Martyn Gould is a seasoned entrepreneur and currently CEO of Right Coverage. Right Coverage (written as ‘rightcoverage’) analyses mobile and broadband connectivity, providing data and ratings for UK areas and properties.
Previously, Gould founded ‘yboo’ in Huddersfield – a mobile phone contract comparison app and ran it from Jan 2017 to Oct 2019. He took yboo from paper concept, grew a team of 12, raised £1.8M in funding and oversaw the company’s acquisition by DixonsCarphone less than two years later.
Well, that’s the unofficial abridged and saccharine version. Because there was nothing simple, sweet or straightforward about what actually happened. Eagle-eyed readers and fans of Dragon’s Den may recognise Martyn from an episode that aired in 2019 just before the pandemic took hold.
“This is a story about deceit and betrayal and hopefully a successful new dawn now” Martyn begins, animated. “This is a story of two founders losing their entire life savings. This was dark days, hardship and real pain, not some carefully manufactured ‘BBS’ – bullsh*t back story – real pain that triggered very real questions and deep introspection to this day. If you enjoy easy success stories with a touch of Disney glamour, my story is not for you” he declares, clearly still reeling over the last two years.
Mr Gould appeared on BBC’s Dragon’s Den in August 2019, pitching for £250,000 of funding in exchange for 2.5% of the business. It’s fair to say he was given quite a tough time by the dragons who weren’t convinced by the valuation of the company nor the degree of commitment a large comparison site had made towards Gould’s company. The Dragons were pretty excoriating. It was rough viewing and tough for Martyn to swallow at the time, but in retrospect, ‘bad luck’ was merely getting its shoes on at that point. A few short months after the episode aired, yboo faced collapse. Martyn continues the story below.
“Quite early on in the life of yboo, we got a buyout offer from GoCompare” Gould starts. “For most founders and investors these would have been the happiest days of their lives; your hard work and investment was about to be repaid handsomely. Investing in any new technology startups carries huge risks that can only be balanced by the hope of a ‘50X’ exit for your faith and endeavours.
If you’re an investor, and a gigantic brand comes in to buy out part of your portfolio, you know you’ve invested in something great right? But that’s not what happened here. In fact, it was the beginning of the storm to come.
Our investors upped their stake in our company considerably – perhaps eyeing an even larger prize. But with every extra pound invested, the investors seemed to become more and more needy which wasn’t what we needed at the time at all. They seemed less able to focus on the detail of what we were doing day to day. We instead found our attention geared towards managing them and their expectations than the actual nitty gritty and project at hand. But we all persevered.
An Investor Calls
“It was a gloriously sunny Saturday afternoon and things were looking on the up for myself and the company. We’d had a good week. That week, yboo’s MMR (monthly recurring revenues) had hit an incredible £34K per month. The sky was now the limit I thought.
I took a telephone call, it was our investors. I was being told that their bank account had been ‘temporarily frozen’ due to the activities of one of their previous directors. But I need not worry because ‘fixes’ were in progress. But I may see some rather negative news about them in the papers early next week. But I should enjoy the weekend and not worry about this for now. Because it would be fine.
The fixes never came. Our investors defaulted on their agreements with us and other people and weeks later, yboo was placed into administration.
Paul [Paul Doyle, co-founder] and I made a buy-back offer backed by a financial giant to allow our investors to break even but our offer was not acknowledged. Our employees left, all snapped up by other companies. The business was ‘sold’ to DixonsCarphone for 1% of it’s value”.
“These were the most painful five weeks of my life, then followed by painful months of unpaid work transitioning yboo over to DixonsCarphone. Life savings, gone. Company, gone. We were defeated, broke, downtrodden and laden with pangs of guilt for the people we’d worked with or had backed us. Paul and I felt we had failed them and ourselves. We felt we didn’t have a value or future. And that’s hard to take as founders.
During that dark transition phase – middle of last year, 2020 – we managed to pick up a little bit of extra work while working out what to do next. Up until now, Paul and I have effectively lived on minimum wage. I personally would not have been able to survive without selling most of the things I’ve worked so hard for over the last 20 years. This did nothing but add to my feelings of hopelessness and failure. I owe a big thanks here to the people who checked in on us over those months to make sure we were ok, or as ok as we possibly could be at that point”.
