Note: This is part 2 of a recent post called “When a Team Refuses to Die.“
The point of my last post was not to tell the “Zinch Story,” but to share an abridged version of certain historical events to help convey a message: great entrepreneurs always find a way.
My post covered the time period between q4 of 2007 and q1 of 2008. Though a very important part of the Zinch story, it’s exactly that — just a part of the Zinch story. And it’s just my perspective. The beginning of the story dates back to my Princeton days in 2006. The end of the story has yet to be told.
It’s very hard to summarize a span of 6 months in a blog post. In startup world, that’s an eternity. There were so many intricate details, unique experiences, and drama-filled events that took place during that time. The story is so much more powerful than what I shared. A lot went down. Fights. Creative investor buy-outs. Rogue employees. Luck. You name it, we had it. It’s as sexy, complex and crazy as the early days of the Facebook story. Not even an epic novel or a Hollywood thriller could give “The Zinch Story” the justice it deserves.
Having said that, let’s unpack “The Storm” section of my blog post just a little bit more. That wasn’t the focus of my post so that’s why I didn’t get into much detail. But that part of the story definitely deserves additional attention, and one of my cofounders put together his perspective that I wanted to share. This was q4 of 2007. There is so much untold — so many unsung heroes.
Below is Brad Hagen‘s perspective on what went down during that time period. Hopefully this paints a better picture of how tough the times were. It was a dark, dark time for Zinch. But we were determined. We refused to die.
We worked our butts off trying to figure things out. We weren’t charging colleges when we raised capital from the Utah Angels. Metrics started slowing down and we were burning money because we had no revenue. Users we’re growing, but not as quickly as we’d have liked. We decided to try to monetize with colleges and this was in the middle of us going to battle with the angels (vision wasn’t aligned).They weren’t on the same page as us, and we found that out quickly after the money came in the bank. The battle with them felt like the movie ‘300’ when we we’re in it. It seemed epic and it seemed as if it would define our company. At the time it did. We won, we got it the way we wanted, but not without some battle wounds. We took on debt to save ourselves and got them out of our way. We changed CEO’s. We were exhausted. We slayed the angels and got rid of some rogue employees, but this still didn’t save our cash flow problem.
All during this time we pushed Than Hancock to help monetize with colleges. In September we talked about what it would take. Could we ramp up colleges before we ran out of money? We got our first check from a college in November. Were we worried? Yes. Were we too busy with photo shoots and admiring ourselves? No. What were we doing? Battling the most important battle ever, taking down crappy employees and the Utah Angels who didn’t believe. That’s what the distraction was, and even with that, we knew money was draining.
It came to the first week of November and we realized we would not make payroll at the end of the month. We talked about a lot of things. We decided to pay the tech team and keep them all happy. We needed them. We figured out a way to pay them — I would pull another $60K out of my personal bank account to float payroll that month. That was my reality to keep this company alive — to keep it breathing. To be honest, I don’t even know if I got paid back that money. Doesn’t matter. Zinch was my life, my baby, and it was going to succeed. I wasn’t… none of us were going to let it die without a fight. We knew the concept was valid, we just needed to get it to the masses. We decided to let a team go, a team of five people that were dedicated to grassroots high school marketing. It was a team that I was working with on a daily basis, so it was tough. We still needed to talk to our sales team, who up until recently, we hadn’t really asked to make sales.
But the toughest thing was talking to the sales team, most of whom I had personally brought on through friendships. Over two nights, after work, I met with each of them individually. This is where the real story is. There was four or five of them. They were all at Zinch because they believed in it. And it broke my heart to have to meet with them and most likely tell them bye. I explained the situation. I explained our plan to get out of it. And then I asked them if they would be willing to work for a month without pay. I told them they could leave but we wanted them to stay. We couldn’t pay them, but we needed them.
It was probably the first time I had tears as a grown man. It was emotional. I was real with them. It brought me to tears. I’ll never forget these talks. Every single one of them wanted to back the company. Every single one said they’d stand with us. Every single one stayed to make this happen. It’s because of them that we are where we are today. This was a humbling moment in so many ways. Those early employees not only had character that I didn’t believe people had, but they had a loyalty to our company and to us as founders. That was the power that made Zinch. Do you want to talk about never willing to quit, it was the sales team that exemplified this to me.
So that November we all busted our butts. Everyone still at the company knew our situation and bonded together to make it happen. Being open with them empowered them. We ended up getting revenue started. But that wasn’t the end. The story doesn’t end happy there. We didn’t have enough money still. We were still skeptical about making payroll for December. I’ve never pounded the streets so hard, we all were, trying to figure anything out. Trying to find someone to invest, and give us more time to ramp revenue from colleges.
Sid and Mick were all pounding the pavement pretty hard, we were doing everything. I was flying to New York, New Jersey, trying to talk to anyone we could through introductions people gave us. Then one of our loyal sales reps came to us and said, “My dad has an extra $100K that he wants to put somewhere before the end of the year. Do you think he could invest in Zinch (paraphrasing).” I won’t forget that moment. It wasn’t that easy, but we had another opportunity. I remember going to his fathers office and pitching him. It was one of the most important sales I’ve ever made. I convinced him and then I wondered, should we take his money? Is this going to work or am I going to just waste his $100K? It was a serious moral dilemma. When I got back to the offices and saw the sales team doing work on the phones, I knew that $100K was not going to waste. There was a team ready to make it happen. An entire team that wouldn’t quit. This was what we needed to get over the hump.
We ended up getting the check the last couple days of December, something like the 30th and payroll went out the day later (a little more than half of that money). By January we had ramped revenue, colleges were jumping on board and paying good money for it. We’ve never looked back since then. And your post covers well what happened in early 2008 (March Madness, fundraising effort, etc).
I know its hard to get specific in a blog post, but I felt like our reality of that time period was cheated in your post (I don’t blame you for it, not many will understand all the emotions, sweat, tears that we went through during that time. I know my words still don’t capture the reality, there is much more that we are leaving out). The never say die attitude was in the details of the events over those 3 months and it came from multiple people. Those were tough times, challenging times. But all for the better. It was an amazing experience for me. And it’s a challenge that I will never forget and hope to never have again. I’m glad we didn’t go through that alone. We needed 3 founders to get through that, I’m glad we had each other and a team that supported us. I know we all worked extremely hard to not let Zinch die. I’m sure Sid has an even different lens. But this was mine. And it probably still missed some things, but this is etched in my mind forever.