Too little, a trifle early

Some fool has paid their debts and suddenly we’re awash with funds.  Well, damp around the toes, anyway.  There’s still the distant howl of creditors outside, but we’ve enough to sustain us for a few more days.

Meanwhile, the emailed orders are flooding in.  OK, I’m overexcited, but there have been a lot of them.  Well quite a few. All for rather small amounts, but more than in the last few days than for the same number of weeks before.  And none of the biggies is coming in.  But there’s sufficient to believe that one of the monsters must also fall, soon.

This self-delusion is an aspect of my Loftex brain-washing I’m not at all happy about.  When I started here I could tell you that 10 licences at £500 each was £5000.  These days when asked what my 10-licence order amounts to I’m more likely to round it up to £10k.  Our erstwhile CEO would have rounded still further and by the time you heard it back from the other offices you’d scored a £90k deal with potential for a further million.

If my brain hadn’t been washed I wouldn’t be so happy getting my pitiful salary 7 days early, which is (bizzarely) what’s happened.  I’m still owed mega-oodles in commissions etc., so why am I feeling grateful?  And why have they paid it early?

Meanwhile chasing the channels that haven’t paid up continues.  I’ve done debt chasing before, but usually for larger corporates and usually for debt that’s over a month late.  Once the scheduled payment date is past, one of us is on the phone, and when the amount is less than £200 its starting to become obvious we’re in fairly desperate straits.  All in the cause, of course, and if I had any confidence some of it would find its way to paying something other than the bare minimum I’d have more enthusiasm.

So if you’re reading this, Mr. Foreign Channel that owes me/us $973.27 (and you know who you are), pay up now so we can buy our children Christmas presents.

Please!

Bigger offices, bigger picture

In common with most startups, Loftex started life in the UK in a tiny managed-service office. Then moved to a slightly larger one, more central. Then had a wall knocked through to expand said office to a modest but multi-roomed one. Then realised someone was going to want money for all this….

Right at the point that it looked like we might have to re-shrink the office, a stroke of luck. The managed-service-office people got evicted. Turns out they were in their turn renting what they rented to us, and their landlord (a state-owned enterprise of some infamy) had decided they needed the space for their own expanding workforce, having only lost £200 million in the preceding financial year and needing to staff up to get government’s attention (which they duly did, but that’s another tale). Now this was lucky for every tenant of the managed-service office company because (and who’d have believed it of the legal profession) their lawyers had screwed up and failed to notice a fine detail of their lease. Namely, the 30 days notice period.

This was some 60 days shorter than the notice period their own tenants had. So some humble pleading began, based on a need to relocate all tenants to one of their other fine facilities, none of which was central. Because if a tenant refused to budge a costly and embarrassing legal battle could be guaranteed to hit the papers (at least, the local ones).

So we were showed a series of offices, each grander and more remote than the last. And a deal was struck. Our man in charge of such things, Roger, did his best disgruntled terrier impersonation and got us twice the previous office space for half the going rate. Better, we needed a space they didn’t actually have, so ended up with a space way larger than we needed with a promise not to use the desks in half of it. Which we didn’t, much. Same as we only ever used the internet one at a time so only paid for one ‘live’ port with all the rest just for intra-office communications (these people were even slower than BT to realise what a router could do).

Life went on, the commute from the centre an irritation but the expanded space (including our own ‘boardroom’ should we ever appoint a board) pleasant enough internally. The surrounding wasteland took some getting used to (but saved the wallet from the deprivations of shops, sandwich bars and pubs) but the views of traffic queues and delayed trains were small compensations. We grew to fill the space, almost. We grew beyond our ability to pay the ‘burn’. We grew angry and mutinous.

In months when there was no guarantee of salaries being met, brochures for newer, bigger, fancier offices were spotted floating around the desks of key individuals. This is where my lack of financial nous comes up again. Apparently if you do deals where the first year’s rental is deferred this can make an apparently more expensive office cheaper. Obviously we’d have to spend our office hours sitting on beer-crates until furniture was made affordable (who knows, IKEA might have a ‘pay nothing till 2007′ offer any day now) and there might be small inconveniences in the target offices being in a village without public transport to speak of, but the overall benefit of having our name on a lease and being able to buy our own coffee out-weighed these considerations.

