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How I got here in the end, part eight: the third startup death march begins

The life of an IT industry contractor is an unstable one. There are approximately 250 working days in the 365 day business year, once you subtract weekends, public holidays, 20 vacation days, and allow a couple of weeks for time off being sick. If you're a contractor, the general rule of thumb (in a regular business climate — not a recession) is that you can expect to work for 100 days a year (and you're going to spend those days working like a dog, not slacking or polishing your skills). So you price your daily rate accordingly. To paraphrase Dickens: definition of happiness: 101 or more paid days of work. Definition of unhappiness: 99 or fewer paid days of work. It follows that the ideal job is a steady contract that runs for consecutive months. And hitting the jackpot is getting a job that runs for five months or more in any given financial year.

Or so you might think ...

Let's rewind the clock to April/May 1995, when I fled screaming from the embrace of SCO and landed in an attic in Edinburgh, at a desk between a sauna hut and a rack of skis. In the early days at FMA, I was one of two programmers; the other was Dave MacRae. Dave was then a thirty-ish, trim, energetic guy, one of the few actual born-and-bred natives of Edinburgh in the sector. (Edinburgh has a huge student population, and the University computer science department is highly regarded: a lot of students arrive, decide they like the city, and end up staying.)

My memory has blessedly faded, and is in any case highly fallible (so if you were there at the time, feel free to get in touch and correct me if I've got any of this wrong). As far as I recall, after about three months Dave either resigned or was fired, following a period of what appeared (from my perspective) to be shameless workplace bullying. He had the last laugh, however. Fearghas had set him to working with one specific consultancy client. The month after Dave departed, the client fired FMA — and hired Dave as their full-time programmer. Things were sufficiently half-arsed in the early days of the death march that F. hadn't gotten around to issuing his staff with contracts of employment, much less contracts with non-compete clauses. After a bit of rug-chewing F. got over it and went back to trying to build up his business. Meanwhile ...

The client who had hired Dave was a specialized publishing outfit called Business Briefing Publications. BBP was itself a start-up; it's founders' idea was to deliver company reports and other business intelligence via the then-new world wide web, in return for a fat fee.

These days, we routinely expect our credit cards to work on the internet with no particular fuss or bother; if not credit cards, then Paypal. But spare a thought for those of us who were on the web fifteen years ago, back when it was primarily an academic/tech industry pursuit. Banks are notoriously risk-averse (it's their job, after all) and slow to adapt to new technologies. Dave and his boss, Gavin — a smooth-spoken public school type from Jersey, with all the right connections — ran head-first into a problem: how do you charge your customers for the product?

In 1995, the only solution they could find — for any of the British clearing banks — was a package that ran on a Windows PC. It emulated an EPOS terminal; you typed in a credit card number and the billing amount, it went online via modem, and it carried out the transaction. This, and a merchant account, let you do online credit card processing ... and it sold for something like £5000 a seat. Dave had written some sort of script that ran on a web server and could drop credit cards into this software terminal for processing, but each transaction took about ten seconds, and more importantly, it could only talk to a single account at a single bank.

"If we could write some software of our own that did this, we could sell it as a service to other companies trying to sell goods over the web," Dave and Gavin worked out. "How about we set up a company to do it?"

"Good idea," said Gavin (I'm working from my imagination here), "but you're busy keeping BBP running. Who's going to write the program?"

"I know a programmer ..."

And so I found myself in a pub in Leith one day, listening to Dave's pitch. Which was along these lines; "Gavin and I are setting up a company. We need someone to write a piece of software that takes requests from a web server, talks this particular protocol over a modem, and returns the results." (Imagine a fat stack of ring-binder files sitting to one side, labelled APACS-27/29.) "Are you interested?"

"Sounds risky," I said. "But also sounds interesting. I'm happy to come on board on contract."

"Are you sure? If you come on board full-time we can give you stock options. We'll pay you <X>."

"I'll take the contract instead," I said diplomatically, because I was a big boy now and knew from bitter experience that 90% of startups were doomed.

Now, I can't in all honesty say that I did the right thing, because as it happened the business Dave was telling me about went on to go public via a reverse takeover in early 2000. But neither was turning down the chance to be a shareholder in a successful dot-com startup a ghastly mistake which has blighted my life ever since.

