There and Back Again: A Startup Story
[FYI: This was originally written for the more technical audience of “Hacker News” that I titled “How I built and lost a $10M+ SaaS startup on WordPress” .. but it has morphed into this sort of self-therapy session or whatever this is.]
This isn’t a story I’ve told very often, and not just because I had a three year NDA: It sounds insane. Maybe it was insane. Take what lessons from it you can.
The origin of the story was the Olympic Pipeline Explosion in Bellingham WA back in 1999. My home town. I remember it clearly. The boom, the power going out, the mushroom cloud rising into the air over the city. It seemed as if the world was ending. A gasoline pipeline ruptured into a picturesque creek and a couple of kids managed to light it. A river of gas, 4 feet deep. My apartment was near ground zero so when I saw the blast I assumed my roommate was dead, I was at my parent’s house at the time.
My dad was doing PR work for local refineries and found himself the “PIO” or Public Information Officer for the response. It was madness as the national media descended upon the small town to cover the story. Out of the chaos my dad had an idea: There must be a better way to manage information during a crisis. Mind you, this was 1999, we were just getting into email and websites just started becoming real sources of information. It was forward thinking to say the least.
Somehow he ended up at a ColdFusion conference and saw that as the answer. PHP had really only gotten off the ground a few years earlier, and ColdFusion made it look archaic. I mean, you could just feed it Access files it would make whole web apps with the push of a button! So, my dad found a couple of friends of my brother who happened to have some interest in coding and they got a “ColdFusion 4 for Dummies” book and away they went. I think one was delivering pizza, they were in a band.. of course.
And thus, the Public Information and Emergency Response System, or “PIER System”, was born. It would come to dominate family lore for the next 15 years. He’ll have to fact check me here but I believe he gave it to the local Shell Refinery for use during “drills” or “exercises”. Unbeknownst to most of the public, the oil or “energy” industry regularly holds federally mandated exercises with federal, state, and local agencies. They use the “NIMS” system which is essentially “ICS“, the Incident Command System that was developed for interagency operability in the 1970s to fight wildfires in California. Well, one of these response agencies is quite often the United States Coast Guard (USCG). They took interest in PIER and became one of the first paying clients. I think they paid maybe $3000 for it. But, this turned out to be the dog catching the bus.
The dog catches the bus
After the local branch of the USCG bought PIER other districts and sectors took interest and it began to spread, eventually leading to nationwide adoption by the USCG. With this came adoption by most of the oil and gas industry. PIER ended up with clients like BP, Shell, Chevron, and even ExxonMobil. It slowly spread into other areas as well, such as NASA, Boeing, and the US Army. But this isn’t a unicorn story. It was hard fought. Primarily because no one had budgets for “emergency information” software. A few universities came aboard but things got pretty sticky when the first big school shootings happened. The system could send out texts, phone calls, and emails but it was never intended to be used for high volumes as a mass casualty event. The company’s focus was PR really, not public safety per se. It was primarily for press releases and managing questions from the media. We learned some hard lessons.
I actually joined the company shortly after the nationwide USCG deal. I had been living in New Zealand during much of this but when I came home with my brand new family I needed work. I never graduated from university as I found it to be largely a waste of money. I was a self taught web developer and my dad was on the board of PIER still by this time so I got a nice introduction.
So, I started doing tech support and training. I traveled the country training Coasties on the use of PIER. Brutal for a shy 20-something.
I made some good friends in the industry which would benefit me later. We all shared the “incommunicable experience of war” as we fought to put out good information during Hurricane Katrina, oil spills, and other disasters.
The company stagnated for lots of reasons. It is very hard to create a market for yourself. There are no budgets and it was a decent sized expense for something that was almost only used in a crisis. In hindsight, we should have made a small business version earlier on for daily use. Eventually it was sold to a company called Witt O’Briens. A bigger fish. It might have sold for a few million dollars, I don’t even remember anymore, I didn’t have much stock so it wasn’t exactly a win for me. In fact I took a pay cut to make it seem more profitable. Yay, business. But I would have my revenge By this time I was the de facto Product Manager, grooming the backlog and planning new features.
Deepwater Horizon, AKA “The BP Oil Spill”
This was the big one. We did a lot of planning around these worst case scenarios, but it’s almost impossible to exercise something that spans many states. Large scale exercises already cost over $1M to run. But this was what PIER was for. The remote “Joint Information Center” or “JIC”. All the tools communicators needed, and you didn’t need to be onsite to run it.
