LondonLife
Contributor
I’ve spent a few hours putting together a rather boring story of the last 12 years of my life. If you make it through to the end, congratulations! Needless to say, I won’t be writing a book.
I was never a kid who wanted a fast track life and a fleet of Ferraris. I’d never even considered it. Of course I had the posters of cars, alongside the obligatory posters of models on my wall, but they were always something to look at that was pleasing to the eye, rather than fantasising about having. Being an entrepreneur was certainly never in my blood.
When I was around 15 I self taught myself html and search engine optimization. As a keen photographer and a fan of live music I started tribute sites to a few bands featuring the pictures I’d taken. I wasn't making money but I learnt a lot about website building and basic coding. My currency at that age was website hits. I gauged my success on it.
Knowing what I did about search engine optimization I set myself a new goal. A website that would act as a service, and make me some pocket money from advertising! What a plan! I setup a "swapping site" where people could advertise their items and swap for other items. It began as a mixed success. My hits were good... But I was just not getting big users. Only 10 active trades or so happening at a time after a few months. Advertisers weren't interested, so I was losing money on the costs. I listed many of my own items, and attained a lot of junk I didn't want in an attempt to kick start it. In my attempt to get some money to buy CDs I actually ended up trading most of the CDs I currently owned for vile music I would never listen to (and various kitchen appliances).
My first break came when a friend who had an audiovisual website and forum shut down it's classified section as it had no form of feedback for it's users and was a mess of people stealing goods without paying etc. He started pointing people my way, and my built in tools enabled his users to transfer goods quickly and easily with a solid feedback component. I went from 10 transfers at a time to 100 transfers practically overnight. Within a month I had advertisers. I was making money, albeit it very small. I had various mis-starts trying to offer different services, making it somewhat convoluted. I was basically testing out new functions, all failing rather spectacularly. In the end I simplified the design in an attempt to make it more professional and started developing the website to customers needs.
Lesson: Customer focus, customer focus, customer focus. If you have a new idea, don’t try and push it on existing customers. Gently nudge them in the direction of it, but don’t force them. Good ideas can be dragged down by bad ones, and we all have bad ideas, especially 16 year olds.
A few months later at the end of 1999 the dot-com bubble was in full swing and I was featured in a national newspaper. It featured a selection of some of the biggest websites around, and I was put in my own little section at the end as "One to watch". This was a website run by a 17 year old in his bedroom, with no money to speak of, making little revenue, but with a professional looking design and small but strong user base. Needless to say my website went from strength to strength and I sold it to a competitor in February 2000 at the peak of the boom. They promptly attempted a merger and ultimately shut it down.
Was it a mistake on my behalf? It's hard to say. I got more than it was worth because of the nature of the boom throwing cash at everyone who was breathing, but could I have made it into something huge? I'll never know. When you throw large amounts of hard cash at a 17 year old who doesn't understand business, and wasn't making huge amounts, it was impossible to say no... Needless to say it wasn't enough to retire on and own that fleet of Ferraris.
Under the guidance of my parents a chunk was put aside to buy a property for myself and put me through University on a meagre sum. This was topped up through website building, further developing my programming knowledge. The rest was put into property investment portfolios. This was a very sensible decision as UK property prices sky rocketed at this point and was increasing my worth by approximately 30% per annum.
I lived this life for two years, satisfied that I'd get a normal career but be one up on everyone else because I'd have my own property and a slush fund in investments. I was set up for life, a decent slow-track life.
Through university I met a number of other highly skilled people in the computer sciences and we would always bounce around ideas of the next big thing. The nagging thought that if I could emulate my previous luck I could make much more started to swell, perhaps I could run a business. Hell, I had the funds to start something big didn’t I?
My first major downfall came at 20. I removed all my money from investments, purchased a second property to rent out, and would use the remaining capital to fund a new endeavour. Needless to say it was a catastrophic failure.
