What isn’t working – Sweeble and Bubblews

What I’m listening to as I type:Nebraska

 

So, this is where the story starts. I get this email from a bloke called Mike asking if I’m interested in selling my sweeble.com domain to a client he’s got. So I says “maybe” and “what are you offering?”. So he says “$500”. So I says “No”. So he comes back with “$2,000”.

At this point I google Mike, and his employers Domain Holdings and I start thinking: “Do I even want to sell it?”

I haven’t considered it before. This is sweeble we’re talking about – my sweeble. My sweeble! It isn’t just a domain, it’s who I’ve been for the past nine years.

But I’m sitting there, in a half-built house, with two jobs, no savings and my second grandchild on the way. So maybe it is time to stop with the start-up bug. Maybe it is time to sell my asset.

I tell Mike how much the domain means to me and that my interest in selling would “start at five figures”. He offers $10k – and I start to panic.

 

Will the real slim shady…

I’m going to go back a bit further. Because you need to understand why I was panicking, rather than popping corks.

Back in 2006, I was news editor at a Northern daily and I had this idea that news shouldn’t only be something written by a journalist: people should be helped to write their own stories; their own news.

Anyway, I started working on an idea for a user-generated news website: sheets of lining paper taped to the bedroom walls with scribbled ideas that made me excited to wake up every day.

Sweeble arrived one hot summer’s evening that turned to warm rain over a jug of pina colada in my Saltaire backyard.

I left newspapers and started the first Sweeble and six years of work that would leave me £100k out of pocket but really, truthfully be worth every penny. Because it is such, such a buzz starting up your own thing.

 

sweeblehp2Anyway, Sweeble 1 did ok but not great. This was 2006 – Facebook had only just opened its doors to all-comers; Twitter was newly-born and we just weren’t the social sharing folk then that we are now.

People wanted me to write their stories for them; they didn’t have the confidence to do it themselves. For a while I got around it by doing just that, and by paying expenses to volunteer writers to deliver stories. But it was like knitting with jelly – I just couldn’t get traction.

I got a dog.

Over long muddy walks I came up with a new idea. Rather than helping people to write their stories, what about helping them print them?

The lining paper was taped to the (by now different) walls and I planned out the self-publishing platform I would turn Sweeble into.

Sweeble the self-publishing platform launched in beta in 2009.

sweeblewebpage_chosenBut it proved to be an extraordinarily difficult build and four years later I had to shut it down as the tech failed further with each new browser iteration. As I wrote at the time: “Tying my tooth to a slamming door would hurt less.”

 

Please stand up…

So, back to Mike and his $10k and my mixed feelings.

I’d said five figures but $10k isn’t five figures: I’m in the UK, I think in pounds and $10k is only £6k-ish. So I tell Mike that and ask for £10k and chuck in the .net domain by way of apology for coming over all English on him.

Mike goes quiet.

A few days later, I get an email from a woman called Melanie who politely asks me what the link is between me and Bubblews’s new app called Sweeble?

Whoa, Nelly!! Where the salt fish did this come from??!!

Google, google…

It came from here

It came from here

 

Something called Bubblews was about to launch an app called Sweeble – but on the domain sweebleapp.com (bought five days before Domain Holdings first emailed me).

Bubblews co-founder Arvind Dixit was chattering about Sweeble online; there was a Twitter profile and other stuff…

DixitSweebleI confirmed with Mike that his buyer had dropped out; created a page on sweeble.com to mark out my territory; let Melanie know, and let Dixit know.

Dixit’s reply to my first dm to him basically side-stepped the issue. He may or may not have read my post; he may or may not have been behind the earlier bid to buy the domain – either way his response was friendly but.. “We came to this name [Sweeble] because it’s like Bubblews spelt backwards in a way.”

My ownership of the domains didn’t matter. My ownership of the UK trademark, and the UK Limited company didn’t matter. My very public history of creating, developing and working with the brand in relation to user-led content didn’t matter.

All that mattered was that the owners of Bubblews thought swelbbub sounded like sweeble. So bugger off me.

 

Please stand up.

And here’s where the story is today. I’ve replied to Dixit and formally asked Bubblews to stop using the name Sweeble. I gave them seven days to respond. Ten days later they haven’t and are still calling their app Sweeble.

All they needed to do was add a random letter or stick with Swelbbub! Or Swubble, or Bleeble, or Slobble!

Anyway. Calm. Let’s just put all that emotional stuff about me and Sweeble in a box for a while. Let’s just park it.

