Startup – the pain, the lessons Terry Morrell Published by Terry Morrell at Smashwords Copyright 2013 Terry Morrell Smashwords Edition Chapter 1: All roads lead to Rome How do you end up where you are? Have you ever considered the myriad decisions, events and actions you navigate to arrive at the moment you’re in? Is navigate the right word? Is it more hang on for the ride? Or are you always ten minutes behind schedule? I bet you don’t engage in barstool analysis about your week every Friday night down your local – with your family! Some people call it a ‘Family Meeting’. Whatever you call it, it was akin to laying foundations to our family of two. This was our life for a while. Kim had a daily mountain to climb as a junior hospital doctor and I was a consultant for a local software company. Both jobs, although not requiring much physical exertion, left us drained. A concept our families still cannot comprehend or sympathise with. To them, if you don’t work up the appetite of a packhorse – you’re skiving. We both come from mining backgrounds. Mine in the northeast of England and Kim’s in the Welsh valleys. We were the first in a generation to pass any sort of exam. So we were on our own, trying to make sense and look for common ground in our professional lives in a weekly Guinness fuelled process. I often raise the subject of regular family or relationship meetings with people I meet and either get baffled looks or instant recognition with comments like “yes, it’s great, we thought we were just weird. Good to hear someone else is as strange as us!”. Seems you’ve discovered this tool or you haven’t. I still hear fresh insights. People get so animated, it should be taught at school. The beer flows and the conversation rattles along as you clear your mind of the week’s clutter and I swear you can actually see a physical change in yourself and others taking part. It’s more than a few drinks and ad-hoc bullshitting - this is free self-help. It could save you a bundle in more ways than you think. A worldview The Germans have a great word for worldview - ‘weltanschauung’. The dramatic and mysterious sound of the word somehow fits the fantastic concept of each person having a different view of the world expressed through their day-to-day language and the impact this has on others. The world moves on this stuff. My worldview has developed from factors as varied as yours and going into detail here isn’t what this is all about. It’s not very exciting anyway and wouldn’t make for much of a read. However, several things are worth noting as I go along, so you can develop a weltanschauung about where I am coming from in the position I take throughout this book. That’s it, no more German words. In 1967 I was born a miners son in a town called Easington, one of the most deprived areas in the northeast. The mines were closing down in the area, leaving people with uncertain futures when the ‘job for life’ concept was still a mainstay of British society. My mother was eighteen and loved her social life above anything else. I was an accident and caused a shotgun wedding. Soon after the wedding, she ran off to Nottingham with my grandparents, along with thousands of migrant miners from Geordie land. On arrival she had to find a new life and get out from under her parents feet. I was left with my grandparents who brought me up and sent me to the local school until I was eight. Around this time my mum remarried and established a stable enough life for me to live with her. This marriage didn’t last long either, but it produced my brother. So, we were a mid-seventies single parent family. Oh yes - Adrian Mole comes to mind, but poorer and less intellectual. If it weren’t for granny, we’d have gone without most luxuries including a telly. My relationship with granny was built on open, honest communication. We talked and talked. Anything I wanted to talk about, she was my sounding board. Her experienced ear always knew how to listen or comment when comment was required. Our bond, however formed created a lifelong respect of my elders experience and judgement. Granddad succumbed to cancer while I was still very young. Mum soldiered on with several part time jobs and taking in lodgers to keep us going. She struggled to inspire me or discuss much beyond what my chores were. I went to a dreadful comprehensive school. I made up for the bad times there by taking up fishing and going on fishy adventures with fellow teenage anglers. I went through trials with teenage weight gain, only resolved on leaving school and properly discovering girls and exercise. I left school with two accidental ‘O’ levels and thought further education was for people other than me. I went from job to job and travelled around until I fell into the civil service, full of young people like me. It took a while to realise that they were underachieving and lost too. We were condemning ourselves to a life of grey tedium with the daily panic over getting the usual parking space and remembering your tea money. I started to get a nagging feeling that I was missing something. If I didn’t wake up, it would slip away in the grey fog. I became depressed. Working there did have its perks though, like lots of young women to play with and long lunch hours for jogging. A sport that probably saved my life. Jogging provided me with a release and for the first time in my adult life I thought about goals, personal bests and moving forward. In the words of a later boss I had: “when a problem starts to get to you, get a new perspective”. All I knew back then was exercise took me to another place