In 30 days, my startup will be be dead
Almost 2 years ago today, I quit my day job and started building something. After months of customer development, discussions with my wife about my plans, savings and sleepless nights, I finally decided to take the plunge.
I’m glad I did
That day I quit my job marked the beginning of an epic roller coaster ride. One that saw me hit the top of TechCrunch, hire employees and become a rising star in the technology world. Glowing in our newfound success and ramen-riches, we got an offer that seemed to be the key to making it huge. We were offered a spot in a very well known accelerator.
They say accelerators speed up success and failure, in our case, all it sped up was our ability to play the startup game
The day we set foot into the doors of the accelerator, we had a business that DHH would be proud of. Bootstrapped, lean and already providing (in a small way at least) for the needs of my family and that of my co-founder. Over the next 3 months, our initial desire to not raise a seed round was dismissed and we were thoroughly convinced that we had to continue on the VC rocket-ship in order to matter to anyone. My reluctance to do this was met by scoffs and dismissals from many others in the accelerator cohort (most of which have since gone on to fail hard) as well as by the mentors and investors who had offered their time, network and resources to help us succeed. This is where we made the first in a series of many mistakes
We listened to our investors
They were proven entrepreneurs that had made millions (sometimes nefariously…) and they believed in us. If only we would:
- “Make feature X free”
- “Stop focussing on revenue, someone else will pay the bills”
- “Grow $VANITY_METRIC so you can show a hockey stick at demo day and look good”
- “Cut out that pesky client that generates 80% of your revenue, they’re a distraction on the road to executing $OUR_BIG_VISION”
We drank the Kool-Aid and went all-in. By the time demo day came around, we had cheques being written and were all over the press. Still, I had this nagging feeling eating away at me. That nagging feeling was disbelief.
I didn’t believe the shit I was selling investors. This was not the company I put my life on the line to build.
We raised our round, closing up early so we can get back to work and stop fucking around on endless pitches and breakfast run-arounds. Product after product hit the market and found traction, but not the million-user strong kind of traction that would make us matter. My team was still motivated though, firing on all cylinders building these apps that they loved. Despite this, I found myself sitting at my desk, afraid, alone and overwhelmed.
I built a team that I love. I didn’t build a team that can lead.
I really love my co-founder. It’s an enduring bromance that will last a lifetime. He’s a talented executor, supportive listener and I trust him entirely. However, he left me alone in the cold. He didn’t mean to do this, he didn’t even realize he did. I became the guy who would “do-it-all”. Biz Dev, check. Product Management, check. Support, check. Accounting, check. PR, check. Ad Copy, check. Development Lead, check. While he took complete ownership over design (and really excelling at it).
I’m overwhelmed, stretched so thin and unable to do a really good job at any of my duties. I don’t sleep nearly enough and honestly think the only thing that keeps my health and my marriage intact is my running.
When I built this team, I didn’t build it with generalists and with people who could jump into any area of the business and get shit done. Instead, I built it with quality-minded perfectionists who build beautiful things. These people have their place, but not as early founders unless they can hustle.
Thus, in many ways, when my startup fails, I can clearly say that I failed since behind the scenes I’m responsible for much of what the world sees and how the gears of this (albeit tiny) organization turn.
I don’t know what happens next
I made the decision to start this blog in the middle of the night last night while lying in bed next to my sleeping wife. Just one of the many people I will have disappointed due to this failure. (However, undoubtedly one of the few that will still love and support me afterward). This week, I need to speak to the other founder and fire our first employee before he leaves on a planned vacation. He’s a good developer, but I won’t fucking make payroll next week if I don’t clear him and his severance out of the company.
Yahoo buys Tumblr
The news is official, Yahoo buys Tumblr for 1.1 billion.
There are a lot of people up in arms about it for good and bad (mostly bad) reasons. It should be made clear that startups (and companies) are in the business to make money. Startups are built for exits. Sometimes that timeline has a long horizon (IPO). Sometimes they are short (acquired, sold, fold). That’s why investors are willing to invest in them; so that one day they might bring back a large return for their risk.
As much as I love milk tea, Boba Guys isn’t “just for fun”. Our goal has always been to be the very best at what we do and to change the tea game like the Blue Bottles and Philz Coffees of the world have been able to do for coffee. Building and owning your own company is a lot of fun, but we’ve also put in a huge chunk of our life savings and countless hours into it. It takes its toll.
No entrepreneur in their right mind spends a huge chunk of their life building something for free. Money isn’t everything, but it’s certainly part of the equation. How it comes (through advertising, paid subscription, talent/tech/user acquisition) isn’t always uniform but payment is unequivocally rendered. If Tumblr gave me the option to get paid out for putting ads on my site, the left side would be Phoenix College and the right side would be penis pills before you could refresh.
What’s troubling to see is that there is a lot of entitlement towards something we didn’t create. Even worse, there’s backlash when a startup decides to monetize. We saw it happen with Instagram. It’s a free service and it’s awesome! We use the service and we can leave at any time.
One could argue that the services would be nowhere without the users (or early adopters). I would counter that I have acquired far more value from Tumblr, than they have from me. And I’ve been on the service for almost 5 years and paid nothing. When Google Reader decided to shut down, I was disappointed but optimistic that someone would pick up where it left off and make it better because again, I paid nothing and deserve nothing. If I cared enough, I might even build my own.
We live in interesting times..the tools and technology available today enables anyone with an Internet connection to build and deploy anything we want to see in the world. Don’t like a blogging platform anymore? Roll your own. Hate ads? Learn to pay when you receive value. I’ve never bothered to e-beg like Maria Popova but would you be upset if I did?