How we built a business out of recession - chapter 16 - garlic bread
The story of CitNOW*
This is the 16th 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.
The problem was simple. Alistair needed a monthly salary, and we needed a pair of hands who knew the industry but didn’t have enough to pay him.
Goodwill only runs so far. But since our meeting in Llandudno months ago, it was clear he was still excited about CitNOW’s future. We got along well, spending hours on the phone discussing all the what ifs and what nexts, we could think of. His day job was still consulting for BTC in Crewe, working for Guy, while still managing to export tractors to Africa and have a website that predicted whether your marriage would end in divorce. If I had to sum up Alistair in one word, it would be energy.
Timing is everything, and we’d finally met at a crossroads for him and our business. The reason it had taken so long to get the meeting was because he’d gone walkabout to Hawaii. The acrimonious divorce must have been difficult enough, but finding himself without a job after a falling out with his boss at Accident Exchange must have made the sabbatical all the more inviting.
There are plenty of dead ends when you’re trying to build a business. It was commonplace for meetings with industry influencers and presentations to dealers to go really well. But weeks later, I’d still be chasing those in the meeting for an update, knowing that the likelihood of a positive outcome was fast disappearing.
I remember one group in particular where I’d worked hard to earn a meeting with the Managing Director (MD) and at least one other board member, probably the Finance Director. I’d managed to get CitNOW installed in one of their dealerships. The results had also been encouraging. This was mainly due to the hours of training and return visits I made, working with the Sales Manager to get him and most of his sales team onboard, using the service at least once or twice a week each.
At the board meeting, I was effectively sponsored by the Dealer Principal, who’d been brave and foresighted enough to install CitNOW. The meeting had gone well, and there was now a wait for the next quarterly meeting when the MD would be with all his Dealer Principals (DPs). It sounded like a rubber-stamp exercise, given how enthused he’d been when we shook hands. I eventually found out months later that the DPs had voted unanimously against it, despite the evidence gathered from one of their own dealerships. I guess no one enjoys delivering bad news.
Our situation was a chicken and egg one. Without a marketing budget, we were still no further forward in generating leads, so friendly introductions continued to be our primary source of new business.
Alistair’s time at Accident Exchange meant he knew some industry players who might be persuaded to open more doors. Sales are never guaranteed, but at least we might get the opportunity to pitch a decision maker or two.
He was also happy enough to show willing, even though we didn’t have any formal agreement in place. We attended several early meetings together, talking with consultants, some from the finance industry, who could make introductions if they liked what they saw.
They went well. It was easy to show how CitNOW could positively impact sales. It also provided Alistair with an opportunity to test the water and experience a positive reaction for himself.
Mr Garlic Bread was one such meeting outside Manchester. His name escapes me, but he was a friend of Alistair’s who’d been selling finance products to dealers for years. His reaction was entertaining and memorable.
That’s garlic bread. It’s the future; I’ve tasted it.
He’d just quoted Peter Kay’s memorable line delivered by his character Brian Potter in Phoenix Nights.
It never led to any business, but his reaction was one we encountered a lot; what’s not to like?
I expect most of these positive outcomes didn’t turn into sales because of focus. Even with the prospect of commission, you can’t expect someone selling insurance to feel entirely comfortable selling the idea of a live video system. The first sign of an objection and the subject was probably dropped, never to be revisited.
Despite the many blind alleys, the business continued to grow, enough for Alistair to consider making the leap. BTC had only ever been a temporary situation while he explored other opportunities. It was clear that there was a lot to be done, and a pair of trusted industry hands would only benefit the business.
But coming on board would never be as straightforward as a salary negotiation. If this was to happen, he wanted a share of the business. Given the commitment and sacrifice required, it was a reasonable expectation. We’d also just parted company with the other Alistair, so the shareholding was now very simple. Donna and I held 50% of the company each.
We finally agreed to meet to discuss this at a hotel near Milton Keynes. We’d just had a lunch meeting with Chris, an ex-senior General Motors (GM) figure in Europe. He was now running a successful consultancy business that kept him busy. He could offer help in several directions, services which we would come back to later on.
I don’t know what Alistair was expecting, but I’d been in this situation before leaving a well paid job at Sony to set up a video publishing business.
I’d joined this new business as a minority shareholder with two other partners. It was a wrong decision. The company was severely undercapitalised, but what I remember the most was my resentment at not being an equal partner, even though I was in the same boat, doing everything I could to make the business succeed.
I didn’t want this to happen here. Plus, a business is only worth what someone else is willing to pay, and at this moment, CitNOW wasn’t worth much. Dealers were leaving as fast as they joined; live video was too big a leap for most Sales Managers, and their salespeople and product development ran at a snail’s pace.
Sitting in that hotel lobby, I was mulling over the likelihood of a protracted discussion on value and how much of the company we were prepared to sell. It could become a huge distraction, consuming a lot of time and energy while the real business of trying to build one was put to one side.
We might have discovered garlic bread, but there were no big deliveries, and very few enjoyed the current recipe.
*CitNOW was our company’s trade name before we sold it in 2018.