Perhaps unluckily, the opportunity to move evaporated when a bunch of asylum seekers with cash gazumped us, so we stayed put. Well, almost. Again the managed-service office people made us another offer we couldn’t refuse, so we moved again, this time within the building. Even bigger, yes, and definitely grander for the Politburo side of the office. Once again parts of it aren’t strictly ours so we pretend not to use them. Aside from one instance of an entire live server-rack being accidentally left in a ‘spare’ office, we’ve not been caught doing so yet, either.

Without naming rights for the building we still have unfulfilled ambitions in the real-estate aspects of our corporate existence, but at least now visiting clients get a better sense of what Loftex is all about.

The key to this of course is that the size and physical separation of our offices is such that from the meeting rooms, the wailings of the staff are inaudible.

When is a technology not a technology?

The acquisition of IDspare took over a year and involved considerable efforts from a number of Loftex’s management.  In particular, the legal teams on both sides expended huge energies in defining what we were buying, for how much, over what time-frames, etc.  Regrettably the technological aspects of the technology weren’t really explored until the last round of documents.

Even as I write that I find it hard to explain or understand.  If its a technology, surely the techies would be involved in examining it, trying it out, making sure it performed, before we even talked about what it might be worth?

Apparently I’m naive in these things, because its not at all necessary.  A disruptive technology doesn’t necessarily involve anything tangible, like code.  So it should have come as no surprise when the key element that we all understood to be the guts of IDspare turned out not to belong to the people we were buying IDspare from.  It was (and is) rented from a couple of guys working out of a garage in South London.  Good code, works as it says on the tin, but not for sale.  They’ve written a song and want their 2p every time it gets played.

Which of course is going to be a gazillion times if the business model informing our modest multi-billion dollar valuation is anything to go by.  Which perhaps it isn’t, but thats another story.

So what were we buying?  Turns out to be a concept.  Now anyone who’s read anything about the dotcom bubble knows that concepts can be worth billions.  Or, after a pause for reflection, not.

Now we own a concept, which to be worth anything to our clients is going to have to be used to aggregate technologies, some of which we own and some of which we have to buy as we use.  Which means we no longer have the problem of being solely reliant on our own small team of developers.  We’re also now additionally dependent on an even smaller team of developers, and an implementation team owned by the erstwhile IDspare owners.

One of my larger former employers made a lot of play about its ‘Methodologies’.  I used to be very skeptical about the value of these, given they were largely concepts with fancy logos and a lot of management consultancy words.  I now see that they had quite a lot of value.  We need to get some logos done and a CD made, sharpish.

Pushed or jumped, revisited

Seems he hasn’t fallen after all.  Or at least not as far as we thought.  Not fatally, certainly.

Seems there’s an investor.  With money.  And a willingness to spend some, now.  

Seems there’s hope.

But we’ve been here soooooo many times before, and the source of all these rays of hope?  Oh yes, the man they couldn’t hang.  So I’ve taken the projected cash input, divided by ten, taken the announced likely input date and added three months, and even then this isn’t total disaster – a very unpleasant Christmas, for sure, but possible survival beyond for some (probably not me, but some).  And if its true as related….  But no, it can’t be, it never has been so far.

I hope I’m really wrong about this.  But if I am, you’re going to assume I’ve borrowed a plotline from Dallas where all the characters come back to life cos it was all a bad dream.

Maybe I have.  Maybe it is all a bad dream.  Bloody hard to wake up just now, though.  

The unbearable lateness of peeing

Significant pain endured today doing a web demo for one of Charlie’s clients.  Alan the uber-techie being out demoing somewhere else, I had to step in and use his machine to show the software in all its (carefully rehearsed) glory.

Would have been better if:

1. the screen-saver on the demo machine wasn’t past its free-show date and therefore takes the best part of a minute to invite you to send $9.99 to some porn-central place in Costa Rica;
2. the (also freebie) virus checker wasn’t running (and – yikes! – finding things) when we started;
3. the web-demo software we’re using wasn’t also past its free trial period – we’re on to our eighth free 15 days with this one and we’re starting to run out of sufficiently different email addresses;
4. the ‘please apply these Windows updates’ icon-ette wasn’t flashing away on the toolbar;
5. the VMWare session wasn’t also asking to be updated – not sure how legit the copy is so don’t want to go there, either;
6. the client knew his own email address.

