You know why old men sit down when they pee? Because they’re too damn tired to stand up for the whole ordeal. The above is a picture of me at the end of the hardest week of my life.
I’m only 31 years old. I do pee kind of slow, but that’s not the reason I was sitting down. And it’s also not the reason why my socks didn’t match. I had just had the hardest week of my life, I hadn’t showered in awhile, I didn’t have any other clean socks left to wear that matched, and I certainly didn’t have the stamina left to stand up for the whole thing.
My best friend Norm called me one time back in ~March of 2013. He was frustrated with his job at a “big four” accounting firm. I was expecting another vent session. Said firm had told him he was going to be doing 80% of X and 20% of Y, but it was actually the opposite.
Instead of a vent session, Norm asked me an interesting question. “Schaul, if I wanted to understand an organization and the people in it, where should I look?” He knew it was hard to get the real story. I started talking to him about LinkedIn and how one might search for people with a particular keyword in their title at a particular organization, etc. Once you got to a person’s page, you could basically read their “online resume.” The problem was, a LinkedIn page is usually embellished at best, and incomplete at worst — especially for the decision-makers. And you certainly couldn’t tell what they did from their titles. Titles Don’t Tell.
I remember exactly where I was. I was on the back deck of my apartment in Chicago. One of those 3 story decks that’s probably going to fall down someday. And the squirrels are gnawing it down as well. Squirrels run shit in the Chicago alleys.
It was nice out and it was early mid-day. The sun was shining and the day felt good. I started saying to Norm over the phone…damn, that could be something…what if we could find a way to anonymously crowdsource accurate information about organizations AND business professionals, AND what if we could show all of their reporting relationships — a visual map of the entire organization?
I thought about it for one week and called Norm back. I knew there was a huge problem to be solved and so did he. How would it look? How would we crowdsource it and how would the reputation system work? Was any of this feasible? How the hell was I going to get it built? I didn’t have it all figured out, but I knew I had something really big and really right. After that, everything else was a detail, something to be figured out along the way.
My dad had given me some money a while back, which was just sitting in stocks, and I had taken that and made a couple pretty risky trades from ‘10 through ‘13. I basically risked 80% of my savings and cashed out in 2013 with a ~$400k profit. And I did that with my first child on the way. It was a huge move. At that point I had enough money where my wife and I could have bought a house, worked our jobs, and not worried about too much. But oh no, I had to go chase my passions. So we stayed in our shitty apartment and I put 75% of my gains back on the risk table. I formed Transparentrees as a Delaware LLC in July, 2013.
I had enough money to get started. I wasn’t a developer, I just had a lot of human intuition and things sketched out in Illustrator. I could go one of two ways as a non-technical person: Option #1 — Try and tell as many people as I could about it and try and hire someone to help me build it (Craigslist-style), or Option #2 — Hire a really good shop to help me.
Both options had a ton of risk. With #1, it’d probably take me years to get to market, if ever, and I was in no way qualified to be hiring a developer. So I didn’t like Option #1 much. I felt I knew what I had and if you’re sure about that, I thought the move was to take technical risk off the table. That was Option #2. The problem with Option #2 was that it was very expensive, and I’d have to risk a ton (really leap) before I knew where I was going to put my next foot down.
I guess there was a third door I could have walked through: forget about the whole thing and get on with a less risky life. I took door #2. If you’ve seen The Matrix, that’s essentially the “Blue Pill.”
Transparentrees, LLC had $280k when it was formed, $200k from me, and $80k from one other person — a “friend&family.” I interviewed 3 development shops: Pivotal Labs, thoughtbot, and Hashrocket. Man, do I ever wish there was a site like transparentrees back when I was interviewing them. Who were these shops that did these magical things? What exactly did they do? What languages and technologies did they build in? How much was it going to cost? Trying to figure all that out was pretty daunting.
I went with Hashrocket because they seemed to have a great reputation in the rails community, they had an office in Chicago, and they were kind of the scrappiest…which I liked. Pivotal quoted me $250 / hour and Thoughtbot $220. I wanted a shop that would give me a discount on the rate in exchange for some equity in the deal. I had read about Laura Fitton and her experience with Pivotal via a transcript of an interview I dragged out of the Internet. She had convinced Pivotal to take some equity in her startup. But that was a long time ago and although I asked twice and had it run up the flagpole to Rob Mee, Pivotal balked. Thoughtbot was open to the equity concept, provided my idea was good enough.
I had a strict three-stage process for interviewing these shops. Hashrocket was responding to me faster than everyone else so they got to the second round of my process first. Marian Phelan, Hashrocket’s CEO, agreed that if the idea was as good as I said it was, there was a small chance they’d do discounted rates for equity. So I flew down to Jacksonville, FL, and pitched the idea. They liked it. I went down to Nicaragua for a surf trip and I drafted the joint venture agreement in between the best sessions of waves of my life in the middle of a jungle, and we had a deal soon thereafter.
The Friends & Family
I got a little further along and three close friends & family-types each put in $100k. That was in October of 2013. So we were at $580k raised thus far. That was a huge step.