I said somewhere near the top of this post about the domain being my asset. And it is – mine to sell, use, barter or do what I like with. What on earth’s the point of intellectual property rights if, when it comes down it, you can’t actually stop anyone from just deciding to use that cool name you thought up, and used, and bought licenses for and did all the stuff you were told to do at Seedcamp?

What happens when I decide to use Sweeble for my next project? What if I launch my own Sweeble app? Or a third company does?

Someone asked me why I’m bothered – if their app takes off, my domains increase in value. Well, only to someone who might want to own it rather than just use the name with a different domain. Either way it makes it difficult for me to use it.

Someone else asked me why I don’t just sue Bubblews?

Because real life doesn’t work like that. I’ve been quoted upwards of £30k to take them to court. Even notifying the app stores if they try to launch Sweeble in the UK will cost me time and several hundred pounds in fees.

My trademark would stop them selling an app called Sweeble in the UK but wouldn’t stop them selling it on App stores in any other country, or stop them from offering it for download direct from their website.

I’m not McDonalds, realistically all I can do to try to protect my IP is to write stuff like this and make a fuss. And perhaps that’s what Bubblews’s bosses presumed.

(“Hey Joe, there’s this woman in England says she owns the name.” “Is she doing anything with it?” “Doesn’t look like it.” “Can she sue us over here?” “Doubt it.” “Forget her. Where are we with the launch budget?”)

But I am mightily pissed off. And I’m going to shout out my rage with the fury of a thousand grandmothers.

Do not ignore me: I own Sweeble.

This is my line in the sand.

Pic credit Dean Toh

Pic credit Dean Toh

 

Women founders and web creativity

What I’m listening to while I type: Balls and Hello Love

Had a nice email from Poppy Dinsey last week, of the fabulous WIWT (What I Wore Today).

Dinsey, in what I suspect is fairly typical female founder self-deprecation, said it was too early to say what worked and what didn’t with WIWT: “we’re such babies still”.  But it’s an interesting project, not least because in its first incarnation, WIWT was very much about Dinsey’s personality and a simple idea with minimal tech needs.

I used WIWT in an earlier post as an example of founders who can’t code but who find creative ways to build their personal online brand into a successful business.

Women seem to be doing particularly well at this – building what are fairly traditional businesses at heart (selling products, ads, mags) on the back of a strong personal web presence. Think Natalie Massenet or Tavi Gevinson , but also women founders like Wendy Tan White who, after having children, switched direction from computing and tech to doing an MA in Textile Design and finding a new creative vision that revitalised her company, Moonfruit.

One of the things that particularly interests me is that creative element in relation to these women founders. Dinsey is a  great writer. I don’t believe that just sticking pictures of her outfits online would have worked without the writing and the personality that came through her blog and Twitter writing.

As Dinsey points out in this video, her web writing had already kick-started the large following that she took with her to WIWT:


 
Similarly, Massanet’s Net-a-Porter was as much about giving an authoritative perspective on fashion trends as about selling the clothes. As a fashion journalist, she understood what makes women spend £4 on a copy of Vogue, and the pleasure they get from windowshopping the magazine. She knew that content was integral to building Net-a-Porter as an experience worth the site visitor’s time.

Here’s Massenet (back in 2007) talking about how they fused scorching customer service with good content:

“We very much believe in investment in the experience and making it richer, having more content, more video, but always fused with this idea that there’s an end experience, an end user who’s going to be expecting a delivery.”


 Except, I have several problems with what I’ve written so far.

First, by talking about women’s business creativity (particularly as an alternative to tech skills) am I reinforcing the generally-held belief that women’s businesses are inherently soft and fuzzy and, well, female (ie selling frocks not gadgets)?

Or is the problem that the decision makers around them are a largely amorphous group of men: middle-class, white, educated, married…, who assume that selling, or even better building, gadgets is a safer investment bet than selling frocks

However apologetic the interviewer in the Massenet video is, he doesn’t show that he understands the market she’s successfully engaged in, nor seems to believe he should understand it – there’s not a lot of evidence of good prep in his questions.

(And, as an aside, while I’m pleased that Hu was pleased, how’s this for undermining a CEO when she’s working! A TechCrunch Disrupt proposal)

There are several great projects out there trying to get more attention for women founders in web-tech;  TheNextWomen and Women2 for instance. But the reality is that women face the same barriers to progress in starting their own business as they do in the corporate workplace – only 14% of UK businesses are owned by women and women are half as likely to be entrepreneurially active as men (source: Prowess 2)

That’s something I saw myself, doing the rounds of VCs and Angels in 2010, with events like Seedcamp – great though it was – still overwhelmingly male, white and under 30.

According to those Prowess figures, “the most entrepreneurial age group for women globally is 35-44”  but when was the last time you saw a women in her 40s pitching at Seedcamp? (Aside from me!)

