Thursday, October 05, 2006

The times they are a changin'

This week I have resigned from a job I have loved, for two and a half years, to take a job which also promises to be very enjoyable and rewarding, which involves about 3 hours less in the car each day, but a pay drop something proportionate to that drop in travel :-(

Anyway, I have been working for this company for over 2 years now and I've always felt that this unique experience would one day make a great post. It's a story I need to tell. When written down (or even spoken out loud) the whole story sounds ridiculous, even stupid on my part, but I hope I can do this company, this team and the efforts and determination of a few very good people, justice.

I was recruited from my last job as a team leader for a software development company, by my then manager who was also on the move, to a new, start up wholesale finance company. The business model of a wholesale finance company is a little tricky to understand - something that would become most evident over the coming months. Essentially though, we'd provide funds, infrastructure and loan administration services for companies active in the mortgages market, "selling" home loans. We were wholesalers - they branded the loan products however they liked, charged the rates they wanted and pocketed the difference between that rate and the rate we delivered the funds at. We make a margin, they make a margin - the whole game is about margins - everywhere, everyone gets a margin somewhere.

I was recruited as I.T. Manager - a role I felt at the time was quite a stretch for me.

The company was well and truly in start up mode when I began work (14th June 2004). We acquired the services - for 3 months - of a very qualified network administrator, someone I had worked for in the past and someone I respected (and still do, to this day) greatly. He helped specify our infrastructure requirements, acquire all the hardware, set it up, secure it and so on. I learnt more in that three month period than I thought possible and went from someone who had little competency beyond using the gear, to someone who while couldn't manage it alone, felt confident employing (and managing) someone who could.

At this point the company still needed some further investment to reach some capital reserve requirements necessary to qualify for the type of lending we were to be doing. We had passed an initial "due diligence" by our funding institution - one of Australia's major banks and we had several customers, very impressed with our systems and the services we had to offer. Many of our services were way ahead of any competition. The future was exciting. A major deal too, was all but signed - an important part of any deal as it turns out... Over the course of one weekend, that deal went from us providing some office space and equipment with our new investor, to that investor never being seen in our offices again. I probably sell this story quite short, but naturally was not privy to all the events that occurred. Suffice to say, many conclusions were jumped to, many facts were probably not investigated well enough, and some good old fashioned communication could've seen this outcome avoided. Never-the-less, the executive team set about the search, quite optimistically and positively, for a new investor. A search that was intended to last maybe a couple of months and delay opening only a little longer.
The I.T. department at this stage was 4 people strong. Two full time developers, a full time network admin, and myself (managing to still cut code, about 50% of my time). Things were good - we were appreciative of the extra time and the systems, the security infrastructure and so on, were benefiting from the extra attention with out the pressure of being in production mode. We implemented a couple of third party products - one for online loan origination (processing and tracking loan applications) which integrated to various other third parties for valuations, credit checks, mortgage insurance and so on. We then linked this "front end" product to our "back end" loan administration. Settled loan applications were pushed, via a web service we developed into our back end loan administration system - another third party provided application. This application was then presented to our customers - the retail guys who needed access to their own loans for customer service reasons. We were responsible for all the overnight processing etc. This was all secured nicely, by customer, we built and API to various services for our customers to use (for web sites etc), and documented the API for the back end as well. Some external facing web services for communicating with brokers, checking for exposure to potential borrowers, adding new users for the front end system etc were developed. We built a customised commission processing system - the complexity, flexibility and general usefulness, the likes of which I haven't seen before - and I've worked in the industry for 12 yeasrs. I was very proud of these systems and we were ready for action. Months crept by. There were many, many meetings, but deals with potential investors just weren't being closed. At any one time, over the coming 12 months, we all honestly felt that a deal was no more than a few weeks (maybe even less) away. This was to give us then, a couple of months to bring on customers (users of our services) - customers that were waiting in the wings.

By Christmas 2005, I had been in this role, 18 months. We were now about 12 months later than we were supposed to be, but a deal was imminent. Over this time several large consortiums had been assessing our proposals, but many had quietly disappeared off the radar - but always replaced by new, excited groups, keeping us always convinced that we were not far away. "We are a poofteenth away from a deal" became a popular catch phrase - although the team and I never really knew the full story during this time. Anyway, the latest potential investor came in the form of a residential bulider who had ventured into the world of commercial construction with a inner city tower project, almost at completion. We had found our investor who agreed to everything. He was just completing construction the tower , the sale of which was to bring in so much cash that money was never again to be an issue.