mentally and physically, a place that inspired me to embark on more than running round the park. Somewhere along building self-confidence through exercise I stumbled across further education. After a few false starts I picked up some more ‘O’ levels and several ‘A’ levels. Flushed with success, I enrolled on a part time business degree, which sent me into a completely different zone and began to tear me apart from my civil servant friends. Towards the latter stages of the degree I got a job with a large local software systems company that enabled me to “catch up” with the concept of being a professional adult, as I saw it. As soon as the degree was complete I topped it up with the obligatory MBA. This intensive period was like growing new limbs. I’d gone from shuffling paper in the civil service to advising business clients about their critical systems overnight. Wow, I’d made it and was living the dream. It was a hard baptism of fire from day one though. Company policy was to drop you in the deep end and see how you coped. You had to ask for help if you needed it. If you didn’t ask and you screwed up – you’d be pushed out. If you asked for help and didn’t need it, you’d be sidelined or assigned to client backwaters. I loved it, but felt exposed. Many people around me seemed to possess way more technical knowledge or had that self-confidence that comes with not shuffling paper for years like a dirty secret. I realised my peers were mostly graduates that had gone from university to professional work. They hadn’t felt the pain of scratching to survive. Their biggest worry was how to spend their wages. It was tea money trivia all over again from a different perspective. I felt there was something missing. Something was hindering my peace of mind. It never crossed my mind that my real dream was hidden, subconscious and needed teasing out. I was unnerved. This was my dream come true, what was the problem? It created tension for me. I couldn’t take strength from it. I didn’t have the ability to step back and see the signals. I was always looking for opportunities to be out on client site or networking with typically, older non-peers. I’d fallen into my lifelong model of listening and learning from older, more experienced people. I likened them to my team of professional grannies. Around this time I became assigned to a new manager. Stef was highly professional and possessed an expert level of emotional intelligence. Without realising it, I’d adopted her as my mentor. I took every chance to be with her for a quick coffee, travelling to meetings or arriving early to the office for a chat before the noisy hoards turned up. Being German, she possessed a few classic traits like early rising. This meant she was already in full stride when most people were just turning up with coffee and already stressed. Not her, she’d have the day under control and had time to wander about networking and explore problems without any pressure. She usually had one or two insights that seemed to change my perspective. One way she managed her day was to slow down communication, break it down and respond in a way that closed issues down or assigned complete tasks to others. Not in a work dodger way, but true trusted delegation. Her reputation was one that said “you’d better do your homework before asking me for anything”. This meant you got insightful brilliance or a ticking off for wasting her time when you knew the answer anyway. Stef was direct and one of those people who project a cold front. I saw a twinkle in her eye though and beyond the cold persona was a witty, wise and very supportive person keen to help. One of the things she set up for each of the six or seven consultants that reported to her was a weekly one to one meeting. She gave advice, took on commitments and set new challenges. Her power and success lay in her listening and questioning skills. You knew no issue could be sidestepped to get away. She was happy to tackle anything head on and keep going until a workable route through materialised. It was a great way of managing without ‘managing’. I made the most of these meetings and later learnt I was the only person who bothered to do any preparation, write something down and think about what I needed from her to make me succeed. Another person made a permanent mark on me from those days. Dave came to the organisation to help it change and develop a culture that was better to do business with. He used language and tools that cut through the big egos in situ. He demonstrated there was no “big secret” of technical skills I’d need to succeed in this business or any other. Other skills were much more valuable. A quote he often used was “confidence is not about how you feel; it’s about how others think you feel”. If you think about that long enough, you’ll see the power in it. I’ve never met such a good presenter or public speaker. He had the ability to make you laugh and cry in the same sentence. Dave kept going. He kept going no matter what. If he felt what he was doing was right and had support, he’d see anything though. Another of his guiding beliefs was that you can change anything if you get two out of three people to see the light. That concept drove his approach to any project - go for hearts and minds first and the traction for the change will follow. These two larger than life people were like beacons either attracting or scaring people away. Their views of the world took my breath away, help me focus and realise I could do more – much more. They were both like surrogate parents helping me forge my career. Then I met a