Share dilution being what it is, I think Dave's stock options, when they vested, would have been worth high six digits/low seven digits: we're not talking internet billionaire territory here. Also, they tied him into the company for many years. If I'd been on the same package, I wouldn't have had the push that shoved me into full-time writing from mid-2000 onwards. I might be a millionaire by now — but I probably wouldn't be a happy and successful novelist.

Oh, and the salary deal Dave was offering amounted to a 50% pay cut relative to my freelance contractor status. So what was on the table was: work like a dog for high pay, as long as it lasts — or work like a dog for much lower pay, as long as it lasts, plus maybe a 10% chance of winning the lottery in a few years' time. Most likely the stress of the job would have shoved me into a nervous breakdown or a heart attack by the time I turned forty. So, on balance, it's probably all for the best that I turned him down.

What would you do?

A couple of weeks later, I started working for Dave and Gavin. Gavin was still in London, sharing an office with his partners at BBP. Dave worked out of a tiny office in Leith, in a building subdivided into a bunch of office suites most of which were occupied by architects. For the first couple of weeks I worked out of my spare bedroom (about a mile from his office), poring over the APACS protocol specifications and trying to figure out what the flaming hell this stuff meant. I wasn't destined to move into the eight-foot by ten-foot office with Dave for another few weeks — we needed to get hold of a desk and a chair first.

Now I am not, by background, inclination, or training, a banker. Nor was I a banking IT wonk. So let me digress a little ...

The banking industry works differently in different countries. In the UK, there are a handful of huge high-street banks which operate at a national level; back in 1997 the main players were NatWest, Barclays, Lloyds, Bank of Scotland, Royal Bank of Scotland, and a handful of others. (Many of them have since merged or changed their names and public identities.) These banks do high-street business, both with private customers and businesses. They also handle the credit card franchises.

Credit cards weren't a British invention, but arrived in the UK soon after their introduction in the USA. In the US, Visa and Mastercard run their own networks; merchants had direct contracts with them. But in the UK, things worked differently. Each bank would contract with Visa and/or Mastercard, issue their own cards, and process credit card transactions for their own business customers, over their own network. It was all pretty chaotic; so to reduce the chaos, they established the Association for Payment Clearing Services, a trade body where they could thrash out non-competitive issues such as common standards for data interchange, to allow other folks' hardware to talk to their networks.

Given the APACS protocol specifications, any fule could whip up an EPOS terminal or a piece of software that could use a modem to dial up a bank's authorization server and get an authorization code or a CARD DECLINED message back. With a little more effort, the same person could then write a program to take the daily transaction log and upload it to the bank for overnight processing, at which point the funds would be deducted/transferred between accounts. Then all the fule need do was to convince the bank to certify their software/hardware combination, and — hey presto! — you could start selling it as a service to customers of that bank.

You know already that this picture sounds too good to be true, don't you?

Well it was. And thereon hangs the next piece of this story.

(To be continued ...)




I'm *loving* these pieces, Charlie! This one in particular brought back some memories of my own.

I remember being asked to write an APACS-compliant real-time authorisation module for a telephone betting system back in 1994-95: Visual Basic 3 talking to a PAKNET X.25 wireless modem, using DDE for client-server comms. Bloody miracle we got our authorisation, to be honest. Still not entirely sure I ever actually _read_ all of that APACS docunmentation...


Looks like there might be a few more episodes to come yet, which is fine as it is highly entertaining.


Hey Charlie, just a minor point... "a smooth-spoken public school type from Jersey" has an entirely different connotation in the former colonies. A trap I fall into every day.

BTW, in case you're in need of encouragement, I also am loving this epic tale. And it brings back some dodgy memories of my own...


I had just worked my way through parts 1-7, hit refresh and up popped part #8. Perfect timing.


Was Access (your flexible friend) still around by then? This was run by a company called "Joint Credit Card Company" and consisted (from memory) of Midland Bank, Lloyds, NatWest and RBS. I spent some summer work in 1986 as a temp in their key-to-disk datacenter typing in change of addresses. Wow, lots of people moving in the UK; lots and lots of address forms to process!


3: US readers should substitute "a smooth-spoken preparatory school type from New England" and continue...


3: What connotation does it have?


Do we have a protocol for buying Charlie a pint? I'm doing my fair share of hardcover books-buying, but the quality of this series rates a pint-buying-protocol, or at least pints magically appearing somewhere.


Aneurin @7: the equivalent would be a WASP blue-blood -- serious money background, Yale/Harvard, funny handshakes, and so on.

Sean @8: I suspect that sooner or later this series will end up in a book of non-fiction essays. (Hmm. Must pick Scalzi's brain.)

