The story of one IT company that never came to success (Part 3)
Money infection is amazing. © Pavel Sharpp
2013. It's time to evaluate the results of the past year . Much has been done - there is nothing to boast about.
After reading one of the next “smart” books (or maybe attending a seminar), the CEO understood what’s the catch. Concepts appeared about capitalization, exits, options, stocks, budgets, forecasts, hypotheses, and investment rounds.
All projects have become separate and independent of the incubator. The company provided after-sales services to its own projects. Innovation: Human hours and any other expenses are indexed in monetary terms - all expenses are put in a rate. Then an invoice from the “incubator” department is set for a project for which he supposedly had to pay. In fact, the money didn’t come to anyone, they simply influenced the calculation of the capitalization of each project.
All management, trying to resist the emerging bureaucracy, suspecting the reasons for the eternal prolongation. Each brought his truth to the CEO and offered his own ways out of this situation. Instead of the expected "gap" in the network and the ongoing talk about a successful project, managers received "nothing." Fought convulsions, spent their energy on an internal “war” with the CEO. On the sidelines of only talk about how to properly convey information, and what to do next. Initially, they tried to convey the essence to the CEO with hints, then it was already open. It was difficult to argue without having a single success story, which is why they asserted something, relying on common sense, their intuition and feelings. In this case, the advantage went towards the authority of the CEO, he often hinted as if “don’t forget who feeds you.” All conversations did not lead to anything, nobody succeeded in convincing him of anything. It only remained to be fed up on the fact that he himself would come to a conclusion. “Take off, you can still fix it,” the leaders shouted, “let me try to steer, if my option doesn’t work, I’m ready to be punished.”
An additional project, Designer Tulbarov, appears . A very talented marketer noticed this niche for a long time and offered to start developing. From calculations and presentations: the investments are minimal, the field is familiar, so there are real prospects. The company has +1.
The CEO himself is gradually changing. Gone are the days when work was in the foreground, leaving or absent does not inform anyone (and after all all processes, the burden of responsibility, so to speak) are still tied to it.
The task stack is packed to the top, waiting for its upgrade, and the tasks completed were ignored.
The statuses opposite each task are “Waiting for approve” ;
Opposite the projects is “Prolongation” .
For letters, which he considered less important, they had been waiting for a response for months, while the “unimportant” ones remained completely unanswered (an example of the unimportant ones: it is necessary to pay for office rent, tax overdue, vacation allowance, equipment purchase). There was a change of priorities and the more mundane things took over: overseas, leisure, real estate. "Major" habits did not appear, but the attitude towards employees has changed. If earlier employees expressed their opinion and at least listened to it, and sometimes accepted it as the opinion of a specialist, now at best they “listened”. Absent-mindedness, forgetfulness, especially in those monetary moments where he was “must”. Nobody relied on the given or promised word, everyone duplicated it by mail: the topic of the conversation, its results, mutual agreements, responsibility of the parties and promises. We tried to describe everything in detail,
Each time the CEO was faced with a choice, it was not always made in the right direction and was often dictated by the unwillingness to part with the "blood". For example, the allocation of funds for an advertising company or the purchase of a reference mass for a technically finished project was problematic. These expenses were not encouraged and were not considered necessary; PMs needed to gnaw every subsequent currency symbol. But a complete change of priorities, goals, approaches and a complete "restart" of development - quickly set in motion.
Everything turned upside down. Where it was not necessary, there was excessive wastefulness, and where it was really necessary, it was necessary to encounter misunderstanding and squeeze. It was no surprise to anyone that the button was drawn for 2 weeks, and the design of one product was being developed in a new way in the 4th circle.
The situation is similar to the principle of the principle "well, no, someday it must work!"
The living hypothesis "According to all known statistics, only 1-2 projects out of 10 in the portfolio of a venture capital fund can become successful - therefore, only every 5 startups that raised money can really be a completely stable business" - was tested and for some reason did not work . Games in startups were slowly ending.
He sincerely does not understand the reasons for what is happening, shifting the blame, first to the Project Managers, blaming them for their amateurish approaches and complete incompetence, now for the lack of proper quality of the work performed, then suspecting everyone of the inaccuracy of the information / results provided.
