Hex, Lies and Startups

At the age of twenty I started working for a startup in the translation industry, I was their first employee.

The company would later sell for £60M.

Here's my story.

The founder (let's call him John) had already worked in the translation industry, he'd stolen a few clients, some data, rented an office and hadn't really thought about the rest. It was my job to reshape the stolen data beyond recognition and automate as much of the project management as possible. I was given a low salary in return for the promise of shares and some future looming exit whereby the founder had plans to float the company on the stock market and cash out in a rainbow-filled moment of glory where we would all equally prosper, or so I was led to beleive.

The company did OK with John doing telesales, his brother doing project management and me looking after the technical side, but it became clear that we needed an online marketing strategy. It was John's style to employ friends and family so he took on his former girlfriends brother, Ian, as another technical person to learn from me and take on some of the responsibility of our online marketing efforts.

I told Ian what was planned, re-launch the company's corporate site to make it more friendly and approachable. We read a bunch of marketing, NLP and print-design books to get an idea of layouts and formats that would be appealing and at the same time optimise towards the greatest profitibility for the company. The things we did included organic link-building, link-wheels, comment-spamming, forum-spamming, link-baiting, viral-marketing, A/B testing, testing on multiple browsers, blogging, guest blogging and more that I can't really remember. This was 2004, we were ahead of our time without realising it.

The website shot to the top of Google.com (international) for the term "translation" and some other associated terms, most of our traffic came from "free translation tool" - something I had built for link-baiting - and the company started to grow at an explosive rate.

The technical team grew and so did my responsibilities, within a year me and Ian moved to Bulgaria to start their Bulgarian office and hire both technical and non-technical staff, since John wanted to keep costs down and wasn't prepared to shell out for additional British developers. We'd experimented with outsourcing to India but in the end I found myself writing psuedo code in UML to try and define my requirements and the work often came back incomplete or to a less than satisfactory level.

John had just returned from a ski trip to Bulgaria and loved the low price of beer and the short distance from Sofia to the ski slopes, and based on that it was decided that Bulgaria would be a good place to setup shop.

Me and Ian worked 14 hour days for close to a year, trying to out perform each other with the amount of links we could build, I couldn't always commit my full attention to it because I was busy programming, training other staff, hiring staff and learning the Bulgarian language.

I think me and Ian put in so much effort because we felt so invested in the company, and we knew that the work we were doing was directly impacting the company's profits and turnover - every link we built could be quantified in terms of incoming leads - and the more traffic we could get to the site, the more leads we could get. We had a real-time system that the sales-guys would compete with each other over and it'd be like a game of "fastest finger first" to grab the latest lead that appeared, and this would happen every five minutes or so. In fact they were so flooded with work that they got really pissed off when we tested the live system or had to bring it down whilst we did a deploy - yeah, that's how I rolled back then.

Sales people are pretty sneaky, there was at least four different occaisions when a salesperson would say "Hey Matt, let's setup a company of our own and ditch this place - you can own 50%" - and in every circumstance, whether they were my friend or not, I'd report this to John who would then promptly fire them. Looking back at it now, I kinda feel like I stabbed them in the back since they had families to support and lives of their own.

Their propositions always seemed weak when weighed up against the dream that John had sold me on, I mean - I felt invested in the company so heavily that I knew I was going to get my share of the cake.

On one of my visits back to the head-office in the UK I walked into a management crisis, the company was unable to retain its customers. John had me do some reporting and we discovered that ever since launching we would acquire customers from two routes - telesales or the website. And the salespeople were mostly doing inbound sales now so the traffic from the site was driving roughly 80% to 90% of the business. It had been this way since launch, and we were only able to retain about 20% of our customers due to poor project management processes, poor quality of work and missed deadlines.

I began to think about what this meant... the work that me and Ian did was practically holding the company up, it was paying for peoples jobs, it was helping the company grow. I could now appreciate what exactly it meant to work in IT - not to just squirrel away at something, but to actually add value to a company and to help it grow.

I'm not so arrogant to think that my effort alone helped the company grow, or that I alone was holding the company up - but it couldn't be denied that I'd played a substantial role in the growth of the company.

That evening, me and John sat down for a beer, as we often did, and talked over some of the companies problems, it went like this:

ME: So I guess me and Ian have done a good job?

JOHN: How do you mean?

ME: Y'know, with 80% of business being new business coming in from the site?

JOHN: Yeah but you're not the whole company, there's an army of people doing sales, without them your leads and traffic would be nothing.

ME: Sure, but I feel invested in the company, I work 14 hour days and have managed the online marketing - we're crazy popular out there. I should own a share or be a director or something, right?

JOHN: I'll never make you a director, you're too young

ME: Then how about my shares? I own some part of the company don't I?

JOHN: You're not on any paperwork, so not really, no

ME: Yeah but I've put a lot into the company haven't I? I mean, me and Ian?

JOHN: Sure, but that doesn't mean you're going to own a portion of it. At the end of the day I pay you a wage and you do a job for me. That's how I see it.

ME: So, you're telling me I'll never own a peice of the company? What about what you said when I started? That there'd be a big exit and I'd get a big payout?

JOHN: Oh yeah, you'll get a payout if we float on the stock market, but that's it.

ME: How much would that be?

JOHN: I don't know. If it floats for £10M then probably somewhere between £20k to £50k

ME: That's less than 0.5% ... *stunned* ... but that's why I'm taking a low salary?