Apropos nothing, I just checked my web stats. antipope.org has racked up 940,000 hits so far this month, and is on course to go over the one million mark before the 31st rolls round ... as indeed it did last month, now I look at the figures.


Charlie, I would probably have done the same as you. Having watched (and lived through) the dotcom bubble I was lucky to come out without any bruises. I always smile reading your history because I get reminded to those days. Heck, I even grew up with b/w tellies and non-digital phones :)



Am greatly enjoying this series. Agreed it would be good for it to be in a book of non-fiction essays. Maybe the book could be something like Heinlein's "Expanded Universe" though that book also included some short fiction.


David: non-fiction essays in book format are not exactly my speciality, or that of my publishers. Maybe a small press edition, mixed with short fiction, some year or other ...


If I had a dollar for every time someone told me: "If you'd cashed out at the right moment in the Dotcom Boom you'd be a millionaire," then I'd have about as much money as I have on account now in the the dollar a share stock I hold in the NASDAQ company that was worth $53/share at the time it was issued to me when the company where I was VP was acquired. BUT the laws of the country blocked me from selling, collateralizing, hypothecating, or trading those shares during the time that they plummited from $53 to roughly 1% of that.

Then a few days ago I got an apologetic phone call from my stock brokerage, which was acquired, the acquiring company acquired, and then that one merged, saying that the value of my shares fell below the limit for a free account, and I'd have to either pay $50.00 per year, or liquidate imemdiately.

As I've said, people in "sane" industries find this sort of thing hard to believe. Yet I consider myself lucky. I, at least, did not lose my home when the Dotcom Bust ensued.

Now, if only I could get the Aerospace Company retirement fund to understand that when one company where I had 5 years seniority acquired the other where I had 6 years seniority, I should have 11 years total seniority, and thus have a massively larger retirement benefits package...

I think every industry I spent years in has been Boom and Bust. Including Education, and Science Fiction authorship...

Keep the painful/funny anecdotes coming, Mr. Stross! I feel your pain!


My understanding is that post Sarbanes-Oxley, the goal of most startups is no longer to IPO. Anyone know what the exit strategy du jour is for the take-the-money-and-run crowd these days?


@9: I suppose I should have been clearer; what I was meaning was 'what connotation does "a smooth-spoken public school type from Jersey" have in "the former colonies"?'

Since the American interpretation of the phrase is, apparently, entirely different, I'm interested in knowing how it would be interpreted.


Sean B @ 8:wrote:

> Do we have a protocol for buying Charlie a pint?
> I'm doing my fair share of hardcover books-buying,

AAAARGH! I left _Wireless_ at Ork (it arrived today. I shall now have to wait until Monday before reading it. On the bright side, I no longer have to deal with Amazon[1], as that's the last of the order so I can delete the email address.

> but the quality of this series rates a pint-buying-protocol, or at least pints magically appearing somewhere.

May have to include catfood as well, for his Feline Overlords.

[1] The "free delivery" that wasn't, the relentless flow of "special offer" email despite ticking the correct boxes when I registered, such that I had to opt out again, the long delay (I could have got the first two books from Forbidden Planet considerably quicker and possibly cheaper than from Amazon), and the shipping of a hardcover in a jiffybag instead of a proper book mailer..


Aneurin, both ajay and Charlie answered you.



As I understand it, the previous business model was:
Step 1) Build a web site
Step 3) Profit!

Today's model is:
Step 1) Build a web site
Step 2) Get taken over by google
Step 3) Profit!


@17: Obviously I'm still not being clear (unless I've misunderstood *you*). Last attempt then:

I'm English. I know what the phrase means in the context of the original post. Response #3 indicated that it would be interpreted differently in America, but didn't say in what way, and that's what I'd like to find out.


Aneurin: In an American context, "public school" means "state school", and "Jersey" means "New Jersey" (the state which has the misfortune of sitting between New York and Philadelphia without any large cities of its own).

Probably most Americans' association with the phrase would be something like "mafioso".


Ah, so the problem is that both words do have a 'native' meaning, but they're both particularly different in that context.

Now I know something about New Jersey, thanks.

(Although, Wikipedia claims that "New Jersey overall is considered to have one of the best public education systems in the United States" and "is home to more scientists and engineers per square mile than anywhere else in the world", which I found somewhat amusing in the circumstances)


"a smooth-spoken public school type from Jersey"

In US terms you're looking at someone with a fake tan in a sharp suit who lives in the Bahamas and banks in the Cayman Islands. Sir Allen Stanford is a typical example:


although he has recently traded the sharp outfits for an orange jumpsuit.


