When We First Met Dwolla

When We First Met Dwolla

“These guys are hurting,” said our new investor as we walked out of the room. We’d just seen the family-and-friends-round pitch of “Dwolla,” a struggling online tech company that was working on their beta system in Des Moines, Iowa, USA. They (2 team members) seemed pretty clued up technically and eloquently dissected their concept with all sorts of wonderful words that were mostly whizzing above my head. Their goal was big—they were shoving typical credit card processing services to the side and paving a new way forward.

Later that night, we ran into the Dwolla founders at a cocktail party downtown. They asked me how I managed to get such a high-caliber investor on our startup team. I don’t really remember what I said to him, but I do remember feeling pretty good about our position as a startup (even though we didn’t yet have a functioning beta site).

“These guys are hurting." That statement kept ringing in my head and the picture of the two lads sitting at that boardroom table looking very much in need of capital. I thought to myself, “Man, I don’t ever want to be hurting or spoken of like that. Poor guys."

I had a nice round of angel funding, a board that consisted of very successful finance gurus, entrepreneurs, and directors. It also looked like I had found the best vendors and lawyers. It looked like such a pretty picture.

Jump forward 18 months. I was bankrupt, our investors didn’t pull through on their promises, I owed a lot of money to people that deserved it and some that didn’t. There were conflicts of interest in the board and so most of them resigned, but only after the conflict of interest became very conflicted (see what I mean?).

Being in Zimbabwe didn’t really help because the threatening emails screamed through my inbox. Even though you’re 10,000 miles away, the message still gets to you and there’s no way to sit down face-to-face and talk it through.

I was hurting—and many people were telling other people that I was hurting too.

Another year later, I’m sitting on a Delta flight to go and see my in-laws and I flipped through the in-flight magazine. “The Tech Scene” in Des Moines. I turned to that section and saw an article written about the new high growth startup called Dwolla. Ashton Kutcher had funded an early round (Series-B, if I remember correct, and it was probably days after we left them). And they had just got another injection of something like $15 million.

Not only that, but my former CTO, who moved to Zimbabwe for two years and was with me when things went from good to terrible, was working for the company and they were scaling fast. They had new offices in Silicon Valley, and three new sites. I had a very empty and recently painted office with the remains of previous employees.

It felt like I had just eaten helium balloons—I was so full, sick to my stomach in fact, but so empty. Full of everything that was hollow. The "I feel sorry for you" emails didn't help one bit. It was more of nothing.

Dwolla wasn’t hurting anymore. I was.

There’s no telling what someone can do with a startup, however good or bad the situation seems, it can flip in a second or across a series of events.

For the last few years, our very public startup failure stung quite badly and still has a tendency to bite. But it’s in this failure that future success dwells. Startups succeed or fail—there’s very little mediocrity in this world. I’m learning to view both positively because I never would have learned all the things I did if we hadn’t launched Big Africa in 2009.

Maybe we’ll do it again one of these days. 3 out of 4 startups fail—we were the majority. Hats off to Dwolla, what they’ve been able to accomplish is incredible.

Until next time...

(photo via e crowley)