It is not a sequel to the Da Vinci Code. It is the Impact Horizon – something we have been thinking about a lot at Dogster and can be a useful tool in your decision making progress.

In the early days of Dogster, it was just Ted, Steven and I. We would sit at Ted’s dining room table, write code, answer the phone, have meetings, and lunch at Klein’s. Things were simple and we would work on whatever needed attention or whatever new feature we thought the users would love. We tried making a few long term plans but they were always based on flawed assumptions and became obsolete very fast. In revisiting our past, I realize that our most successful choices in our product and business strategy were the ones that had a profound impact in the short term. Our worst choices seem to have been the ones that we thought would pay off “down the road.”

In our first year, our best decisions were the ones that made a real impact within a few weeks. I would also take that a step further: Our best decisions were made with a vision of the future that was only a few weeks out. Whether it was a new feature, capacity planning, hiring decisions or what have you, having a short-term vision kept us focused yet nimble. Whenever we tried to see beyond this horizon, we were usually wrong and wasting precious time. Hopefully someone has already thought of a better term for this (if you know, please tell me), but for now I am calling it the “Impact Horizon.”

As we moved into the second year our impact horizon grew to about 2 months. We were now a company of three salaried founders with a little seed money, a lease on office space, real revenue and a lot of super-passionate users that we were learning a lot about. We took on some projects that were a little larger and that would not make an impact for 1 or 2 months. Those projects that came to fruition within this horizon worked great. A few times, however, we got too ambitious. I can think of one project in particular where we tried to develop a project with a much greater scope. We even hired a contractor to do it. It took a lot of time and money to develop. Today, it is not even in production.

In the third year, we started hiring full-time employees. By this time we were starting to understand the impact horizon and we made a conscious decision not to fill any position that would not be impactful within 2-3 months. Our first two hires were a Director of Sales and a Director of Systems. Two positions that had a huge impact but it did take a couple of months to really see the difference in the books or in the user experience.

Now as we are about to start our fourth year we have a seriously large community, 14 full-time employees, our third office, awesome advertisers and partners, and some very excellent angel investors. We know a lot about our members and hopefully a lot about communities and running a growing business. Our impact horizon is now at about 6 months. We have started marketing programs that we know will take a few months to figure out and tune. We are adding capacity now for traffic we don’t expect until next summer. Our product development team is now working on cool new projects with longer development lifecycles. I am confident that we can make very good decisions within an impact horizon of 6 months. We still make 1 year and 2 year plans that we feel good about and are useful in their own ways, but in terms of allocating real resources and spending cash, I prefer to work within the impact horizon.

I would love to hear any feedback or similar experience.

Bookmark on del.icio.us, or digg it!