Footnotes on a start-up's saga that is simply ... done

A dotcom turned software firm, followed by the Monitor since 1999, ends its run.

It was a lead I was hoping I would never have to write.

For nearly 2-1/2 years, we've followed a little-known high-tech company (previously a dotcom) called Simply Done Business Solutions.

The company began as the brainchild of four 20-something guys, and looked more like a fraternity house than a real venture. Eventually, Simply Done found its niche selling its own scheduling software to the service industry.

From Day 1, nobody pushed harder than this group. Eighty-plus-hour workweeks were often the norm. During the last few months, the team (down to 16 people) worked - with little sleep - to churn out a new product that was going to be the company's golden egg.

Unfortunately, it came about five months too late. The result: Simply Done has closed its doors, shut down, ended the dream. The Los Angeles-based firm officially ceased operations Jan. 11. The last two months, however, were spent winding down operations. The company joins the legions of dotcoms that have fallen since the mid-1990s heyday. Its trajectory mirrors that of many firms like it.

"Statistically, they are like the overwhelming majority," says John Nesheim, an adjunct professor at Cornell University and author of the recent book "High Tech Start Ups" (Simon & Schuster).

Only 1 in 10 venture-backed start-ups reaches the initial public-offering phase, according to his research. Simply Done's bid to make something out of its first attempt is also typical, Mr. Nesheim adds. "People don't like to give up," he says. "But there's an old adage in Silicon Valley: Start-ups are easier than fix-ups."

Anticipating the end

Simply Done's employees got the announcement shortly before Thanksgiving that investors had decided not to give additional funding. Rather than continue operating until it went bankrupt - typical of many dotcoms - the board voted to close shop right away. (The company will even have a little money to return to investors.)

"It looks as though we planned our demise," jokes John Kjenner, Simply Done's chief executive officer (the company had three in all), explaining that Simply Done's office lease expired about the time it decided to shut down.

Don't be fooled by the humor.

Ask any of these workers, and they'll tell you that closing the business was one of the hardest things they've ever done.

On this particular day - the last day - a U-Haul is backed up into Simply Done's doorway and two men load the last of the desks, computers, and office plants, which another high-tech company has purchased. The phones have already been shut off. And the company's web page is about to come down.

The CEO, the chief technology officer, and the controller - charged with winding down operations - are the last remaining people on the payroll.

"Dismantling and unplugging equipment has been emotionally taxing," says chief technology officer Carl Pregozen, as he and a handful of other former workers sit around a long table in Simply Done's kitchen during lunch eating sandwiches and reflecting on the past year.

Yet, while this group feels a great loss, they leave knowing they gave it their all - all their heart, all their mind, and every ounce of their energy.

"We left it all on the field," says Scott Wilcox, Simply Done's lead software developer. "We did what we could."

Indeed one of the toughest lessons this group learned (relearned, in some cases) is that there are some things you can't control, such as the economy and whether a venture-capital firm has a good quarter. So how did all of this come about?

A series of course corrections

When we last visited Simply Done about six months ago, the company was coming off some pretty rough times. Mr. Kjenner, who comes with plenty of high-tech experience, not to mention blue-chip experience, joined last March.

Over the next two months he instituted two rounds of layoffs, knocking down the number of workers from 35 to 16. Morale, to say the least, was low.

"I was known for building great teams," Kjenner contends. "When I came on here it seemed as if it was going to be impossible [to do that]."

But the company had even bigger problems - primarily that it still had only one key client, Maid Brigade.

Under the current model, Simply Done had been targeting large service merchants. The problem, however, was that landing these big clients was time-consuming, not to mention expensive. Simply Done first had to target a potential client, learn its business, then build a prototype software product, let the merchant test it, and hope that it would be purchased.

So Kjenner and his team devised a new plan: Build a self-configurable scheduling product that enterprises could subscribe to via the Internet and then tailor to their own specifications. This would also allow Simply Done to broaden its target market by making the product appealing to small- and medium-size businesses and to allow individual offices that were part of large national firms to get up and running on their own. This all happened in June.

That meant Simply Done had roughly three months to roll out an entirely new product. So the company's dozen or so developers rallied around a new development approach, started producing a tremendous amount of code, and broke all sorts of personal-endurance records.

"For the first several weeks it was 90-plus hours," says developer Zak Tamsen, who joined Simply Done two years ago. Eventually the team found its stride and was working closer to 50 hours a week. "Those last weeks were the best work we ever produced as a team," he says.