Lesson #1 (probably more like #101 but the others were too hard to count) - is that if something sounds too good to be true, it usually is. Anyway, this investor continued to keep us afloat paying wages and running costs well into the new year (2006), the sale of the tower still just out there - a poofteenth away. Come Easter (April 2006) a big announcement - the time had come. The investor is on board, but needs to wind up the existing company and form a new one. All brands/trade marks etc were purchased, we were relocated (adding another 15 - 20 minutes to my already 75 - 80 minute drive to work). So hesitant, but assured we are now there, we packed up servers, and PCs, and moved them hastily into a new location - into a server room that was half built. (The whole move accomplished in little over 24 hours - again alarm bells ringing off in the distance, but drowned out by hope and optimism of realising our goals). It felt so wrong, but there were so many promises of the improvements to come, we loved the small team that we worked with day to day, we were so proud of what we'd built we wanted to see it come alive. We believed any good news, and discounted the many warning signs - signs like the absence of any superannuation payments for over 12 months! Signs like wages being paid late with increasing regularity. We were blind to the facts because we'd lived this dream, every day, with enthusiasm for nearly 2 years now. So on we went - but the pressure of the alleged 8 weeks we'd have after the relocation, seemed to fall away. Still no sale of the tower that was to provide the magical millions of funding required.

Then worse signs, the CEO steps down, and I lose a couple of staff - a natural part of any IT department, especially after 2 years, but with no replacements. Stories began to change daily. The hopes of a glorious future were pinned on different deals daily - the felling of optimism and belief, began to turn to sceptisism and worry. With each changed story came fresh optimism, but no dollars. As the team became smaller, we got a little closer to the conversations, the home truths, that no-one really knew exactly what the plan was. Still many deals were being negotiated - but the longer it goes on, the more skeptical people become about what you're doing, and as I mentioned, the Wholesale Finance business model, is one many people struggle to comprehend.

Sadly, by August that year (2006) our pays were frequently late, the tower still hadn't sold, the funds were not coming from anywhere else, but worse still, the company supporting us was now showing signs of faulting - low sales etc. Rumours of financial problems with the tower started to surface. Stories even started appearing in newspapers. These are prettty clear signs when you've stepped back out of the forest.

By this stage, I'm travelling 90 minutes to and from work (that's 3 hours - through peak traffic so the slightest hiccup there and that turns to 4) to a job with no live systems, and getting paid spasmodically at best, in a scenario that hasn't changed for about 18 months. When you put it like that, it seems down right daft! But the pay was good and the team of people I worked with were just fantastic - this is what emotional commitment is all about. We so badly wanted it to work, we still couldn't see that forest, for all those damn trees...

Then, when an offer came from a company just 10 minutes from home, I was forced to look at this situation pragmatically. After to-ing and fro-ing for some time about the downside of accepting a significant pay decrease, to work in mind you and very interesting and responsible role of Product Manager for an established software product (and one I had worked on as a contractor in the past), with so little travel, I weighed up security and lifestyle, versus living a dream and hoping against all logic, that something wonderful would eventuate.

So next week, I leave a team of dedicated people that deserve better than what it appears to me, fate has in store for them. I still have an exciting prospect and intend to give the next job my all, but this has been a sad time for me. A realisation that something I had wanted to tackle for a long time; building a complete software solution in the lending industry, building a small tight knit team and making something out of nothing, is gone. The conversations and meeting go on. There are still "irons in the fire" for these guys. I really hope, for the sake of the team and in particular the guys that have put so much on the line - financially and emotionally - that they realised their dream. I leave this job, with regret and harbour no hard feeling what-so-ever, when really I could. I'm out thousand of dollars in superannuation I will never see (from the first liquidation - there were even promises of making that up to us). I do not believe I have ever been lied to - flat out. Everyone has meant everything they've told me and the team. Maybe this is the naivety I mentioned earlier, but if so, it has gone both ways.

Is this why they say, "nice guys finish last". Lots of nice guys (and girls) work for this company, all the way to the top. Something that promised so much two years ago, now, for me anyway, becomes nothing. I'm sad about that. It doesn't feel like justice. But this must be the last I dwell on that. My new opportunity is exciting and something I am prepared to work hard at, to overcome some of the initial challenges and who knows what the next two years hold? If I grow as much in them, as I have in the last two, the sky's the limit.

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