Bringing the situation to a critical point, the CEO is taking a new approach. The wind of change blew.
Naturally, it’s hard to try on several roles at once. On the one hand, he is an investor and finances projects, and on the other hand, he acts as a CEO and spends them himself.
The whole situation is exacerbated by another factor “flow paranoia”. A long-standing love, from the old gray days, to encrypting everything in a row, virtual machines, VPNs and proxies in no way contributed to the simplification of processes and the development as a whole. Lack of information about what is happening with the staff. The policy was conducted "only you and I know, and he know about it." There were not so many employees close to the CEO: accountant, secretary, financier, executive director of the “incubator”. Each was entrusted with a separate piece of work, and each of them owned some part of the "trade secret", but no one generally understood what was happening. As a result, confusion in the heads, in rights and access to internal systems, not to mention the number of duplicate documents. Even those information sectors with which they directly worked were limited. Often the work was done blindly, not knowing the purpose of the document and its functions,
Legal piles: a large number of registered foreign companies for each project. Employees faced confusion in their contacts, emails, and generally in the legends they invented. The number of “masks” for the foreign market is off the charts. A complete mess with bank accounts, transactions and their appointments, as CEO's personal expenses were mixed with the company's expenses. Some of the employees working in managerial positions performed secretary functions in addition to their main job duties.
What is available:
- A lot of theoretical knowledge, little practice
- Application of several techniques simultaneously
- CEO Change of Priority
- CEO does not delegate his tasks (still makes all decisions)
- A large number of required documentation from PMs
- "Independence" of projects (separation from the company "incubator")
- Capitalized projects
- Attempts to market existing projects
- New project: designer Tulbarov
- Change of attitude of CEO to subordinates
- Mutual claims and guilty searches
- Excessive "security"
- Lack of understanding for employees
- Confusion in legal and banking affairs
- Big capital
- Wonderful team
- Good level of salary
- Accumulated fatigue
- Lack of a common goal:
- The goal for PMs is to gain authority
- The goal for the CEO is?
Instead of a long list, you need to do full formatting and start again.
Close "cadaveric" projects, stop combining and teach delegation.
The tighter the belt is tightened, the more it looks like a loop. © Valentin Domil
Having graduated from new courses (accountant, agile specialist, project manager, business analyst), the CEO mastered a couple of new techniques that he is actively implementing. There are additional roles on projects, the right to choose a management team. The CEO positions himself as a portfolio investor, trying to move away from performing activities.
This path led to the following: instead of unloading the leaders, giving them the opportunity to breathe freely and be responsible for their actions, everything turned out differently. CEO does not take part in the project, but! now, each PM at the next iteration (a new round of investments) had to prove “its” profitability. The struggle for survival has begun.
PMs are mired in a compartment of documents: budgets, planning, options for exits, several options for hypotheses in order of priority. Everyone filled an unimaginable amount of documentation, drew graphs, “drew numbers” ... yes, yes, they drew. Hypotheses suggest, and facts dispose. Having no idea how and where it would turn out, they scooped up tons of other people's statistics, trying to "pull" them on their prodigies. They appointed meetings with the CEO to present and defend their "scribble", which is mandatory for the next round of investment. All unwanted hypotheses were discarded, and without being tested, budgets and plans were substantially adjusted. "They gave the wheel, forgot the keys." In fact, the CEO was still the head of the company and each individual project, only now the responsibility was no longer on him.
Each subsequent round of investments required the provision of confirming / refuting information, as a result of the tested hypothesis, necessarily in numbers. Even those leaders who were humanities to the core, learned to create unimaginable calculations.
Investment rounds were first semi-annual, then short-term 1-3 months. At the end of which PMs prepared documents, sent them and waited for the conclusion. Despite the fact that many hypotheses simply could not bear fruit in such a short time, or could not be accurately estimated. For example, launched an advertising campaign in the social. networks, unsubscribed on thematic forums, registered on exchanges, bought 100 cu of reference mass; attention is the question: “how many sales each method has converted?”, “How many posts do you need to unsubscribe to make a profit of 200 cu?” The
CEO looked through papers with business knowledge, introduced corrections and taught PMs in higher mathematics.