Funding falters

At this point, Simply Done's two investors, SBC Venture Capital Corp. and Clearstone Venture Partners (formerly Idealab! Capital Partners), were evaluating the merits of providing an inside round of funding if Simply Done could pull this off.

"If our investors had lost their faith in the company, we would have pulled the plug much sooner," Kjenner contends.

Still, nothing was certain. "Until the money starts coming in from new customers," he adds, "it's a huge gamble."

Interestingly, about the time that Simply Done was making these adjustments, Microsoft had concluded an $8 million acquisition of a company called WebAppoint, which had its own scheduling software. Microsoft then released the product on its own web portal in late August.

Kjenner's thinking: If other web portals were looking for a way to compete with Microsoft in this category, Simply Done had the product.

By the first week of October, Simply Done's new scheduling software was armed and ready to peddle to web portals. But the company didn't have much time.

By the end of the year, it would be out of money.

To help get the ball rolling, SBC, which had a significant ownership in Prodigy and had recently acquired the web portal, introduced Simply Done. The two groups soon worked out "an agreement in principal," says Kjenner, to test market Simply Done's scheduling tool through the Prodigy portal.

A last window, missed

Simply Done was set to launch its product on Prodigy in mid-December. But just as the two groups were finishing the deal, SBC and Yahoo! Inc. announced a strategic alliance.

What did that mean for Prodigy? It looked as if it would no longer be content focused. And that meant the Simply Done deal was up in the air, leaving the company with no immediate way to test the market traction that its product would have.

Simply Done also had a deal in place with a portal called MyHomeKey.com, but the dotcom went out of business shortly before Simply Done released its new product.

In mid-November, the investors announced that they would not be putting up another round of funding. Too much had changed since Round 1.

"At the time we saw a strategic fit," says SBC spokeswoman Shawn Ramsey. "I think the market changed, and we simply decided not to make a second investment."

For Simply Done, the next step was unfortunately all too clear. Roughly two days later, on Nov. 16, Simply Done's seven-person board, which included both Kjenner and former CEO Michael Barton, voted to close down.

Tallying the lessons

Initially a handful of companies were interested in buying Simply Done's intellectual assets and software, according to Kjenner. Currently there remains only "soft" interest.

At the same time, a handful of employees are exploring a possible buyout. Still, no one left feeling defeated. Rather, they learned to define success in their own terms - to never give up and to push until the very end.

"People were killing themselves to get it [the new software] working," recalls lead developer Mr. Wilcox. "The only failure we saw was that the money was going to run out before we succeeded."

Tracking a dotcom's ups and downs

Nearly 2 1/2 years ago, the Monitor decided to put a tail on a start-up then called Handshake.com - chosen somewhat arbitrarily from among the legions of such ventures that got under way in the mid- to late-1990s. Its trajectory turned out to be like that of many similar firms. The company closed its doors last month.

MAY 1999 Four 20-something guys pool $150,000, rent an office suite in a 76-year-old building in Fullerton, Calif., and launch Handshake - which connects consumers nationwide to local merchants, such as caterers and cleaning services.

AUGUST 1999 Handshake lands $4 million in venture capital from Idealab! Capital Partners (now Clearstone Venture Partners).

OCTOBER 1999 Site debuts on the web. Number of employees: 25. Average work day: 16 hours.

JANUARY 2000 Company moves to a 13,000-sq.-ft. converted warehouse in Los Angeles. One popular car among employees: BMW.

MARCH 2000 Second round of funding from SBC Venture Capital Corp. and Clearstone Venture Partners (undisclosed amount).

APRIL 2000 New CEO: Michael Barton. Number of employees: 40, 10 short of the firm's peak level.

JUNE 2000 Company changes its business model. It now starts selling its scheduling software to service merchants. To reflect the new plan, Handshake changes its name to Simply Done Business Solutions - and drops the 'dotcom.'

APRIL 2001 New CEO: John Kjenner. Two rounds of layoffs (all with severance). Headcount drops to 16.

MAY 2001 Company lands first and only enterprise client for scheduling software, Maid Brigade.

JUNE 2001 Company redesigns scheduling-software product so that merchants can roll it out one office at a time. The plan: Sell the software to web portals through which clients can subscribe to the product, then tailor it.

NOVEMBER 2001 Board votes to close operations.

JANUARY 2002 Company officially closes shop.

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