How we built a business out of recession - chapter 23 - we got married
How we built a business out of recession - chapter 23 - we got married
The story of CitNOW*
This is the 23rd chapter about CitNOW, the company started from a kitchen table in Winnersh, Berkshire. If you’d like to read from the beginning, here’s a link to chpt 1. Each chapter is a 5-minute read. It’s an early draft of a book.
CitNOW was founded by Andrew Howells and Donna Barradale in 2005, although the company was only registered in 2008. In February 2018, we sold the company to Tenzing, a UK private equity company. It has been sold again since.
Have I gone the wrong way? I must have gone the wrong way.
I continued to stare blankly at the road, looking for inspiration that didn’t appear to be coming any time soon.
At the bottom of the hill from The Crispin, a Wokingham pub we’d recently exited, the road was strangely empty and quiet of traffic. It was late. The stillness only added to my growing embarrassment.
Where could their guest house have possibly disappeared to?
I strained to clear my foggy brain, the ill effects of too much beer, while the three of them stood patiently waiting, each now tethered to their overnight bags, wondering how long this would take.
Erm, this can’t be right.
I tried to fill the awkward silence, which descended quickly after my abrupt halt, the sort brisk walking tour guides take on a tight schedule before pontificating on an architectural gem, surely missed if you hadn’t bought their tour.
Shit, that’s Molly Millars, which you probably know is the way back to the office and definitely not the Bed and Breakfast you’re booked into.
We were standing at the third mini-roundabout after the pub, two too many, although I couldn’t have told you that then. The fog was beginning to clear. I now realised we must be too far down the hill and apologetically led them back, retracing our steps until we were in sight of the pub again, still looking for the right turn. It had to be the last one, of course. I was finally headed in the right direction and could say goodnight, delivered to the front door and comfort of their temporary home for the evening.
I was with Codevio. All of them having flown down from Stirling or Amsterdam, in Berrie’s case, that morning. There was always too much to cover when we met, and the day had been helpful as usual. With Donna and Alistair, our quorum of six had spent the afternoon in tight discussion.
The most important topic of conversation was finding a way to deal with the mountain of debt we owed. They weren’t surprised when we introduced the idea of an equity swap. Putting a value on our business and what that would buy them was the nut that wouldn’t be cracked today.
Such discussions and decisions are never just based on a formula, and we knew there was a lot more benefit to getting Codevio on board than just clearing debt. The opportunity realised with BMW left us under no illusion that change was now essential if we wanted to remain a trusted partner and truly satisfy the rest of the market.
The launch of our first app had effectively made us a software-as-a-service (SaaS)** business. It was vital to now have an in-house software development team, even if that house happened to be based in Stirling.
Other factors contributed to our taking the next step together. The BMW business vindicated our position. We were now realising some pent-up potential rather than just talking about it. We also needed a close tie between sales and product development, and it needed to become a strength of the business, not an underfunded weakness as it had been.
Historically, Colin, Michael and Berrie had run their own business, developing video software for the PC during the early noughties, a company they successfully sold six years later. By the time we met them, they had effectively become jobbing freelancers, whether it was for the anonymous US conglomerate that had bought the hotel video business or an automotive software start-up called CitNOW.
We hoped to offer them more than a decent day rate, and they didn’t need us to explain the benefits of company ownership. In return, we could rely on their skills as senior engineers who knew how to develop the engine room of a software business with growing demands.
It was one of the reasons why I was feeling a little worse for wear that evening. I’d volunteered to be the evening’s entertainment, which was only fair. Alistair had headed for the hills, a long drive back to Warrington, and Donna was needed at home, her two back from school for food, homework and the usual weekday routine. Plus, I wanted to go out with our guests. It was important to spend some time away from the business together, even if the conversation often drifted back in that direction.
The mechanism for any merger had already been discussed, and some initial legal advice had already been taken on the easiest and most cost-effective way to achieve it. Each Codevio shareholder would sell their shares for a penny in return for an agreed-upon percentage of CitNOW shares. The current debt would then fall away because CitNOW would own Codevio.
Further to our afternoon discussions, Berrie was keen for me to hear exactly what he wanted, especially as the pints began to roll.
15% shareholding is all I want, Andrew.
Such a generous offer, Berrie. Thank you so much. But how did you work out 15%?
It was all a big game and largely tongue-in-cheek, except such discussions are never quite just a joke, are they? Colin and Michael didn’t join in, knowing this wasn’t my decision to make in a pub and certainly not without the others. I was also beginning to look a little worse for wear. Even Berrie eventually stopped, the joke no longer quite as amusing as we drifted around in circles.
I would have to wait a few more years before seeing such an animated Berrie again. This time, we wouldn’t be in a pub, though. The stakes were significantly higher as we discussed a final offer from a private equity company in a city lawyer’s office.
By then, I couldn't wait to see the back of Alistair. A feeling which was entirely mutual.
A kind note from Martin, our first full-time grown-up trainer, following last week’s chapter.
Great days Andrew, I remember turning up at 44 Space Business Centre with the rain clattering on the tin roof thinking it wasn’t the plush office I expected. However, the enthusiasm of yourself, Donna and Alistair plus Rachel and Stevie in the office consolidated my belief in the product.
My first impressions when I met you and Donna were that this feels right and the product has legs. What legs it had; all down to a few people believing initially then thousands of converted believers. It was fantastic to be a small part of such an influence on the motor industry.
*CitNOW was our company’s trade name before we sold it in 2018.
**Software as a Service (SaaS) is a cloud-based software delivery model that has become increasingly popular. The CitNOW apps were all available to download. They are in Apple’s app store and Google Play for Android devices.