Entrepreneurship   02/05/18

17hats — A Startup Creation Story

Donovan
CEO / Founder 17hats

By age 8 I knew I wanted to run my own business. By age 9 I succeeded in that goal. I was the proud owner of a paper route. Of course I had to do something to fight the boredom of delivering papers, and the solution was to listen to audio books. My dad had given me some of his old business audio books and it is how I found my first true love … business.

The journey of business ideas kicked off and when I was 16, I was accepted to the Amsterdam School of Business. I loved my first semester, but then a life changing moment happened… I was introduced to the Internet.

Within minutes of my modem being connected (at a superfast 3KB a second), I was hooked. It was mid 1995, and a whole new world just opened up. Of course my school in the Netherlands had no education on the Internet; in fact, not even a connection for its students. So in my mind, contrary to my parents’ opinion, there was no other option but to drop out. The day I turned 18, I started my web design company; however being young I didn’t take into account that it was 1996 and the Internet in the Netherlands was pretty still much non existent. The classic product / market fit problem and the company never quite got off the ground. I like to think I was slightly ahead of the time. 🙂

I decided to move to the UK (where the Internet did exist) to enroll in a programming course. In the meantime, I took what I thought to be a ordinary data entry temp job; little did I know it would turn out to be the biggest break of my life. The company was a small business magazine which gave advice on how to successfully run a small business. I was hired to enter 1000s of addresses for their new website. Easy job. Then, by a stroke of luck, the system they used broke. When their CEO found out that I knew HTML, I was hired on the spot to be their new webmaster. Through their partnerships with Microsoft, Compaq and others, I got to work on some amazing projects and our website ended up being a top 10 website in the Netherlands. Not only was it a great learning experience technically, but I was also able to work with many different small business owners which cemented my love for not just business but small business. This was also the place where I ended up meeting my business partner, and best friend, Rhesa.

Soon after, I left to start my 2nd company — a software company, where Rhesa joined as employee #1. We built a product to design web pages. One week, it was the #2 productivity software in The Netherlands, only behind Microsoft Office. Needless to say, my mother was proud. We managed to secure some investment, and grew the company, eventually offering 5 different products in 9 different countries all of the world. One of those countries was Australia, which meant my dad able to walk into his local computer shop and purchase a physical copy of my product, created half a world away. That was a pretty cool moment!

Another one of those countries was the US, and when we needed somebody to move to Los Angeles, I jumped on the opportunity. Who could say no to perfect weather, beaches and mountains?

Unfortunately, about a year after I moved to L.A., our luck ran out. Since it was a software product, it had to go through distributors and retail stores to get into the hands of buyers. Four distributors went out of business around the same time, which caused our cash flow to stop. How does a business go broke? Slowly, then suddenly. There were many great lessons to be learned from it though. And most importantly, it got me to the land of my dreams: The United States.

For the next few years, I was a freelance software developer for small businesses and a photographer friend needed a way to sell photos online. What at first seemed like a weekend project blossomed into a legit stand-alone business. This time, Rhesa joined me as a business partner and in 2004 we launched a new online gallery and sales system for photographers. The company grew so fast that in 2006 we also built our own photo lab. It was very fulfilling, no pun intended, to see hundreds of orders come in every day, and make their way through the production process. It was our own little factory. The post office actually had to use a bigger truck on their route to handle our volume. That was a pretty awesome time.

After the stock market crash of 2008, we started to look at adding additional services. It became obvious that an online gallery was only one piece to the puzzle of success for photography business owners. In fact, in running any service business, there is always the struggle of dealing with contracts, invoicing, project management, bookkeeping, etc. I started looking around for a solution, I could not find one that was complete, easy and didn’t suffer from death by menu. There had to be a better way!

And so 17hats was born — the first complete business management system for businesses of one. When I first told Rhesa about the idea, I figured he would tell me it was yet another crazy idea of mine (I’ve had a few of those). To my delight, he jumped on board immediately and started building the server architecture for it.

It had a few false starts, but it was finally released on October 1st, 2014. The success behind it was overwhelming. Ironically, for a system that is supposed to give time back, it became all consuming for me. After a year, we had about 10,000 users. A year later, we also had about 75 employees. Pretty insane. Truth be told, we had grown too fast and it was starting to show. The system itself was becoming slow and buggy, our customer support was embarrassing. Despite my best efforts, it was the typical story of growing too fast and getting out of control. So in October of 2016, just after our 2nd birthday, we started the slow and painful process of turning the company around.

As we celebrate our third birthday, we look back at a tough but oh so critical year. We shuttered a service that was the first of its kind, we brought customer support back in house and started the process of simplifying our own business by going back to basics. The result is a company stronger than ever and one that has a clear vision.

Being entrepreneurs, we tend to overcomplicate things. We tend to think that more is better, and as I have discovered through years of experience that simply is not true. As we begin our fourth year, it has become a part of our vision to help you not make the same, easily avoidable mistakes I did — and to provide you with the software needed to keep your business organized, while running efficiently and effectively, allowing you to reach the success you desire.

Our team of entrepreneurs work on it every day to make that vision happen. 17hats is a work of passion, and we love crafting it every day; and I thank you for joining me on my journey of entrepreneurship, and we are all excited that you are allowing 17hats to be a part of yours!

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