Postmortem of Venture-Backed Startup, Sonar
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Teddy Roosevelt and his father suffered from bouts of depression, and the remedy they found was constant movement. They had a saying they would repeat, "Get action, be sane". Keep moving. It's the striving that counts more than the results.
You've probably heard this one before but its fitting upon the death of a dream:
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat"
- Teddy Roosevelt
So I raise a glass to Sonar, and all the (wo)men in the arena, whether they find victory or defeat.
And in the final counting it's not a defeat, it's a strategic retreat. They will fall back, consolidate their position and go once more into the breach.
Kudos to the team for trying and to the author for writing it up.
Is it okay to say cynicism kills?
Kudos to anyone who exerts effort in their great attempts and ambitions, rather than sit off to the side and make nonconstructive remarks about the failures of others.
You see it in the father that sinks hundreds of thousands into a franchise and loses the family house or the founder banging their head against the wall. That's where ambition crosses over into obsession, or addiction. Fail fast is a good motto.
We all can't and don't want to achieve greatness, but striving for something is one of the best tools we have for dealing with the predicament of being a human on a still primitive earth.
The thing that impressed me most about TR was that he became a once-in-a-generation leader through sheer force of will, a demand to have fun, to be free, a desire to experience new and dangerous things, and a righteous absence of fear of death.
All this despite treacherous fate cursing him to be a sickly child, with severe asthma at a time when there were no good medicines for it. His brother was the heir apparent, but TR had a lust for life, he wanted it more.
I want to want it more.
"There are a few people in every country so born that they can lead lives of leisure. These fill a useful function if they make it evident that leisure does not mean idleness; [...] But the average man must earn his own livelihood. He should be trained to do so, and he should be trained to feel that he occupies a contemptible position if he does not do so; that he is not an object of envy if he is idle, at whichever end of the social scale he stands, but an object of contempt, an object of derision."
further down[2] the nuance is again changed:
"The citizen must have high ideals, and yet he must be able to achieve them in practical fashion. No permanent good comes from aspirations so lofty that they have grown fantastic and have become impossible and indeed undesirable to realize. The impractical visionary is far less often the guide and precursor than he is the embittered foe of the real reformer, of the man who, with stumblings and shortcoming, yet does in some shape, in practical fashion, give effect to the hopes and desires of those who strive for better things."
[1] Page 5, http://design.caltech.edu/erik/Misc/Citizenship_in_a_Republi... [2] Page 8, ibid
You'll learn a ton of stuff about RepRaps but you're going to be behind on your hardware product at some point, if the goal is your hardware product maybe wood or farming out the parts to people that already have 3D printers would be a short-cut time wise and depending on what you do also precision and finish wise?
I'm all for a good round of Yak shaving though so don't let me distract you from your mission ;) But if you're serious about your hardware product and attempting a start-up speed is somewhat of an essential thing.
I wanted to not just build a manufactured product, I wanted to build a kit, like the RepRap, that could be fabricated by ordinary people out of a combination of printed and mostly commodity parts. I wanted to build a new kind of hardware product, one where the lead time of tooling and manufacturing could be cut out, at least for the kit version, I plan a full normal manufacturing process as well. So building was us eating our own dog food.
It's an experiment to see if the RepRap model can be extended to other areas. It's an experiment to see if 3D printers can live up to their hype. The hype is incomplete, as small plastic parts are only so useful. But I think plastic parts in combination with circuit boards, arduinos, laser cut wood parts and commodity manufactured parts is incredibly powerful.
This was my thinking on building vs buying a 3D printer when I made the decison:
I needed a large build area, and so the 12" Prusa for $650 seemed a good choice, compared to a $1300 Solidoodle that I read bad reviews of, saying that it did not work well, or a $2000+ Makerbot that I just did not have the money for on my bootstrapping budget.
When I bought the kit the seller advertised a build time of 3+ hours. I thought that's nothing, we can do it in one or two evenings and it won't set us back at all. It took much longer, but what really took time was the fine calibration and the learning curve of designing 3D parts that are able to be printed one layer at a time.
The instructional videos were outdated in many places, on older iterations of the kit. We had a heated bed short out, and we had no experience with RepRaps. The parts didn't come labelled and just figuring out what was what took a while. I didn't realize until the end that Colin at MakerFarm provides heroic, incredibly responsive email support and so many of the questions that stumped us for a while could have been answered almost instantaneously with a quick email.
Despite that, Makerfarm still makes a really great RepRap kit that I highly recommend and Colin is seriously a standup guy that replaced the shorted out heated bed for free.
