Sramana Mitra: What did you burn the $200,000 on?
Guy Mucklow: Partly salaries and technology. Though we were building a lot of stuff ourselves, we needed infrastructure to support the service we were building. If you look back on those times, you think, “Why on earth did I do that?” We spent $50,000 on just building a business plan and using a third-party consultancy to build that business case and put a great presentation to enable us to go out.
Sramana Mitra: You learn. You don’t know what the priorities are. I’ve been through that. I know exactly what you are talking about.
Guy Mucklow: It’s about priorities. We just didn’t realize what the key priorities were for us. In hindsight, spending a quarter of your capital on a strategy plan was absolutely nuts. It’s one of those things. It seemed right at that time. Everyone was doing it. I don’t even remember the name of the company. It seemed to be the right thing to do at that time.
It was a difficult period for us because I recognized fairly quickly that we were barking up the wrong tree. We had too narrow a proposition in a market that was dominated by three or four major players. Even if we had secured the largest player in that market, the odds are that the others wouldn’t necessarily have followed. The timing was just appalling.
As a sector, it was not terribly technically savvy. Even today, I would say that what we were looking to develop around that time was still probably too early for them. They are not there even now. They’ve moved on significantly but it was a proposition that was far too early.
Sramana Mitra: Timing is very important in choosing what you’re going to do.
Guy Mucklow: Timing is absolutely critical. I’ve got some interesting experiences around that. No one other than ourselves lost money in that venture. It was a difficult conversation between myself and one of the other co-founders. There were three of us. Another interesting learning in getting any business off the ground is you need not only the team in the business to be on the same page, you also need huge amounts of support from behind the scenes. His wife, unlike my wife who rolled with it, wasn’t prepared to do that.
She wanted to see him have a safe secure job with a proper salary. She was putting a lot of pressure on him to do that. He said, “I need to pay myself a salary out of our own capital.” It was at that point in which I said, “This is nuts. You’re paying tax twice on something. There’s no point in your putting in money in the first place.” We had that difficult conversation. We amicably agreed to separate.
Sramana Mitra: What year was this when you wrapped up the business?
Guy Mucklow: 2001. We set up the business in June 2000. I had the conversation with one of my co-founders at Christmas and then we wrapped the business up in February 2001. It lasted eight months. It was a major learning. I never saw it as the end of the road. By then, I had worked closely enough and long enough with one of the other co-founders, Jamie, who is still with me today and is our CEO, to recognize that as a CTO of a new business, we had huge potential to do something incredibly meaningful. What we wanted was a smaller team with much greater focus. We hadn’t decided at that point when we separated where that focus was going to be.