“In this period, Paul and I talked about starting something else, something small – a ‘side hustle’ to begin with, just to bring in some extra money and take it from there. We also wanted to make amends and get back some of what we had lost. We (correctly) believed that our reputations were now so badly damaged that no-one would employ us so we couldn’t make any money through traditional extra work. We were in the same boat and we only had ourselves. We’d have to start again, together. We named the side hustle Right Signal. But we later had to change this to Right Coverage (‘rightcoverage’) to head off a legal dispute about the name. We really didn’t have the appetite for drama after all we’d been through the last couple of years. It was easier to change it at our end.
I make no secret that we liked working out of Wetherspoons for the odd day each week so setting up a business in the lockdown climate was very different and had a different set of challenges. While it would have been cheaper to pull up a stool in a local bar, that clearly wasn’t possible in lockdown so we rented a room in Regus Halifax for a day every week where we’d meet and strategise. In October 2020, we officially and fully committed to rightcoverage and making it into a proper company. The challenge now was moving the company into a position where it was making cash off its own steam rather than eating the little cash we had”.
A New Chance
“I can with all certainty tell you that the company’s fluid transition from ‘eating’ to ‘making’ cash came about as a result of hard graft, a total refusal to be beaten and a bit of luck. We took a huge risk in how we positioned our service. We decided there would be no need to register to use our service – which could have been seen as foolhardy – but that enabled us to target a huge chunk of the population with privacy at the top of their concern list.
A sharp upturn in revenue in November 2020 convinced us that although we had no money, we could deliver decent margins if we could just keep it growing. We managed to beg and borrow enough cash to increase our targeting and messaging and drive more people to our service.
We doubled November revenue in December. Doubled December revenue in January and that story (double growth) has been fairly consistent since to today. We now rent a tiny room in the same Regus, but not just one day a week. We secured a peer-2-peer loan, then more recently sold 1% of rightcoverage’s equity to help cashflow. We’re on track for £100K monthly recurring revenues by Q3 this year.
No bounce back loan, no CBILS (Coronavirus Business Interruption Loan Scheme), no start up loan, no team, no glamour. No PR, no chasing glory. Just a solid focus on spending as little as possible and doubling that growth. Spend minimally, double that growth.. spend minimally, double that growth.
As we get back to where we once were, we decided to allocate some of the shares in rightcoverage to our old yboo team who obviously lost out in all the turmoil. There are various reasons behind that – some alluded to above – but that’s a story for another day perhaps. But we still look back on those times with horror and the key point is that we’re determined to give our old guys the exits they should have had, and deserve. And if all things go well, that should hopefully be later this year”.
“The 5 main things I’ve learned from this story are these:
One: We were not perfect. As Founders we tried our best, but ultimately we failed to control our stakeholders and we lost.
Two: You can instantly tell who will be there for you in the good times and the bad times. If you know someone won’t be around in the bad times, don’t have them around you at all.
Three: Never give up. Don’t let anyone else determine whether you are deserving of success.
Four: When you have investment you have more choices and more time – but act as though you have neither and you will grow quicker.
Five: Split the risk. Create multiple start-ups across differing sectors and share the rewards with whoever backs you.
Looking back as I speak about this, the lessons for founders here are easier to spot and I often wonder why I couldn’t see what was going on, but I can tell you, as a founder in the midst of this chaos, it became impossible to distinguish between the wood and trees in neverending soap opera mini-dramas that often come one after the other. We just hope that our experience and possibly naive trust may make other founders think twice about who they bring in, why they bring them in and be aware just how quickly things can change if you lose control and the vision of your project.
We’ve been to the brink and have had to come back the long hard way and we wouldn’t wish any other entrepreneur that journey. If we make just a few founders pause before they go careening off into the horizon, then telling our story would have been worth it”.
You can find out more about rightcoverage at rightcoverage.co.uk
(Martyn Gould was speaking to Davis Mukasa. Interview abridged and amended in places for clarity).