Women are more likely to take a break from fulltime work to have children in their late 20s and early 30s and, either because we find we can’t just step back on the career ladder again on the same rung we stepped off it, or because we don’t want to (if ‘coding twists the brain’, try giving birth), we’re more likely to look for alternative career paths post-children because family life means living life differently.

I don’t agree with everything she says, but Penelope Trunk writes with authority about the combined pressure of serial start-ups and family life, including why women opt to slow the pace  (Women don’t want to do start-ups. They want children).

But, just to get back to the creative vs coding idea. I still think that web-tech founders should know how to code, at least a bit, if only because knowing some code makes it easier to manage the tech in your web start-up.

But I do worry that there may be too much emphasis being put on knowing code (yes – including from me) and that that in itself is creating another barrier for women start-ups.

Not because fewer women can code, but because coding is part of the tech thing, part of the guy web thing (not for nothing are porn, sport and gambling among the biggest online money earners).

The web is ubiquitous. We use it without thinking about the tech behind it – like we use dishwashers without thinking of the electronics, or watch TV without seeing the pixels moving.

So maybe the tech isn’t actually what matters on the web – it’s the creativity of the idea; coming up with a different way for people to use the web tool to do something they already want to do (surf porn, gamble, buy frocks) or to do something they didn’t know they wanted to do (tweet, fight, manage a cartoon farm…).

I’m not suggesting that’s something women are better at. I’m not making any generalisations about women and creativity (where’s the data?). But I am suggesting that the assumption that every web-tech start-up team needs a tech-hot partner  may be missing the point of the web.

What didn’t work. Part 2: funding

What I’m listening to while I type: Let England Shake

“I love this idea of wrong thinking – of encouraging people who have ideas to go see if they work and not dismissing them just because they sound like the wrong solution. No one has the right answer at the beginning. I made 5,127 prototypes of the bagless vacuum before I got it right.” James Dyson

So, and in case you hadn’t yet spotted it, there’s a page on this site called ‘What didn’t’. Right now it’s just a handful of web-tech ideas that didn’t last, written up as a list. What I hope to create eventually is a database of great ideas that launched and folded – Dyson’s “wrong thinking” legacy.

 @duncanburbidge  pointed me to Techcrunch’s fabulous Deadpool, which tags stories of closures and likely closures. It’s an interesting list but difficult to work with in terms of useful data.

I want the information in the WWWD database to be a) written by the founder/s who were there at the birth and death of the project to provide valid qualitative data, and b) structured so that it can be interpreted by researchers (I’m still working on that, suggestions appreciated).

Anyway, this post is part two of my look at the things that I believe make web-tech start-up success more likely, based on my experience of things going wrong. Number two on my list of five critical things is:

2. Don’t only spend your own money.

It’ll cost you to launch your own web-tech business. You’ll have to spend some of your own money, maybe a lot of it, but my advice is that if you only spend your own money it will fail. You need investors.

I left newspapers in 2006 to work on my first web-tech project, a user-generated news site. Since then I’ve launched Sweeble (web/print self-publishing) and a couple of traditional websites.

But over five years, I’ve only earned about £7k in salary from all these projects. My time for the last four years has been paid for by working part-time at Staffordshire University, teaching web-based journalism for c£17k pa.

The most I earned in newspapers was £35k pa, in 2002 when I was managing editor of a bunch of Northcliffe’s thisis… local news websites. Allowing for the fact that my salary dropped when I went back to the newsroom ‘proper’ as news editor, I could still expect to have earned around £30k a year had I stayed in newspapers and not gone all entrepreneurial on myself.

So far I’ve lost around £75k in salary over five years.  Potentially more if you add that, when I worked for the man instead of myself, I was promoted most years (I’m a bright woman – just clearly bad at being an entrepreneur).

But let’s stick with that figure of £75k as theoretical lost earnings. That’s one cost of my investing time in my several start-ups.

The other is a bit more direct. I’ve also put £18k of my own savings into my business, and expect to put in a further £5k in this financial year. And I owe £10k to family investors that I’d like to think I could repay one day.

So, cost to me of spending five years trying to get my web-tech start-ups to fly – £108k.

I mentioned investment.

The Government has invested in me and my bright ideas with two R&D grants in five years, totalling £27k. Thank you Tony and Gordon.

I’ve had private investors interested several times, had meetings with Angels and VCs and, in 2010, had an offer and term sheet on the table from Midven Ltd for £255k.

However, the issue is not about me chipping in cash myself vs spending someone else’s money, it’s about the importance of investment, and in particular Angel and venture capital (VC) investment in making it more likely that a start-up will succeed.

