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Third time start-up: Applying the lessons of 25 years in business

Founder of David Lester launches his third start-up today. Here’s how his start-up experiences inspired a new business

Fifteen years ago I was busy working incredibly hard developing this website— I am thrilled to say that it worked well, after a bumpy start, and is now read by millions of people every year.

I am still as passionate about start-ups and small business today as I was then. So much so that I am in the middle of launching my third business.

I launched all those years ago in order to help other people start their own businesses. So it feels natural and important now to write this blog in the hope that at least some of you will get some useful tips from it. I’ll talk about the highlights of the new start-up journey – and, just like the book on starting a business I wrote a few years ago, I’ll include the good, the bad and the unexpected.

Starting up for the first time

I started my first business (a software company) as a hobby with some friends when I was 22. That had a great first year, then a few terrible years before finding its feet properly and growing fast, especially in the USA. We sold to a larger US company in 1995 for a substantial sum.

Since then I have invested in over 15 small businesses directly, and in several venture capital funds. I have seen some fabulous success stories, making some good profits, and some real horror stories where I lost my entire investment. The experience has helped me see a number of things to do when growing a business, and a much longer list of what not to do!

I then started Crimson Publishing in 1999, mainly to launch as a way of “giving back” while also making some money; the publishing world has changed dramatically since then, which gave Crimson its own roller-coaster ride, but I won’t bore you with that here. It has evolved into a small, successful book publisher and Startups (this website) is run as a successful separate team.

At Startups we talk to literally thousands of people starting and running small companies. Over time, a number of themes have emerged as constant issues – such as raising money, and the burden of red tape. This gave me the idea for my new business.

Inspired to start-up again

Several  years ago I tried to buy a product which I couldn’t find, but which I thought really ought to exist. I thought that quite a few other organisations would want it, too. So I did some research, and found that there really wasn’t anyone doing what I wanted for small and medium sized businesses.

There were some companies offering it, though, for very large customers – but at enormous cost, far more than it would have been sensible for us to pay. As I looked into this more, I saw various ways to build on the core product I had originally wanted to make something really useful, and completely unique.

This idea took root inside me and grew. I kept coming back to it, seeing new ways to do it. And there were two reasons I felt that this was the right idea for my next start-up. Firstly, the bulk of the product is software, which I had done successfully once before and felt excited to get back to. Secondly, the customers for this new idea would be small businesses – and through I have developed a good understanding of what this audience (people like you) want.

OK, so what is the idea? In short, an all-in-one employer support service. Eh??? I know, one of our challenges is how to get across what we do quickly and clearly! My initial idea was for an online employment database so I could store my employment records online and access them from anywhere, any time.

We were forever losing bits of paper and struggling with the admin burden of having employees (from all those requests for “how much holiday do I have left this year?” to reference requests for employees who left several years ago).

A new way to take care of HR

I had a vision for a product which would enable me to look up information about my staff from anywhere, 24×7; one which would store targets for bonuses so there was never any dispute about what they had been; one which would be smart and send employers reminders about key dates, from the end of a probationary period for a new member of staff to reminders about work permits expiring soon or maternity leave or even when people’s birthdays are…

Over the years at my other companies we have tried several different ways of getting HR documents and advice. We have used employment lawyers and HR consultants, and found good and bad in both. We have subscribed to various services which send us details of when employment law changes.

I thought that it made far more sense to combine all this into one service; why just tell someone that the law has changed, when it would be much more useful to tell them and at the same time update their employment contracts or policies as needed? And let’s synchronise this to payroll, so you don’t need to retype all the information (which most small companies still do today).

I spent over a year researching and planning just such a product. I set about building a team, with HR and employment law expertise, and 15 months ago we started development work.  Along the way the product has changed quite a bit, grown substantially, rebranded, and become increasingly focused on the smaller end of the market (organisations employing from 1 to 30 staff in particular). And we’re quite a few months later than originally planned – a very typical start-up, then!

We are literally launching today, and I am really proud of what we have put together. There is lots we will add to the service over the coming few months, but already it is the UK’s only comprehensive HR service for smaller employers.

We have named it citrusHR—because we think we have a really fresh approach to issues every organisation which employs people faces.

You might think it would be easy to start a company for the third time. Certainly there are some advantages, though I am still encountering some of the same hurdles I did with my very first business, as well as plenty of new ones.

Over the coming weeks I will share much more of the journey with you. I hope you enjoy the story and get something out of it. Feel welcome to comment on this either on the site or directly to me at – I will try to answer every one.

David Lester is the founder of employer support service citrusHR.


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