I had a borderline premonition when I saw the first picture of the Deepwater Horizon on fire and listing. We got the call from BP, go time. Still gives me goosebumps. After seeing the picture I immediately ran to my desk and bought the domain name “DeepwaterHorizonResponse.com”.. no, I wasn’t a squatter. This was part of our playbook. We essentially pioneered large scale web based public information. Somehow I knew it was going to sink and when it did the well head would release a lot of oil. Oh boy, it sure did. The website I set up would end up being featured on CNN and would get 10s of millions of views.
Before I knew it was talking to the USCG and on a red eye flight to Robert Louisiana where the command center was set up. I had never seen anything like it. A sprawling complex of response vehicles from just about every agency there was: EPA, NOAA, Fish and Wildlife, Sheriffs, Police, USCG, National Guard.. you name it.. they were there. The White House had people on the ground almost immediately it would seem.
I walked into a trailer and started asking questions about how information was going out. It seemed like all the training and processes had been thrown out the window due to people showing up that clearly weren’t normal responders. I asked how information was being pushed out and it seemed like a free for all. Once people found out I was managing the website I had people hand me stuff without signatures from the chain of command.. when I asked where it had come from I was told “the White House”. I then had to explain that things don’t work like that here and then I would lecture them on ICS.
Anyway, I could go on and on about this one. We had the Secretary of State come through and even VP Joe Biden, though I had just finished one of my tours down there so I missed meeting him. The command center had moved to New Orleans by this point. We had taken over a 20 story building downtown and BP would be looking for an apartment for me, I said no thanks. We had command centers, and PIER sites set up for multiple states. My co-responders regularly hopped on the BP private jets between them. Wild times. We worked back to back 18 hr days, eating at 11pm only to be back at our posts at 5am the next morning.
After the mess
Everyone in the industry was pretty burned out after that spill. It consumed over a year and many of the people I worked with started taking different jobs away from the frontlines. I mean, you can’t work dozens of 18 hr+ days in a row without some consequences. I also think people were bored afterwards. It was intense. In a very small way it was like coming home after a war. What do you do after the spill to end all spills?
I too was looking for new challenges. I had some big ideas of where I wanted to take PIER. I had an idea to use Twilio to create a “Virtual Call Center”. I wanted to set up a call center with a click of a button, which was not done back in those days. It’s probably something I could have slapped a patent on. When I presented the idea to my boss, who presented it to the CEO he said, “Cool idea, we aren’t going to do it, and if you do it on your own we’ll sue you”. Oooooooh boy. That was a huge mistake, but it would take them a couple years to realize just how bad of a mistake it was.
Shortly after that I planned my escape. I figured out how much money I needed to make each month and then struck out on my own. I started doing consulting. I mostly built websites for creative agency’s clients. This was back when you do make an okay living building websites. Pre-offshoring and Squarespace.
Side note: One of the first apps I ever built was probably one of the very first CMSs in existence. I think I built it in 2001 maybe? Using ColdFusion of course I built it because I was tired of having to make simple website changes for clients. I thought, why not just put ALL of the website into the database? Thus “OpenSite” was born. I was told the last OpenSite website died a couple of years ago.
Working for clients I had used a lot of CMSs, but really focused on WordPress. I found templating to be the easiest and the development community was huge. There really wasn’t much you couldn’t do with plugins.
And I kept finding plugins that did bits and pieces of what PIER did. Hmm.
Encouragement from an unlikely source
I had been working a bit with my cousin on the marketing business. He had built a few apps here and there. We still had unicorn dreams. It all seemed so accessible to us. I watched from PIER’s windows as it seemed the whole startup boom was passing me by. I debated the merits of Salesforce and MailChimp as they rose to greatness with fellow employees. I got a beta Gmail account and watched numerous dotcoms boom and bust. I got a Twitter account in 2007, mostly just to see if we could use it somehow for emergency notification. My friend Nate Ritter was actually the first to use #hashtags in a crisis and got some amount of publicity for it.
It was my uncle that sat me down and told me I couldn’t just walk away from all of my experience in the crisis world. He was right. That was my domain. Yes, it was a niche, but it was mine. Few people knew the problems of communicating during a crisis like I did at the time. People think they do, but they don’t really. Imagine having to suddenly craft a workflow for posting press releases when all the world’s news trucks show up at your doorstep. It’s a HUGE punch in the face and all plans go out the window. I learned one real lesson, I could stay calm in a crisis: Make a plan, execute.
But PIER was the undisputed king in the market. It was pretty much a monopoly. Companies tried to replicate it, but it was no small feat combining a CMS, CRM, help desk, and notification system, among numerous other features. It had a 15 year head start, thousands of lines of code. It was battle hardened. When I worked there we all scoffed at people who tried to go up against us. Besides, we had the USCG, companies pretty much HAD to use PIER…
But times were changing.
