Coast Digital CEO James Frost sold price comparison website CompareandSave for more than £12 million, but he’s the first to admit it’s been a bumpy ride.
Coast Digital CEO James Frost sold price comparison website CompareandSave for more than £12 million, but he’s the first to admit it’s been a bumpy ride.
When I started my website design business in the 1990s, I quickly learnt that money doesn’t last very long. I got through all of it (about £20,000) in the first few months.
My approach was just to get the work so I could pay the bills and I had this unrealistic view that the bank would be falling over itself to lend me money. They made it quite clear they had been burnt from dotcom businesses before and would not view any application for funding favourably. I ended up having to draw money from my mortgage to get additional capital, which was around £50,000.
The experience taught me the importance of being able to take advice and support from people when it’s available, even though it can sometimes be easy to dismiss. After I got support from a business mentor everything became much more goal-oriented and the business started to find its direction.
‘My approach was to get the work so I could pay the bills’
Another lesson I learned is that you have to fight for things: they’re not just going to be given to you. Before I started out I was promised some contracts from old friends and colleagues from previous companies. However, once it came to the crunch, most of these offers evaporated. If they had followed through with their promises then that would have kept us going for longer in those first few months, but I may never have started the business if I had known they were going to change their minds. So, in a sense I suppose, they did me a favour.
Keep going
I started my current business, Coast Digital, in 2002. It was a 50:50 joint venture, and what caused me a lot of pain and anxiety was that when it came to needing more money, my partner was nowhere to be seen. So I had to make the decision to buy him out.
It made me realise that if you are going to embark on a joint venture, you need to have a clear outline of each other’s expectations first. Friendship and business don’t mix otherwise. By the time I set up Compareandsave.com with another partner in 2005, I learned my lesson. Falling out with a good friend has got to be my biggest regret in the last seven years.
In the early days of Compareandsave.com I was trying to do everything on a shoestring, but my partner pointed out that the company would never achieve its full potential that way. That was hard to accept at first, as we were running the company as a side operation and I didn’t want to lose him from working full-time at Coast Digital.
The problem was that I was consumed by the other business and didn’t want to get too caught up in a side project. It’s possible we may have made greater headway if we’d focused more on the new business, although it worked out well in the end.
The key thing to remember in business is that you have to be prepared to change, but also be open to suggestions from other people.
