A History Of Malfeasance – Turn Of Century #DCTech Part 3
If you haven’t yet read Part 1 or 2 of this Wolves of #DCTech Startupland Episode… you can catch up here:
- A History Of Malfeasance – Turn Of Century #DCTech Part 1
- A History Of Malfeasance – Turn Of Century #DCTech Part 2
Now I assume all of you are caught up and we can move forward with Ikimbo.
Technology landscape and Ikimbo IP Background
Ikimbo’s product was a methodology for integrating presence and instant messaging with enterprise applications. Ikimbo’s product was called Agenda. Agenda in theory, allowed a company to define a prioritized list of critical people to gather together in a virtual meeting room (think today’s google hangouts or Webex) to handle predefined corporate crises. Back in 2003 this kind of technology was radical… dude!
Agenda integrated presence and instant conferencing with enterprise apps. Let’s suppose a company using SAP received an SAP alert that a critical customer delivery was not going to be met. When integrated into Agenda, SAP could send a message to Agenda and then Agenda would start contacting people on the list to create a virtual meeting designed to help mitigate the crisis. If the person was online on some Instant Messaging Platform they would be invited to a virtual meeting room. If they weren’t available, text messages to mobile phones would be sent with links to a meeting room.
Once all the critical resources were gathered in the room, Agenda would serve up a predefined dashboard of all necessary data from SAP relevant for crisis management. It would create a meeting agenda for the virtual meeting, gather the right people and assign follow-up actions. Sitting in this virtual “war room” you might have the customer account manager, the logistics manager, the accounting and finance people needed to expedite the shipment and manage the information sharing with the customer. All this gathered quickly in real-time to strategize, plan and take the actions necessary to reduce the impact of the crisis.
The 2003 Technology Landscape
Hey you kids, did you know Apple, Google, and Amazon… the big three… weren’t that big in 2003. No the big guys in those days were IBM (yes IBM really was a technology giant at one time although big blue was a big blue bruised blue at this time), IBM was a leader in collaboration software with Lotus Notes, AOL was the leader in instant messaging with AOL Instant Messaging (AIM), and Microsoft owned the desktop with bundled Microsoft Messenger.
Over the next 30 days, I dug into the company. Meeting with the first 2 CEOs, a former General Counsel (because what no-revenue startup doesn’t need their own in-house, full-time general counsel), the CEO of our first Outsource Development Firm, Peter Harrison of Global Logic, recently replaced by Peter Noce and DDLabs.
In interviewing past and present staff I found out that the first CEO, Jamey Harvey hired the 2nd CEO and he moved over to a CTO position. Most of the people I spoke with felt that CEO #2 then threw Jamey under the bus… fired him. That CEO #2 use to hold daily, mandatory, all-hands, morning christian prayer meetings. Yup everyone who wanted to have a career in the company needed to pray to Jesus whether they were Christian, Muslim, Jew, Hindu or Pastafarian.
The 3rd CEO was hired by the second CEO as the COO. The COO then staged a coup with the board… ousted the 2nd CEO and crown himself the king. Just to catch you up, I was on the board that fired the 3rd CEO, to crown myself as CEO for life or 11 months whichever came first. I was the 4th and final CEO of Ikimbo.
Getting To MVS – Minimum Viable Staffing
Evaluating the staff of 18 survivors I found we had more people doing nothing than anyone doing anything…. I thought this was supposed to be a startup but it appeared more like a country club. A couple of the people were trying to spend a lot of time with me and I found that those that weren’t were actually doing work. I let the suck ups go. Bye Bye “CTO.”
I let Jeeve’s, the VP of Professional Services go making him available to industry and to pursue his career as a professional Polo player (if you recall, the company picked up Jeeve’s when CEO #3 made the bonehead move to purchase Jeeve’s consulting company). Unfortunately, I found out that Jeeves Infiniti Automobile had 2 more years left on the lease. When we bought his company, we picked up the lease liability. Sorry Jeeve’s, say goodbye to your car.
Instead of appropriating the car for myself I made the company Infinity a benefit that employees got to use on a rotating basis.
With Jeeve’s gone… all of his staff decided to take a hike. Perhaps closing Jeeve’s Gaithersburg MD office and forcing everyone to make the 1 hour commute to Herndon helped. I allowed Jeeve’s consultants to take over the clients that they were managing as they left… not much of a sacrifice because the cost of Jeeve’s and his staff far outstripped the non-strategic, unrelated revenue we derived by those customers. In other words, we went from being a very unprofitable company with revenue to a less unprofitable company with no revenue.
Lesson there— Revenue, even slightly profitable revenue that is unrelated to your core mission is a distraction. This revenue was just a BS way of pretending that Ikimbo was a viable company. If we couldn’t get someone to buy our product…. silly revenue shell games weren’t going to help us succeed. We weren’t fooling anyone.
Shoring up the Sales Operations
For a company with Zero real sales we were stacked with Sales BD people. There was Larry who was the senior guy. He had developed a “strategic relationship” with IBM and AOL. We had another “VP of Business Development” Walt who appeared to have developed a great relationship with golf course owners around town….. bye bye Walt.
And there was Meg. Meg had one large network communications company that had agreed to try our product…. as soon as we had a product. She had a strong relationship with the decision maker.