Once we got going, it was fine.  Client’s embarrassment at not knowing his email (‘this explains why I haven’t been getting some of the messages I was expecting’ (some?)) balanced off the obvious cheap and tawdry aspects about our end of things.  Everything he asked about we had an answer for, in most cases two answers;  Charlie’s initial bluster and my bumbling semi-techno one.  Not always in that order, and not always utterly contradictory either.  He was dead impressed, generally. 

Problem was the thing started late and I made the mistake of nodding when asked by some passing oik if I wanted another coffee, having just had one and needing a pee before even logging on.  Drank the extra coffee while setting up, which just made things worse.  Charlie’s explanations seemed to get longer as the demo wore on, the client kept asking questions which invited multiple answers, examples, anecdotes from days long ago….

Eventually I had to fake a telecom outage to escape.  Hung up phone and killed Webex simultaneously for realism’s sake and legged it down the corridor. By the time I got back there was a message saying thanks for the demo but the client had another meeting to go to, so apologies if we’d been cut short. 

They don’t know how close to the truth that was. 

Key performance indicators

For me, today, posts per hour into this blog. But at one time…

One must confess its never been the most splendid performance from any of us. Those of us with sales targets never hit them two quarters running (one quarter on target was always reason enough for a celebration). The techie guys could point at numbers of problems handled and resolved, but if that had ever been measured in anger it was easy enough to manipulate. The fund-raisers cunningly never had targets written down, though collective memory suggests failures against whatever targets had been talked up.

When targets were first set for us sales monkeys, I recall an evening interlude in a beer garden discussing possible targets for all staff. These were of course to be SMART objectives: (Silly, Measurable, Amateurish, Realistic and Trivial). Among the more popular suggestions at the time, particularly for the ELF participants:

• Attend 10% of meetings on time or within ten minutes of advertised start time;

• Words per day (for the Chief Legal Officer – at one time this target would have been a challenge if set above 3, if by ‘words’ we meant ‘words that will form part of a signed agreement’);

• Interference in channels threshold

• Payments to staff not more than 7 days late (we set this target to what we foolishly thought was an achievable level);

• Whinges about referees in sporting contests involving antipodeans less than 2 per televisual weekend (for…. well lets just say this one’s personal);

• Purchase of other companies to be restricted to offers less than twice the amount of existing debt;

• Buzzword bingo restrictions (i.e. less than twice per month) to apply to the following list of terms (to be amended as necessary, partial list only shown here):

1. new paradigm
2. disruptive technology
3. in the market
4. the marketplace
5. awesome
6. its not a job, its a ticket
7. I can promise you…

Reporting format changes to be less than 20 per annum.

The list went on, there were some even sillier ones, it was a jolly evening all in all.

Regrettably, we didn’t implement.

We are that business school case study

Here’s a couple of test questions for the MBA candidates among you:

Let’s say you have a technology that already has a good security reputation. Let’s say you’re being courted by a reseller of digital certificates. And let’s say they convince you that you should PKI-enable your product, so it can use PKI as an authentication protection. And let’s finally say that at the time all this is happening there are three major vendors of the underlying PKI technology all desperate for an application or two to come along and start driving the sales of certificates up the old J-curve that’s been promised for a decade or so.

Would you:

1. play the three against each other and see which one offers you most help, support, cash or other inducements to use their certificate type as your base? or
2. sign a deal commiting significant lumps of your cash to the first one you talk to?

Here’s another hypothetical situation. You meet with the certificate resellers alluded to above over a beer or two at a trade show. You’re in love with their technology, business model and corporate image. You’re pretty sure they feel the same way about you. You’ve got the sexy application which is going to drive sales of their dull old certificates, after all. You have a very small sales force with limited technical nous, they have a whole bunch of people who seem to know their onions. Here’s the easy choice, do you:

1. allow them to use your technology to sell theirs, on a reseller commission basis? or
2. get them to introduce you to their reseller partners? or
3. sign a deal where they promise to sell $US20K of your software and you promise to sell $US200k of theirs, just as soon as you understand what it is they actually sell?