This is where the fun begins
I started wire-framing like a fiend. I got Balsamiq and started planning out the perfect tool for organizations to use in a crisis. Drafting press releases, pushing out FAQs, approval workflows, inquiry management (During Deepwater we managed something like 150k questions through PIER, some super super crazy stuff), and a virtual call center Oh yeah, and why not a social media monitoring system? PIER didn’t have anything like that because it was built pre-twitter. Oh yeah, and I always wanted an internal chat and external chat system.. I wanted EVERYTHING.
I had it ALL planned out. It was a labor of love. I worked on it nights and weekends. It was fun, and I’m not the “work is fun” type. However, it was a big application. Complex. I was going to need help, and I was absolutely not just going to hack something together and then try to sell it to Federal agencies. Stability was critical. This was something that needed to handle high traffic and be up ALL the time, all the 9s.
I needed investors. I needed a team. I approached a local start up incubator and did my presentation. HOORAY! I WAS IN! They were going to fund it, except they said since I didn’t have any clients they were going to take all the equity. WTF? So, I walked away ready to give up. They were right, without paying clients I had really nothing more than an idea and this wasn’t something I could hack together in my parent’s basement. I had kids to feed at this point. I was going to be grinding away at website development for 10s of dollars forever. I couldn’t stand that idea. I watched the whole Internet pass me by it seemed while fighting to make PIER a success, for what? This was supposed to my payoff, my payback for working 18hrs a day for what worked out to probably be less than $10 per hour.
Oh yeah, I got a $1000 bonus after Deepwater Horizon. Our company made over $1M in services during DWH, and I fought tooth and nail against the White House to keep it in place. Let’s just say, it go real political when Obama realized it had the potential of becoming his “Hurricane Katrina”. It wasn’t great.
Hail Mary
I had an idea: I needed a partner in the industry. Someone who gets it. Someone willing to go up against PIER, my old company, my old bosses. My old friends :/ .. though I always hoped to bring them all over with me.
I knew of a guy. The right company. I’m not going to name him here or the company since he’s my boogeyman now, I don’t want to accidentally summon him. But he was really the only one on the planet that could make this happen for me. His company had software to manage the actual response. How much feet of oil boom is in the water etc. The REST of the response. My dad had talked to him early in the PIER days about partnering but he wasn’t interested. I found out later he had always wanted to build a competitor to PIER. He tried a couple of times, but failed miserably. When PIER sold to HIS competitor that just sealed the deal, he needed a solution.
So, I tried to call him. Ha. His admin shut me down fast. Who was I? So, I filled out the “Contact Us” on their website. I wrote a few sentences about what I was up to. He called me in less than an hour. Apparently he read every “Contact Us” when they came in. I learned more about his idiosyncratic prioritization later, but in this one case it helped me out.
A few days later I was having lunch with him in Houston. It seemed worth throwing some of my meager business savings on a flight. My business almost always lived hand to mouth.. such were the wonderful days of website development. Feast or famine, usually famine.
We got BBQ. I told him my plans. I showed my wireframes to his team. When he asked what I wanted I sort of panicked and said “60/40”. This really was do or die for the project I was calling “Jetty”. I got the name from one of our PIER servers. Jetty, Dock, Quay.. the name for Jetty was always Jetty (and still is). For my technical readers, you are probably saying “there is already a Jetty”, and yes, eventually I did get a cease and desist But I am persistent. He countered my 60/40 with 50/50. Fair enough, he was planning on putting in all the money. We shook on it. I had gotten an estimate on what it was going to cost to build from my friend Nate Ritter, of hashtag fame: $160k. He agreed to that, but he didn’t like having a contractor build it.. he wanted me to hire people. Sorry Nate.
Red flag #1
When I got home my new business partner called and said his lawyers didn’t want him going to 50/50 on something where he was putting in all the money. He said THEY wanted 51/49 in his favor, of course. My more wizened readers are now seeing where this is going. As it turns out, that 1% makes all the difference in the world. 49% is almost zero in the business world.
I could hear my kids downstairs playing. We bought a little hobby farm. It was a bit of a money pit, a good experience, but feeding organic chicken feed to rats is costly when you are trying to run a startup with no revenue. I had spent so much time on this. I had no other work coming in. No college education. My expertise was locked away with a company I had left. This felt like it, last and best and only chance. I was desperate. Never a good place. I called my dad, he very wisely suggested I get a shotgun clause in the contract (one person cuts the pie, the other picks the piece basically).