This is still fascinating reading.

I noticed the following on an invoice not so long ago... 'This transaction was processed by DataCash'.

Is that the same one you're writing about? I only ask because i've followed your diary for a while now and thought you mentioned them as going belly-up and not looking good on your CV. Unless i have that horrendously wrong. Or maybe they are a new clothes kind of thing like SCO... i must wait for more parts. Just curious.


You know, I think computing's attachment with math's seriously overrated. I'm mediocre at traditional math, but good at computers. It's all because a certain specialized kind of mathematician invented computers and did the early rounds of computer science, like Turing and von Neumann. BUT. Really, computing's just depends on one specialized kind of math, taught in a 1-semester course, Discrete Math, at my undergrad school. Probability and statistics can improve your engineering sophistication and reach, but they're strictly optional.

I tend to think there are three kinds of talent that commonly help computer guys: languages, theory, and abstraction geeks (I'm the last kind - handy for dealing with Big Programming).

I got my kid interested in legos by showing him the potential of noisy destruction for big towers.... We'll see if he turns into a terrorist, or an engineer, or maybe a human-language geek like his mama.


Stephen Harris@5: Access was gone (if only just) by this point, I believe. Certainly we didn't worry about Access a few months after Charlie started, when I joined DataCash.

Tim@23: Yes, it's DataCash. They (eventually) got better.


Another "huzzah!" from this left-pondian for the wry anecdotes. In reading them I have experienced a certain synaesthesic bleed-over (attributable in one part to your live appearances, another part from your reading of Trunk and Disorderly); the illusory voice in which I seem to hear you recount these events puts the deadpan humor 'way over the top and jeopardises my nominally-sober demeanor.

But ... the real reason I'm clogging this space is to beg you to return to the pell-mell, rollicky-ranky hoorah of application development for one final triumph. Y'see, what many people (especially your readers) could really, really use is a practical implementation of the Cash-Data-Beer Payment Clearance protocol -- just scroll back up the screen if you have doubts.

I await the deployment of such a system in the hope that you will be amply rewarded by many happy customers. And until then, I still hope to stand you a pint or six. :-)


Charlie @ 8 - does that stat include people like me who only read the rss feed in thunderbird unless I want to comment?

Chris S @ 16 Forbidden Planet (both websites, there are two entirely separate entities online) are hopeless. I've canceled more orders than have ever completed with FP online. Amazon have sometimes been a bit slow but generally at least they update the expected date of arrival so you have some idea of the delay. Play have been most consistent, free shipping that takes a week at most but usually quicker. At least with Play you know it'll take a week as standard. It would be nice to have a next day option, though.


#25 Thank you. My memory did not completely betray me at least.


"And hitting the jackpot is getting a job that runs for five months or more in any given financial year."

I've had one main client for five years. I've earned good money from it, but my skills have become overly specialised and have atrophied as a result and if I lost it now I would probably have to spend at least six months catching up with the latest trends.

I also have a very limited portfolio as a result. Recently, my client merged a large chunk of their business with another one and most of that 5 years work went off-line, as the new partners had in-house skills (I'm a web developer).

In future, I'd ideally like work that lasts five months at a time and no more, or even better an opportunity to change direction entirely.

Thanks for the series Charlie, it's been very interesting, and motivating, to hear about all the twists and turns.

What would you do?
I'd have done the contract.
Everyone and their dog used to think they had a brilliant web start-up idea, I have a new one myself every few weeks.


@27 and @16 in re Amazon, FP etc.

May I put in a quick boost for "www.thebookdepository.co.uk" they seem to be very excellent at shipping stuff and particulalry good at getting US published stuff over on this side of the pond promptly and at reasonable pricing.

@13 Cashing out. I doubt I'd be _much_ richer because I'd almost certainly have taken my profits and invested them in something that went splat but one thing I have learned from the dot com boom is that holding on to avoid paying taxes generally means you end up not paying any taxes because the shares in question are now worthless. Take the money and pay the tax and bank it somewhere safe like Switzerland is my new philosophy - though I haven't yet had a chance to put said strategy into practice.


>I have a new one myself every few weeks

That's a strange coincidence! I have this absolutely brilliant idea for a sure fire money winner of a website!

Anyone interested in investing?