Musings Index>Stupid Start-up Stories

These are case studies, illustrating examples of start-up folly. Every story is true; I've been a participant, a client, a vendor, or an observer.

The Pigeon Room
Professional Recruiting?
Personal Hygiene
Trade-show ROI

Stupid Start-up Story - The Pigeon Room

I shared with two big, loud guys a 15x10 foot "office" in a land marked decrepit building . Our desks were filing cabinets and saw horses topped with black Formica-covered press board. Our room was one of about twelve lining a dark, dingy hall that once housed President Lincoln during trips to NYC. Our neighbors were small, very small, businesses including a chess master who gave lessons to young prodigies, a comic book trader, and a psychologist who provided counsel to sex offenders who chose therapy over jail time. Because the therapist's clients scared me, I often locked myself in our room. I locked the door despite the stifling summer-in-NYC heat cutting off any chance of a cross-breeze stirring from our air-shaft window. Needless to say, we didn't have A/C. In fact, we had to keep the window open at least an inch because our network and phone lines ran down the air shaft from the sixth floor where the company's "main" offices were. One night, we forgot to shut the window. In the morning, we were greeted by pigeons who had ungraciously "let loose" all over our work and worse, on our keyboards. Aahhh, life in a start-up. Top

Stupid Start-up Story - Professional Recruiting?

Bear with me. This is a long one with a particularly ironic twist.

I sent my credentials to a company that was seeking a VP of Marketing. The company provided professional services and investment funding to start-ups. Within a couple of days, I received a call from the company requesting me to come down to speak with the CEO, presumably about the VP of Marketing position.

I traveled 40 miles to their offices (in traffic, about a 65 minute drive), then awkwardly waited in busy "cube-land" 20 minutes for the CEO. Upon meeting her, it quickly became clear that she was unsure why I was there and, had not reviewed my credentials in preparation for our appointment. So I explained the purpose of our meeting. The CEO quickly and surprisingly--since they had called me--dismissed my qualifications for her marketing position but, proceeded to pitch me for another position for which I was qualified but uninterested. The duration of our meeting totaled 14 minutes. So, I drove home, frustrated and annoyed at their demonstrated unprofessionalism. I was disappointed and disillusioned since I had heard positive feedback about the organization from folks who had previously worked with the company.

Several months later, I started receiving calls from the same company--three cell phone messages and two messages at home. I was out-of-town when they started calling, had not solicited any further contact, so I ignored their calls until I received a pleading message that went something like this:

"Miss HOWard, I've been TRYing to reach you for SEVeral days now to meet with [BETTY Boop], our VP of Consulting Services. PLEASE return my call as SOON as possible to let me know WHEN you'll be available to come to our offices for a MEETING."

I returned the woman's call to inform her that I had not solicited any positions therefore, it would be helpful to receive a position spec to learn why they were calling me. I promised that upon receipt I would review it, then determine if it made sense for me to meet with [Betty Boop].

"Oh, OK. Yeah, I'll send you the spec. MOST people are so excited to work with us that they don't ASK for that. You would be meeting with [Betty Boop], CO-FOUNDER [Bob], and [Tom], our internal director of marketing who will be TESTING your marketing knowledge."

I read the spec, it seemed like an interesting opportunity despite my prior negative experience with them. So I agreed to a conference call with the hiring manager, who seemed sincere and knowledgeable, then to subsequent face-to-face afternoon-long meetings.

Upon arrival, I again was asked to wait 20 minutes while the hiring manager caught up with her schedule. I met with her for about 40 minutes. All positive stuff. We'll call you, you're the top of our list, etc.

Then the "chemistry check" with the baby-faced co-founder who didn't add any value to the process. He basically wanted to talk about NYC restaurants.

Next was the marketing "litmus test" to be conducted by their internal marketing director [Tom] who had, oh maybe, three years professional experience. As I considered how to handle this meeting, not wanting to intimidate or insult him, he frantically entered the conference room holding-tank. (BTW--don't leave Board meeting material in a room into which you invite non-NDA folk.)

