In case you missed it, with part two of the Shugo story I shared how my consulting partner left it on me to keep the consulting business afloat or close the entity. It threw me for a monkey wrench since it wasn’t the response I had expected when I shared I was the one who was going to walk away to concentrate on this new venture. So once again, back to a few days of thinking: what was the best course not just for me, but for the two employees we had as well? Honestly, the decision would’ve been easy if it had just been the two owners.
I couldn’t do it…so it remained open
I can honestly say the main reason I decided to keep the consulting entity going was for our employees. They had always poured their heart and soul into their work and represented themselves and the company to the fullest. They didn’t deserve an immediate “termination”.
I knew they were both super talented and could get other jobs immediately, so it wasn’t about them not having work and income. It was about their loyalty through the years. I enjoyed working with them and learned a number of things from each.
I felt having them with me on the start of this journey would be a benefit. It would help:
- Minimize the risk by continuing to have consulting income as we started this new venture. Wouldn’t you want to know that you at least had “x” dollars coming in than nothing at all?
- Expedite the first version of FileGuardian. Remember this was mid-year 2008 and we still didn’t have a single line of code written for the application. Heck, we didn’t have anything but a product name (we still didn’t have a company name).
Point #1 is an important one to review. Remember I had a young and growing family I needed to support. My wife was a teacher but once we had children, we decided she would stay at home. It’s a decision we both felt strongly about but that meant fully supporting the family financially fell on my shoulders. Pretty big burden as I had this brilliant idea to start a new venture and change the course of my career! Like I said before, if she had known the revenue we were generating with consulting, I’m not so sure she’d be 100% on-board with me!
Side Tidbit: I have the utmost respect for any stay at home parent. It’s more work than I do on a daily basis and is worth a much higher salary than most in the workforce make. I could never do what my wife does daily; she’s an absolute saint with a great deal of patience, something I severely lack.
Ok, so what’s up next?
I now had two main items to complete immediately…one was something I had no clue how to approach but that’s why you surround yourself with good people:
- Buyout my consulting partner – we were 50/50 partners in the business so I needed to buyout his remaining ownership. This was the item I had no clue on what to do, but it’s why we have lawyers to help. As much as I’ll b!tch at the hourly cost we’re invoiced for their services, they’re really a huge help. So I immediately called up Kevin our business attorney and shared the situation. There’s some legal stuff I don’t need to share but he helped us get through the process rather quickly. Since the business was cash rich, I didn’t have to pull anything out of pocket to buy him out so it was relatively painless.
- Share the news with our employees – all this was going on with our employees oblivious to the fact. Obviously they needed to know so they could decide if they wanted to continue on with me or find other opportunities elsewhere. I’d support then in either path, but had hoped they’d stay and support my objectives. For this conversation, I prepared a PowerPoint sharing my vision moving forward and how each of us fit into the plan.
One employee would be responsible for defining our network architecture (servers and other hardware) we needed to support FileGuardian and participate in the application design and architecture. He would still consult a high number of hours per week as well. The second employee would scale back his consulting hours and concentrate on FileGuardian’s overall application design. His goal would be create a prototype within a few weeks. Scaling back his consulting work back a bit would provide him more time to concentrate on FileGuardian, but this put some pressure on me since it would reduce the revenue he was generating. I knew I’d be taken a pretty big loss on his time, but felt hey, this would be my investment into the beginning of this new venture.
I would still concentrate on consulting – much to my chagrin – and I’d start building the business plan for this venture. I’d also share the FileGuardian concept with a number of local accountants and other professionals I had known to start spreading the word. I knew we wouldn’t have a large marketing budget (frankly we didn’t have one at all) and that word of mouth would be our guerilla tactic. We’d offer perpetual free usage of the product in return for their feedback. Luckily, I had a couple bite even though we hadn’t written a stich of code!
But we still didn’t have a name yet
As I was starting to craft the business plan, I kept putting in placeholders for the name of the business. You’d see paragraphs in the business plan with “[businessname]” embedded since I still didn’t know what we were going to name the company. I knew we needed a name and that I wasn’t the right person for the job. I didn’t have dollars to spend on hiring someone either to help.
I thought why not ask the original marketing partner (remember from the three amigos) to help. He and I were still great friends, there was never any bridges burned and marketing was his specialty. Luckily he agreed to tackle the task! My only preference for the company name was that I wanted it to be something short and catchy like a Google or Yahoo. Remember I wanted something like that for the product name but he thought better of it based on our target market but agreed we could be a bit creative for the company name.
Within a few days he emailed me sharing a concept and wanted to see what I thought. Would this be it? Would our company now have a name or would we be going back to the drawing board?