The rallies were constantly disrupted, due to the busy work of the CEO, which delayed the work for an even longer period. In anticipation of the consideration of their "case", many PMs did a lot in advance, on their own. They themselves raised the sites, slightly “sub-code”, agreed on credit with the remoters (if they could not get the investment, they paid out of pocket).
In fact, we get such a process on projects: they work for 2 months, write documentation for 2 weeks, and try to “agree” with the CEO for another month.
Design- in short, the train left. Envato has increased such a service that it’s neither swim, nor jump. Previous attempts by the project manager were unsuccessful, for several reasons: no experience, no competitors (elements of novelty), there was no "trial and error" method, the inability to conduct your project and make decisions independently.
Billing- The hype from the difficult certification stage passed. It turned out that this certificate does not help in any way in working with banks. Reality was tougher than imagined. All well-established banks, and most of those involved in E-commerce have long had their own processing company. Separate Yur. a person who “has” nothing with the bank or ... they have already concluded an agreement with local processing ... who did not own monetary assets for their own structure. Conclusion: everyone wants to work through their processing with their payments. New players have no place here. The project manager put in a lot of effort and still “shoved”, and then ... the search for customers. Within the framework of the white business, everyone has the same conditions, there were several options: to attract friends / their projects or work in the red. There was a particular desire to work in the negative, do not forget that the CEO, by definition, did not consider the possibility of working with small clients ("not our flight bird"). Large boulders did not need our services, they had no problems with the discovery of merchants. We process our own projects.
Hosting - the billing project system administrator becomes the head of this project. Positive trends. In addition to its internal projects, it was possible to find external partners. It is still far from the level of self-sufficiency, since the bulk of the investment was in rather expensive iron. The negative aspect is that physical equipment is depreciated, there is no project capitalization. In cases of overcoming the crisis point, in this case it was possible to sell something and return part of the investment. CEO invests with less caution, understanding the specifics of the project and considering more realistic exit options.
Peer-to-peer- there were problems from the very beginning. At the head of the project appears, the previously mentioned, MBA specialist. Cope only with the software part, truths and not truths. Licensing - not pulled, commercial activity was impossible. We were looking for other opportunities. Content could not be a priori commercially. The lack of leadership of any of those clearly affected. knowledge and product architecture. Replacing the project manager with the techie “elder” of the company also did not bring mind-blowing success. From previous experience, he was familiar with the gray methods of promotion, only they earned. Subscriptions? Twisted this way and that, tried tried. I couldn’t earn on white. Investor did not agree to any shade of gray. There was still money here ... BUSTED!
With unity, even the small grows, with discord, the greatest falls apart. © Sallust
Hypothesis: the cause of failure in organizational issues.
After some time, the CEO realized that in the absence of any regulatory documents, it’s hard to understand who is right, who is to blame for disputes (it rarely happened within the team) and it is difficult to assess the reasons for such a protracted development.
The stage of restructuring and regulations has begun.
Regulated everything: the procedure for issuing vacations, passes, rules for providing social services. the package, the procedure for completing the task, the distribution of roles on projects and in the company, subordination, the procedure and stages of investment, assessment of the quality of work, etc.
Almost none of them earned at full strength, with the exception of the one that described attendance, holidays, passes and everything related to earthly life.
I’ll tell you a little about the procedure for writing regulations - there was a precedent system. There was a situation> wrote it down> wrote a solution to the situation. Thus, they underwent constant changes, more and more tightened, and if earlier a monthly pleasant and crunchy bonus was relied on for reporting or punctuality, now there were penalties in the form of overwork, fines and sanctions.
Why encourage reporting and punctuality? Previously, reports were more likely to be preventative in nature (during debriefing), so as not to forget, they decided to reward. Punctuality - the schedule was flexible enough, but there were limits too, in order to somehow synchronize developers and discipline managers, because the work was a team - it’s better to motivate extra. income. Some employees managed well and without bonuses, so there were abuses, although they were not permanent and did not affect the processes as a whole.