Last one now. There is a piece of software functionality you’d like to have which will cost you gazillions to develop and which already exists for a reasonable fee. No, you’ve jumped ahead, prepare to be surprised slightly here. Even your big nasty competitors with the army of talented and compliant developers don’t re-invent this wheel, so neither will we. Everybody in our game buys this functionality, mostly from the one place. We need access to it for our server product, in particular, but at the time we’d sold slightly more copies than there are fingers on the left hand of a short-sighted butcher. But volume discounts are on offer. Not everybody needs this functionality, but when they do need it, they’ll pay for it. Would you:

1. get the best unit price you can and offer it on demand to clients? or
2. commit to a sales number with a claw-back clause if that number is not met, meaning a need to pay slightly more for units actually bought? or
3. give it to clients for free and pay a fixed amount for every single copy of your product sold, whether or not the functionality paid for was wanted or implemented?

There are no right answers. 

But I can tell you what happens with the wrong answers, if you’re interested.

Did he jump or was he pushed?

Or perhaps more properly, was he pushed or kicked over?

Some of us would like a chance to throw other heavy objects down after him, anyway.  

Allegedly today he gets the big confrontation.  Unfortunately this will be by phone as he’s scurried back to his homeland last week when the words ‘thieving’ and ‘git’ were first being bandied about the office in relation to his activities over the last years.  I’d love to see his face.  Actually, no, I’d like a video of his face so I can edit it down to whatever bits of contrition remained from what I’m sure will otherwise be a bravura performance.

Charlie’s talking about the police again.  I started that when the red mist came down last week.  Since then I’ve come to realise that’s a bit like calling the cops onto your local when they have a lock-in but don’t invite you;  satisfying in the short term but ultimately self-harming.

No doubt Cookie and the rest will provide full and frank feedback once the various ‘board’ meetings are completed later today.  Well they might if we make enough silly noise.  Open communication is the least of the unfulfilled promises to be seriously upset about, but somehow its the most irritating.

Ho-hum,  just as well the blood pressure check was last week.

No Cups, again

Managed service offices are fine in that they mean you don’t have to spend time on difficult but ultimately time-wasting decisions like what colour chair fabric to go for or whether to offer a choice of tea-bag types to staff.  Its all done for you and generally the choices made are the opposite to what yours would have been, so you get to experience things you otherwise wouldn’t.

The downside is they are expensive, relative to straight rental or property purchase, because you have to pay for the pimply youth who will answer your main office number with someone else’s company name, and for the woman who puts stamps on your mail for which a 200% surcharge will of course also apply.  In our case I’d kind of assumed that being out on this industrial estate which would be reasonably accessible if it weren’t in a part of England whose roads seem to be part of an upcoming reality TV show (I’m trying to find the M4, get me out of here), and in a building whose occupancy rate led to its Marie Celeste nickname locally, that we’d be getting a healthy discount on the going rate.  Imagine my surprise therefore in yesterday’s showdown meeting when someone asked the question of how much our rent was, and the answer was a very large number indeed.

Well it certainly looks large to me, being as it is more than three times what I get paid.  For that sort of money you’d expect some level of service and quality of facilities.  Well I would.

There’s no bloody clean cups on our floor, again. 

Laws of time and why they no longer apply

Like every organisation flogging technology, Loftex enjoys (check definition here) the natural tensions between sales and development.  Development’s view being:

‘This is one fine piece of technology – go forth and sell it’

To which the traditional sales response is:

‘My customer will buy it if you port it to GCOS-7, make it do weekly instead of monthly and change the interface to blue with a Verdana font – and we need it by next month guys’

To which development’s response is too well known to bother reproducing here.

To add to those tensions we located our development guys in an office nowhere near any of the operations and sales offices, with minimal bandwidth and a phone system uniquely irritating in its early termination of vital conversations.  Our communications with them were restricted to complaints about the existing code and uncoordinated demands for radical changes.

They were driven by an enhancement list which we saw immediately after each release was finalised, which had apparently been built from bulletion board rants (which they’d had printed and sent to them as the bandwidth wouldn’t support participation), GNU user group whinges (ditto) and the occasional night in the pub with the team.  The commercial focus was therefore not always in line with our expectations. 

The battle was extended by sales (oh all right, me) demanding the development of new security features including interoperability with external digital certificates and/or security tokens.  After an inordinate amount of bullying development finally delivered, two and a half years ago.  We’ve yet to sell our first implementation of the two-factor security version.