It was an online gaming client that I rushed into with a guy who ran a small gaming server service. I paid way too much money to promote it, including paying a number of small-time games publishers to exclusively use my service through integration with their games. A bunch of under supported rubbish that often turned into vapourware. The main downfall was giving one publisher in particular a huge chunk of cash who then never materialised with any games. I then entered legal proceedings to retrieve it. I may as well have burnt the money as they went bust and couldn't pay it back. Within 12 months I'd sold my second flat I'd only just purchased, moved out of my own flat to rent out so I had some money, and threw all my liquid assets away in paying of premium subscribers to the service. I'd gone from a safe future to just about hanging onto one flat, whilst living in a friends box room, and with bills littering the floor.
The bright light a few months later was that I did manage to sell the software behind the client which covered the bills and gave me a bit of extra cash. No-where near the amount invested in this doomed project, but just enough to keep me afloat.
Lesson: Being arrogant and surrounding myself with people who think you crap gold is always a road to disaster. The “yes man†is never assertive enough to help anything but your ego. Someone needs to give you perspective once in a while.
At 21 I made a last ditch effort to re-acquire my success of 4 years prior. I had a year left on my degree, and was introduced to a group of internet entrepreneurs through a lecturer at University (Fortunately not aware of my somewhat recent downfall from grace). They had an idea to start a series of companies offering professional e-commerce services. They would all be based on the same back end from the same building, with the same staff. Being the youngest, I would take a back seat in the company to begin with providing technical knowledge, and join them properly when I had finished by degree. The aim was to start small, pay ourselves minimal wage, employ no-one else, work 60 hour weeks minimum and keeps costs to an absolute bear minimum. Anything we did make would be put straight back into the company. No new cars, no expensive nights out, nothing. We had between 5 and 7 companies operating at a time with 10 employees, all who were investors. And the best thing about it? It didn’t require huge investment. £200,000 between us would keep us in an office, pay our expenses and keep us all on minimum wage salary for an entire year, even without a single penny of income.
Though not all endeavours were entirely successful, it was easy to shift focus into those that were, due to the dynamic nature of the set-up. By the time I joined after getting my degree we had already broken the "Don't employ anyone else" rule, because we had a secretary/administrator and had brought in an extra website builder. But we all saw this as a good thing. We had too much work and too little time. Things were good. We’d already made back over double the initial investment and began reinvesting it back into the company.
For the next 18 months I developed the search engine optimization consultancy, various passive income services, and started development on a piece of market segmentation software which could be incorporated into websites, used for email lists etc. By this point we had 60+ members of staff on the consultancy side of things and had a fully self sufficient company with good profits.
Downfall Number 4: The next downfall begins. A bit of a monetary one… but primarily the loss of some friends, some high stress and some petty childish times. Due to our increasing funds and assets there was a lot of infighting within the initial group of us about what to invest the extra money in. The happy days of us sharing pizza and drinking warm beer out of cans late at night were fading into distant memory. Some guys wanted to give themselves huge wages, others wanted to grow the business further, and some wanted to start investing in other ways. There was a stupid attempt at keeping everyone happy with us splitting into groups with what everyone wanted, ultimately making no-one happy. People left and we bought them out at above their worth to avoid more fighting. It was a mess. Money was going down the drain quickly.
Lesson: Money changes people. Even people you think you know and are friends with. Don’t be surprised if it happens. You may think you don’t need a contract or a lawyer involved in investments between friends, but I can’t stress the importance enough.
In the end, two other guys and myself sold our investments to external parties. I also brought out the fledgling company providing the software I'd created for very little, and we left.
By this point I'm 24, have a big chunk of cash and own a piece of software I see a lot of potential in. The three of us re-affirm our ideas of investing further. We decided we would pick fledgling or struggling start-up e-commerce sites, provide technical support, and bankroll them.
We spent our days in meetings, training staff and pumping money away to start-ups like it was going out of fashion. I spent my evenings developing my software, and started implementing it into some of the companies we were supporting. Within 1 year I had 12 staff acting as software consultants to outside parties. A year later I had 30+ staff, and a year after that I had 93 payroll staff and countless outside consultants if and when needed.
