Startup 101: Quitting the day job

I mentioned before that I wanted to write about starting up a company and figured this would be a good time to do it. Moving forward I'll put Startup 101 in the title of these posts so that readers that come for my Mac experience won't have to sift through these if they don't want to. My hope though is that everyone can gain some value from this; if not for specific advice on how to build a company from scratch but for the stories that come from those experiences.

Don't worry - I will keep writing about Mac too!

Getting Started
In September of 1997 I decided that I wanted to create something that would leverage the internet. The Dot Com era was really starting to take off and with the internet I saw a tremendous opportunity to create rich Windows based applications that would leverage the power of a common network accessible by anyone.

By day I was a mild mannered User Interface Architect, responsible for developing user interface concepts and models for the technology division of a large publishing empire. I made a good living, worked on some neat technology and was well regarded by my superiors. But by night I was an obsessed workaholic Entrepreneur, trying to come up with a cool idea upon which I could build a business.

The idea I came up with was to build a tool for creating web based surveys. I wanted something that was really simple and easy to use. I cast about for a name and finally settled on WebSurveyor. The tool would allow people to create and publish a survey on the web, then collect and analyze the results. I wanted to make it so that anyone inside a company could do this, not just techies or the IT department. 

From September 1997 until June 1998 I worked nights and weekends building WebSurveyor, often putting in 40-50 hours beyond the 40 I was putting in with the day job. It was painful at times, but usually I enjoyed it and it didn't seem like work.

In June of 1998 I formally launched the product. I had no idea how to market it and I fumbled around, trying to get Yahoo to place it properly in their directory and promote it on certain web sites. Marketing products on the internet in 1998 was hardly a science; it was still the wild west.

I slowly started to grow the business and by September of 1998 I was ready to quit my day job and focus more time on WebSurveyor. Not that WebSurveyor was generating a lot of revenue - I was selling it as shareware at the time. You tried it and if you liked it you would pay me $149 and I'd send you a registration code. By September of 1998 my income was barely over $1200 / month in sales.

At the time I was 35 years old, had a wife that stayed home with my three young kids, a mortgage and car payment, hardly any savings and nearly $19K in credit card debt. Just thinking about my financial situation put my heart in the target aerobic range , which was good since I didn't have time to exercise.

In order to make ends meet I decided to do contract software development gigs. A couple of good friends had started a technology consulting firm and offered me a contract job for 3 months. With that thin rope firmly attached to my waist I leapt out of regular paychecks and job security and into the gaping maw of self employment.

Taking on a Partner
By the beginning of 1999 my business had started to look like it could go somewhere. I was generating close to $3K a month in revenue - a nice boost from just a couple of months earlier. I couldn't make a living off it yet and was still dependent on my contract software work but I figured that if I could just get someone to focus on marketing the product it could get really big.

I met the guy that would become a good friend and partner - Tom Lueker - through a technology networking event. We hit it off and after just a month I realized that Tom was about as driven as I was, if not more so. Tom had some success before and could work for a while without being paid so he joined me as Chief Marketing Officer and I gave up a pretty size-able portion of the company in return for Tom coming on board. 

Tom had a very different approach to WebSurveyor than I did - while I was focused on building a software company, he recognized that what we really needed to do was give the software away free and provide the back-end services to host people's surveys for them. At first I resisted but after many a late night argument decided that it was worth a shot. I spent the next couple of months changing WebSurveyor to use only our servers and built a back end administration system. I used what little money we made in acquiring hosting equipment and in July of 1999 we launched WebSurveyor 2.0.

We stopped selling WebSurveyor 1.0 - the software version - a couple of months earlier. By the end of our first month with the new model we tallied up our results. We had made $211. Let me spell that out: Two Hundred Eleven Dollars and no cents.  I was beginning to think we had made a mistake.

We stuck it out though, trying to figure out what people wanted, learning how to sell it better, tracking web site visitors and seeing where they fell off, etc.  By the end of 1999 we were back to where we were at the beginning of the year, though we were ramping much faster.

Going in to 2000 we still were not generating enough revenue to pay ourselves - Tom was taking a tiny salary since he didn't have any other income and was living off savings. I was entirely dependent on my contract software work. The rest of the money went right back into the business.

Adding another Partner
We knew we wanted to expand the business and to do that we needed money. Then I could devote all my energy into WebSurveyor, both Tom and I could get a paycheck and we would have the money to build up a sales team to take the product to the next level.

A friend introduced us to Bruce Mancinelli and both Tom and I knew we had found the guy that could get us to the next level. Bruce had lots of C-level experience, had run companies before and knew the investment community pretty well. Most importantly, Bruce was willing to work without a salary until we were able to land some funding.

I gave up my CEO title to Bruce and became the CTO. Bruce immediately set about getting us in front of venture firms and within a couple of months had landed us a meeting with the Capital Investors Group, which gave us an angel round of funding to get us moving.

The three of us set about building up the company as quickly as we could. Little did we know that our challenges were just beginning.

Up next: Getting through the tough times.


Marco said...

Great post! One of the most interesting posts I have read on here. Can't wait for "Getting through the tough times"!

Ed Bortoni said...

Thank you for this.

Desi said...

Right post @ the right time for me. Starting with ur Digged article last week (i just bought an iMac 2 weeks ago!) - and loving every moment of reading ur blog - this post is something about what is keeping me at cross roads as well.

looking forward for part 2!

~ have a full-time job, a dba company for freelance web design + web apps > and wanna do more!

Sean said...

Thanks for sharing. This series of posts could definitely become useful to me later in life.

Blog Admin said...


You blog is very inspirational. One could learn a lot from a person who has had the hunger, persistence and wisdom to make it. You have been through the motions and experiences that many of us are or will be going through.

Also, it is entertaining to read through your blog (hint: you may remember my name!)


David Alison said...

@Isaac: The Isaac I worked with at Nantucket 16 years ago? Hey man! Glad you found the blog and enjoyed reading it. I hope life is treating you well.

Isaac said...


I'm sure by now you could write a book about startups and corporate life. Plus you've always been so practical, hands-on and results-oriented.