So that’s given development an ongoing mandate to ignore us completely ever since.  Our only hope was to get Cookie, the CTO, on our side.  And what better way than to make him head of EU Operations?  Then our problems would be his problems, wouldn’t they?

And for the first few months we scored, big time.  Cookie went with us into the channel meetings and the trade shows and made all the promises we were too scared to make, in the knowledge that he still had a CTO stick to wield and make things happen.

Somewhere along the line though, development smelt the wind and realised Cookie had been turned.  They plotted, they connived, they organised.  They announced organisational changes which none of us sussed as significant.  They consistently bleated as to their reduced numbers and increased workloads.  They threatened not to honour the holy days of product releases.

They won, in a word.  The so-called CTO now finds himself apologising for non-delivery of the ‘extras’ promised to all and sundry.  The sales guys find themselves explaining to channels how Q4 could actually be as late as June next year, due to a misunderstanding of when the year started.  The clients needing specific functionality find themselves buying elsewhere.

I’d say we’ve lost sales as a result, but my record doesn’t really support any assumption of knowledge of what people want in a software product. 

Unlike the dev team, of course. 

The last piece of the jigsaw

Some of you will recall the year-long debacle that saw the purchase of something that turned out to be more concept than software, and if you don’t, well, the salient point was that it gave Loftex several components of a whole which defined the term ‘Disruptive Technology’ and for which the world would beat a path to our managed-service-office door.  Of course completing the whole was an assumed end-goal and would require, first, integrating the bits we did have (i.e. the bits our guys had written and the bits we thought we’d bought but turned out we’d only bought the brochures for but could now rent (exclusively) for very reasonable amounts which in most cases were less than we’d be able to sell the whole for).  The bits we didn’t have were the nice-to-haves, the icing on the cake, the bits no-one would demand but that once we implemented would make the competition just run into a corner and whimper.  But we didn’t need them now and nobody expected them. Kind of like security and Microsoft.

Imagine our surprise then when the corporate coup announcement was made back in September, that we’d been successful in our approaches to WoodTech and now owned the IP to iWash.  Owned because we’d bought.  Bought when we can’t pay existing creditors, including yours truly. 

iWash is a fine product as far as I can tell, and has been bought by happy clients numbering more than several, allegedly.  WoodTech didn’t really want to sell it but it fitted our corporate strategy better than theirs (oh dear). It has the benefit of being developed by people of the same nationality and location as our own highly talented developers, who’d like to save on office costs.  Once we’ve integrated the bits we already own (or sort of) integrating iWash should be a doddle. 

iWash is that last piece of the jigsaw.

Trouble is we’re still looking for the edge pieces to get started. 

End of the working day

Ooooh that was nasty.

But totally predictable.  We have a bunch of options involving cutting salaries (from low to very very low, presumably), cutting staff (can go with that in a number of cases), increasing sales (well, derrr!), and (why didn’t we think of this before) getting some more investment capital.  The current state of the ‘hole’ or ‘debt’ as accountants prefer to call it, is roughly twice what any of us thought, excluding re-structurable debts, long-term directors loans, and ones we’d rather not think about just now.  But that’s not apparently bad as quite a lot of that debt has yet to be asked for in a direct or threatening way.  If we keep very quiet the tax man might just forget about us this year.

None of which says, panic not, you will be paid and go to the Christmas Ball, Cinders.

Maybe that’s our best hope – put on a panto based on this blog and other scurrilous writings. Look behind you! What? It’s your chance of getting out of this with any integrity, stupid.

How to buy nothing for quite a lot of money

This post explains how to add a lot to your technology profile, how to break the existing service-led paradigm and how to bundle the unbundleable, all without doing anything worthwhile.

First ensure that your capable technical personnel are kept up to date after each deal that you do.  Its important they’re not in the loop beforehand as their foreknowledge may cause the resultant IP purchase to be less than totally disruptive.  The best people to take into early technical negotiations are lawyers and accountants, but a CEO alone can also accomplish a lot.

Second change your mind about every aspect of the deal as you do it, preferably within a couple of days of reaching total agreement (each time).  This will ensure that the counter-party becomes wary and will maximise the opportunities for further meetings over meals and alcohol, thereby cementing a great long-term business relationship.

