Photo: Wave Accounting
Kirk Simpson learned a thing or two after his first start-up joined the dot-com graveyard in 2001. Such as: don’t start a business with friends.”There’s a tendency with your first business to surround yourself with friends as co-founders,” says Simpson, who launched adventurelifestyle.com in 1997 at age 23, after dropping out of college. The site helped people arrange extreme adventure trips, such as bungee jumping excursions.
“I think there’s a natural desire to do it. You have to look at it from 50,000 feet: if I didn’t know this person as a friend, would I want to work with him or her? Then look at the friendship — is there loyalty, trustworthiness?”
Adventurelifestyle.com was largely self-funded, with some angel financing. Simpson and his buddy hired five more employees (friends) before it folded. He blames the failure on his youthful naivete, among other things. “We didn’t have a big enough network,” he says, to really figure out who should have been working for the company.
His second start-up fared better. He launched outdoorsica.com, which has a similar concept, in 2007. By then, he had a decade of real-world experience — and connections — through working in Toronto’s media world.
“You have to go into the work force and take a job where smart people are above you so you can learn from them,” he says. “So much about being an entrepreneur is about fostering a connection.”
But revenue figures weren’t that impressive, which he blames on the next major lesson he learned: you need real passion to make something work. He and his partners kept their day jobs, so this was an evening-and-weekend project. Outdoorsica is on the market and will likely be sold soon, he says.
“Trying to build a business with part-timers, my experience is that it’s really difficult to get it off the ground. They’re telling you they’re committed, and then they don’t deliver.”
He says he finally got it right the third time around, with his latest venture: Wave Accounting, a Mint.com for small businesses. The company launched in November 2010, and earlier this month it completed a $1.5 million round of VC funding — which he attributes to the power of a much-expanded network.
“Selling key positions within the company was just like pitching to VCs,” says Simpson, who pulled in one staffer from software giant Sage. “You have to convince them to take a chance on you.”
With a recent push from Google Chrome, Wave has already signed on 20,000 businesses in 165 countries.
“A career coach once told me that I’d ultimately be an entrepreneur,” Simpson says. “As much as I’d like to coach people not to start a business right away, if you’re anything like me, you’re going to.”
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