The CEO nevertheless had a deep conviction that this was the root cause of all the troubles, but he was in no hurry to set his own example, always “delaying”, forgetting about tasks / agreements / upcoming meetings, etc. The nuts tightened tightly and unprincipled.
They lifted all the documentation up to 2010, calculated the remnants of the “non-scheduled” vacation, and ... realized that if all employees were given the opportunity to use their balance, then they could safely let go of all the management at 3 months, which was unacceptable. As a result, the limit on the number of days per year. They informed all employees about the new order, which caused a storm of emotions and indignation. Some thought that this was not their concern and hoped to get, though not vacation, but monetary compensation so accurately. Others bit their elbows, recalling those “lost opportunities,” while trying to correctly convey the idea of the injustice of this scheme — they did not find understanding on the part of the CEO.
At this time, the founders of the company (I remind them there were only 4), “smelled the smell of fried” and began to wash their hands until it was too late. Everyone remained in good relations, albeit not the best friends, at the moment they have no complaints against each other.
The first one went. I want to add on my own behalf that these kinds of people are quite rare, and some never do. Crazy tech., A talented architect, somewhat reminiscent of Einstein, a very charismatic, good-natured and easy-going person. The whole architecture of the “tree-splitting” machine and the technical side of billing is his merit. Allowed the fin. questions, retired, remaining a shareholder, while still receiving the due fin. reward.
The second one went. Another architect (system administrator), who was at the forefront, sat and thought, decided to go on indefinite vacation. This employee is a master in data security and on a short leg with concepts such as encryption, high load. I threw off all my responsibilities to such young people in this matter, and ate my fin. reward, waved and never returned again. This happened with a number of employees.
The team spirit quickly evaporated somewhere. The CEO added fuel to the fire, inventing new ways of “execution” and increasingly sophisticated methods.
The documents for calculating the capitalization of each project are filled in daily. All investments are made here up to the penny, right down to the amortized equipment and the computers that the company once bought for work. Tons of documentation, in which even those who filled them were no longer able to understand. The complexity of the formulas was amazing.
The service function of the incubator is already over. Marketers, designers, layout designers and testers sat out without work, occasionally typing something on the keyboard. The solution was finally to reorient to the foreign market and start making money by providing its services or finding another startup somewhere. The company didn’t have any social life, having created a business card website for applicants, they didn’t “promote” it further.
How to promote a company that does not have a single success story? No portfolio. We need a wave of fame, at least one of the projects. Departments formed on a hunch needed expertise. We wait. In the meantime, everyone is looking for any other occupation in the projects, offering himself as an employee. The company employs adequate people who understand that money needs to be earned. They did not want to sit up and wipe their pants, even for money. Those who have not found a use for themselves diverge from one place to another. The work is over. BUSTED!
After a short period of time, the CEO disseminates information that a lot has already been spent. Investments are ending. PMs get their bread in vain, because they don’t understand the price of money, they “sit” on salaries and spend investments without risks for themselves, and according to the CEO, this was wrong. It is necessary to take measures and it is time to tighten the belts.
The “Game of Entrepreneurs" begins. Social canceled. packages, bonuses are completely canceled, only fines remain. Project managers are forced to underestimate the RFP, which has already lost its former luster in the market. The RFP is part of the planned budget. Tightened up with documents, couldn’t “crush” the investor - blame yourself, then you sit without investments and ZP, wait for your turn. Who likes it? Right to anyone!
The question is posed by an edge. All PMs are now becoming entrepreneurs, so they carry the same risks of being left without money as the CEO. Whoever doesn’t like it can go out.
Is it worth talking about the mood of the employees of all projects? Every man for himself. Throwing your project, your brainchild, is a rather difficult decision. At first, everyone fought for their place under the "fading" sun. Then they realized that there was no turning back. Not a single argument, not a single conversation with the CEO brought results. Everyone understands that they have already been entrepreneurs for a long time because they have learned a lot on their own: to invest their money in “not their” projects, took risks without problems, and learned to do the maximum for a minimum.