So, I did my best to negotiate. I was so young. He didn’t go for it, he kept pushing me to sign quickly. I signed. I got the money. Phew. Set up “Jetty Communications Solutions LLC” (ugh, I just wanted to call it Jetty)… and boom, I had my very own SaaS startup This was insane, there was no way I was going to be able to build a PIER replacement in 6 months. Not a chance, this was a moonshot (and irony not lost on my when I got my VIP tour of Johnson Space Center after landing NASA as a client).
Warning, technical bits
I hired my first engineer, a young guy who was mostly a frontend guy but knew a bit of JavaScript. My cousin, a PHP contractor, and I would do the rest. A ragtag team indeed. We sat down at a local cafe and had a fateful conversation: What would we build it in? Node.js was the new hotness. JavaScript by some miracle (or curse) had somehow managed to get on to servers. I 100% bet against that every happening, I thought JS would be banned after people very quickly abused it in early browsers (ooh look, I just moved the user’s browser off their desktop). I had spent some time learning vanilla javascript and it was a nightmare doing even basic UI stuff. Once jQuery came along things were MUCH better, at least from a UI standpoint. I built some crazy hacky things with it in my PIER days. I even build my own chat widget with the “document” API we used for press releases (our engineers weren’t as excited about that as I was). We also briefly considered Python, and Ruby on Rails. Except, none of us knew those. My crazy thought, why not WordPress? At least for V1. I mean, we could get it off the ground and then rebuild it with Node or whatever.. someday (you in the tech world can laugh here, I am). I’m still a bit fuzzy on the license agreement allowing for all of this to work. But we built sort-of-applications on WordPress all the time for clients. Was SaaS the same? I don’t know to this day if it was all okay, but I do know that it was absolutely the only way we would have ever shipped Jetty. The whole thing would have blown up in my face if we had tried to do what we did with any other platform or framework. We got just about everything we needed out of WordPress plugins. We spent most of our time making a custom UI for it and making sure all the pieces fit together and a stable way. The inquiry management system was pretty much a custom plugin, but it shouldn’t have been. Same with the social media monitoring. Anyway, it worked. I mean, parts were rough.. but we threw together a very functional prototype in no time at all. I mean, WordPress is a CMS out of the box, and plugins are often licensed for resale. So.. maybe this was going to actually work?
It’s working
The race to profit was on. I watched month after month as the bank account slowly shrunk. I needed to get it out there. But who would trust a nothing business with something as critical as a crisis response? BP, really? I ran threw my old networks. Thankfully I had kept a lot of relationships and had built a lot of trust. I actually got some good meetings set up, but the question is always “who is actually using this?” I needed someone to blink first and take a big leap with me.
The bat phone rang. It was a consultant friend I made in the PIER days. PIER had pissed him off pretty bad and he was desperate for a replacement. There was an oil spill in the Yellowstone river. He asked if Jetty was ready, I crossed my fingers and said yes. I hopped on a plane and headed to the response. My team was great. We all supported the response and they fixed bugs as quick as they came in. I did the “everything is fine, we’ve got this” while on the ground with the client and the response was a success. Of course, assuming you weren’t one of the townsfolk who got a bit of benzene in your drinking water. There was a lot of anger during the town hall. Did I mention I actually despise fossil fuels? I have stories, lots of them. Like the fact that pretty much all oiled birds die, the cleaning is just for show.
I had my first big win with Jetty. Now I could hit the road and learn how to do enterprise sales. Screenshots of the response website, my partnership with the other company, and my existing network was enough. There was just one big missing piece: The USCG. The Feds have the ability to “Federalize” a response. Typically the “Responsible Party” runs the response, they provide the “Incident Commander”. However, if the Federal agency wants to for whatever reason, they can take over. For us that meant, if the USCG wanted to use PIER instead of Jetty during a response, it was game over for us. Thankfully, I had friends on the inside. Lots of them. I spent a lot of time developing and maintaining those relationships. Also, the USCG put out an RFP for a cohesive response package. They wanted a system that could both track the response as well as push out information. This is was exactly what we were building. I envisioned a future where the PIO was essentially automated. “How much oil was in the water?” We had the answer to that. Press releases were out of date. Why not build a chatbot that has all the facts? I still don’t think this has been done, but it’s doable.
All the marbles were pushed to the center of the table. We put our bid out there and PIER put theirs. They had no idea we even existed at this point. I intentionally flew under their radar as long as I could. I remember running into a Witt O’Brien’s team at a conference, when they saw me found out the Jetty rumors were real they went white as a ghost. In some small way I felt like a traitor, but this is the company that threatened to sue me for an idea while I worked for them. They did this to themselves.