Third, offer to buy out anyone with attractive Intellectual Property whether or not you have any cash to do so.  This will ensure the counter-party’s full respect throughout the relationship.  It also means when you offer stock instead of the expected cash the negotiation to reach a mutually acceptable number will be short and sweet.  It will also give your in-house lawyer something to do.

Following these rules allowed Loftex4 to re-define Disruptive Technology.  As those of us still here can attest, from close-up knowledge.

Middle of the working day

Today is show-down time (allegedly). We’ve had a few of these, but maybe this one is the one. Last week there was (allegedly) a bailiff wandering the offices looking for assets of value. Good luck, mate, we’ve all done the same wander – if you find anything it probably belongs to an employee.

So today we get to hear the real situation, the truth about the balance sheet, the extent of known debt, and the ‘action plan’ for locating and securing the needed additional finance. And probably a cure for cancer as well.

My guess is it’ll be another acrimonious bout of whingeing and moaning which will be met with hand-wringing and perhaps a degree of contrition but no real answers – though these will be promised, of course.

Just had a ‘pre-meeting’ with a couple of fellow complainants, discussing lists of questions, what we believe the status is, etc. All a waste of time. There’s one question, and I already know the answer:

Q: ‘Where’s my ****ing money??’

A: ‘We haven’t got any to pay you’

Now we can have that conversation another 50 times or we can just fold up the tents and go home. I’ve already put my sleeping bag away.

Leadership to die for, or kill, possibly

Leadership will be a subject we’ll come back to, but one small anecdote from the Executive Leadership Forum (ELF) for now to illustrate what we’ve been up against.

The ELF meetings were theoretically monthly but in reality more like bi-monthly due to them having to be called by a CEO whose sense of time and place was different to the rest of the world’s.  I was an attendee at the ELFs for a while, before I fell out with the other woodland creatures (another story).

One particular ELF was distinguished from the others by the sheer length of the contributions of the financial representatives.  This was partly because their figures made no sense and were self-contradictory, and this needed to be explained, and partly because we were leading into a period of seeking external finance (though I appreciate this has always been true of Loftex) and contradictory figures tend to be anathema to city whizz-kid financiers.

Our then CFO, Chuck, had already spent 20 minutes over a fuzzy telephone connection explaining the arcane detail of his numbers to us when our then global ELF chairman, Fred, interrupted him.  

‘Chuck, help me out here, I’ve got September revenues as 80 on your 1st spreadsheet but on your second…’

‘The second one is the right one, Fred..’

‘.. on your second I’ve two different September numbers, 77 and 89, and I’d just need to understand which…’

We then had ten further minutes of explanation where Chuck appeared at one stage to be blaming a bug in Excel (but pulled back and ultimately, as far as I recall, went with overwork and fatigue as the root cause and the mean of the presented three numbers as the answer).

Now it was my turn, and brain spinning as I tried to get to grips with the new numeracy of the e-economy, I started talking through sales projections.  Let me be the first to admit my ability with sales forecasting is akin to my ability with weather forecasting or in fact any forecasting involving items less predictable than, say, the rotation of a planet.  So my sales forecasts were then and are now very much to be treated with caution.

However, at this particular juncture we were working with a (regrettably now abandoned) set of disciplines which allowed a sale to be forecast pretty much only if it had already occurred.  This had markedly increased the accuracy of sales forecasting while (strangely enough) decreasing the value of the forecastable pipeline.

So (and you may think this is more about terms and definitions than any kind of business reality, in which case I’d have to ask you to bear wth me and understand that for some of the participants here those terms are not differentiable) we now started to dig into the non-forecastable pipeline, where of curse all the sneaky little items we used to treat as forecasts were now hiding.  Fred started quizzing me on these items, when he could find them.

Fred had joined us a year or so earlier as our man in the US, but more than that, our representative of senior corporate wisdom (hey, wasn’t that me some time back?), the man who would bring us $US10 million in sales via his heavy-hitting network, a voice of pragmatism for the ELF and other senior fora, and (you’ll never guess) a significant investor.  Significant investors could gain that status by putting in more than anyone else or by putting in the same amount but when we were more desperate.  I never found out how Fred got his status.  

