On March 06, 2008 Signature Days, a company I founded, sadly went into bankrupcy. This is our story.
Signature Days was founded in my apartment in November 2004. At the time there were similar models in the
After we were founded, two more credible competitors came into the market. The first was Cloud 9 Living and the second was Excitations. These latter two actually came out with very nice websites and Cloud 9 Living quickly came to be a viable competitor. Excitations had limited geographical reach which held them back to a certain extent. Of the original two, Great American Days seem very corporate focused so we never saw them much and XperienceDays simply got outclassed by the new comers. All four however, currently exist and compete, so all credit to them.
Within 2 years Signature Days, in my opinion, had the best looking site, very broad coverage and by far the best distribution with cards in CVS, Walmart and Costco and distribution deals with Hilton Honors and United Airlines. All credit to the excellent team that we had assembled. Unfortunately this rapid growth would eventually undo us.
After our launch in June 2005 we started well with a great 2005 holiday season and a fantastic 2006. With all guns blazing we were growing fast and had to start building capacity to handle the growth. By capacity I mean more people, a real office space and better technology. We did this in 2007 while we were seeing around 30% growth month on month over the previous year.
However as we progressed into the latter part of the year our super growth, turned into mild growth and by the last month of the year we saw a decline over the prior year. This was about the time that people first started talking about the mortgage crisis. People were worried and they were spending less on luxury, non discretionary services. At least from our point of view they were.
The holiday shopping season of 2007 was a bad one. Few retailers remained unscathed. Early 2008 saw The Sharper Image going bankrupt as well as Utix, another experiential aggregator that focused mainly on Golf and Skiing. We tried to reduce our burn by making some quick and painful cuts in January which helped. But as we marched into February we realized things were looking grim.
I quickly met individually with 3 or 4 seasoned executives who I have known and trusted for many years. The consensus was, to paraphrase, something like this:
“This is not going to end well. Although Signature Days is currently not out of money, it probably would be by the summer. While we still had some assets and some cash in the bank the right thing to do would be to file for Chapter 7 Bankruptcy and allow the courts to distribute the leftovers in an efficient and legally equitable way.”
This was very hard to hear but a little voice inside me knew they were right. Once I was convinced I did not hesitate with the painful actions that lay ahead. We filed and with that I said farewell to my initial $400,000 investment and the sweat equity of working the first 2 years for free.So contrary to some misguided opinions I did not run off with anyone’s money, this was not a scam and no one benefited from our demise.