After some time, which was absolutely natural, PMs got a little tired of the eternal pursuit of happiness, so we resigned.
Project Billing - BUSTED!
Hosting Project - BUSTED!
Design project - BUSTED!
The toolbar project - a little later, but also BUSTED!
All who invested their personal money, not receiving profit, or acted as a co-investor, partially sacrificing their RFP, with a scratch and rattle removed only the invested money. There was no question of any%, nor convertible shares, stocks, options.
Everything has been indexed, recalculated, re-divided and spent for a long time and without them, the shares were blurred, or in general many were “poured along the way” for a long time. Under any pretext, the CEO delayed (sometimes for several years) even the very moment of payment of the due and already “confirmed” payment. There were many different reasons, changes, and facts that made this amount even smaller and smaller! A bunch of excel'ek and formulas according to CEO "confirmed" his right. Most employees diverge. The CEO notes the fact of failure and claims that the entire management “threw it”, leaving without a drop of gratitude.
Here, in general, everything is just like that, except for money ...
Kf 'Brother-2' And now it's time to remember about project X. The gnomes have done well. As before, they are successfully washing not only gold, but also “diamonds”. Shortly with fin. the situation here was just wonderful.
As a result, the CEO shows visible signs of star fever, impunity and omnipotence. All this time, he didn’t really afford to buy new cars, houses or any other material goods.
Project X staff and the “incubator” practically did not interact. Naturally, many employees of the “incubator” did not even think that they did not receive their%, dividends and various bonuses, not at all because they were illiterate and wasteful managers ... in general, everyone complained about their personal mistakes.
Briefly about what this project achieved: when attending various kinds of thematic events, the employee only called the company he works for and immediately signed a contract with a large company for several KKKs, without any preliminary lengthy negotiations.
After “coping with the incubator”, most of the projects were closed - the CEO had more time and desire to bring his innovations to this project. Previously, he took little part in it, with the exception of cash transactions and the calculation of working capital.
Several employees from the “incubator” are being transferred to this project. Mainly on ordinary performing posts such as customer support.
It is easy to guess that the same methodologies, regulations, rules and a subordinate organization began to be introduced on project X. Everything was motivated by the fact that due to his busyness, the CEO previously could not devote much time to this project and now sees significant shortcomings that need to be fixed. While the CEO himself was still not particularly versed in the processes and what and how he works here, PMs could actively nod their heads at rallies in rallies in the meantime, but in the meantime they did as they needed. Only thanks to these actions, again my subjective point of view, this project successfully continued to earn quite good numbers with a huge number of zeros. The CEO makes attempts to tie all processes to himself, which took some time. The fact is that for his absence, The processes were built long ago and the project staff knew the subject area much better than the CEO himself, which is why his authority did not immediately gain weight there, only after some disturbances, delays in the RF, several fines, everyone realized that they still had to put up with what was happening. Obeyed. They began to develop additional admin pages, modify internal tools, and redo statistics.
For several years, the pink dream - to work in white - was never realized, so the CEO is trying to whiten this business. Let me remind you that the whole scheme on which this business is based, a priori, is not very white. They hung everything with bundles ... how can this be bleached? That's right, you need to start again!
The CEO dismisses all the “dummies” from the project, having previously reduced the project’s cash flow to 20%, which he subsequently used as an argument for not paying%, dividends are again an old story. New law firms are opening, the number of employees is reduced by 3 times. I won’t procrastinate here for long, I’ll just say that nothing has changed. They created the white name, successfully launched it, made a beautiful legend, connected the same customers that they were, just did not mention that they were all the same yeast and the same people. In fact, they did everything the same as always ... the bot traffic didn’t bleach somehow, so they made gray chernukha.
The last currency peak occurred at the beginning of 2014, after which a series of obviously predicted events came. CEO is no longer focused on making money (and it’s clear why), whitening and external beauty are his goal. The only problem was that the employees depended on the turnover and tried in every possible way to make money, the CEO has other plans, we will earn later — now we need to build the same project only in a different way. The "Soldier Games" also lived here for some time. Until the company's earnings fell to a critical point, and part of the profits evaporated somewhere. Again sharing. Nobody gets anything again. Key employees leave again, almost no one is left ...