girl. Being with her meant leaving Nottingham, the company car, the expense account, the rosy future and moving to Cardiff. Was I a professional yet? Or did I just exist behind the safety net of a big company? The big company had been my training ground for six years and my career was motoring under Stef’s leadership. I was blinded and not for the first time by a female, so I took the plunge. Within a few months of the move, I’d left the girl. In the middle of the split my brother called to tell me he’d found our mother dead in her bed and my granny had begun a long fight with Alzheimer’s. My world had turned alright. I suppose I could have gone back, but I seemed to get up each day in what I can only describe as holiday mood. Maybe it’s the Welsh air? I soon settled into a smallish (around 150 staff) family software firm in Cardiff. I was big fish in a small pond initially unaware of the power of my experience. Being a family business, the culture was conservative for the dynamic software business. They allowed me plenty of latitude and I enjoyed spending over two years with them. During my time there I met Kim, which seemed to be what all my life was leading to. She made and continues to make me feel real and gives me the inspiration to fully trust my instincts to define my future, not just arrive at it. A turning point for me occurred during this time when amazing opportunities for me to move away from Cardiff were offered. I decided to stay and make a permanent life in Cardiff. I’d grown to love the place and my new life. I was ready to start a family. However, the conservative nature of the family firm frustrated me. I didn’t know where these feelings were coming from, but they knew no rest. I was itching to move on and during a downturn at the firm, I decided to leave. During the latter stages of my time there I met a guy who left to set-up a dot.com. His personality seemed to tower over the other directors at the firm. I left and joined him. Steve has a raging torrent life force. His previous job at the family firm was director of the technical staff. He likened it to herding cats. He did however command respect and loyalty, so much so, he took several key players with him to set-up his new firm. He too had enjoyed the cushy life at the family firm, spending ten years with them. He wanted a stab going it alone before it passed him by. He was having a late midlife crisis and looking for a reason to buy a red sports car. I don’t think I’ve ever seen Steve not wear a suit in public. His whole character transforms when he puts it on, even his brain seems to rev up a few extra motors. He loves working till late at night and bullshitting about women at every opportunity. He can literally talk you to death if you let him. A quick mind, open to anything if you can sell well and catch his attention. Getting his attention was something most people close to him had given up on, leaving him to make his own assumptions. This led him to many business dead ends. This was a man in need of constant recognition and confirmation that he exists - a small flaw in someone that you could bet your life on. Despite Steve’s high octane take on the world, I was in a place that only changed if I changed it. I felt drunk with it. From here on in, I was out on my own defining my future, making daily decisions about everything. Life felt more colourful and rich each day. I started to see the world through Steve’s eyes. I started to get audacious. Investment ready? I started to do something I always admired others for doing – I networked. It wasn’t scary. It was fun. I couldn’t believe it. I was able to pick up the telephone or walk straight up to people and talk business, my business. Something I thought steeped in chaos and mysterious skills I’d never possess. Removing fear and getting somewhere with networking for me is always having an edgy opinion. People really do want to hear something fresh and not just politically correct gestures. When you are out on your own, you develop the ability to say what you think, not what company policy makes you say. If you’ve thought about why you think the way you do, then words or phrases won’t sound false or forced. In fact you sound passionate, knowledgeable and credible. Life with Steve was a about trying to make something stick, whether it be an order for business or investment funds. Unfortunately “You’re not investment ready” were the final words from investors being courted. It was a blow, but deep inside I knew it. It was asking for investment when backed into a corner and failing, rather than to fuel growth and the investors saw it. We were in the post dot.com crash, so investors were wary of ‘concept’ businesses. So, it was back to “Bootstrapping”, an experience that can change your perception of investment-funding forever. To continue with Steve meant no income until the business earned enough to pay in a company I had no stake in. After several months of intense activity my head was up looking for alternatives. It felt good to have “failed” the funding chase. Before we were turned down for funding I’d began to notice things, uncomfortable things. The life of the business vibrated inside Steve’s head. I never knew which way he was going to turn next. He was living on his wits looking for a way to survive, rather than pursue a viable opportunity. Early on I saw this as passion for his business. Getting closer I saw the pain of sleep deprivation, skin rashes, threadbare suits and car in a dangerous state of repair. It hadn’t broken his spirit, just his bank account. The realty was the business