I considered farming the parts out, but knew I would need to print multiple iterations and I would not get it right on the first or second or third attempts and it would slow down our OODA loop.
I can't wait to show the world what we have been doing but we are just not quite ready yet, still in super secret g14 classified startup mode.
Looks like you've really thought this out well, one of my previous experiences along the Yak Shaving line wasn't so hot so I figured I'd just give you my $0.02. Ping me when you're ready to show please!
I'm sorry that the author's company did something screwy with a daily deals company and it didn't work out, but this is extremely bad advice.
For all but the most dramatic successes, companies are absolutely sold and not bought. Small strategic acquisition? Talent acquisition? Technology acquisition? Asset sale? None of those will happen if you don't know the potential acquirers and take the appropriate actions - usually backchannel mentions with a simultaneous PR push. If your startup's failing, and you don't have a plan to sell, you'll run it into the ground and you get nothing. With a plan to sell, sometimes you still get nothing, but sometimes you'll get a cushy landing, and sometimes you'll get rich.
The author's company didn't go wrong by trying to sell, it went wrong by getting wedded to a single company who wasn't really interested (nine months? come on) and by dramatically changing what they were doing instead of focusing on building a shiny happy narrative that could attract other acquirers.
http://www.slideshare.net/justGlew/the-terminal-plan-how-to-...
I'm also a fan of Basil Peters' Early Exits book. I don't agree that you need an 'exit coach' or an 'M&A advisor' to do this stuff, though, which is what he's been emphasizing on his website.
This applies not just for companies, but for products in general.
It is inspirational and helpful to know what to do. It is even more helpful to know what not to do and which mistakes to avoid. You gain time to figure out other problems on your own.
Blindingly obvious to some, and will never been seen by others. Being responsible for something you have no control over is probably the worst position to be in in any aspect of work/life.
With your post, you gave me the inspiration to write about it, I will definitely share what I passed so, maybe, I can avoid the same thing to someone else.
I am not ashamed about failures, I failed so much time in my life, but on the other hand I succeeded in some other case when it was completely unexpected. Only people that try can fail, who doesn't try can only live in the world full "what if I had try...".
I hope you can find a new, successful project and apply what you learned!
Edit: Typo
If you meet someone at a networking event, or at a bar, there is inherently some common ground or common expectation.
Something like Sonar is context-agnostic: I could be running late to something, hanging out with people I already know, at work, etc. It might be a nice idea in theory to think you are bringing people together, but the real question is do those people want to be brought together at that time in the way you are bringing them together?
You are right in that context is key.
Facebook and Twitter: both stupid ideas that now have dominant market positions. The iPhone was "too late, too expensive, too lame" to take off when it was first released, at least in the opinion of some professional pundits.
These lessons or observations are all OK, although I'd say that figuring out what people are willing to use or pay for is and always will be a huge unsolved problem. Sometimes you build something for a market that turns out not to be there.
There are two types of technology: ones that everyone wants and no one knows how to do (think SpaceX) and ones that everyone knows how to do but nobody knows anyone wants (think Facebook).
Everything in the social media/mobile space is a lot more like the second kind. There's not rocket science. It's all HTML and CSS and .js and nosql and whatnot. But knowing what people are willing to buy into, out of all the infinite things we could do with those parts, is a mystery.
No, they weren't. They were tasteless ideas. Pundits hate tasteless ideas (because their job is predicated on [being perceived as] having better taste than you), but regular people don't mind them.
Some of the best ideas are tasteless. The entirety of the casual games industry (a $3bn market) is built on tasteless ideas. McDonalds' food is (both literally and figuratively) tasteless. Walmart's curation is tasteless. Summer Hollywood blockbusters are tasteless. Casinos are the most tasteless places on earth.
But none of them are stupid—they all make complete sense, economically. They align with people's incentives; it's clear exactly why they make money, and it would be easy to imagine their business models working out if they were pitched to you.
A stupid idea, on the other hand, is the opposite of something like a McDonalds or a Walmart: something that might be tasteful, might sound great in some abstract/idealistic sense, but is very obviously not aligned with anyone's incentives, and so has no valid route to adoption.
Pets.com was a stupid idea. People didn't want to put in the effort to order household consumables over the internet in 1999. Ordering something over the internet in 1999 entailed an amount of effort about equal to buying it from a mail-order catalogue—and nobody was selling pet food that way, either. The logistics didn't, and couldn't, work out, without a whole lot of supply-chain scale borrowed from other lines of business, ala Amazon. And remember, pet food is perishable.