Winning big and then losing it all
We got the contract. But PIER/Witt O’Brien’s legal team found the missing dragon scale: The contract stipulated no reliance on browser plugins. My partner’s product required “Silverlight” of all things. Remember Silverlight? Microsoft’s answer to Flash. It was a disaster for us. Jetty was supposed to get over $1M ARR (for 5 years) from the USCG contract (or so I was led to believe). The contract was tossed and everyone had to rebid, but this time everyone knew what everyone else had bid. So, it got cutthroat. All my dancing turned to weeping and sorrow. I got the call from my partner that said we pretty much had to give Jetty away to get the contract. I told him, “We aren’t good to anyone if we are dead, you’ll need to support us.” (In hindsight, we should have written up EXACTLY what this was going to look like). Somehow, his company (yes, legally they were both his) still managed to get a decent amount of the deal. Jetty employees, like myself, went on their payroll.
These were the best of days, and the worst. The shorter version is: We got more and more of PIER’s clients, until Witt O’Briens pulled the plug on PIER altogether. We had most of their big clients by this time but this gave us the rest. We were a tiny team to pull in a lot of clients. I had a great team, and I took in as many PIER employees as I could. Before PIER shut down word on the street was that they were for sale, I tried to convince my partner to let me buy them but he was impossible to work with.
He was a toxic human being. Even when things were going well he was horrible to work with. Extremely unresponsive unless he was upset about something, and when he was upset it was usually about me not communicating with him. Which was .. ironic. He had over 10,000 unread text messages, not emails.. text messages. I can’t imagine what his inbox looked like. He was a dictator, not a manager. Gaslighting, projecting, all of it. He began threatening me more and more. He would occasionally talk about replacing me. It slowly dawned on me during this time that this was going to end poorly for me. But I couldn’t really deal with that right then. I had enough on my plate between the travel, caring for growing family (now three small kids), the hobby farm.. the disaster response. All the stress of a startup, times 10. I had FedRAMP security docs to review. I had to meet with executives at ExxonMobil. They were scary.
Is this just me being “dramatic”? Maybe it was me, right? Here is just one of many examples of my partner’s nonsense. Pretty early on my partner reached out to me and we had an opportunity to support ExxonMobil during an exercise. This was as huge opportunity for us. So much so we decided to bring another Jetty engineer along as well. So, after confirming the dates of the exercise we hopped on a plane for Houston. When we got there I reached out to my partner to meet up. We couldn’t get a hold of him. Went to his office, nope. Tried and tried and tried to get ahold of him. I must have reached out at least a dozen times through text, voicemail, and email. His own Admin couldn’t get a hold of him. At some point I got desperate enough to try and find the exercise location and talk my way in. It wouldn’t have worked, even if I could found it we wouldn’t have been able to get past security. We were in Houston for three days and we never got a hold of him. We just puttered around trying to figure out what was going on, and then flew home. I think it was about this time my lead engineer started looking for a new job, if I was him that’s what I would have done as well. It was clearly a very messed up situation. I tried to play it off, but it was a colossal waste of time and money.. and showed there was something rotten at the top.
Did I mention I was on a multi-year equity plan? Oh yeah, I didn’t even technically have 49% at this point. I started off in the teens, maybe 15%. I started reviewing my legal options, and they weren’t good. I had a lawyer friend review the contact before signing but his advice at the end of the day was “don’t sign this”. But, as I said before, I was desperate. Business advice here: Don’t operate out of desperation, bad decisions will be made. Contracts are divorce papers, to be used when a business relationship fails. I still believe this today. If you trust your clients or business partners, contracts are not needed.. clear expectations yes, but contracts are only as good as your ability or willingness to defend them in court.
I was winning everything, and losing it all at the same time. My stress levels started to go through the roof. Especially once it finally clicked in to place. I had been carefully building relationships with my partner’s top lieutenants. They liked me. They told me without telling me, “You are in danger”. His plan was to get me desperate again and take all my equity.
We had an incredible year. In spite of losing the $1M USCG money we got a deal worth over $1M ARR from ExxonMobil for a mixture of software and services. We were wildly profitable with a tiny team. We had an offshore team supporting us at this point but the actual team was small. I think we had maybe 5 full time and we had roughly $1.6M ARR if I remember correctly, with nothing but growth ahead. I had big plans for a small business SaaS product and I think we could have gotten great traction in the “Online Newsroom” market with clients like ExxonMobil using it across the globe. I never even told my partner about this because he couldn’t have even given a demo of the product. He wouldn’t have liked this plan at all since all he knew was the emergency response world. He had no idea what we really did, except make him a ton of money. Supposedly, he privately told people close to him that he was lucky to have found me. To my face, he never said a single positive thing.. ever. I don’t know if it was because he was afraid it would give me leverage somehow or if it was just his management style.
