Whendy was a website that would gather your interests and let you know when something exciting was going to happen—like if your favorite actor was going to be on the Tonight Show. I couldn’t get enough of Julianne Hough, a professional dancer who had recently left Dancing with the Stars and when an early beta of the website alerted me that she was returning for a special episode, I ran into Ryan’s office, put up my hand for a high five, and announced, “Ryan, this is the best one yet. I love it!”
But the best one was actually Fusepay. From billing platforms that we had custom built for our own product lines, we had learned an enormous amount about payment processing, including significant weaknesses in how subscription data was analyzed and how new merchants were brought on board by current payment system providers. On paper, we designed a completely new end-toend package for Software as a Service (SaaS) vendors to create and optimize subscription billing. SaaS was a hot area, billing was a huge problem, and we had inside knowledge on how to solve it. We hired a custom team of programmers to develop the software, brought in a senior product manager, and began negotiating terms with credit card suppliers. We were going to change the world, and Ryan and I set aside $1 million to get the project going.
The P3 program was so successful that within a few months, 30 percent of our staff were working on their entrepreneurial dreams. Employees were more engaged than ever, and P3 was effectively utilizing our reinvestment fund. I was excited. This was going even better than I’d hoped.
Then one night I was lying in bed checking e-mail on my laptop and asked my wife, “Babe, if you wanted to find a site that lets you and your friends share pictures you take of the same event, what would you type into Google?”
She said, “Share birthday party pictures.” I typed it in, and the first result was a site called Photobucket.com. I’d never heard of it. Neither had anyone else I knew. Yet it was the second-largest photo-sharing site on the Internet after Yahoo/Flickr. It turned out that it just wasn’t popular in Canada. Shwink was committing a cardinal sin of startups, attacking an entrenched leader without having any core differentiation.
Not too long after, the head of the iBundle project asked for a meeting with me. Shawn*, a young, likeable, exuberant former salesman had come up with the idea of sharing media accounts as a way of saving money on subscriptions and had partnered with one of our top software developers to create the beta version of the product.
Shawn began, “Sanjay, have you been using iBundle?”
“Of course!” I said. “I love it. It works great! How are sales?”
“That’s the problem,” he said. “There aren’t any.”
I was puzzled, but then got nervous quickly. “Did you get sued by Netflix for sharing passwords?”
Shawn shook his head. “No, nothing like that has happened with any of the services we’re sharing. In fact, I wish it would happen. They can’t really stop us, and it would mean we were being noticed.”
“Then what’s the problem?”
He slumped back in his chair. “We can’t figure out how to market it. It’s amazing. But nobody is looking for anything like it. Who would ever type ‘share passwords’ or ‘share my Netflix account’ into Google? If they’re not looking for it, then we can’t advertise to them at anything close to a reasonable cost.”
I leaned forward and said, “Shawn, you’re a smart guy. Figure out how to market it. We’ve given you $150,000 already. If you can’t solve this problem, I’m not going to throw good money after bad.”
As Shawn slowly walked back to his desk, I went into Ryan’s office and told him, “iBundle’s in trouble. Shawn’s having trouble trying to figure out how to market it, and I can’t think of anything either. We might have to write that one down to zero in our forecasts.”
Ryan shrugged and said, “You win some, you lose some.”
To make myself feel better, I wandered over to Robert*, the hardware engineer in charge of converting our video search software to work on a hardware set-top box, dubbed “Whambox.” I loved the concept and knew it would be a huge success if we could just get it working. Robert was putting batteries into a remote control when I approached. “Is it ready to deploy yet?”
Robert gave me the same response he’d given a dozen times in the past. “Sanjay, I’m working on it, and I’m almost done. You can’t rush these things.”
We’d funded Whambox with $100,000 to develop a prototype, and Robert just never seemed to be able to get the components completed. This time he added, “Sanjay, the reason they call it hardware is because it’s harder than software!”