If the only things you can think to say about an idea are reasons it won't work—and you can't think of even one cynical/self-serving reason people might use it anyway—then it's a stupid idea.
If it would be great, if not for [some huge list of flaws], but there's at least one person out there in the world that none of those flaws will matter to? Then it's not stupid; it's a disruptive idea, and the next version will probably iron a lot of those flaws out and become a pretty great idea.
You're confusing economic viability - which relies on lowest-common-denominator customer pandering - with broader social value.
The idea that price = social value is a very cynical one, and marginalises and discounts minority interests.
One big problem with the argument is that real innovation often comes from people who live in those fringes, and not from those who live in the middle of the bell curve.
So eliminating that "stupidity" will kill off a lot of sources of future investment and innovation.
E.g. what keeps the music or fashion or web technology markets running: those people who recycle the same ideas over and over, or the "stupid" people who invent new ideas that have no obvious economic value - until they do.
A stupid idea is one that serves nobody's needs; it has no monetary value, no social value, no value of any kind. Again, Pets.com: it sounds like something that could work on paper, but there's nobody (in 1999) that would be better-served by doing business with it than by ignoring it and doing what they were already doing.
To make this clearer, some "social good" examples might help:
- Food stamps are a smart idea. People in the targeted group are willing to go through the trouble of getting them, for what they get from them; people who can afford food aren't, so they don't. Since they can't be used to buy much other than food, they also aren't a common target for exploiters trying to make a public-handout money pump. The incentives work out.
- Ambulances (under their current model) are a horrendously stupid idea—they bill people extreme amounts for taking them to a hospital, such that the people most in need (the poorest people usually wait the longest before going to a hospital, and are therefore in the worst/most critical condition) are the ones most strongly disincentivized from taking them. The incentives don't work out at all.
Facebook does not fall into latter. Online social communication was in trend much before/during Facebook's inception and will always do so future. The essential core of internet is communication.
But on a larger point, instead of broadly classifying company failure around the their initial idea, it may be more related to their execution strategy. Which means a combination of idea,team, focus and necessary pivots.
Disclaimer: I bootstapped a competitor to Sonar, Highlight, and Glancee during this time period, but we never made it to Launch (problems with execution). My opinions above are based on all the (exhaustive) customer validation work that was performed.
The customer validation results you got could be explained by a prestige hierarchy in social interactions. In general, addressing people directly and hiding as little of yourself as possible signals higher status, because it implies that you are less ashamed of who you are. Nobody's going to say "Yeah, I'm a hermit who spends all my time trolling people anonymously on Reddit", they'll say "Yes, of course I want higher quality face-to-face interactions." But when it comes to their moment-to-moment decisions, very often they would rather troll people on Reddit.
The items you highlight are common across almost all startups, so the lessons I draw are meaningful across the board.
1/ Design startups for speed. There is no way in hell you will get rid of false positives. You need to make sure you survive enough till you hit a true positive. This does NOT mean writing more code faster. In fact, this means do NOT write any code if you can avoid it. Learn though extremely cheap means even if the means only return 10% of the signal of a working product. If people don't absolutely fall in love with the prototype, it's not going to work.
2/ Don't be blinded by big names. Big name customers love to stay in the know about what is going on. They also have inflated self worth. Go after the small guys, and start using that to beat the drum around the big guys. In a past role when I was selling, I was walked out of the building by a VP who called in to get rid of me. 2 years later they called me because smaller competitors had better products than they did.
3/ Engagement with a small feature matters a LOT - I agree with your take that deepening engagement for almost all companies prior to growth is a bad idea. It is relatively easier to find a "feature" 1 user likes, and then scale it out to other users, than deepen engagement with that user.
You've got to manage your time exceedingly carefully when all that matters to 95% of people is your growth trajectory. Most potential customers and partners are nothing more than leeches; always identify and go after the low-hanging fruit; never listen to people that want you to burn like crazy to accomplish something crazy.
He's right that companies are bought, not sold -- my old boss used to say "run your company like you're going to own it forever, or else you will."
Above all, be honest with yourself about all aspects of your business, product, and team.
Disclaimer: I bootstapped a competitor to Sonar, Highlight, and Glancee during this time period, but we never made it to Launch (problems with execution). My opinions above are based on all the (exhaustive) customer validation work that was performed.
My favorite part is the suggestion to get your top three priorities and then throw out two and three. No startup can survive trying to be three things at once.