Since the end of 2014, the CEO has been riding at the same speed that the managers have set him on, and the remaining ones are successfully working on the development of admin areas and study schedules and regularly sit out long-term scrum rallies.
The remaining employees are not ambitious and rather passive, in my opinion, so there is no need to expect any ideas from them, or amazing projects, because they have a simple interest: they still pay to work. Such employees are ideal for performing activities and are also indisputably needed, but as long as they obey, there is no need to talk about any team work. No ambition - no innovation.
As a result, project X suffered almost the same fate as all of the above, as soon as the CEO switched to it and began to “manage” it. To this day, confidence that the team let him down. Without him, no one will achieve anything, since he needs him, only he (CEO) can give all these people the opportunity to earn money, teach them something and lead them to success.
To make a lot of money is courage; to preserve them is wisdom, and to skillfully spend is art. © Auerbach Berthold
This story contains a fairly large number of trial and error.
A good example of the fact that even in an ideal set of circumstances, everything can be brought to the "pen".
There was everything:
- A good team that was engaged in self-sacrifice for pleasure.
- Common goal.
- A sufficient amount of knowledge and experience to implement their projects. (as an example, the Hosting1 project, which in time separated from the company determined its success).
- Huge capital.
- Ability to save, achieve their goals with minimal losses.
- Fairly good ideas for projects that have the right to life.
"... this is life. Well, it was and it was." © Smokey Mo.
I want to note that the problems are deeper than it might seem. Monetary relations came much later, for example, added oil to the fire, but in no way were the root cause of what was happening.
In my personal opinion, the beginning of the end is precisely the loss of a common goal, which led to a “war” within the company.
When one satisfied his primary needs, was full and did not give the opportunity to “eat” others, then from that moment their paths diverge, they begin to pursue different goals.
- Inept application of well-known methodologies.
- Ignoring any legal agreements, lack of contracts between the employer and employees.
- Responsibility of the Parties
- Frank search with regulations
- Excessive bureaucracy
- Improperly constructed processes, etc., etc.
Many readers may wonder how you can be so naive and wait for the last rat to escape from the ship. I will not hide that the CEO has a wonderful skill, the only correctly applicable one, the ability to persuade and manipulate. For all the time he honed it to a shine. This is a wonderful skill, but alas, it was incorrectly aimed at his team, and in addition it was used for selfish purposes — not to gain, but to “squeeze out”, which fundamentally leads exclusively to destructiveness and is in no way applicable in the IT field.
Despite, and maybe contrary to all of the above described in 3 parts, the employees remained adequate and tolerant of what happened. In general, these events rallied everyone much better than any team building. If the CEO had a goal to unite the team in this way, then he succeeded.
Capital. I will not hide that a lot has been spent. As promised in the previous part, here is the order of investment amounts (some projects were not affected, since they were essentially derived or identical):
- Peer-to-peer project - 80K
- Designer Tulbar -90K
- Project Hosting2 - 200K
- Marketplace Project - 80K
- Indoor / Outdoor Advertising Project - 160K
- Project Billing - 150K
- Incubator - 150K
- Streaming Projects - 220K
These amounts have been invested over 3 years. If closer to reality, then all these projects were “fed” by our good old gray friend. Thanks to the former "dullness", a small part of the employees was able to provide themselves far and for a long time, all the others gained invaluable experience for the money, of course they could be cheaper, but here it is!
PS At the moment, all the key quitters have launched their projects, each continues to work in its own niche. Everyone got a rather vivid and colorful example, and the most vivid experience is the story of “failure”. Some of these projects, for such a short time, have already ceased to be “startups”, and have grown into full-fledged independent companies, without investment and initial capital, with stable earnings.
Few of them use some of the best practices from a previous life - since it was a waste of time. They prefer to do it from scratch, as they consider it necessary, and make fun of old stories, sincerely amazed at the fact: “like in such a time, with such a team and with such capital, everything could be ... missed”.
The final saying:
People who think money is capable of doing everything themselves can do everything for money. ©