He grinned at me as I responded. “Ha ha. That’s not funny, Robert. If you can’t get this done soon, we’re not going to be able to keep funding it.”
Robert cheerfully went back to his remote control as I sighed and went back to my own office.
The next morning, I had a progress meeting scheduled with the head of the Fusepay project, and a half hour before the meeting, Mary*, our head of HR, pinged me over Skype. “Sanjay, are you meeting with Tom* this morning?”
I typed back, “Yeah, why?”
“Can I see you for a minute first?”
With a sense of foreboding, I walked over to her office. As I entered, she waved for me to close the door, then she began immediately. “There’s a problem with Tom.”
“I guessed that much. What is it?” I said.
Mary paused for a moment, and then said, “Uh, this probably isn’t going to sound like anything to worry about, but bear with me.” I didn’t say anything, so she continued. “A couple of weeks ago, one of the girls in marketing told me that he pulled up a chair beside her and was kicking the legs of her chair as he talked to her. She told him it was annoying, but he didn’t stop.”
I waited, but Mary appeared to want a reaction from me, so I said, “That’s it? So what?”
“Okay, then a few days ago, apparently he was walking by the kitchen, and a girl from customer service was eating a Popsicle. Tom said to her ‘Gee, that’s an awfully large Popsicle you’ve got in your mouth.’”
I couldn’t help grinning, and I said, “Okay, so he’s an idiot. But you’re not suggesting there’s sexual harassment going on, are you?”
Mary raised her hand and said, “Wait for it.”
The grin disappeared from my face as Mary continued. “Yesterday he walked up to our graphic designer, and asked her, ‘Hey, I hear you’re an amateur photographer. Do you have any lingerie shoots that you’d like to share?’ And this morning I heard that he’d asked another girl in marketing if she’d like to get together for a drink on Saturday night.”
I raised an eyebrow and asked, “Isn’t he married?”
Mary nodded. “Yup.”
I blew out a breath. “I’m going to have to do something about this aren’t I?”
Mary nodded again. “Yup.”
I started to say, “But he’s critical to—” and the look on Mary’s face forced me to interrupt myself. “Fine. It’s not like the project was going well anyway.”
Soon after, one of our top programmers, Wally*, came to my office and expressed a concern, “Sanjay, I’m worried that I’m not going to get ahead here at Fusenet.” I liked Wally and was surprised at the comment. He continued. “I’m worried that you don’t have any respect for me because I haven’t come up with a P3 idea.”
Uh oh. Pendulum too far. In our zeal to promote entrepreneurship, we had neglected to affirm the value of our non-entrepreneurial professional staff. I, along with the rest of the Fusenet executive team, had become fixated on incubating businesses and lost interest in our core audiobooks and video search products.
There were many more ideas and many more investments. One year into the experiment we’d doled out $2 million in seed funding, and I found myself at one of my regular lunches with Mac. By then I was feeling a little glum about things. We hadn’t had any breakout new ventures yet, and there was nothing on the horizon. As I explained the lack of progress, Mac interrupt
ed me and said, “Hap, can I give you some advice?”
“Of course.”
“You’re not going to like it,” he warned me.
I shrugged. “Bring it on.”
“Hap, in the twenty years I’ve known you, every time you’ve focused your entire attention on a single project, you’ve been successful. Every time you fragment your attention, you fail. Why do you think this time is going to be any different?”
I slumped and thought hard about the question. I couldn’t sleep that night, and the next day I went to Ryan, repeated the conversation, and waited for a reaction. Ryan was a strong proponent of P3, but he was as concerned as I was about our lack of progress. I took a deep breath, then suggested, “I think maybe we should kill all our projects except Fusepay.” We had invested almost $1 million in Fusepay by that point. It was mired in product development delays, but I still had high hopes.