Meanwhile the investments, with my two partners have had there own share of hits and misses. We've hit it big in some cases, and we've made big hits in others. Giving a company £2m to expand its range of clothing, only for it's buyers to buy highly expensive designer stuff when the majority of its customers are stay at home mums who couldn’t afford it. I wasn't happy with that to say the least considering the software they purchased of me would have told them otherwise!
Our philosophy is to buy young and sell on. It's very high risk but the returns can be phenomenal if you get it right. We’ve made some good money out of it and have remained strong friends throughout.
I sold my software company in October 2009, and am planning on pulling out of the day to day running of the investments. As I said in my introduction thread, some are not doing very well at the moment due to the recession and I was at risk of pumping money, including that from the sale of the company into them. It's amazing how the risk all attitude is still with me even when the sums are bigger. A frank talk with my family and friends finally made me realise my attitude was ridiculous. I'm not proud to admit it, but it was definitely a gambling attitude getting out of control. It’s so hard to get out of that mindset of "I'm going to get out when I reach £xm", achieving it and thinking it all over again.
Lesson: Seek the council of others, especially those you see as being “slow-laneâ€. They can bring you down to earth when your arrogance and stubbornness gets the better of you. Your personal life doesn’t revolve around money, and they will remind you of it.
I’m now 27 years old. A spring chicken by anyone’s books but a quick calculation in my head tells me I’ve worked too many hours for too many years for someone significantly older than me. I have met some outstanding people over the years. I’ve made some great friends, and lost others. I’ve been to the brink of bankruptcy and back.
When even the lows give you a buzz you know you have to be insane to go down this path. Was it worth it? Hell yes. I wouldn’t give up a minute of it.
I am now in a position where for the first time I have liquid capital and time on my hands. I can concentrate my time on my family and friends who have stuck by me, and repay the time of birthdays, anniversaries and weekends I’ve so often missed. My mind is swimming in a haze of “What next?â€. How can I help other people, support the charities I donate to in more ways than a monthly bank transfer, and of course, enjoying it.
Now… how do I spend it?
I was never a kid who wanted a fast track life and a fleet of Ferraris. I’d never even considered it. Of course I had the posters of cars, alongside the obligatory posters of models on my wall, but they were always something to look at that was pleasing to the eye, rather than fantasising about having. Being an entrepreneur was certainly never in my blood.
When I was around 15 I self taught myself html and search engine optimization. As a keen photographer and a fan of live music I started tribute sites to a few bands featuring the pictures I’d taken. I wasn't making money but I learnt a lot about website building and basic coding. My currency at that age was website hits. I gauged my success on it.
Knowing what I did about search engine optimization I set myself a new goal. A website that would act as a service, and make me some pocket money from advertising! What a plan! I setup a "swapping site" where people could advertise their items and swap for other items. It began as a mixed success. My hits were good... But I was just not getting big users. Only 10 active trades or so happening at a time after a few months. Advertisers weren't interested, so I was losing money on the costs. I listed many of my own items, and attained a lot of junk I didn't want in an attempt to kick start it. In my attempt to get some money to buy CDs I actually ended up trading most of the CDs I currently owned for vile music I would never listen to (and various kitchen appliances).
My first break came when a friend who had an audiovisual website and forum shut down it's classified section as it had no form of feedback for it's users and was a mess of people stealing goods without paying etc. He started pointing people my way, and my built in tools enabled his users to transfer goods quickly and easily with a solid feedback component. I went from 10 transfers at a time to 100 transfers practically overnight. Within a month I had advertisers. I was making money, albeit it very small. I had various mis-starts trying to offer different services, making it somewhat convoluted. I was basically testing out new functions, all failing rather spectacularly. In the end I simplified the design in an attempt to make it more professional and started developing the website to customers needs.
Lesson: Customer focus, customer focus, customer focus. If you have a new idea, don’t try and push it on existing customers. Gently nudge them in the direction of it, but don’t force them. Good ideas can be dragged down by bad ones, and we all have bad ideas, especially 16 year olds.