Then, one day he called me and he yelled at me for “calling myself” CEO. I was CEO from day one, there was never any question from anyone. I got business cards printed shortly after forming the LLC so I could actually go to conferences etc. I knew the wheels were falling off the bus now for sure.
Then, he called me out for using my contractors from my services business to build Jetty. Red flags. It sounded like he was building a case against me, if not a legal one, then at least a way from him to demonize me. He needed to be the hero and me the villain in order for him to justify was he was about to do. Thankfully I had been documenting the hell out of every conversation we had for the past year. I had noticed he worked hard to keep things out of email and text. Voice only. I even installed a call recording app, but it made me nervous so I never used it, though I used my new found interest in legal issues to confirm I could have done so legally. So, instead I just took notes during each call and logged them.
I had to play a long. I had to keep smiling until I got my equity and figured out a way out of the trap he had set. He couldn’t know I was on to his plan because then he would be too careful. My only hope was to catch him with “minority oppression”.
The final hammer blow: I logged into the business account and the money was gone. He had taken all of it. Things get a bit blurry here, but all of my plans of escape had to go into affect immediately. I had been meeting with all my wise friends and lawyers, I had read and read and re-read the legal agreement a thousand times. I was desperate to find an exit that didn’t screw my family? Pretty much everyone I had been talking to had been telling me to just walk away. I was digging down to try and escape. I had a date on my calendar I was trying to hit, I had looked at it for years, counting down the days.. the day I got my 49%. Something worth fighting for. I think I made it to 39%. Close enough, I knew I wasn’t going to make it 49%. Taking all the money forced my hand a bit. I was all smiles while I took years of abuse, but now there was something I couldn’t smile my way out of: I owed taxes on the profit of over a million dollars! Holy crap, I was screwed. I screwed my family, I was bankrupt. I lost what was essentially my dad’s invention. This was a low point, to say the least. Coming back from a meeting in Houston, for the first time in my life, I briefly considered putting my car into a guardrail on the freeway. I die in an “accident” and my family pays the IRS with insurance money.
Pretty sure this about when I had my first panic attack. On the bright side, I had started running a lot more..
It was time.
I had a few secret weapons: Documentation, friends, and my partner thinking I was weak. My partner made the mistake of hiring a long trusted friend, PIER’s sales guy. He had hired him to sell for his company, and for Jetty. This guy saw what was happening and connected me to a lawyer friend of his. Not just any lawyer, but a complete badass. This guy’s last case was a $400M lawsuit, and he was an accountant. This was a gift from God. He was initially very skeptical of me, and very very expensive. For someone who charged something like $700 per hour, he spoke very very slowly in an accent that I don’t typically associate with intelligence. This Benoit Blanc from Knives’s Out and you are close. Thankfully, my amazing dad, offered to bankroll him for me until I was able to get a settlement. The PIER saga continued in a strange way, and headed towards its end after 20 years. After some time, my lawyer, came to see that I was good guy here.. and the other guy was definitely a villain. A rare thing for him.
The other mistake my partner made was being sloppy with the bookkeeping. In his rush to justify taking all of Jetty’s money he made up a bunch of expenses for his company. To be fair, some were legit, but only because Jetty didn’t get any money from the big USCG deal. But most of them were just rough pencil on scraps of paper kind of things.. I saw the pictures of them.. it was pretty funny. This to me, looked very much like “minority oppression”. If you are a co-founder in a business, I strongly suggest doing your homework on this one. If you own two businesses, and use one to benefit the other.. and at a co-owner’s expense, you are in jeopardy. I got an unofficial law degree during this time, I read a lot of legal docs.
And then, there I was, looking out over the Houston skyline at mediation. I hate Houston to this day. I think I was on the 14th floor? But, I was smiling. For the first time in maybe three or four years, I could start to feel the burden being lifted from my shoulders. We were about 10 or 11 hours into mediation and like when Gandalf showed up at the Battle of Helm’s Deep, the tide had be begun to turn. The chess pieces I had moved around the board for the past year were finally in play. Did you know that the high level mediators make $10k per day? Sweet Jeebus. But I’ve skipped one of my favorite parts of this story..
Go to Hell
At some point in this mess my Apple Watch notified me and asked if I was dying. Apparently my heart rate increased so quickly that it assumed I was having a heart attack. In all my years owning and wearing an Apple Watch that has happened only once, and that was during a call with my business partner from hell.
