be treated.
- Do things differently.
- Lead by example for how to build a business and team in the outsourcing software development industry.
We decided to implement a policy we called “FriYays,” giving our employees every other Friday off (half the team one Friday; the other half the next Friday). At first, it was just for the summer months. But when we looked at our billable hours and productivity for those months, we didn’t see any issues with our cash flow or profitability (and we noticed the team was much happier), so we extended it permanently for the entire year. This felt like a giant step.
FriYays were offered on top of the existing 25 paid vacation days, 10 national holidays, and as-needed sick days. No one’s salary was lowered. With FriYays, our team got 26 extra paid vacation days each year.
Did we have strong research data to back up this decision? Not really. Did we know if it was going to disrupt productivity or output? We thought it might. Were we scared our clients may be upset that their team members weren’t there every Friday? Yes. Did we make a gut decision that turned out to be one of the best ones we have ever made for our business? Hell yes.
We knew it was risky, but FriYays aligned with our company values and commitment to our team. Two years later, we are all the stronger for it.
Happy Team, Better Business
With the FriYays policy in full effect, our team reports feeling happier and more motivated, and they have much more time to take care of their lives away from work. The additional paid time off frees them up to spend more time with their families and tend to personal self-care tasks. We even had a team member use his extra time off to build a cabin in the countryside.
On the business side of things, we have seen productivity go up (measured by more billable hours each month when compared year over year) and turnover go down. Our clients even report improved output and increased project satisfaction. We also shifted our business strategy to include a stronger focus on developing open-source products, as many of our software engineers enjoy spending their FriYays learning, training and working on passion projects associated with building software.
With all those positive contributing effects, it’s no surprise to learn that our profitability has increased significantly, too. We attract more top-tier engineering talent who know about our one-of-a-kind PTO policy. This allows us to take on larger, higher-dollar contracts, and our powerhouse team has become even more efficient and dedicated to the projects we work on.
Increased PTO: More Than a Recruitment and Retention Tool
While I do think generous PTO policies give a company a unique advantage when competing for top talent, I have found this type of benefit goes well beyond a recruitment and retention tool. The success of FriYays has helped us understand that more time away from work makes you better when you are at work. And by requiring three-day weekends instead of making vacation time “optional” or “unlimited,” you can level the playing field for your employees, and they will take advantage of the time off knowing everyone else will, too.
For our existing employees, FriYays has served as a clear and resounding message that we regard them — not the bottom line — as our No. 1 priority. When we talk about “caring” as one of our company values, it feels good to know that we are walking the walk and backing it up with policies that prove it.
Making big decisions for your company can be scary. It is strikingly evident to me now, though, that when you do the right thing for your team, you can’t go wrong. Whether it’s updating your PTO policy, offering the benefits you would want, sticking with yearly raises or cultivating a culture where employees can grow and get promoted, putting your team members first will pay off in ways you can’t even imagine.
