Introduction
The idea for Notes on a Startup came about a year after I had left CloudSense, a software as a service (SaaS) company that I had co-founded as its CEO a decade earlier.
When I was running my business, I was usually absorbed by its daily challenges, always trying to take it to the next level, and being stretched to the limits with little time to reflect on what we were creating.
Looking at it in the rear-view mirror today, I can see that my three co-founders and I had built something quite remarkable. Over a period of seven years we had opened offices all around the world, counted more than 70 globally recognised brands as our customers before selling the business for a nine-figure sum.
Barring one memorable falling-out over dinner at the Hotel Du Vin at Henley in Oxfordshire, over those seven years my three business partners and I remained extremely close and hold a close friendship to this day.
As remarkable as our story may be, until the summer we started, neither CloudSense nor any other start-up had featured on my career plan. At that time, I’d been working as a technology leader at one of Europe’s largest satellite TV companies. On the sunny day in question, I was taking a lunchtime walk along London’s melting pot Brick Lane. I was with Alex, a particularly talented software engineer and member of my team, and we were heading from a meeting to our nearby office. As we walked, seeking out a good lunch and enjoying the exotic sounds and smells of cooking in nearby restaurants, Alex sprang on me that he and two of the other great talents working for me, Fawzi and Davor, were thinking of leaving the company. To compound my surprise, the three of them wanted me to come with them and join their new start-up as CEO, a job I’d never done before.
I spent the following few weeks trying to rationalize the irrational desire I had to ditch my increasingly successful corporate career and start a new business with no customers, and to take this leap into the unknown just months before my wife and I were expecting our first child.
As it happened, the ripple effect of the financial crisis that had smashed apart the global financial system a couple of years earlier was now filtering through to people’s pockets, and the core satellite TV business of my employer went from being a necessity to a luxury for its customers. The bosses decided it was time for some cutbacks. As the summer sun gave way to the autumn damp, budgets got slashed and people lost jobs.
My boss let me know that I’d be leaving. With my career progress vanishing over the horizon, my mind was made up, now was the time to sink or swim.
Thanks to Alex, Fawzi, and Davor, I was about to become an co-founder and CEO.
As a CEO about to chart the course of our fledgling business, I had no practical experience owning and running a company. As our needs and ambitions grew and we took four venture capital (VC) cheques over six years before the exit, I knew even less about the long odds of success for companies raising the all-important capital to grow a large subscription software business.
An article by the Corporate Finance Institute breaks these odds down into several layers of detail, concluding that in aggregate odds of success as a VC-backed tech company are 0.05 per cent, or one in 2,000, when you include all the businesses that seek funding but don’t get it. Looking at it another way, from just the businesses that do raise venture money, 90 per cent of them fail to make a notable exit; and of those that do, in 75 per cent of cases the founders have no equity left by the time the business is sold.
I’m relieved to say that despite starting out with just a quarter of our business each and then watching our ownership stakes reduced through each of our venture rounds, I and my four co-founders were able to earn life-changing returns from our equity sale. We achieved this by doing some things very well, and in particular learning how to operate the company at a high level of sales performance, and by building innovative products.
I am writing my Notes on a Startup because there was no founder authoredd source like this when I started out. I learned through trial and error. My journey as a founder took longer and was more difficult than I could have imagined.
If I can help move the innovation of others forward faster, by sharing and helping educate founders and they can realisee their ambitions, then I will have done something useful by writing this book.
I hope you enjoy my Notes on a Startup.