I was having one last conversation with my business partner. It was time to very politely tell him to go back to the hell from whence he came.
In all my interactions with this guy, I never raised my voice once. Never. I had every reason to: The threats, the lies, the insults. I never took the bait. The last conversation we had I politely told him that I quit and gave him some calm and constructive feedback. He responded in shock, and then preceded to threaten me. My calm probably scared the hell out of him. I hope it did. I think he was probably excited as well, like Gollum finally getting the ring.
From then on it was email only.
I had cc’d Robert, my lawyer, on an email. My partner asked who I had cc’d. I told him they were an accountant (not a lie). He responded with, “Are they an attorney?” Me: “Yes.” He then responded with several lawyers on his email. I looked them up. He had hired several extremely expensive law firms in an attempt to scare me away. Robert confirmed these were heavy hitters, and that’s saying a lot coming from a guy who just fought a $400M lawsuit. It would be a huge waste of money for him.
Mediation
And so, we went to mediation. A wild experience and a story in an of itself. I’ll just leave you with the highlights. First of all, the mediator said he usually tries to get everyone in the same room, at least to start. After a brief into to my partner he met with me and said putting us in the same room would be a bad idea. This guy was a pro at hiding his feelings, 100% poker face.. but he said a few things that suggested that he got a sense of my partner’s character. But, his job was to find the chinks in my armor, because that was his job. I was no saint, surely I was here because I was at least 10% villain. And, they thought they had a smoking gun. The fact that I made money from my contractors working on Jetty outside of what we agreed to me being paid. But, thankfully, I had ALL of this not only documented, but I had sent it to my partner for his approval. Complete paper trail, I had been 100% transparent about what I was doing.
So, my partner’s first offer was “Go fuck yourself”. I countered with “Fine, I’ll buy the company”. I got on the phone with my dad, who made some calls and we quickly found a group of people willing to pitch in and buy the company for at least $1M. The Partner, of course, was not interested in this idea as Jetty was worth way more than this.. but this was the shotgun clause. It forced his hand.
Back and forth, back and forth. The mediator went from room to room. I told the whole story, pretty much like what I am doing right now. The lights really went on for him when I told him about PIER being my dad’s idea. The whole thing was, I just.. carried it along and gave it new wings. I left it because the company was letting it die on the vine. I saw its potential and wanted it to be what it could be. I wanted the clients to love it again and help it grow. My partner was enough of a narcissist to believe it was all him. He didn’t do anything other than luck out having me land on his doorstep. He got easily 10x on his investment, and in return I owed the IRS hundreds of thousands of dollars. His plan all along was to steal it from me, it’s obvious in hindsight. I even learned he did this to one of his cofounders. He made them an offer they couldn’t refuse after trapping them. Well, not this guy, I wasn’t going down without a fight.
After about 12 hours of negotiation I said I was read to go to court, something no one really wanted. It would have meant years of litigation and I would have ended up with probably nothing after legal fees, probably not even a family to go home to. But, the mediator was good. We started getting offers up on the white board, maybe $50k was the first offer, I can’t remember exactly.. but it was laughably low. I planted the flag at $650k. Nothing close to what Jetty was worth to me, but better than years of court battles. I just needed out of the hole and enough to not carry bitterness with me forever.
In the end, after 14 hours, I settled for $500k paid out over a couple years, with him paying everything Jetty owed the IRS, and a three year NDA. A huge win all things considered. I’m especially proud of the extra long NDA, he was still scared of me After all was said and done I ended up with about $200k personally. Which I used to help pay off the house and buy a hot tub, to help deal with the years of stress. I was just glad to have those dark days in my past, it was literally killing me and my family. I was excited about my future again, I thought having started a company worth millions of dollars would give me a golden ticket in the job market. I was very much wrong.
The bitterness is largely gone, it’s been a few years. For quite awhile there were a lot of dark thoughts. Especially when talking to the kids about expenses and college. Jetty was largely my retirement plan, I spent so many years in startup world we had very little saved.
I’ve been asked a few times if it was worth it. That’s hard to say.. but would I do it over again? I’m pretty sure my wife would say “no way”, but the past is impossible to judge.. maybe other outcomes would have been worse? Who knows. It certainly made me more resilient the Product Manager I am today, and we were able to pay off our house.
I’m not one to stay in the Shire while people head to Mordor. I need to climb mountains and slay dragons.