Fred was getting cross, or as the Americans like to say, ‘pissed’ (and we all wanted to get that way now as it was past six p.m. in our timezone), because of my forecasting or lack thereof.  I sallied with what I thought he wanted to hear – a whole bunch of ‘maybe’ opportunities that came to several million pounds, with a bit of detail on each.  Wrong move.

‘Do you think any investor worth his salt is going to let you get away with a sales forecast as woolly as that and financials that are as imprecise as you guys have here?  You think investors will be fooled by this shit?’

It went quiet round the table.  We were probably all thinking the same thing. 

‘Well you were, Fred’. 

 

Best and brightest

Recruitment policy for Loftex was probably the key to understanding our profit growth curve, or lack thereof.  Our own egos of course prevented any of us detecting the problem before it was well too late.

It went like this in my case:  Barry Foeliou and I had lunch at a pleasant but not hugely expensive Italian restaurant (at his expense) then drinks in an utterly over-priced London hotel (at my expense), during both of which I was complimented on my wisdom, my depth and breadth of experience, etc. and it was made clear that Loftex without me would be a slower-growing and (ultimately successful, but) less profitable beast.  With me on board clearly the world would soon be bashng our door down.

At this point clearly I can name my price and define the dimensions of my private office, but then (signal violins playing mournfully), the small problems currently preventing world domination have to be addressed, and number one is cash.  This is such a trivial thing its hardly worth spending time on, and clearly this time next quarter we’re not going to have any such problems, we’ll laugh at these times, but for just now could I, as a man of substance and honour, see my way to…

Now you can see where this is going, and now so can I, but at the time I wanted to believe this man with such judgment that he knew me for the substantial wise man I knew myself to be.  Where it ultimately went was six months work for no salary then a ‘reduced’ or ‘sacrifice’ salary which funnily enough I’m still on three years later.  In exchange of course I have equity.  How much equity used to be something I cared about – i.e. I’m sure I was promised 50 grand’s worth, which when it materialised was 25 grand’s worth.  Whatever, the souvenir value of the scrip (surely the only residual) won’t be much different for either.

Lest you think I was an isolated hire, lets review:  of the 12 European hires since I joined all but three have invested prior to being offered a job.  Those three were for jobs we actually needed doing.  These lucky investors didn’t have to go without pay as I did, instead they just handed over cash, which has continued to be an irritatingly rare item in and around the Loftex empire.  None of these investor/employees, yours truly included, is doing a job at Loftex for which he or she is specifically trained, qualified or has experience in.    

Now I didn’t see this as a problem in my own case as my talents, drive and intellect would overcome anything so trivial as not having done the job before.  How difficult can sales and channel management be, after all?

I did start to see it as a bit of a problem with a couple of the other guys, mind you.  Especially when they started to criticise the way I was fulfilling my role.

By then, of course, it was a bit late. 

Disruptive technologies and how to avoid them

Life at Loftex4 goes on but only just. We continue to pretend we’re:

a) about to beat our competitors in one or more of their favoured market niches. All of them (competitors) have more money than us. The boy I buy a paper from each morning has more money than us. They also have better software, salespeople, channels, colour schemes on their brochures, etc.;

b) on the brink of the paradigm-shattering technology-led world media announcement breakthrough which, given a zero marketing spend, would indeed be worth writing about;

c) not trading while insolvent.

Maintaining these self-delusions was easier when we were getting paid. Let me re-phrase – we’ve always been paid something, and never been paid all of what we’re due, or on time. So what I think I mean is when we were getting paid slightly more completely than now….. anyway the self-delusion is wearing off and the restlessness of the natives is palpable.

Even Finglass, previously noted for his gullibility, lack of technical nous and general good-chappishness, has become distinctly miltant of late. When Barry Foeliou’s demise was announced he led the cheering, but was also first to ask – ‘so how does this affect the likelihood of my overdues arriving?’. Funnily enough the answer seems to be not a lot.

The scent of blood has alerted the others, as well. No-one believes anymore this will be running at Christmas. Maybe we’ve been disrupted by our own technology? Tomorrow in theory I’m meeting with the party from whom we acquired some of the more disruptive parts of the technology, and certainly they’ve had their own problems paying bills, so maybe that’s part of the answer.

How we got here I’ll be documenting in more-or-less libellous episodes on this blog, plus obviously keep up to date with future developments. Don’t expect many of those bar a death rattle or two, mind…