--- Introduction ---

More than three years back, three of us (all classmates from college) decided to take the plunge and start up. I know one of the founders very well; we did a lot of projects together in college. I was also working with him (in the same company) before we decided to start up. We both worked at a small software development firm. (Let’s call him Jerry) The other co-founder was a very good friend from college and had similar ideas about starting up. He was working for a fairly large software development firm before starting up with us. (Let’s call him Tom)

We decided to put in our own money and initially started out creating our own product, a web based event planning tool. Our initial plan was to create a basic version of the application and depending on the response create a premium (paid) version for event organizers. Unfortunately, at that time, event organizers in India weren't really interested in the idea. We started looking for consulting work and received a few local and overseas projects. This definitely boosted our confidence and our bank balance.

[While working together we noticed that the way me and Jerry worked was different from the way Tom was used to working. Tom wanted a proper document in place which would describe exactly what needed to be done. While me and Jerry didn't have any qualms about having everything in writing before starting on a project. As projects would progress, we would realize that we had missed something and it would require some more effort. This is where we saw things differently, Tom would sometimes flatly refuse to work on the change or be upset because now he would have to work on something that wasn't mentioned earlier on. Me and Jerry would not think much of it and go ahead and get it done. This had caused issues between Jerry and Tom, which eventually led to a discussion in which we tried to make Tom understand that requirements change and we aren't a big software company and following processes which are prevalent in bigger software companies would not be feasible for us]

Over the course of one year we completed couple of more projects. We also managed to sign on a large project which would involve us hiring 3 more developers. The contracts were signed, we finish hiring and had started the initial requirements gathering phase when suddenly the client wanted to put the whole project on hold for a couple of months (this was during the slow down around Q1 '09), the client eventually backed out completely. We were in a very precarious situation as we had hired people and had no projects that were currently running (never put all your eggs in one basket). As this was a recession, getting projects was very hard, and we eventually had to dip into our savings to keep our startup afloat.

After a few very uncertain months we slowly started receiving work. We found a project which would involve us dedicating one person to it continuously (let’s call it the US project). Tom started working as a dedicated resource for this project since he had experience in the technology they were looking for. Simultaneously we started getting couple of small projects which would keep everyone mostly busy.

At this time the project that Tom was working on would make up the significant portion our revenues and is what kept us afloat till things picked up.

Tom (after about 6 months) started training one of our developers (let’s call him Patrick) to work on as the dedicated resource for the project. For quite some time Tom & Patrick would both be working (the knowledge transfer period was quite long) on the US project. Tom still spends at least a couple of hours every day helping Patrick.

Me and Jerry have been working on multiple projects as we have been getting a steady stream of projects and have more than we can currently take up. Most of us have been working at least 12 - 14 hours in a day.

In June this year Jerry and Tom had a heated argument on the direction the company should take. We all had a long discussion on our current situation and fut...