To my surprise, instead of arguing for patience with P3, Ryan came back with, “Well, if we need to focus, shouldn’t we kill Fusepay too?” I paused, swallowed hard, and nodded my head. We decided to end P3, but we didn’t want to kill the entrepreneurial dreams of the participants, so we came up with a plan to let each team get 80 percent of their company, which they could continue to pursue outside of Fusenet, albeit with no further funding from us. To my dismay, only two of nine current founders agreed to take what was an amazing deal to continue their ventures.
I didn’t understand what was happening. One founder said to me, “I was fine with working on this while I had a job, but it’s too risky to do this on my own.” Two other founders were worse: “We never really believed in the idea, but it was fun to work on.”
It was clear that we had made it too easy to be an entrepreneur. Even the two companies that continued with their original founders never hit their stride and stumbled along only for a year before their founders shut them down. Each of my own successful ventures had a moment where it looked like the business had failed, but my personal risk tolerance, enthusiasm, and additional capital at critical times carried the companies into success. Maybe real entrepreneurs don’t need their companies to encourage them to develop a product and start a company? In any case, that was the end of corporate-endorsed entrepreneurship within the company.
Ironically, Google Labs, the initiative that served as a template for our own, was killed a few months after we shut down P3, with Google CEO Larry Page saying they were going to put “more wood behind fewer arrows.”
With our experiment in rabid and rampant entrepreneurship over, Ryan and I looked around and realized that we were significantly overstaffed if we were going to just concentrate on our core businesses. Over a depressing series of weeks, we laid off 30 percent of the company, moved out of our second office, and sold our golf cart for half of what we’d paid for it. Even that had been a bad investment. Despite all this, our overall business continued to grow, and as far as anyone could tell from the outside, we were still successful.
YOU WANT TO BE FAMOUS, DON’T YOU?
As the CEO of a rapidly growing dot-com company, I started to achieve a little respect in the Toronto business community. As a minor but funny confirmation of my new cool status, in August 2009 I received an e-mail from Anokhi, a South-Asian focused Canadian fashion magazine that was in the process of putting together their 2010 “Sexy and Successful” issue.
The e-mail started with a long preamble describing the magazine, during which I started to expect a pitch to advertise in the gala issue, but I was taken aback when I came to, “You will be included as one of the notable individuals within the South Asian community in Canada, the United States, the UK, and India who have definitely made a mark and set an example of what Anokhi readers aspire to be.”
I began to giggle to myself. I suppose I had reached a mild level of financial success, but I was stuck on the word “Sexy.” I was convinced it was a practical joke, so I began to parse the e-mail, double-checked the send address, and verified that the sender really was the editor of the magazine. It seemed to be authentic, so I hit “Reply” and told her I was flattered and would love to participate.
Three months later, the issue came out on newsstands, and there I was in full, glossy glory, smiling at a point in the distance and commenting on my favorite movies and what motivated me to achieve success. When my mother saw the issue (I sent her a dozen copies), she called to congratulate me, and I told her, “Mom, it’s unbelievable how many people have seen this thing! Twenty years of work, a bankruptcy, lawsuits, and long-awaited success in business, and this article is the thing everyone’s congratulating me on.”
She just laughed. “Enjoy it while you can, my sexy and successful son.”
---
Despite the steadily mounting pile of investment failures, or perhaps because of them, I was becoming known in the Toronto business community as a prolific supporter of startups. One day I received a call from a friend who asked me, “Have you ever watched Dragon’s Den?”
“Duh,” I said. “It’s probably the most popular show in the country after Hockey Night in Canada. Of course I’ve watched it.”
“Good,” she said. “I have a friend who works at the network, CBC, and they’re looking for people to be on the show. Interested?”
With the success of Fusenet and Simply Audiobooks starting to pad my bank account, I replied, “I think I’m a little past that stage. I don’t need any Dragons investing in any business I start.”
“I think you’ll want to talk to the producer before you decide,” she replied.