they started off with failed. They kept together and tried lots of things to survive as a team to avoid being wage slaves again. The price was high, too high. That wasn’t smart working. It’s funny, at times like this stuff happens. The phone rang from a head- hunter with an opportunity in a firm in the same industry as the old family firm. Just across the bridge in Bristol, it was an immediate parachute. It felt like a compromise, but I needed to shake Steve off before I got sucked in completely. Parachuting in Early days in a new job are always tense. You see everything in enhanced colour and time moves at a different pace. You’re on alert, trying to make sense of everything so you can be yourself again quickly. Small things like the location of the toilet and coffee occupy too much mind space initially. I was used to walking into new situations all the time and getting my feet under the table quickly, but entering an organisation as one of them, rather than for a specific purpose changes your approach. I didn’t want to be one of them. I was thinking, “What’s in this for me?” The bonus to this approach was the senior players liked it (although they didn’t know why they liked it) and quickly saw the opportunity to use me in ways that met with my personal agenda. However, it alienated the consulting team I was part of. They felt frustrated that I was getting all the new business opportunities, whilst they were pinned to the ground with billable work. I was enjoying myself. My diary was full of meetings with prospects. There was a clear gap in the capabilities of the company to engage the client at a business problem level. The approach used by the company was pitching their software features in the hope some would catch the eye. This leaves the client to connect software features to their unique situation. It had limited success. The leap from software feature to an operational situation is not always obvious. The company perceived problems in this area as client objections to the sale. The strategy for dealing with this was to offer a better deal. This was making life and growth for this company very painful. This was an area I felt comfortable. I enjoyed the drama. Six months in and I had the ear of the directors and understood where each was across the “what’s in it for me?” spectrum. Or thought I did. Trip up the north I’d got reasonably close to the managing director (MD). We’d several successful trips under our belts including a few days in Amsterdam, where the beer flowed and the client pitch was endured with severe hangovers. The teamwork on that trip enabled trust and faith to develop between us. He was what I call a veteran, just over sixty with an air of reserved confidence and ability. I’d found another mentor, with a big energetic presence. His command of the written word was impressive too. He displayed the ability to sum up complex and fluid issues clearly with the knack of making people feel special. He genuinely wanted to hear others opinions about a situation before he took action. This trait rattled me beyond reason later. He held a PhD in Engineering, which seemed off topic for where he was now, but the interest in mechanics seemed to fit with selling modular software packages. He was on his third wife and had several kids from previous marriages of all ages. He’d been there, done that. A major opportunity came up in the north of England. He made sure I cleared my diary to support him. The preferred method of doing the north was to travel up in the afternoon of the day before a meeting, get a hotel and hit the bar. This occasion was no different and we sped north in his Jag. We chatted about families, (Kim was now pregnant) and the stock market as we both dabbled. It was the first time we had spent a few hours together uninterrupted to explore what made each other tick. I got to the bar about thirty seconds ahead of him and ordered beer. He smiled and visibly shook off the day. Most people from the company made sure he paid for everything on a trip, which you could tell he found tiring. It was summer time and the north offered rain, so no sunset drinks on the terrace. We half watched sport on the television whilst the first beer relaxed us from the journey. I was in reflective mood after discussing my personal life in the car and hearing about his life away from the day job. I could see him fidgeting. I sat back and waited for him to drive the conversation. I couldn’t tell if he was bored or in need of the loo. In the few moments it took me to sit back, take a sip of beer his face darkened like a man about to admit to a serious crime. He wanted out. Not just walk away. He wanted more. More than I had in mind. Blood brothers MD had the title, but none of the responsibility of Managing Director. The firm had been acquired by a venture capital firm and three players had been sent in to run it until it could be sold at a premium. So, he was MD in name only for continuity with clients. Things took a while to get going providing a breathing space to think it over. We knew that pursuit of opportunities for personal gain would break our employment contracts from that moment on. For me, that would mean dismissal and loss of the usual ongoing benefits. After what I’d been through recently, that seemed trivial. MD didn’t have much equity in the firm, so wasn’t motivated to assist in the objective to sell the firm, but had a big enough exit and pension deal not to rock the boat. About ten days or so after the trip MD called me into his office to join him in a client conference call. This was just a ruse