There is plenty of academic research in this area (I’ve quoted from a little of it) and the research shows three things:

1. There’s a link between Angel/VC  investment and growth for start-ups. Researchers disagree on whether this is primarily linked to VCs ability to ‘pick’ winners or ‘coach’ them:

“Although prior scholarship uniformly associates VC investment with positive outcomes for startups, this relationship is predicated upon two distinct mechanisms. VCs may be able to identify, preinvestment, those startups that are particularly likely to exhibit superior future performance, thus picking winners… Alternatively, VCs may provide postinvestment management expertise and connections, thus building winners” (Baum, Silverman, 2004)

2. VC investment in start-ups is not necessarily based on evidence of prior growth. Nor, despite what VCs say, is it about the quality of the founder/s:

“Given that venture-backed startups grow faster than their non-venture backed counterparts, we examine whether this distinctive growth path is already identifiable before the first round of venture capital funding. Our results indicate that the growth path of venture and non-venture backed firms cannot be distinguished before the former companies receive their venture funding.” (Davila, Foster, Gupta, 2003)

3. VC investment “signals” quality to other investors and makes further investment more likely. VC funding tells other agents in the network that a start-up is worth supporting:

“VC firms implicitly decide the survival and death of start-ups by choosing which of them to fund… By investing or refusing to do so that signals the level of risk for each start-up and indirectly modify the risk evaluation and the behaviour of the other agents of the system.” (Ferrary, Granovetter, 2009)

Basically, if you get VC cash your tech-web start-up is more likely to attract further investment and more likely to get to market ahead of competitors.

Let’s add some figures to that .

VC funding accounted for 21% of all investment in UK firms between 2000 and 2009. However, there have been year-on-year falls in VC investment since 2008 and investment is around a third of what it was in 2000. The first quarter of this year saw a 4% drop in UK investments and, in the US, the  fall has continued into Q3.

Alongside the fall in investment, a 2010 report by Nesta identified that seed and first round funding had been hardest hit with VCs concentrating on re-investing in their existing portfolio, or focusing on later stage companies.

The report also pointed to a fall in the number of exits; an increase in the length of time taken to exit; and increase in firms needing more rounds of funding before reaching the exit stage.

There’s a nice outline of that process in Robin Klein’s post on TAG  about his involvement with Fizzback from first investment in 2005 to this year’s $80m exit sale. What you see is the close personal relationship between investor and founder and the ‘coaching’ role  Klein took on as first investor. He writes:

“Our relationship with Rob Keve, Fizzback’s founder, goes back about 15 years and we invested in IMI (Instant Market Intelligence – its former iteration) in 2005 – as part of the company’s small seed round. I well remember the 4 hours Rob and I spent driving to and from the Cotswolds every month during 2003 for the board meetings.

“Its initial vision was to address demand for rapid market research and new forms of customer insight – kind of vox pop via SMS. Selling a product to the market research community didn’t seem to me to be a place where we’d find good sized budgets. Rob had another much more appealing idea which he was running in parallel. A service to retailers and service providers which enabled consumers to provide feedback at the point of experience – in store, on the train etc – via their mobile phones – via SMS… This latter idea got me excited. I agreed to invest and join the board as Chairman.
 
“Rob and I pulled together a small group of angels – including Jonathan McKay – and what a great decision that was! Jonathan, who is a real enterprise software/services guru, took over the Chair in 2008 and helped Rob build the stellar sales team and been an invaluable guide to the business.
 
 “Step one back in 2005 was hire a small team… Operations head was Jonathan Morris (my son-in-law) – still the Operations Director of the group, often holding things together …. another reason for the soft spot for this company.”
Back in 2006, Robin and Saul Klein (I’ll return to their importance in UK tech-web) considered investing in my user-led news start-up. They didn’t in the end, but our paths cross again – Robin put me in touch with Richard Morross, at Moo, when I was still working out how to move forward on my self-publishing project, and Saul led Seedcamp and picked Sweeble as one of his ‘wildcard’ finalists in 2010.
 
To pull all this together – without investment you will run out of steam.
 
It’s hard to keep going on your own and having (the right) investor onboard does two things.
 
First, it ‘signals’ that your business is better than rest because of that VC’s reputation for ‘picking winners’. That attracts interest from press, other investors and the tech-web networks. 
 
Second, the investor brings ideas and people to the table. As ‘coaches’ they push you and help things happen faster than you could on your own.
 
Investors oil the wheels of your project’s progress.
 
Pre-investment

Pre-investment

 
 

Post-investment!

Post-investment!