I only needed one person for the sales function and Larry was the more senior person who I felt would be able to navigate sales with the least amount of supervision. After much discussion, he decided he wasn’t going to stay with the company. He went to work for the prior CEO I just replaced…. I was sorry to see Larry go but he was twice as expensive as Meg and Meg was loyal to the company. So Bye Bye Larry and Hello Meg.
We were quickly down from 18 team members to a core group of 8.
Then I found another surprise, a company with zero sales had a contract with another company to help us increase our zero sales. No fault to them but they weren’t performing. We had nothing to sell. Yet we had them on a retainer and we paid them for every qualified appointment they set up.
Going through the contract and the bills, I felt their definition of qualified and mine weren’t the same. I canceled the contract and offered to pay them a fraction of the fees for appointments, with an explanation of which of the appointments I felt were not qualified and why. I said I wouldn’t pay anything until they agreed.
They refused…. they wanted all of it. We went to court. In small claims court, I presented my case and they presented theirs…. the judge ruled I had to pay them a negotiated amount. It was five dollars more than I originally offered.
Then I got this call…
“Hi Glen, this is Larry.” Larry was a fellow Mindshare CEO and a local CEO of a Federal Government-Focused, Instant Messaging company. I had tried to sell Ikimbo to him earlier. He was interested but couldn’t get his investors to buy-in.
“Hey Larry, what’s up. Want to buy us today?”
“No Glen, I don’t need to buy you anymore, I just got you for free. I have detailed product plans here that have Ikimbo’s and your product manager’s name all over them.”
“WTF? What do you mean?”
“Well the other day I got a call from this outsourced development company, DDLabs and when they pitched me, I asked if they had any experience building instant messaging products….. so they sent me a product plan they’re working on…. it’s got Ikimbo’s name all over it.”
Thankfully they sent it to a reputable man of character. Thanks Larry for letting me know.
We were paying DDLabs $20K per month in a contract that was difficult to get out of. I still had a full time product manager and 2 competent, one of them very competent, developers who assured me they could get the product finished without DDLabs.
I stopped paying DDLabs…. and once again wound up in court. This time accompanied by an expensive lawyer.
The upside is I had significantly cut burn. The downside is Ikimbo was a wounded duck.
We were out of cash and I had one remaining patron, and that was Cross Atlantic Partners in Philadelphia. Every week, I would send an update on what we accomplished or didn’t, and what our plans were for the next week. Over-communicating in tenuous situations is usually a good idea. No surprises builds trust and trust was the most important thing if I was to keep getting funding. Each month, I’d itemize spending and ask for a check to make it through the next month…. and each month a check from the investors came in.
Meanwhile I couldn’t recruit any sales talent… no one with a future wanted to work for a company that had to ask for an allowance from it’s Dad-in-VC-clothing every month. Amazingly the staff morale was pretty good. We were motivated, people were getting work done and we actually had some fun.
One day, one of the toilets in the company’s men’s rooms was broken…. instead of calling a plumber, which would have cost money, the team raided the network closet. We had the wiring in place for 80 computers (wifi wasn’t a thing back then kids) and we only had 8 people. So 2 of the developers (pictured here) raided the wiring closet and used the network cable to fix the flush mechanism of our toilet. Frugality was now a source of pride! We dubbed the toilet the iToilet (there weren’t yet iPhones but there were iPods).
10 months after assuming the helm of Ikimbo, I found myself in court. DDLabs was suing Ikimbo for breach of contract… because we stopped paying them. We countersued because the company breached our NDA by sharing our critical Intellectual Property, our product plans, with a competitor. The judge split the baby…. we could terminate the contract early but we owed DDLabs several months for non-payment.
The next day, I called the investors and recommended that we close up shop. I told them that I could no longer continue without real funding and that I was resigning. They agreed to close shop. I was done and off the payroll the next day. Meg, our remaining salesperson left to become a real estate agent…. she’s a successful real-estate exec today.
Mary was kept on for 2 months to shut the company down in an orderly fashion. The developers and product manager remained for two weeks to archive and document the code and send it to Cross Atlantic. I sent an email to Jeeves to let him know the company would no longer make car lease payments. He had personally guaranteed the car and since we were shutting down the company the car and the payments were now his.
Ikimbo was ahead of it’s time… in some ways the infrastructure required to make it work (ubiquitous broadband, wifi, LTE, smart phones) weren’t there yet. But ultimately the failure was a lack of focus… too much money too soon, and Two CEOs who cared more about their titles and the trappings of management than making a company successful. Ikimbo was a company with the political intrigue of a spy novel versus a startup. At one time there were 70 people working for that company…. all of them eventually lost their jobs… many of them just waiting for a vision of success from the CEO. Instead they received lessons in greed, pomposity and incompetence. Many of those employees were innocent victims.
I’ve seen many Ikimbos. Many mismanaged jewels. Why do I call out bullshit when I see bullshit? There are… or at least were good people working at Dumpster fires like Ikimbo, Astracon, IntelliPark, Speek and Trustify…. Who is there to call bullshit on the bullshitocrats today? Not the current tech press. Who’s there to call out the wolve’s who are playing with people’s careers? Who puts up the “proceed with caution” before you invest in a flim flam man like Danny Boice?
DDLabs and Peter Noce…
That’s the real story and will be featured in Part 4 of this series. Peter Noce, from eTensity to DDLabs to wherever he is now.