A few months later at the end of 1999 the dot-com bubble was in full swing and I was featured in a national newspaper. It featured a selection of some of the biggest websites around, and I was put in my own little section at the end as "One to watch". This was a website run by a 17 year old in his bedroom, with no money to speak of, making little revenue, but with a professional looking design and small but strong user base. Needless to say my website went from strength to strength and I sold it to a competitor in February 2000 at the peak of the boom. They promptly attempted a merger and ultimately shut it down.
Was it a mistake on my behalf? It's hard to say. I got more than it was worth because of the nature of the boom throwing cash at everyone who was breathing, but could I have made it into something huge? I'll never know. When you throw large amounts of hard cash at a 17 year old who doesn't understand business, and wasn't making huge amounts, it was impossible to say no... Needless to say it wasn't enough to retire on and own that fleet of Ferraris.
Under the guidance of my parents a chunk was put aside to buy a property for myself and put me through University on a meagre sum. This was topped up through website building, further developing my programming knowledge. The rest was put into property investment portfolios. This was a very sensible decision as UK property prices sky rocketed at this point and was increasing my worth by approximately 30% per annum.
I lived this life for two years, satisfied that I'd get a normal career but be one up on everyone else because I'd have my own property and a slush fund in investments. I was set up for life, a decent slow-track life.
Through university I met a number of other highly skilled people in the computer sciences and we would always bounce around ideas of the next big thing. The nagging thought that if I could emulate my previous luck I could make much more started to swell, perhaps I could run a business. Hell, I had the funds to start something big didn’t I?
My first major downfall came at 20. I removed all my money from investments, purchased a second property to rent out, and would use the remaining capital to fund a new endeavour. Needless to say it was a catastrophic failure.
It was an online gaming client that I rushed into with a guy who ran a small gaming server service. I paid way too much money to promote it, including paying a number of small-time games publishers to exclusively use my service through integration with their games. A bunch of under supported rubbish that often turned into vapourware. The main downfall was giving one publisher in particular a huge chunk of cash who then never materialised with any games. I then entered legal proceedings to retrieve it. I may as well have burnt the money as they went bust and couldn't pay it back. Within 12 months I'd sold my second flat I'd only just purchased, moved out of my own flat to rent out so I had some money, and threw all my liquid assets away in paying of premium subscribers to the service. I'd gone from a safe future to just about hanging onto one flat, whilst living in a friends box room, and with bills littering the floor.
The bright light a few months later was that I did manage to sell the software behind the client which covered the bills and gave me a bit of extra cash. No-where near the amount invested in this doomed project, but just enough to keep me afloat.
Lesson: Being arrogant and surrounding myself with people who think you crap gold is always a road to disaster. The “yes man†is never assertive enough to help anything but your ego. Someone needs to give you perspective once in a while.
At 21 I made a last ditch effort to re-acquire my success of 4 years prior. I had a year left on my degree, and was introduced to a group of internet entrepreneurs through a lecturer at University (Fortunately not aware of my somewhat recent downfall from grace). They had an idea to start a series of companies offering professional e-commerce services. They would all be based on the same back end from the same building, with the same staff. Being the youngest, I would take a back seat in the company to begin with providing technical knowledge, and join them properly when I had finished by degree. The aim was to start small, pay ourselves minimal wage, employ no-one else, work 60 hour weeks minimum and keeps costs to an absolute bear minimum. Anything we did make would be put straight back into the company. No new cars, no expensive nights out, nothing. We had between 5 and 7 companies operating at a time with 10 employees, all who were investors. And the best thing about it? It didn’t require huge investment. £200,000 between us would keep us in an office, pay our expenses and keep us all on minimum wage salary for an entire year, even without a single penny of income.
Though not all endeavours were entirely successful, it was easy to shift focus into those that were, due to the dynamic nature of the set-up. By the time I joined after getting my degree we had already broken the "Don't employ anyone else" rule, because we had a secretary/administrator and had brought in an extra website builder. But we all saw this as a good thing. We had too much work and too little time. Things were good. We’d already made back over double the initial investment and began reinvesting it back into the company.
