[Startup 4.0] Zondigo, Inc. – Wireless and Voice Application Development Software Company
Age: 24 – 25
Time Period: 2000 – 2001
My Role: CEO and Founder
High Point: Partnering with Intel and having Craig Barrett (Intel CEO) present Zondigo’s technology as “the future”
Wireless was going to be the “next big thing.” I left my CTO position at L90 (Startup 3.0) to start a company called Zondigo (genesis of name: “its-on-the-go”), a wireless and voice technology company. We developed software to enable developers to quickly and easily create and deploy wireless and voice business applications.
So, I did what any other opportunistic entrepreneur does when they want to quickly build a company to capitalize on an opportunity. I immediately raised some venture capital and then recruited the most experienced team I could find. The individuals we recruited had very impressive backgrounds. However, they did not function well together as a “team.” I missed, perhaps, the single most important company building fundamental – I had failed to consider the dynamics of how everyone would work together. Nonetheless, though it was a bit of a struggle, the individuals eventually learned to work together as a team. We accomplished great things – we signed Intel as a customer and partner, developed a very strong product and generated a fair amount of awareness. But, there was always something “missing” in the teamwork category that prevented us from going full throttle.
Zondigo was the perfect example of why all good companies must be “right idea” AND “right time.” We missed out on the “right time” part. The company was about 5 years ahead of its time (starting this company today would be the right timing). Zondigo was creating the types of innovative wireless applications that you are seeing in use today. We were creating applications similar to the wireless phone/texting voting system used by American Idol or the rewards program that Coca-Cola recently launched (MyCokeRewards.com). As a matter of fact, we even pitched the idea to Coke about 5 years ago.
Again, like most opportunistic entrepreneurs, part of our growth plan was to raise venture capital. As CEO, I spent 6 months on the road, full-time, trying to raise our Series B funding. This was in 2001 when the market was tanking and all VCs were gun-shy. All of a sudden, wireless went from being the “next big thing” to being the last thing on people’s minds. As a result, like many entrepreneurs, we changed our business plan about 10 times to “fit” what the VCs were looking for so that we could fund the company and survive. Big mistake. Finally, we convinced a firm to invest.
After a small celebration, a few days later, I realized that two very bad things happened while I was out raising capital: a) the market opportunity disappeared and b) we had mangled our business plan so much that the plan no longer made any sense. But, the VCs liked it! So, for the first time at this company, I acted unlike other opportunistic entrepreneurs and I made a very unpopular decision – GIVE THE MONEY BACK!
So, we did just that. A couple of months later, we sold the technology and the rest was history.
An entrepreneur’s most valuable asset is time. You can always raise money, build things and find people – but you can never raise more time. Therefore, for true entrepreneurs, it is not about ROI, it is all about ROT (Return on Time).
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SNAPSHOT:
Venture Capital Funding: $1.25M
Exit: Technology acquired
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LESSON(S) LEARNED:
Teamwork is critical: A startup company, like a baby, is fragile and impressionable. It is important to bring in the right people at the right stages. Personally, in the very beginning stages of a company, I think it is important to find young-thinking, hungry, passionate, quick learners who are willing to make mistakes, work as a team and constantly learn and adapt. I’ve learned to put experience far behind the rest of these traits.
Believe in YOUR business plan: If VCs (or anyone else, for that matter) had all the right answers, they would be starting their own companies – they’d certainly make more money that way. At the end of the day, right or wrong, you need to believe in your business plan and execute it to its fullest potential.
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BIGGEST…
…reason for success: We did not let emotions cloud “market judgment.”
…mistake: Raising capital too early.
…challenge: Getting a bunch of smart, experienced individuals to learn to work together as a team.
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IF I WERE…
…smarter: I would have been more careful about how I built the team and adapted the business plan.
…dumber: Instead of giving the money back and moving on, I would have wasted a bunch of money and time.
…to do it all over again: I would have secured a customer first and validated the market timing before rushing to build a company.
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Next on deck: Startup 5.0… “I’m just going to chill out for a bit… (OK, for a month…)”
