Before it was a multimillion-dollar enterprise, Appster’s startup story started with a tale of a broken vacuum cleaner, an international betrayal, an undying passion, and a whole lot of McDonald’s wrappers.
Today Appster has a team of 400 across offices in Melbourne, San Francisco and Gurgaon, India and annual revenue of $19 million, according to co-founder Josiah Humphrey, but the startup’s origin story was not so glamorous.
As a way to show that startup life is full of trials, setbacks, and triumphs against adversity, the Hot 30 under 30 alumni recently took to Medium to explain some of the more challenging parts of Appster’s origin story. From living and working in an old distillery tower with a broken vacuum cleaner, to not getting paid, being defrauded by an international employee, and living off fast-food, it’s a tale of struggle and ultimately learning.
“I wanted to be more vulnerable and show that we’re not just this ‘overnight success’ that’s had it easy,” Humphrey tells StartupSmart.
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After launching in 2011, Appster’s offerings were gaining traction, and in 2013 the startup — and its founders Humphrey and Mark McDonald — were calling an old distillery tower home.
Living and working in the same office wasn’t necessarily conducive to a healthy work-life balance, and when the founder’s only vacuum cleaner broke, Humphrey says he hit a new low.
“One of the lowest points in my startup career revolved around a dirty office and a vacuum cleaner,” he shared in his post.
Because the company had “a dogged focus on growth”, Humphrey said cash reserves “were at an all-time low” and the business was struggling to pay its staff and “was hovering near the edge”.
After a previous Appster general manager lent a helping hand and bought a new vacuum, the founders managed to clean up their office, and their finances, but were still not taking a salary themselves. They chose to re-invest all the funds back into the company — that is, “except for what we spent at McDonald’s” Humprey said.
“I think [showing that struggle] is important with entrepreneurship, because a lot of it is glamourised; people think you just make millions and drive fast cars,” he tells StartupSmart.
“If you read the stories of every single person who’s achieved anything they’ve managed to do it by overcoming adversity. That’s the way it is — it’s not like you wake up five years later and it was the easiest thing in the world,” he says.
Bouncing back from betrayal
While the startup now had fewer dust bunnies, thanks to its new vacuum cleaner, it still faced major challenges. In 2013, the founders decided to set up an engineering hub in Gurgaon, India, but soon learned the perils of operating an international office.
“Nothing worked. It was a total failure,” Humphrey said of their early efforts to establish an Indian office.
The company hired a Melbourne-based director with an Indian background to work onsite in the country, but Humphrey admits “the wheels flew off the bus” after he visited India and discovered the new recruit had been defrauding the company of hundreds of thousands of dollars.
“This new, trusted hire had recently torn up thousands of receipts and tossed them in the water,” he said.
While “the betrayal was devastating” and it took Appster nine months to get back on its feet, Humphrey said what kept the startup going was a “shared enthusiasm for the company” and the fact the founders “never lost sight of what we were trying to create”.
“There’s a million things I would do differently”
While Humphrey says he is “thankful for the journey I’ve come on”, with six years experience now under his belt he says if he had his time again he would “start things [like marketing campaigns] a lot quicker, hire differently and make a lot of changes.”
“I know everyone says the cliche, ”No, I wouldn’t do anything differently’,” Humphrey observes.
“There’s a million things I would do differently.”
Though Humphrey admits Appster isn’t “a little startup anymore” he says the journey, and the business lessons learn along the way, was like completing a six-year-long MBA.
Humphrey himself dropped out of high school and bypassed going to university, but says that didn’t stop him from growing Appster into the multimillion-dollar business it is today.
“There are many, many, many successful entrepreneurs that dropped out along the way to pursue what they were doing,” he says.
“Even though I didn’t go to uni, I am a learning junkie, constantly learning from top experts in the fields … listening to podcasts, and trying to learn as much as I can,” he says.
Humphrey says Appster is now looking to expand into more countries in Asia “hopefully by the end of the year” and in the next six months will be launching a new founder and startup-focused platform that’s been years in the works.
One thing Humphrey doesn’t plan on worrying about in the future is having a working vacuum cleaner.
“We’ve bought a few — we should be good now,” he laughs.