Starting a business is a lot like starting a family. Months of speculation as to whether it’s a “good idea” are proceeded by years of hard work, late nights and ridiculous amounts of risk – but you do it anyway, because ultimately, the reward far outweighs the temporary inconvenience. At least in theory.
As the father to a 14-month-old daughter, I find myself constantly drawing parallels between my role as a father and my role as the manager of Chombo/SONET. There is no doubt that there is no greater joy than watching your child achieve milestones and slowly grow into their own autonomous entity – the same can be said for my business ventures.
Every parent wants the best for their children. For a plethora of different reasons (which I will discuss in a later blog post), earlier this year Andrew and I made an executive decision to sell Chombo to Refresh Domains Pty Ltd. We approached Refresh, as we had close ties with their Managing Director through relationships with both SONET and personally with myself. Their approach seemed sound and it appeared that our goals and visions for the growth of Chombo were significantly aligned – it was my honest belief that the cash investment Refresh were planning on making, combined with their supposed long term vision would yield the best outcome for Chombo’s customers.
As operational control of the business was handed over, the differences between the approaches of Refresh and SONET became evermore apparent – many of these are exemplified in some of the posts which Michael made on this blog earlier this year. Whilst I have always strongly believed in organic growth and conservative investment (especially in such a fragile economy), Refresh focused on growth acceleration, including the investment of significant amounts of money in both web and radio advertising and the introduction of telephone support and unsustainable pricing: this kind of “pump” methodology has been something we’ve always attempted to avoid, as it was never our intention to sell Chombo. The construction of our purpose-built datacentre facility and continued re-investment of profit into the business is a testament to our ongoing desire for continuous improvement.
There is no denying that the “pump” strategy is a fantastic way to build volume. The thought of building the business for fast sale is very alluring, especially when considering the potential returns on a short-term investment, but this does not change the fact that there is no way to sustainably offer the services we have offered previously, with the level of service our customers are used to: ultimately, our customers are the reason we exist and a failure to show continued respect for their trust and patronage is to invite doubt into their minds as to our intentions.
Within two months, Chombo came dangerously close to insolvency. We used our contractual exit clause to regain control of the assets of the business and have managed to successfully halt and reverse the debt spiral for which it was destined.
Whilst there is no denying that the past few months have been challenging for all involved, we’ve reconciled our position, hired more staff and made continued investment into the business – our weekly reconciliations look healthy once again and we’ll turn a profit by the end of this month (not including the amortization of the bail-out – that’ll be resolved by the end of October without accounting for growth).
Earnest Hemingway quoted: “never confuse movement with action”. We’re moving on, collecting the pieces and quietly expanding our internal business systems and exposing more of our business process to our customers. We have learned a valuable lesson from this experience – one we will never make again.
I’d like to take one more moment to thank everyone for your unwavering support during these turbulent times – as always, your understanding and patronage remains an inspiration to myself and my team and for that we thank you.