Key lessons learned
- No one is an island — Through this there is on way I could have done what I did with out my dad. He was always there for advice and money for legal fees. It’s impossible to imagine the outcome, or even the beginning without him. My cousin, who was a rock I relied daily as he helped lead the team and build something that could hold up under pressure. Of course, the support of my amazing wife who was going through her own hardships. I put her through hell and was often gone while she bore the brunt of raising kids. My friends: I can’t tell you how many hours and beers and tears were spilled with friends patiently listening to me and sob stories in what we call “the dark days”. I can’t thank everyone enough for helping me get through the fires of Mordor and back to the Shire. The lawyers were probably the Eagles in this analogy, having them there from day one probably would have been good
- Exercise — Running probably saved my life. I ran relentlessly to try and let go of the stress. Running and crying. This is a drum banged a lot in the startup world, but for good reason. Learning you can endure nearly unlimited amounts of suffering by simple putting one foot in front of the other is a valuable lesson. Everything comes to an end, eventually. Since this endeavor I ran a 50k, with the help of my friends and family.
- Counseling — I’m so glad getting professional help has been normalized. I can’t pass along too much amazing wisdom from this but I just remember feeling so much relief telling all of it to someone and having the professional opinion of “holy crap, how have you made it this far?”. It was hard, and sometimes you need a professional to tell you that it is in fact, hard.
- Prioritization — I really meant this to be a more technical post about the pros and cons of using WordPress to create a SaaS application, but maybe that is actually another, more technical post, if anyone is interested in that. The real lesson here is the power of making brutal priority decisions to get across the finish line. If you never ship, you’ll never succeed. Sure, I didn’t actually stay with Jetty long enough to deal with the hard realities of the technical debt we took with us for this decision, but the fact the at are even conversions about this happening is because we made that decision in the first place. I’m now a Product Manager at a mid-size startup and the lessons I’ve learned about prioritization are helping drive our development process. I’ve also seen the horrors of too much tech debt, PIER couldn’t develop new features with the 20 years of ColdFusion and JAVA dragging them down. I was the little guy who took down the 800 lb gorilla by being nimble and aggressive.
- Don’t be too hard on yourself — I felt so foolish for so long. I could have pushed for a better contract, I could have done a million different things.. but after a lot of retrospection, the most likely result would have been the same as most startups: Failure. Even my former partner’s buddies said I was never going to do better than I did with him. It was the best possible outcome for me. A contract is really just divorce papers, businesses are built on trusting relationships.Now, Jetty lives on and provides a valuable service and livelihoods to a great group of people. Sure, it also helps a rich A-hole, but just about every company does. I recently met with the current Jetty team and they are thankful I did what I did. So, there is that.
Well, this ended up being a lot longer than I anticipated. It’s probably still part of the therapy. It’s very very hard losing a company, especially one based on an idea that’s been a part of your family lore for 20 years. Sometimes, I wonder if the saga is done, I think it is for me. I’m not even really sure what a competitor in this space would look like, or if it’s even needed. We often talked about “fake news” and how to fight it.. and this was early in the Internet days.. when the idea of a “blogger” acting like a “real” journalist was a new concept. We had no idea just how bad things would get, or really how important good public information would become. At the end of the day it always comes back to trust, it’s something my dad and I both fought hard for with our clients, especially if they were “low trust” like “Big Oil”. One of my dad’s mantra’s was “Be the first and best source of information” .. that was the heart of PIER and Jetty. Let’s get the news out first, let’s be the source of truth. Rip the bandaid off, tell people how bad it is.. and what you are doing about it. We all drive cars, we live plastic lives, we are all complicit, but that doesn’t justify disasters. It’s easy to be cynical, but everyone I worked with was top notch, everyone just wanted to do a good job. No one wants oil spills, yes, mistakes were made in the name of speed etc. That’s probably another post as well. Anyway. It’s been a hell of a ride.
Now what? I’ve put some of my entrepreneurial spirit away to provide more stability for my family. My wife’s career is just taking off after putting up with my mis-adventures for so many years so I want to be there to support her in that. In hindsight, she probably should have been the career warrior and left me to make messes at home with the kids. But, there is no way the house would have run like she did, and our culture wasn’t really into that. I generally do enjoy being a product manager. I work for a small but feisty company with a great group of people over at Akitabox.com and I keep a few little side hustles going, such as a backpack company I start with a couple friends and my wife: Vendovi.co
If there is any interest in a more technical look at how we managed to scale, and not scale WordPress to handle global traffic spikes from 0–10M+ within minutes of CNN posting the URL. There are stories to tell, but I would need to get together with the old team to get the details.
Email me at geoffbaron{AT}gmail.com if you have any questions.