"I have to take an emergency conference call. I'll get someone to meet with you."

Fifteen minutes later, the CEO's assistant, [Sally], introduces herself. She is my next meeting and she is 24. Oh, goody! I tell myself, "Be nice Les, she has the ear of the CEO." We chit-chat about the company's culture, its mission to make everyone there successful, etc. I ask, "Could you ask [Betty Boop] if she'd like to reschedule my time with [Tom], your marketing director?" [Sally] returns, stating that [Betty] will call me tomorrow.

A week passes. I email [Betty] requesting status. No response. Several more weeks pass. Then I receive a very "old-school" form-letter indicating that "...although my skills are impressive, there is no current position open...". Keep in mind, THEY CALLED ME!

I emailed [Betty] thanking her for the closure provided by her letter but, would she be so kind to provide some constructive feedback? No response.

Just yesterday, which would be about six weeks since I received the "thanks-but-no-thanks" letter, I received an email from [Betty Boop]:

Hello Leslie. I pulled your resume out of our top candidates folder because we are in need of an interim Marketing Consultant. As I recall, we had spoken in mid-[wrong month here] about the Marketing Practice Leader role. [MyCompany].com has gone through a restructuring here and rearranged our own internal Marketing group. What is your status? Are you interested and available? I am trying to start the conversation now, but am actually leaving for vacation tomorrow morning through Friday 2/23."

Ironic Twist
Here's the kicker. This company plans to provide their clients...RECRUITING EXPERTISE? Top

Stupid Start-up Story - Personal Hygiene

I worked with a company comprised of guys in their early 20's. For many of them this company was their first employer aside from summer jobs coaching, painting, bartending, etc. The company's start-up environment and culture was developing, guided by a few inexperienced managers.

One day after lunch, I walked up to the offices where "the guys" worked. I found them all walking around the office flossing their teeth. They didn't understand my horror as I explained that personal hygiene should be conducted in the restroom, not in the office. The managers thought it was a great demonstration of team camaraderie that they took care of their gums together.

It just goes to show, on a very visible basis, what happens when you hire managers who've never been managed. Top

Stupid Start-up Story - Trade Show ROI

I presented a newly-minted, inexperienced CEO a proposed annual marketing budget. He expressed concern that I had not allocated sufficient funds to cover the costs of exhibiting at the industry's largest trade show. His objective at the auto trade show would be to convince more dealers to join his online broker business. In his experience, a significant presence at this particular show lent dot.com companies credibility in the dealer community and therefore delivered increased dealer participation. Specifically, he wanted to have a presence at the show that matched his competition's (his former employer). Therefore, the CEO suggested I increase the allocation I had made for this specific show from $60K to $600K.

I reminded him of several inarguable facts:

exhibiting at the show required a cash deposit to reserve space but, he didn't have enough money in the bank to cover the deposit
the entire budget was, in fact, theoretical based on Series B investment-raising targets

This cash argument did not convince him. He became insistent that I didn't understand the show's significance. He brought in several dealer sales guys who had attended the show in past years to recount their success stories generated from exhibiting at the show. The discussion became animated then degenerated to "we'll fail if we aren't at this show."

I walked them through the marketing ROI math:

assuming a conservative 20% ROI, we'd have to generate $720K in consumer sales (revenue source) to justify the marketing investment
$720K in sales translated to 4,800 cars sold, directly attributable to just that show
4,800 cars sold were more cars than his business model had projected for the year's sales
given that consumers would not attend the industry trade show, how did he expect to sell 4,800 cars by investing $600K in just that show?

The room became very quiet. It was agreed that his company couldn't afford to exhibit at the show in a manner that would position the company well against its competitors. I suggested several alternative means to have a presence at the show which could be managed within the original $60K budget.

In the end, the organization did not raise its Series B funds required to have any presence at the show besides attending to "work the floor". Top