and an excuse to shut his office door. We used ‘do not disturb’ cards when in conference call meetings, so we had relative privacy and perceived legitimacy. He had me fooled until I sat down and watched him unplug his desk phone. He was a graceful cat in his office and seemed to fill the air with positive anticipation. He was animated with something, yet calm and unhurried at the same time. It was pure focus and conviction in his belief that “we can do far better on our own than we can under this regime”. His delivery sold me in seconds. My ongoing need for leadership and business adventure was again in the hands of someone I could connect with, trust and initially…follow. We were a two-man band at this stage and although it was not getting the time it deserved, it worked well. However, MD enlightened me to several players in the organisation that, given the right circumstances, would jump at the chance to go it alone. Slowly these characters emerged and joined our early morning chats, which by now were starting to look suspicious. We initiated our first clandestine “board” meeting. Inaugural meeting It felt energising to get out of the office after a non-productive day, jump in the car and nip round to a local hotel with all the so called “mutineers”. This label stuck due to the MD’s liking for sailing. He had the mutiny flag formation stuck to his whiteboard out of distaste for the corporate equity owning directors brought in to “suck the life out” of the company and “sell out at the first opportunity” as he saw it. The other mutineers had been unhappy for some time before I arrived and often joked that working there was like being on the Titanic. The level of black humour about this was intense and vicious. These guys really wanted out or revenge - it was hard to determine the difference. I couldn’t believe it, just over six months into taking this job to “see what happens”, I’ve got the MD, the technical director (Technical) and the head software development (Guru) spilling their guts and desperate to get free to create something for themselves, not tow the corporate line. Technical was another veteran. In his mid-fifties, loads of experience with unusually good communication skills for a technical person. He’d been married over twenty years, got adult children. His wife was inflexible in her attitude to life, which meant they tended to do their own things most of the time. This reflected in his various hobbies like fixing and driving classic cars. He owned an old Jaguar that worked now and again and was taking flying lessons. He was a “solid chap”, utterly dependable, although a little obsessed with detail. He felt obliged to know more about the technical stuff than you – relevant or not. He had that “something is missing from my life” look on his face. I later learned he was now a sober alcoholic and ex chain smoker. But, I felt a bit more secure in our future ability to deliver software with someone like that around. Guru was in his early forties and didn’t have the usual background you would expect a software expert to have. His passion in life was singing show tunes. He was just about to marry his second wife and had kids from a previous marriage. His route to software development was not planned or traditional, he fell into it after doing a course years ago when he realised his life was going nowhere. This I immediately understood and had respect for his “square peg, round hole” appearance in the software development game. He’d been burned by constant interference in his development plans to get software out the door earlier, even if not complete. That was how he saw it anyway. It was hard to determine what happened that evening until afterwards. It wasn’t about the content of the meeting. The real output was a huge buy in, commitment and the beginnings of a viable team. During the drive home I realised the dynamic had changed in one night. I felt an outsider again. These guys knew each other well. I was still the new guy in the office. Who was in more need of trust? My brain was fried. Arriving home at one in the morning, I had no energy to tell Kim how things went, but she could see I was “happy tired”. We established weekly meetings in all sorts of locations including Harry Ramsdens (where MD enjoyed the over sixties meal deal), hotel lobbies and team members’ homes. The latter developed into the standard approach and was labelled “winners dinners” through trying to outdo the previous meal provided. The mill owners Back at the office, three individuals held large shareholdings in the company, whilst venture capital funders held the lion’s share. This gang of three excluded MD. The Chief Executive had been brought in by the venture capitalists to “keep an eye on their investment and manage those crazies in the Wild West” (as MD liked to put it). He was in his early fifties and talked about Manchester United at every opportunity. I had little dealings with him, but noticed his lack of public speaking skills. MD said he spoke like a man desperate for a shit. At staff meetings he whimpered a bit then MD took over and rescued awkward situations time and again. Next was the Marketing Director, also sent in by the venture capitalists to do a “changing rooms” style marketing facelift and get the business looking good for a sale to the highest bidder. He considered himself a player, well connected and able to “do strategic marketing” not that “writing brochures bullshit” as he called it. I liked his approach and with a little less downright arrogance, I thought he could be good to know. Unfortunately, feedback