The startup that didn't make it

Most of what’s written about startups is written by the ones that survived. That’s a shame, because the businesses that don’t make it tend to teach you more, and faster.

StepJockey was a health and wellbeing product that encouraged people to be more active at work. It started with a simple idea: if we label food for calories, why not label staircases for calorie burn? We built a mobile app, a web dashboard, and physical signs that went up in buildings. We had an experienced founding team, a research grant, and blue-chip clients including Comcast, the NHS, the Ministry of Justice, Deutsche Bank and BNP Paribas. And in 2019, after five years, we stopped trading.

Here’s what happened, and the lessons I still use.

2014–15: the early days

An SBRI grant funded research into how many calories stair climbing burns, and the behavioural science behind visual prompts. That paid for an MVP: the app, the dashboard, and an online ordering system for the signs. The signs themselves went through a user-led process, round after round, before we settled on the final content and design.

The first trials and paying clients gave us loads of feedback. They also taught us our first real lesson, and it was a slightly embarrassing one: nobody ever used the online ordering system we’d built. We’d spent time and money on a feature nobody wanted, because we assumed instead of asking. Every part of the product that had been through user research worked. The part that hadn’t, didn’t.

The other thing that stood out from those early days was where our money came from. Our first investment came through the founders’ networks. Connections, not cold approaches. I’ve taken that seriously ever since. Keep track of who you know, keep those relationships warm, and remember a network is something you build years before you need it.

And with a tiny team, process isn’t bureaucracy. It’s the only way to get any leverage at all. Simple processes, brought in early, are what let three or four people work like ten.

2015–16: raising, and spending

We raised £600k and grew the team across sales and tech. On paper, this was the good bit. In practice, it’s where the cracks started.

Recruitment was harder than we expected. Disagreements inside the team led to the COO leaving. We spent on tech, with a refreshed marketing site and new mobile apps, and grew a team split between London and Cornwall. We pivoted to B2B, targeting HR and wellness professionals in organisations with more than a thousand employees. For the first time we had a full board and shareholders to report to.

Three things I took from that period.

Someone needs to own the product. If you’re building a digital product, product can’t be a shared responsibility that everyone chips in on and nobody leads. It needs a name against it.

Product-market fit gets much harder when the buyer and the user are different people. We were selling to HR and wellness managers, but the people using the product were employees walking up stairs. Keeping one happy doesn’t automatically keep the other happy, and it’s easy to end up designing for whoever signs the cheque instead of whoever uses the thing.

Spend the money. When an investor puts money in, they want to see you create value with it. Being cautious feels responsible, but it often isn’t. Be decisive and make the difficult calls.

2017–18: lost direction, then reset

2017 was the year we drifted. Team changes and patchy sales meant we lost our way. Not dramatically, just gradually, which is worse because it’s harder to spot.

Our existing investors threw us a lifeline in 2016 and again in 2017, but there were redundancies. By the end of 2017 their patience had run out, and the board asked the CEO and founder to step down. A new CEO came in with a lot of business experience, the board was shaken up, and the business was reset. Another pivot, this time to facilities and building managers and real estate, focused on client services and delivering a programme instead of a product.

What I learned in that stretch has shaped how I work more than anything else on this list.

Culture and leadership are multipliers. A strong culture multiplies creativity and productivity. And if you’re building a product, a diverse team only makes it better. You’re designing for people who aren’t like you, so it helps a lot to have some of them in the room.

Investors follow their money. The hardest part is getting an investor on board in the first place. Once they’re in, keep them engaged and up to date, and they’ll often invest again. Founders who go quiet between rounds make life much harder for themselves.

Have a functional board, not a supervisory one. A board of investors guarding their investments will watch you. A functional board will give the operational team guidance and support. The difference is huge, and it’s worth fighting for while the board is being formed, because it’s very hard to change later.

2019: so close

The new approach was working. Clients renewed and grew their accounts. But the model was expensive, and we came to rely on our chairman to fund our cash flow.

In the first half of 2019 we brought in an investment advisor to raise a substantial round. We had a new app in development. And we got a letter of intent from Comcast to roll StepJockey out across their whole portfolio: 45 sites worldwide.

Then several things came together at once and we had no choice but to stop trading.

That’s how it tends to happen. Not one big disaster, but several things landing at the same time on a business with no cash buffer and a funding round that hadn’t closed yet.

Investment takes far longer than you think. From realising you need money to having it in the bank is six months, minimum. If you’re a founder, take that timeline to heart and keep potential investors warm long before you need them. We started our raise while we still had runway. It wasn’t long enough.

Know your responsibilities as a director. Putting a business into liquidation is stressful for everyone involved, and directors have legal duties that aren’t always obvious until you’re in the middle of it. Learn them before you need them.

What it was worth

I don’t think of StepJockey as wasted time. Success doesn’t have to be measured in money. I learned more in those five years than at any time before or since, and almost all of it went straight into building Hiyield, which became a B Corp, a seven-figure business, and eventually an exit to an Employee Ownership Trust.

The lessons that carried over: test your assumptions before you build, put a name against product ownership, keep investors close, build a board that helps instead of watches, and start raising six months before you think you need to.

None of that is theory for me. I got every one of them wrong first.

If you’re somewhere in the middle of this (the drift, the pivot, the round that’s taking longer than planned), it’s worth talking to someone who’s been through it. That’s most of what I do now, as a fractional CTO and adviser to founders.