There are few things more depressing than hearing that your app developer has gone into voluntary administration.

Oh no, wait, there are several things:

1. Discovering that the administrator will make $50,000, with the senior making $19K for 60 hours work.

2. Realising that the liquidator will make a further $30,000.

3. Knowing that the administrator and the liquidator are one and the same.

4. Finding out that YOUR money is, in industry parlance, unable to be recovered.

There are several lessons I’ve learned from this short foray into admistration territory:

1: ALWAYS pay on a credit card or with Paypal. The creditors who did this were able to recover all or most of their cash.

2: Just because it’s a company with a fancy website, good-looking apps and great testimonials doesn’t mean it can’t go under. No company will ever tell you that they are about to go bust.  There were several creditors who put down a 50% deposit on the Friday, to be told the company was bust on the Monday.

Apparently, all the directors are above suspicion.  However rumour has it that one of them went on several overseas holidays and bought some nice furniture too. Karma is now on the top of my “To Believe In” list …

3. Administrators are vultures. They administrate a company for the same reason you do business: to make money.  And they will take as much as they can.  It is apparently standard for the administration and liquidation costs to be coincidentally identical to the amount of cash in the company’s bank.

4. Just because your developer of choice is based locally doesn’t mean that their coders are. I found out recently that the coders The Developers were using were from Belarus.  I thought that the account manager had said La Perouse…  The point is, if the coders are not local, and your developer’s prices are, then the developers are charging a premium.  Which means you’re getting screwed.

5. If it seems to you that nothing is getting done on your project, then that’s probably the case.

The Developers had my account for about six weeks, and all I received during that time was wireframes.  They had quoted me twelve weeks to release.   As this was my first time I assumed that this is the way projects go, and that things must have been happening that I didn’t know about.  The administrators then told me that nothing had been started on my project.

Actually not a bad thing, as the administrators then sold the creditors the IP that they had already paid for.  Vultures.

6. Being a director of a company means that you can ditch your company to administrators and walk away scot-free. So what if there is $100K worth of unfinished business that your clients put their hard-earned into.

7.  DO YOUR RESEARCH. Hindsight can be a hard pill to swallow.  I know why I made the decisions I did.  I decided on The Developers because they got back to me in a courteous manner, gave me a detailed quote, called me up to discuss the quote, and they had designers and coders under one roof.  I didn’t want to submit to analysis paralysis, so I made my decision fairly quickly.  And let’s be fair, if the company didn’t go bust, then it would have looked like the right decision.  But now I have a much, MUCH better idea of what research is.

Nate Hunter is living the dream-slash-nightmare of startup land, balancing full-time work, child-rearing and an oversized head with the entrepreneurial rollercoaster. Fun times, fun times.