I was asked to write on this topic for the Society Of Petroleum Engineers in 2013 after I took Skynet Labs through Surge Accelerator in Huston, Texas.
Here is a link to the full article.
Just to be clear, to me, Entrepreneurship is something not taught in academia, it is something learned from experience, from mistakes big and small and especially from those monumental big hairy mistakes. I firmly believe that entrepreneurs do not learn how to be, they just are. I think you can teach a lot of the skills and methods and strategies, but you can not teach grit, staying power, or having a strong stomach for the tough times. Im not saying either I am a master of any or all of these, but I do have battle scars, some victories, some failures.
Starting Skynet came out of my work in building Mercury Digital, the digital agency. We were a team of about 14 at that point December 2011. We took a large hit from a client that had run out of money and wasn’t paying us a large bill. I had been thinking for about 6 months prior that we as a company of designers and developers needed to diversify our revenue streams and not just rely on client service work.
The team and I were rapid prototyping about 3 projects at the time. One was a stack trace reporting tool, similar to Crittercism except only for mobile and smart devices. Another was an intuitive web layout engine based on floating point screen size recognition, the other was Skynets DFS- Drilling Formula Sheets.
So it came to December 2012 and it got around a few people that we were working on an oil and gas calculation tool for iPhone and Android. Next thing I knew I had held about 4 meetings all with people wanting to invest 50k on it. I decided to turn them all down as the people/ investors just were not the right fit for what we were doing or where we were going. One we did accept was from StartupBootcamp which gave us a little money that covered some prototype dev hours we had already put in. I left my desk in Mercury Digital and worked at a desk in a very cold but very cool warehouse in Barrow St next door to Google.
Long-story-short, from there on, with our prototype, I led the business dev, saturating myself half in the problem that our users had and in talking to users and the other half in talking to giant oil companies to convince them to perform trials using our software. What I experienced from there on was difficult. We were given comments by advisors like
“It takes on average 8 years for a startup in the energy sector to start making real money”
Securing trials was and is MEGA DIFFICULT. Make no mistake. Im talking Jedi Master level sales and patience. To get what is called an ‘operator’ level oil company to sign up to a trial, pilot or anything is super difficult.
An operator level company would be like Shell, BP, Chevron. An operator is the ultimate owner and funding company on an oil project. You then have service companies below them like Halliburton and Baker Hughes which are now the one mega company or Schlumberger and subcontractors below them and so on.
To summarise, I was coming from the technology side with a solution that we knew users wanted. I had polled 200 drillers worldwide and they all said they would love to have our product and use our prototype quoting a time saving per day of up to 3 hours. As we gathered more end users, we were still no closer to sealing a large deal with the monolith oil companies.
The oil patch is notoriously slow to adopt new technology and in startup land this can be the kiss of death when your customers are not ready to adopt new tech or buy. The only reassuring thing though it that some of the most successful companies in this space had to cut their teeth on slow traction for up to 5 years before any clients would deal with them. One mentor and customer of Skynets highlighted this to me a few months ago saying that “Sometimes your potential clients will just wait out their decision to buy form you or use your product simply to see if you have staying power. Will you be there in 1,2,3 years time. The oil industry invests in long term relationships, not quick flings”
We went on to take to take part in Surge Accelerator in Texas in 2013 as part of class 2 which was a great experience and exposure to the top level of the global oil industry. I would highly recommend any startup to consider Surge as a development and investment partner. Here is an interview I did shortly after joining the program.
Today Skynet has 50,000 end users around the world and the software is at a stage where we forged partnerships with the right people and companies that appreciated what we are bringing to the industry. It is still very much a startup and at trial and prototype stage company and have some exciting things on the horizon.
So to answer what it takes? Well, it takes determination in the face of sheer adversity, people telling you to let it go and move on, investors bowing out, getting 100 rejections and still going to another meeting. The list goes on. I think the best answer I can give is……It takes whatever it takes until the business is on a positive trajectory or until you give up.
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