Lots of trouble with Jimmy & James 

There are always various ways to look back on difficult times in life. This is the story of three extremely troubled years, 2016 to 2019, and what we choose to remember and to bring along for the journey ahead of us.

Early 2012, in a shabby little back room of a shared office in Vienna, me and two other rookies, gathered around a table. We had this shared dream of freedom and independence. Inspired by the words and the works of 37signals and Gidsy and mite and Big Cartel and Iridesco and others, we decided to start something new together. Envisioning our near future, we would continuously refine and market our own carefully crafted digital product.

We didn’t know any better, so we fearlessly started to build a community marketplace, from scratch, without key partners and without external funding. We called it JIMMBO. A combination of Jimmy and IMMO (a short form of “Immobilien”, i.e. “real estate” in German) and Board. The initial spark came from our personal experience searching for commission free apartments for rent in Vienna. All the existing platforms felt so clumsy and careless. Frustrated by our own bad experiences, we thought, everybody’s searching for a new place to live every once in a while. So we concluded, this is our time to create a fundamentally better marketplace for private to private real estate transactions.

Here’s our first learning: Establishing a consumer-oriented community driven marketplace requires a lot more than great interface design and solid engineering. Even more so, if the need for the traded offers is relatively infrequent (i.e. renting a flat), or constitutes a rare investment in your customer’s life (i.e. buying a new home).

We’ve already been running this digital agency for about eight years. What was left after paying the bills, we re-invested into realizing our product vision. We built the platform, and some tools to connect with private real estate providers in Austria. The platform activity numbers were growing. We reached about a thousand active listings and about seventeen thousand verified community members. Up to that point our new marketplace platform was offered for free.

We knew we had to find a way to turn this into a viable, self-sustaining business. So we introduced a paywall for renters and buyers. A subscription plan to get full access to the currently active providers on our marketplace. Our platform activity numbers dropping drastically. After about a month we lost our patience and removed the paywall, going back to “everything for free” again.

April 2016, a finance guy discovered our site and approached us, asking for an offer to build a similar platform or extend ours. He also introduced us to another finance guy, his co-founder. They told us about their extensive network of connections on the market, and about the funding they’re about to receive from an established real estate developer and investor in Vienna. Working with a big branding agency they already had a brand concept for their platform idea. A kind of digital butler for real estate transactions. We’re calling him James here.

They knew how to finance real estate projects, but they didn’t know anything about how to build and market a digital product. We knew how to build the product, but also didn’t know much about how to establish this kind of multi-sided marketplace. Through our smartly integrated marketplace platform we wanted to revolutionize how real estate is traded online and how related services are made accessible.

The agreement with our two real estate business partners included a decent amount money in compensation for our existing platform software plus a monthly retainer for our ongoing efforts to redesign and build the new version, paid out as soon as the funding would be received. So we transferred all rights of our existing platform software (a little over four years in the making) into this newly co-founded company. Blinded by those promises and full of excitement we added two more developers to our team and started pouring our energy and resources into redesigning and building this extended version of the platform software.

Yet, week after week, something was always missing or had to be clarified, or somebody temporarily unavailable. After about half a year the initial financing agreement turned out to be a bluff. There was no signed contract, just a plan with somebody who intended to participate, maybe. And as if that wasn’t enough, they also carried along a number of outstanding invoices from lawyers dating from the time before they partnered with us. Months and months of difficult negotiations followed.

Without any reserves left and confronted with a big pile of open payments, we desperately needed to get out of this negative spiral. All our efforts to acquire a strong strategic investor failed. So we signed a contract with the original investor for a fraction of the amount of what was agreed upon at the beginning. Key partners promised to collaborate but never followed through, everything turned out very different from what was expected.

Lesson learned: If somebody demands your service for multiple weeks or months without any written agreement about your compensation, that’s a huge red flag. We still don’t like bloated and overly complicated contracts, but we cannot overstate the importance and power of written words.

Moreover: Don’t start a business with anybody you haven’t known and worked with for an extended period of time, ideally a couple of years. Be as clear and specific as possible about roles and responsibilities and expectations between founders.

Over the course of three years, up until 2019, we severely struggled to make ends meet, and to retain the integrity of our team. We kept our patience, stayed together and persevered. Against all those depressing circumstances we were holding on to our ambition for creating great products together.

One of the hardest lessons was to cut the losses, actively refusing to fall victim to the sunk cost fallacy. So we had to let go of our beloved product, selling all our shares and giving up all our rights for a symbolic 1 Euro transaction to one of the finance guys.

Moving on, let’s talk about failures openly and objectively. What went wrong? How can we make better decisions in the future? In whom do we trust? What do we say “No” to?

As we continue on our path into the future, we’re taking the time to consciously formulate our principles, and to carefully consider any old and new agreements.