For the next 18 months I developed the search engine optimization consultancy, various passive income services, and started development on a piece of market segmentation software which could be incorporated into websites, used for email lists etc. By this point we had 60+ members of staff on the consultancy side of things and had a fully self sufficient company with good profits.
Downfall Number 4: The next downfall begins. A bit of a monetary one… but primarily the loss of some friends, some high stress and some petty childish times. Due to our increasing funds and assets there was a lot of infighting within the initial group of us about what to invest the extra money in. The happy days of us sharing pizza and drinking warm beer out of cans late at night were fading into distant memory. Some guys wanted to give themselves huge wages, others wanted to grow the business further, and some wanted to start investing in other ways. There was a stupid attempt at keeping everyone happy with us splitting into groups with what everyone wanted, ultimately making no-one happy. People left and we bought them out at above their worth to avoid more fighting. It was a mess. Money was going down the drain quickly.
Lesson: Money changes people. Even people you think you know and are friends with. Don’t be surprised if it happens. You may think you don’t need a contract or a lawyer involved in investments between friends, but I can’t stress the importance enough.
In the end, two other guys and myself sold our investments to external parties. I also brought out the fledgling company providing the software I'd created for very little, and we left.
By this point I'm 24, have a big chunk of cash and own a piece of software I see a lot of potential in. The three of us re-affirm our ideas of investing further. We decided we would pick fledgling or struggling start-up e-commerce sites, provide technical support, and bankroll them.
We spent our days in meetings, training staff and pumping money away to start-ups like it was going out of fashion. I spent my evenings developing my software, and started implementing it into some of the companies we were supporting. Within 1 year I had 12 staff acting as software consultants to outside parties. A year later I had 30+ staff, and a year after that I had 93 payroll staff and countless outside consultants if and when needed.
Meanwhile the investments, with my two partners have had there own share of hits and misses. We've hit it big in some cases, and we've made big hits in others. Giving a company £2m to expand its range of clothing, only for it's buyers to buy highly expensive designer stuff when the majority of its customers are stay at home mums who couldn’t afford it. I wasn't happy with that to say the least considering the software they purchased of me would have told them otherwise!
Our philosophy is to buy young and sell on. It's very high risk but the returns can be phenomenal if you get it right. We’ve made some good money out of it and have remained strong friends throughout.
I sold my software company in October 2009, and am planning on pulling out of the day to day running of the investments. As I said in my introduction thread, some are not doing very well at the moment due to the recession and I was at risk of pumping money, including that from the sale of the company into them. It's amazing how the risk all attitude is still with me even when the sums are bigger. A frank talk with my family and friends finally made me realise my attitude was ridiculous. I'm not proud to admit it, but it was definitely a gambling attitude getting out of control. It’s so hard to get out of that mindset of "I'm going to get out when I reach £xm", achieving it and thinking it all over again.
Lesson: Seek the council of others, especially those you see as being “slow-laneâ€. They can bring you down to earth when your arrogance and stubbornness gets the better of you. Your personal life doesn’t revolve around money, and they will remind you of it.
I’m now 27 years old. A spring chicken by anyone’s books but a quick calculation in my head tells me I’ve worked too many hours for too many years for someone significantly older than me. I have met some outstanding people over the years. I’ve made some great friends, and lost others. I’ve been to the brink of bankruptcy and back.
When even the lows give you a buzz you know you have to be insane to go down this path. Was it worth it? Hell yes. I wouldn’t give up a minute of it.
I am now in a position where for the first time I have liquid capital and time on my hands. I can concentrate my time on my family and friends who have stuck by me, and repay the time of birthdays, anniversaries and weekends I’ve so often missed. My mind is swimming in a haze of “What next?â€. How can I help other people, support the charities I donate to in more ways than a monthly bank transfer, and of course, enjoying it.
Now… how do I spend it?
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