I sighed. “Okay, give me the number.” She said she’d pass on my name and someone from CBC would call me.
Despite my not needing the money, pitching a company on Dragon’s Den still meant a lot of publicity, and I was enough of a show-off that I started to get a bit excited about the prospect. I thought it was odd that CBC would specifically be calling me, though, since by all accounts, there was a flood of applicants every year from wannabe entrepreneurs aspiring to be on the show.
Two days later I got a call. “Hi, Sanjay, this is Richard from the CBC. I’m an assistant producer on Dragon’s Den. I hear you watch the show?” I said that I was a fan, and he asked me, “Well, as you’re aware then, Brett Wilson recently decided not to renew his contract, and we’re looking for a replacement. Are you interested in screening for a role as a Dragon?”
I didn’t know what to say. The Dragons were practically household names in Canada. Kevin O’Leary, John Treliving, Arlene Dickinson, Robert Herjavec, and Brett Wilson were the reigning Dragons, at the forefront of wealth and investment fame in the country. I wasn’t in that league, and I said so. “Richard, I love that someone thought I was qualified to be on the show, but I don’t have the kind of wealth that you’re looking for. I’m not in the hundred million dollar club.”
Richard laughed and said, “Sanjay, Dragon’s Den is about entertainment, not investing. You’d be surprised. Do you have a large house and a nice car?” Thinking of my new estate home and recently purchased BMW 750, I replied yes, and he said, “Then you’ve got what it takes to be a Dragon. We’re screening about twenty people. Are you interested?”
“Hell, yes!”
Two weeks later, I strolled into CBC’s downtown Toronto office. Richard met me at reception and walked me up to the production studios and straight into makeup. Between various publicity interviews and my brief appearance on Reach for the Top I’d been on TV several times; but that didn’t prepare me for the lights, the professionalism, or the sheer glamour of a CBC production studio. I couldn’t stop grinning as I was seated in a makeup chair and dusted to reduce my glossiness for high-definition cameras.
While I was preening in front of the mirror, Richard explained that they were going to run a full, one-hour mock session of Dragon’s Den, with five screening candidates as the judges. He told me not to overthink it and to just act normal. “Not bloody likely,” I thought. He added that the presenters were real funding candidates who had eith
er already been on the show or who were slated for a future appearance. I could actually invest in any of the pitches if I wanted to, but I wouldn’t be held to any commitments I made during the taping.
Palms sweating, I was guided onto the Dragon’s Den set, a surreal experience in itself, and I took a seat in the fourth chair. I didn’t recognize any of the other potential Dragons. I was mildly disappointed. Somehow I had built up in my head the idea that the real Dragons would be in the other chairs, despite being told otherwise. Being on the set was getting to me.
A few minutes before the taping was to start, the fifth chair, to my left, was still empty. I watched the curtain as it began fluttering, and in rushed the fifth candidate, whom I did recognize—Ajay*. Ajay ran a downtown mobile software company and was also an investor, having founded his own venture firm. I had met him briefly a year earlier, and he was the brother-in-law of a friend of mine. None of this was on my mind though, as I was filled with the thought, “Damn, he looks way better than I do.” Ajay had decided to go for personality and was wearing a trim gray suit with a purple bowtie and purple pocket kerchief. I had a boring beige jacket and blue jeans—pretty much the standard uniform of middle-aged entrepreneurs.
Since Ajay was also South Asian, I thought to myself, “If CBC decides to pick a candidate to promote diversity, I’m screwed.” Ajay seemed surprised to see me there, but he leaned over and shook my hand as the cameraman signaled that we were starting.
There followed a series of pitches that alternated between silly and reasonable. My normal style at a pitch competition is to be fairly aggressive and hostile, so I went with this style until I decided a pitch was a good one, then I softened and became friends with the entrepreneur-to-be in case I wanted him to want me as an investor. Ajay, my natural competition, wasn’t as active as I was, but he held his own.
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