JOHN: You've never asked for a pay-rise, maybe it is a little low. I'll do you a deal

ME: Go on

JOHN: If you really want a pay rise, then you have to do something for me, will you do it?

ME: Maybe, tell me what it is first

JOHN: I want you to fire Ian, the moment you get back to Bulgaria, and I'll bump you up another £5k

ME: That's pretty shitty, Ian's still learning, he won't be able to get another job in IT. And how will he get back to the UK?

JOHN: Don't worry, I'll pay for a flight back for him - if you do it, you get £5k

I felt pretty shitty after that conversation - and I was unsure of what to do with myself.

There were words and phrases from that conversation that kept playing over and over in my mind, for the most part I was too young to know how to deal with what had been said, I felt completely backed into a corner. On the one hand, if I stayed at the company my compensation would roughly equate to a regular paying job somewhere else - and on the other hand, if I left the company I would never be properly compensated for all my effort. I felt I was in a lose/lose situation and felt a huge amount of animosity towards John and the company. As though he'd snuck me off to Bulgaria to avoid dealing with me and just let me carry on being unquestionably loyal to the company.

Ian had been to Poland whilst I had been back in the UK and we'd both arranged to meetup in Prague to change for a flight back to Bulgaria - as soon as I saw Ian at the airport I burst into tears and unloaded all of my problems, including the problem of firing Ian. He'd been expecting it and left pretty quickly. I still feel to this day like I stabbed Ian in the back - because I could have fought harder, I could have refused the pay-rise.

It was my first day back in the office in Bulgaria, Ian wasn't there and people were asking why... I was just honest with them, I told them some of the stuff that John had said, but I held a fair bit back. It was probably a little unprofessional because it caused a kind of poisonous atmosphere in the office - the staff already resented John for some decisions he'd made but now it was worse. I had hired at least thirty staff whilst in Bulgaria, we were all good friends and now I felt that we had something of a common enemy, but it didn't help, at the end of the day everyone liked being paid an above average salary and just carried on.

I should mention that whilst in Bulgaria, I made every staff member job offers that were far above the local avarage wage - I disagreed with John that the company couldn't afford UK salaries and so offered every new hire a wage just below the UK equivalent for that role.

I started working my contracted 7.5 hours a day, I became detached from my work, I felt alone in a foreign place and I didn't really know how to make it all seem right. When I'd beleived that I was part of something: people could see it in me, they could feel it when I spoke, I had pride in my work and I heard earned the respect of every staff member by being helpful and dilligent with even the most trivial issue. But now there was nothing there, I had to accept that this was just a job I was being paid to do, that any additional effort invested by me would go unrewarded, that my loyalty was unappreciated.

What it meant to work at a startup had been lost, I missed it, and there was no way back.

I handed in my notice, I was told that I had to stay on for three months to hire a replacement and train him on everything I knew. If I did this, John assured me it would be worth my while but never specified exactly what that might be. I would find out at my leaving party.

My replacement was a nice chap called Hristo who looked like an Eastern European version of Mario but liked to wear old leather jackets and sunglasses in the blistering heat of the Bulgarian summer, he also drove a fifteen year old BMW. What a guy. I later found out that once Hristo had moved over to the UK, he'd left his job pretty quickly to become an IT contractor.

When my last day came we all went to the pub for a last beer, John assured me that all my hard work and effort would be rewarded today. All the staff gathered around as John gave a few final words to commemerate my short lived career with the company, and then presented me with a box - my mind was racing with possibilities, could this be it? Is it my shares? A cheque? No it feels too heavy for that.

I opened the box and inside, there sat a watch... worth approximately £135 but John got it in a sale for £85 - he'd left the receipt in the box. I cried and everyone beleived they were tears of sorrow and emotion due to my departure, they were actually tears of disbeleif.

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I'm not so naive or bitter about it these days, in fact it was a great learning experience and a fantastic way to build ones character and skillset from such a young age. Even I now think I shouldn't have assumed so much about what I had been promised, John hadn't technically lied about much - it was just some shady manouvering of carrot-and-stick to build his business.

I went back in early 2011 to advise on their website, they were losing money and their website had slipped from an Alexa ranking of less than 10,000 to a ranking of more than 200,000 and they felt this was causing them to lose money. The company was only slightly larger in 2011 than it was when I left in 2005.

I met their new Head of Marketing, she wanted to redesign the site and do some digital marketing, she didn't really have a clue about much and she drew some doodles on some peices of paper. She was asking questions that I'd asked myself back in 2004.

I also met the technical team, they too were stuggling with the same problems I'd been stuggling with back in 2004 - only they'd taken the time to re-write the entire system and when particular business-cases came up they were re-investing thought and effort into lessons that had already been learnt years earlier.

After I'd exchanged pleasantries and said my goodbyes with the few remaining familiar faces - I hopped in my car, screwed up the peices of paper with doodles on them, and never looked back.

In 2012, the company reported record-losses, but they'd just narrowly won a major goverment contract which led to them being bought up by a large UK company for £60M. According to Johns calculations, I could have had landed myself £120k to £300k - however, the payments were staged over many years and were related to company performance, the initial payment was just £7.5M with subsequent payments coming years later... or never if the company performed poorly.

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I sometimes like to imagine how it might have continued if I had stayed, if me and Ian could have stayed ahead of the Panda and Penguin updates and the company retained it's high-ranking position on Google. That might have led to a steady increase in leads over time and an improvement in repeat business. But then I remember not to get so personally invested in it, it's like John said "At the end of the day I pay you a wage and you do a job for me. That's how I see it."

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