Part 2 — Fail 1

A real-time story of building a startup.

And we were off!

I like to do my due diligence, but once I make a decision I like to act fast and get it, whatever “it” is, done.

So when I met with Jarred and F2 (Founder 2) back at the end of 2011, I was excited that they believed in the concept and wanted to get moving as fast as I.

And we did… Within the first few months, we had decided on a business name, incorporated the company with the three of us as founders, designed a logo, registered a website and applied for a couple of trademarks for our name and logo.

In the following month we had design mockups for the website and the development for the site had begun. We were all focussed, each with our own tasks to complete, working as a cohesive team.

And then we weren’t…

We charged F2 with the design and development of the original website. The website was meant to be built on the wordpress platform utilising a raft of plugins that would be tweaked to suit our needs.

We were aware that he was outsourcing a majority of the development work to a freelancer but we were not entirely sure the extent of his own technical ability.

As with all great plans, once the development had begun, things began to slow down and take a turn. Cracks began to appear with the organisation of our development resources, because of the fact it was happening at such a distance from the core team.

Over the proceeding 20 months the developer married, had a baby, took a trip home to Asia to introduce the baby to his family, and found himself a new job.

It was very clear that the development of our website was at the bottom of his priorities, as he constantly had another reason as to why he could not work on it.

The fact that I was not able to communicate directly with this developer — I was only able to do so through F2 — compounded the frustrations and began to take a toll on the relationship between F2 and I.

Through the course of a couple of hundred emails over 18 months, I offered bonuses to the developer to get it completed by a set date, I suggested to F2 that we find a new developer to complete the site, as well as a raft of other ideas to speed up delivery.

All of these suggestions and workarounds fell on deaf ears, and were often met with hostile replies from F2.

Our relationship was deteriorating quickly.

Here is what Dad and I built in the meantime…

And we were live!

In September 2013, nearly 2 years after the inception of the company, I decided enough was enough and started to devote my time to Trade Review.

The website still wasn’t exactly right, but I knew I had to start getting the word out and begin testing all of the assumptions we had made.

In three short months, I discovered that what we were offering with Trade Review was not going to be enough. Although the idea was noble, the service was not sufficient enough for clients to enjoy using.

Even if they found a tradesman they liked the sound of, the tradesman wouldn’t be available, and clients would need to call 5 tradesmen before finding one that was interested, if they were lucky.

We had spent 2 years developing a service and it took only three months to disprove much of it’s value proposition.

It was demotivating to realise this, but I knew it wasn’t going to be an easy path.

So after spending the majority of my savings on iteration one, what was I to do? I couldn’t afford to start from scratch using the same structure we had just used, and I couldn’t afford to go to an agency.

I taught myself to code.

Over Christmas 2013 I forced myself to learn PHP, HTML and CSS. If I was going to keep going I needed to be more technical myself.

It turned out, I really enjoyed it too. It’s much like building a house, starting with the smallest pieces first, they combine to make something unique, interesting and whole.

Arrays, Ints, Chars and Loops are the fundamental raw materials like the cement, sand and clay within bricks. Functions are the individual brick units themselves. And the collection of bricks working together are the Application as a whole.

And then we weren’t (again)…

So with my newly equipped knowledge I was able to confidently screen and select a new freelance developer myself, and I began work with him at the start of 2014. We rebuilt the entire application together within 3 weeks and it was infinitely better than the wordpress version — at a fraction of the cost.

With the new application working it was time to tell F2 that I was internalising development and taking on that role myself. The time and monetary costs and the delivery of the original structure simply did not work and his performance to date couldn’t warrant another attempt.

So I sent F2 an email. I was in no way demeaning to him, and I let him know straight up that there would still be plenty of other work to do in the company for him. I just told him the facts.

To be honest, I expected him to understand my position and to accept that he had failed on his part to deliver.

Instead, he shut down the domain to spite me (as he had control over it at the time) and informed me that I would not have access to it until I bought him out of the company.

I knew I had a serious problem here. I was not able to continue working on my startup and he was probably going to be ridiculous in the valuation of his shares. Sure enough, he believed that with his presence the company was worth $150,000.

To Forster I went…

In order to afford to buy him out and continue working on the company, I moved back in with my parents. They had recently bought a home in Forster, NSW and were planning to renovate it, and from March to July 2014 that is where I resided, helping them to build.

I did manage to buy F2 out, at a much more reasonable rate — valuing the company at $35,000. But I am realistic — I knew the company was worth jack shit. I didn’t have any revenue yet.

What to learn from my mistakes…

I consider the original iteration of the business a complete failure. But as with all things, I learnt a shit load. So if you are just starting out, here is what I would suggest are the biggest take aways from my experience this far.

I also know that every single startup is different, so they may not apply to everyone.

1. Learn Tech — If you are starting up in 2014, you need to know the fundamentals in code. Chances are one of (if not your primary) channels is a website.

For example, SEO will probably be one of your marketing efforts, so you should know how to change tags at the bare minimum. And, If you want to track what your users are doing on your website, you need to be able to install that code. Waiting and paying for a developer to do this is ridiculous.

It is not impossible, and if you have the tenacity and drive to start a startup, I believe you have the ability within you to learn some amount of code. Here are a few resources I used to teach myself: tutsplus, lynda, treehouse, codeschool. Start with the theoretical and then delve in to practical.

Secondly, but still to this point, as you learn to code you will discover more and more resources that will save you money or help to accelerate the delivery of your product. Frameworks for different languages exist, frameworks for design exist. You do not need to reinvent the wheel — these let you take work that people have already completed and made freely available so that you can focus on what makes your service unique.

2. Shareholder Agreements — If I had proper shareholder agreements in place at the point of incorporation, we could have organised vesting of shares at specific milestones.

If we had done this, F2 would not have received all his shares in the company until the website was delivered. If we had done this, he could not have held the company to ransom.

Don’t bullshit yourself — if you have co-founders, then organise an agreement for this stuff. Nope, I didn’t think it was going to happen to me, but it did.

Check out lawpath, vesting, vesting and more vesting

3. Delivery is all that matters — I spent $3,500 registering trademarks for Trade Review. I may as well have thrown it in the bin, because that logo and name are not even in use any longer. Once we disproved the value proposition behind Trade Review we pivoted and that $3,500 was never to be seen again.

The point is, if it is not essential to your service or product offering, its most probably a waste of time, money and effort. Wait until you have your service in the marketplace and you are beginning to build a brand around it that actually requires, and deserves, defending.

Before then, and before you have customers or a brand, this is pointless, because who gains anything from piggy backing off a non-existent brand?

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