November, 2013. I started to get even more comfortable with the technical challenges of the build and had narrowed my completion date from a full 52 week swing down to a 2-3 month swing (isn’t it insane that I can call that more “comfortable?”). Next, we raised $511,000, mostly from people that stood up in my wedding or were other life-long friends. I personally invested the most of anyone during this time ($137,500). That brought my total personal investment to $337,500 (of ~$1.1MM). It was my 31st birthday, it was a coincidence.
We moved from an independent contractor model at first with my nephew, Justin, to eventually an employer/employee model with 3 employees (not including myself). We managed not to spend a dime on legal fees from the original joint venture agreement I drafted in my board shorts in the jungle, through the investments, and past the endless minutiae of running a company (F’ing A, there’s a lot of confusing governmental adminisrative crap).
Right around the November raise is when things started to get very heavy on me. I had already convinced a family/friend to invest $80k in August of 2013. Then I had my first child, my baby boy Dean in September of 2013. Then I had three $100k investments in October of 2013 from friends & family types. Then my nephew quit the first job he ever had out of college to come work with me. Then Norm quit his job to join the team full-time. Then I convinced ~15 other friends & family types that this was worth getting behind in November of 2013. Keep in mind, these weren’t rich people; these were friends that believed in the idea and me. Then a childhood friend, Kevin, who had a wife and a son and the associated financial responsibilities that come with those things quit his job to come work with me.
Extended periods of this kind of pressure can sneak up on you in ways you can’t imagine beforehand. I even look a little stressed below.
The Hardest Week of My Life
We soft launched Monday, March 3rd, one of the most nerve-racking but fun days of my life. Our personal networks were blowing up Facebook and emails were flying. VCs emailed me back, a few very important ones. Fred Wilson/Albert Wenger. Jim Dugan. Brad Feld told me it looked “interesting” (you can find his tweet on Twitter). A few big journalists emailed me back but then crickets...the biggest was David Pogue. He said it looked interesting and that he’d check it out. I watched him sign up and click around in the analytics. Talk about exciting. Some other influential people said “nice work.”
You get the idea. There were reasons to be positive. But no one wrote about us that first week. You might think, “yea, so what?” Well, I was surprised. I thought we had something very paradigm-shifting. My expectations lived on Mars. Incorrectly setting expectations is probably the single-greatest thing I screwed up and what I feel the worst about. My investors are cool about it, but I misjudged the timing of events.
I hadn’t really been sleeping. I was waking up in the middle of night panicky since March 3rd— not full-blown panic attacks, but I was very nervous and waves of sadness would roll over me before my mind would snap into gear and start doing something more productive.
Before I finish this story, I want to explain that I’ve had hard weeks before. I had an unusual childhood. My mother was an alcoholic and my parents were never married. My dad always supported me financially, and I spent every summer with him, but from 1st grade through 9th grade the physical place I called “home” changed ten times and I lived with nine different families.
But I don’t regret it. Trying to reconcile all of that completely irreconcilable information made me think…a lot. But here’s my point: most kids grow up knowing their parents as largely infallible sources of wisdom. I realized, very early, they’re just different people. Once you realize that, anything’s possible. Because that fairytale person that’s going to have all the answers for you, or all of us, just doesn’t exist. I swear, I wrote that last point, and somebody just showed me this:
That’s exactly what I’m talking about.
The evening rolled around on Friday the 7th of March. My wife and I and our baby boy went out to dinner at a Mexican restaurant we’ve lived by for ~4 years but had never been. I had a drink before and a margarita during dinner.
We came home. I made myself another drink and took half a valium. I slapped on headphones and started watching my favorite movie, The Matrix. I especially like that movie these days because I feel a lot like Morpheus, and like Transparentrees is “the one.” Morpheus believed that Neo was the one so thoroughly, so “blindly,” that he was willing to go through anything to see it through, and his confidence was unwavering. But then the agent Mr. Smith shot Neo in the hallway, and Neo lay there dead. Morpheus stared in disbelief, “impossible…” he stammered. His face was all disbelief and doubt.
As the last day of the hardest week of my life was setting, I took off my headphones and got up to go to bed. I was too tired to brush my teeth. I was almost too tired to pee, so I just sat down. Sitting there, buzzed and exhausted, I noticed my socks didn’t match. And they weren’t even close; one was a long black dress sock and the other was a white gym sock. I knew when I put them on in the wee hours that prior morning that they didn’t match — it’s not like I didn’t notice when I put them on. I was just too tired to give a shit and I didn’t have any other options. That’s when it hit me: out of all those ~31 years, that was the hardest week of my life. Unreal. So I took a picture of it.
I‘ll keep writing if there’s interest. A lot happened after the first week. A wealthy Chicagoan offered us $1MM for 20%, we made it to the final round of Techstars, we were denied by YC (no shit), and we made a deceptively obvious but important pivot. You can reach me at firstname.lastname@example.org if you have any advice or questions. We REALLY appreciate advice. http://www.transparentrees.com