How we built a business out of recession - chapter 50 - no more photographers
The story of CitNOW*
This is the 50th 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.
Inchcape became our swan song. We had added another first with a revitalised fee-paying web app, where the focus was very much on still images rather than video, and it couldn’t have come at a better time.
There was a bit of huffing and puffing from Stirling, but it was an impossible development to ignore. Inchcape was one of our best clients, who now wanted to discuss the improved functionality of our web app with a group of their senior managers at their head office in Milton Keynes.
I couldn’t blame Colin** and the development team for not immediately jumping for joy. There had been too many previous ultimatums with tight timeframes and the promise of big orders, which vanished like Scotch mist when it was finally time for the customer to sign up. The long hours and extra sprints*** to meet the requirements had too often been worth a big fat zero.
This was very different. The business case was maths any child could understand. The cost of our improved app to Inchcape was less than they were paying for photographers, plus there was the big bonus of stock being on sale, sometimes days or weeks in advance.
The entire project, from start to finish (at least for a deployable version 1), was completed in under three months, including a pilot.
A lot of time was spent defining how the images should be taken, with wireframes added to provide clear guidelines for the user at the dealership. The most valuable part of the project for CitNOW was the integration with Inchcape’s image-handling server, because it made our app sticky.
It meant that uploaded images from the app in any Inchcape dealership would be available across a myriad of different websites. Notably, it included AutoTrader, the UK’s number one motoring advertising portal.
AutoTrader’s pricing reminded me a lot of ITV’s approach to selling TV advertising spots before digital seriously dented their wheels. They were also in a near-monopoly position, which had made them greedy, arrogant, and unpopular with the dealer networks (advertisers) they served.
I’ve always wondered how the conversation went when Inchcape informed their AutoTrader account director about the changes they were about to make. I want to think it was a passing comment as their regular meeting was coming to a close.
Oh, and one more thing. No more photographers from next month. Thank you.
It was a significant contract to cancel and one that rang the death knell for a whole way of doing business for the industry.
It wasn’t as if AutoTrader could be obstructive or difficult at that point either. Inchcape remained an excellent client, continuing to spend on classified advertising, even if they had just given them a bloody nose.
The stickiness I’ve just mentioned was strategically really important for CitNOW. While the Sales and Workshop apps were performing well, neither was essential to the dealership's operation. But an app that was used for image origination, populated through our servers and then distributed seamlessly online to create customer enquiries was golden.
The more integrated we were with the dealer’s business, the more difficult it was for competitors to remove us, which in turn made the company more valuable.
The other notable loose end I picked up was MAN*****. Their UK head office was in Swindon, and they had an obvious problem that video could help resolve. HGV truck inspections, often referred to as the 6-weekly inspection, are a legal requirement for commercial goods vehicle operators.
It means that MAN-qualified technicians are constantly undertaking a massive ongoing volume of work. They wanted to devise a semi-automated programme, which guided the technicians, step-by-step and could also be used to record every inspection.
Honeywell were holding them to ransom at the time, having already developed a proven service. We’d already started doing a bit of business with MAN on their rental returns, but I couldn’t persuade the CitNOW board to focus on this colossal project.
We’d become a lot more sensitive to off-piste distractions, having spent too much valuable time chasing boatyards, campsites, lift manufacturers, even the gas industry. I still believe the HGV industry is aligned closely enough with CitNOW’s core market to be feasible.
Is there a gold nugget, still sitting there, waiting to be discovered?
The process of selling the company began when the board approved the appointment of KPMG. It wasn’t quite as simple as saying, Hey, you nice chaps over there in the suits, please sell our company. They first did some due diligence to convince themselves that we were worthy of their time and effort. It was essential security on their part because the deal is almost entirely back-end weighted. Only when a sale is successfully concluded would they get their payout.
In our case, like many, we had shareholders who wanted to leave - me, Donna, Angela, and Berrie - and those who wanted to stay - Colin, Michael, and Alistair. We also had two thoroughly pissed off board members with share options - Gordon and Nick^, who wanted to postpone any sale entirely.
If we had been a more joined-up group of shareholders with the right CEO, their wish might have been granted. The business was fundamentally a good one, but there was now a push to sell, even if that meant being premature.
It was a decision that would cost us all. Ironically, the biggest loser would be Alistair.
*CitNOW was our company’s trade name before we sold it in 2018.
**Colin was our Chief Technology Officer.
***Sprints - a term often used in product development teams. It’s typically a timeframe of 1-4 weeks where a team works collaboratively to deliver a shippable product.
****ITV - is a British free-to-air public broadcast television network, which missed the digital boat and has been playing catch-up ever since.
*****MAN - Maschinenfabrik Augsburg-Nürnberg, a German manufacturer of commercial vehicles, diesel engines, and gear systems.
^ Gordon and Nick - Gordon was CitNOW’s Sales Director, Nick was Managing Director, Europe.