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The basic gist is that I was arrogant and negligent. I started a company to leverage an order taking and customer management system I’d built for a friend’s b2

The basic gist is that I was arrogant and negligent. I started a company to leverage an order taking and customer management system I’d built for a friend’s b2b outside sales company. Before, they were managing everything with excel spreadsheets on a shared drive and it was a mess. After, everything was in a php application that could set up a recurring credit card transaction within a few clicks. It used AJAX (in 2004, before responsive forms took off) to take different form inputs. I rode that one client pony for too long. Managed to get a second client, but I hadn’t worked out a good pricing strategy. I needed to offer the program publicly, but we were too busy doing feature development for our two clients to develop features for multi tenant. I was bad at the administrative aspects of running the company, so I inadvertently ran up a bunch of bills. I wasn’t keeping my sales funnel full or dedicating much time to finding new clients and calling on them. The whole thing went crashing down when my clients decided that they didn’t want to have 100% dependence on my company anymore and per our contract paid a one time lump sum for a copy of the software. Still wasn’t enough to fill the holes the bills had left. I could have been SalesForce if I hadn’t been an arrogant 24 year old who couldn’t learn from other people, but instead I ended up in about $50k of personal debt.

Aeolun 8y ago
They didn’t need any support of the product at all after buying it outright? I can see how you’d be temporarily without money, but not sure how they’d take away all income.
- karlkatzke 8y ago
  They took development in house. It’s not like PHP (despite some obfuscators being available) can’t be edited by anyone who barely knows the language.
  - ak39 8y ago
    Did you have subscription plan or was it only pay for development?
    - karlkatzke 8y ago
      That’s one of the places I messed up. The original agreement was that they’d fund development of the features they needed, but I retained rights to the software and they got a license as long as they were funding development, but they could license a copy in perpetuity for a flat fee. We never updated the amount of that flat fee as the feature set grew. I had thought I needed to develop a multitenant feature set in order to sell to more people with a subscription, but I was probably incorrect on that (in hindsight). The bigger issue was that I didn’t know how to plan for anything like that. I was essentially in reactive mode and got way behind.
Nydhal 8y ago
> I could have been SalesForce if I hadn't been arrogant. Did you overcome that and learn from the mistakes? No offence, but to be honest you saying "I could have been SalesForce" makes it seem like you're still working on the arrogance part.
- karlkatzke 8y ago
  My point in saying that was not to express arrogance, but was to point out that ideas are worth nothing and execution is everything. I executed poorly. If I had executed well and a bunch of other variables had aligned, I might have grown that company successfully. I’m still a bit arrogant and aggressive in my approach to solving problems, but it’s tempered somewhat by experience.
- liamcardenas 8y ago
  To be fair, he said he “could” have been SalesForce, not that he “would”, necessarily, have been SalesForce.
ollerac 8y ago
IMO you didn’t lose out here. 1. You got to work closely with 2 highly engaged customers. The value of the product development research you did with them is probably worth more than your debt, if you ever decide to build something similar again. 2. You actually built something they wanted and were willing to pay a huge lump sum for. Many startups never get to this point. You now know you have the ability to create something highly valuable. Don’t take the confidence that comes from that for granted. It’s worth more than $50k in the startup world, in my opinion. I’m curious, knowing you’d created something valuable at the time, did you continue to try to sell it in the years after the 2 original companies left you?

Aeolun 8y ago

They didn’t need any support of the product at all after buying it outright? I can see how you’d be temporarily without money, but not sure how they’d take away all income.

karlkatzke 8y ago
They took development in house. It’s not like PHP (despite some obfuscators being available) can’t be edited by anyone who barely knows the language.
- ak39 8y ago
  Did you have subscription plan or was it only pay for development?
  - karlkatzke 8y ago
    That’s one of the places I messed up. The original agreement was that they’d fund development of the features they needed, but I retained rights to the software and they got a license as long as they were funding development, but they could license a copy in perpetuity for a flat fee. We never updated the amount of that flat fee as the feature set grew. I had thought I needed to develop a multitenant feature set in order to sell to more people with a subscription, but I was probably incorrect on that (in hindsight). The bigger issue was that I didn’t know how to plan for anything like that. I was essentially in reactive mode and got way behind.

Nydhal 8y ago

> I could have been SalesForce if I hadn't been arrogant. Did you overcome that and learn from the mistakes? No offence, but to be honest you saying "I could have been SalesForce" makes it seem like you're still working on the arrogance part.

karlkatzke 8y ago
My point in saying that was not to express arrogance, but was to point out that ideas are worth nothing and execution is everything. I executed poorly. If I had executed well and a bunch of other variables had aligned, I might have grown that company successfully. I’m still a bit arrogant and aggressive in my approach to solving problems, but it’s tempered somewhat by experience.
liamcardenas 8y ago
To be fair, he said he “could” have been SalesForce, not that he “would”, necessarily, have been SalesForce.

ollerac 8y ago

IMO you didn’t lose out here. 1. You got to work closely with 2 highly engaged customers. The value of the product development research you did with them is probably worth more than your debt, if you ever decide to build something similar again. 2. You actually built something they wanted and were willing to pay a huge lump sum for. Many startups never get to this point. You now know you have the ability to create something highly valuable. Don’t take the confidence that comes from that for granted. It’s worth more than $50k in the startup world, in my opinion. I’m curious, knowing you’d created something valuable at the time, did you continue to try to sell it in the years after the 2 original companies left you?