from several of my industry contacts confirmed my gut feeling that he was high maintenance. Every encounter with him was a tricky dance to avoid loading up my back with his monkeys. The last of the venture capital henchmen was a highly financially skilled, but sullen woman. Her head (she always came to the office with wet hair for some reason) seemed permanently bent forward and shuffled around, getting animated at month end when the numbers needed taming. All I knew was, she was a friend of the Chief Executive and had performed to his satisfaction in previous companies they’d “rescued”. These three met separately from MD to make any required decisions and had direct contact with the equity house paying the bills. No other ‘directors’ were trusted enough to join the inner sanctum. The next level down in management was where MD and Technical lived, along with other director types trying to hold onto their jobs in an environment of constant reorganisations. This team included the mustached, middle aged consultancy director. He was unable to stop twiddling with his mouth bush in every meeting. His stock phrase when discussing a difficult client was “I’ll go see them and kick their ass!” He [...]... what am I going to do about it?” I was back in the now familiar position of nothing happens without me driving it I realised our family and friends were aghast at my antics I was in the eye of the storm and began to focus on the next hour, the next day and the day after – the future would have to wait Walking the talk Procrastination from the team incensed me Their task avoidance and inability to perform... business, rather than in it A big problem early on was doing anything tangible We tripped over each other playing out the drama of being thrown together During the early days I was still suspended from work by the old firm They chose to communicate via formal letters Disappointingly, there was no verbal dialogue This re-enforced my views They weren’t interested in doing business, only protecting their position... The heat forced him to lose the jacket and tie quickly He told us how he and Technical had known each other for forty years and went cycling as boys They’d both moved away from the area, yet ended up living about twenty miles apart in the same area they grew up in Fate, the old boys loved it Market didn’t feel like a stranger with the Technical connection and we quickly started to open up But, as the. .. last a while and went to the kitchen for more coffee Maybe I should have talked through the report to make the scale of the task clear, but I wanted to get a reaction as it stood By the time I came back MD had summarised the gossip as “We’ll beat them at their own game lads, they cannot survive doing business like that” I was relieved it hadn’t become a full on bitch about the old company session Everyone... scale to a start-up The lads perked up They knew enough to spot a green light by now The process eventually ended and my worst fears came true, as the next day we had no forward plans in the diary and no clear route to galvanise investor support MD and Technical had enjoyed the jovial experience of the grant process It gave them some structure to each day Now they wanted a break – a bloody holiday!... had become rich – on paper It was a great way to start the day and MD knew it I wasn’t questioning the greed of MD If he could bring in the sales and funding quickly then he deserved reward and earlier exit options at his time of life The rest of the distribution seemed fair, with market accepting he was not a founding member and would receive less It hit me for the first time how big the differences... future was facing the wives at home We didn’t think they really believed this day was coming We had no plan for it and expected to react to a signal that the time was right to exit We’d need to take the risk and jump at some point This view was tempered with the question “So, when will you get paid again?” from the wives It focuses the mind Birth and death I spent most of the next day on the phone and... about the old company session Everyone was looking over the investor report and with some warm up gossip out the way they prepared to give the issue some attention MD could see this could develop into a messy discussion – something I wanted to happen to clear the air on the subject He closed it by asking everyone to respond to the report by email the next day I let it go He looked like he was about to... his six month paid notice? The way things work in our industry; he’d have been sent home on garden leave or left to rot in his office for the six months anyway His prevarication seemed to play into the hands of the equity owners They must have seen the opportunity to remove a high cost individual, who hadn’t performed too well recently – well his mind hadn’t been on the job They waited for just enough... sure they get the business and more importantly, refer them to others – funny where you can learn a lesson or two Our fantasy business plate spinning continued Technical and I fell for a new build office complex aimed at high tech businesses like ours The penthouse suite was still available Technical played the professional office tenant with ease and asked all the right questions while I checked out the . focus on the next hour, the next day and the day after – the future would have to wait. Walking the talk Procrastination from the team incensed me. Their. not for the first time by a female, so I took the plunge. Within a few months of the move, I’d left the girl. In the middle of the split my brother called