My start-up flop...

A few weeks ago I marked the one year anniversary of the beginning of what turned out to be a short-lived career as President and CEO of an early stage mobile application/interactive marketing start-up. As I embark this week on the next stage of my career, completely unrelated (indeed, a return to my D.C. roots of yore - but that's another story), I'm unable to resist the urge to chronicle the sad debacle that was my start-up experience.

When leaving Nokia in February 2009, a far more bitter than sweet experience, I had a reasonable cushion upon which to mount my job search. Don't get me wrong, I was terrified from the first day of unemployment, but I was also in a position to consider a wide range of options, and I was in some sense driven to recapture the excitement and passion from that time I spent leading Nokia's maverick North American Multimedia business.

I had feelers out to every headhunter I knew, and was meeting new ones on a regular basis. I networked with former Nokia and other industry insiders at other companies in the mobile space. I flirted with one or another courting start-up, and, then, was approached with a unique and intriguing President and CEO opportunity by a headhunter I'd befriended via a mobile-related blog he managed.

What followed was a series of interviews with a range of advisers to and Members of the Board of the fledgling start-up, founded by three software platform developers who'd been together for a pair of decades and were making their first foray into the mobile space. Their solution was not rocket science, and I'll get to it in a minute, but it did indeed have the potential to be disruptive, and successful.

The start-up's Chairperson, who represented the VC that led the miniscule $750k A Round of funding (almost a third of which was already gone by the time I joined), was the prime decision-maker, and had surrounded herself with an eclectic group of well-pedigreed but oddly - seemingly - ill-fit (in terms of the start-up's offering) advisers. Hers was the decision to hire me, only after which did I get a chance to meet the Founders.

The Founders and I quickly bonded - good guys, if, however, in my perhaps not-fully-informed perception, set at pre-commercial Internet clock speeds when it came to development. When I came on board in late June, I was told we'd have a commercial solution in mid-July. Uh, not...

But what was it?

Well, when the iPhone SDK was released, the guys, who, again, had no mobile background, saw it as their next platform, and developed a clever mechanism to essentially circumvent the iterative iPhone application development process.

The way it was working when they birthed their brainchild, let's say in the context of a content owner, was that the content owner would hire an app developer, tell them what they wanted their app to do and feature, wait for the developer to return something that, with luck, actually met their specifications, then submit the app for Apple's review and, ultimately, publishing. If the content owner wanted to update the app, well, they'd go back to the developer, get the changes tweaked, pay for it, re-submit to Apple, re-publish, wait for iPhone users to update their apps, etc. Not a terribly dynamic process.

What they guys figured out was that the configuration file at the core of any app - the "property list" - could actually be updated without re-publishing if the originally published app's property list contained code for all of the potential functionality that might ultimately be desired in the app, even if the initial app only featured, in terms of the user experience, some subset of that functionality.

The solution, grossly simplified, was for the app, each time launched by an end user, to quickly touch the start-up's servers and, if the server-based config file had changed, so too would the app's property list, enabling what appeared to be a magically morphing app in terms of look, feel, feature set, experience, etc. Quite cool.

So, with a rudimentary, clumsy and awkward UI version of the solution, I set out to convince content owners that they should license our platform, bring their app development process in-house, and launch apps that they could continually morph, whether based on user behavior, new product launches, what-have-you...

I had a couple of working leads, pre-dating my coming on board, one a specialty marketing shop with a couple of trendy brand clients (lined up by one of the quirky advisers), the other a major educational content publisher. The former ultimately signed a contract, but never made use of the platform, instead leveraging one of the Founders to design and redesign an app that never launched. The other, sadly, bogged down in its own inertia, and, frankly, our failure to deliver a compelling design experience.

I turned my attention to richer content opportunities, engaging, for instance, a major music publishing group representing multiple labels, a couple of indie labels, and two major professional sports leagues.

What we soon learned from our very rich and intriguing conversations with these potential customers was that, in fact, they were frustrated by the entire mobile app experience. They couldn't make money off apps. Yet, they kept contracting developers to deliver them because apps had become a hygiene requirement in the mobile space.

All the while, I was fielding almost daily requests from the Board Chairperson and one or another of her advisers to consider random, alternative business model deviations and/or to consult with some newfound "expert."

Sigh... You see, the start-up was the Chairperson's first lead investment and, as I'd been warned by the Founders in my first week on the job, her constant interference reflected her fundamental lack of confidence and basic understanding of our business and the industry in which we were doing business. My failure - my key failure - was not putting my foot down early, demanding that she allow us to do our jobs rather than respond to her each and every whim.

In September, came an epiphanal conversation with the folks from that major music publishing group I mentioned.

What if, I suggested, we turned the model on its head, published one core app for free on Apple's App Store, with the richest potential configuration possible, and then launched a drop-dead simple consumer-focused site where individuals could design, publish and virally share their own configuration files? The content owners could open up their content management servers - just the basic, static stock content - and allow individuals to, for instance, create config files celebrating their passion for, e.g. Lady GaGa, or the Washington Capitals, or whatever. The config files, easily plugged into the single core app, would spread virally across social networks, libraries would emerge, hosted by content owners, or otherwise. Content owners would have a whole new distribution channel to up-sell premium content to people who had self-identified themselves as passionate about their content. And we'd get a piece of the action in terms of up-sell revenue, and everyone would benefit from advertisement- and analytics-based revenues and consumer behavioral understanding.

The major music publisher loved the idea. As did the couple of indies I was talking to, as did the two pro sports leagues, as did the Founders. I prepared an entirely new business plan around the new model, projecting viral growth of the core application and uber-viral growth of consumer-generated app configurations, but, importantly, no revenues until 2011, earliest.

With funds dwindling, even after having been augmented by an A+ Round of a couple hundred grand in November, I pitched the Board a new plan in the context of launching a B Round to fund us through 2010 until we could reap 2011 revenues. The Chairperson rejected the idea, as did her adviser. And then, the one Founder on the Board caved in, leaving me stranded, and, worse, facing demands from the Chairperson for a business plan that would drive 2010 revenues, perhaps around, sigh, custom app development... Such a pedestrian business was not what I signed up for...

...And, in short, it was not a terribly cordial parting of the ways. I believed in my plan and believed it would earn us a B Round. Indeed, I believed in it so much that I offered to work for sweat equity until we landed that B Round. But the Chairperson was adamant, and, unknown to me at the time, had already decided I was to be ousted, having recruited yet another "expert" to step into my shoes, notably bringing with him not insignificant funding.

We had some heated conversations, the Chairperson and I, but to no avail, other than her somewhat petty refusal to allow one of the willing Founders to write a recommendation for me on Linked-In.

And that, in short, and for the record, is my start-up story. A fabulous learning experience if nothing else.

Notably, and as an epitaph of sorts, since my departure in December, seven months later, the re-focused start-up has published, to the best of my knowledge unless otherwise white-labeled, exactly one app powered by their unique platform. One. And that one app was for the home-managed business of one of the Founders' spouses. And it's available for free from the app store. Sad. And, meanwhile, Google has recently launched their own custom individual consumer application configuration utility for Android apps. Go figure...

But, hey, all of that's behind me now...

Later...