Blowing out the Candl

Tom Cox
Tom Cox
Dec 6, 2017 · 13 min read
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An unfortunately perfect metaphor.

When we started Candl in April of 2016, our goal was to build a company that could solve a real-world problem while being profitable. Specifically, we set out to make connectivity a fundamental human right and build something that could help both first world consumers and people in desperate need — refugees.

Our idea to build the world’s first carrier store is a great idea. I sincerely believe that this is a vital component to the successful migration from physical SIM cards to eSIM that’s coming.

But ideas alone are not enough. Without a fully functioning product team, the idea remains just that. At Candl we’ve had a tumultuous time with our product team, and unfortunately we weren’t able to get our product released before our seed funding ran out.

And so it’s with a ton of sadness that I have to announce that Candl is winding down.

This year has been a roller-coaster. From the highest of highs, to the lowest of lows, our team has been through the widest range of experiences a startup could go through. And while the team handled everything with amazing resiliency, in the end we simply ran out of time.

The last thing I feel like doing right now is writing a post-mortem for our company and putting it out there for everyone in the world to read. But I promised that we would be honest and transparent about the entire journey.

Most of the time when we fail, we do so privately. I’ve failed tremendously before. In those cases, I kept things relatively quiet and ‘below-deck’. In fact, some people work very hard to cover up and hide their failures. But I’ve learned a lot from other people’s failures, as well as my own. My hope in sharing this story is to share some valuable lessons I’ve learned the hard way through this journey, so you can learn from our challenges and mistakes, and know just how hard building a successful startup really is.

As a company, we faced three major challenges. I’ll go through them in excruciating detail below.

Challenge #1: An Outside Track Moonshot

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Candl had a very ambitious objective — to build the world’s first carrier store. We were building a platform that could change your phone’s SIM profile without changing the SIM card, and an app that would let users choose and immediately change their carrier anywhere in the world.

We pivoted to this idea during our time at Techstars. Originally we were building a global wifi hotspot that would help international travelers stay connected in 120+ countries. After a lot of advice and some internal conversations, we realized the hotspot — the piece of hardware — was the biggest piece of friction. Getting rid of the hotspot and making a software-based global hotspot solution made more sense in terms of the business model.

The problem with this was that we were attacking a $1-trillion dollar industry from the outside. Our lead engineer David is legendary in his ability to hack together just about anything you ask of him. And his experience digging around inside Android phones when we built really cool stuff together in our last startup gave me confidence he could dig through this problem as well.

Have a great big idea, but have a very clear roadmap to get there.

We also watched the rise of eSIM — the virtual SIM solution that was being adopted by more and more carriers as 2017 went along. Between Demo Day in April and the time of this writing in early December, 12 international carriers have launched eSIM plans for smartphones around the world, with many others rolling out plans to use eSIM solutions from SIM card leaders Gemalto and G+D. And the Google Pixel 2 is the world’s first eSIM-enabled smartphone, but most assuredly not the last.

Finally, it’s a little difficult to compete with (or work with) Google when they own the operating system (Android), the devices with eSIM (Google Pixel 2), and their own mobile virtual network (Google Fi) that operates in 135 countries already. In retrospect, maybe our technology would have served a smaller community better in order to gain some initial traction.

If you attack billion-dollar companies head-on, focus on a niche they ignore.

We made really good progress on this front building out a database and architecting a machine-learning platform that would help users choose the best plan based on a number of factors including those we could collect from their smartphones.

We uncovered a number of patentable and protectable areas around the carrier store concept, and began to build a portfolio of intellectual property for a patent application.

But in the end, this new focus for us came together too late.

Challenge #2: Post-Techstars Co-Founder Drama

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Running a startup alone after a co-founder leaves is one of the loneliest feelings in the world.

We set out on establishing a new normal back home using all the tools and language we had learned in Techstars. Within two weeks it was clear something was very wrong. My co-founder and I weren’t communicating well, and all the tools/structure we had at Techstars started to erode.

Throughout Techstars, things were tense between my co-founder and me, but I attributed that mostly to being away from our families for so long and running low on funding. I assumed things would smooth out after we raised our seed round and once we got back to Atlanta.

They didn’t.

What happened next doesn’t need to be shared publicly. What matters is our technical co-founder left the company. I had been forced into making the hardest, worst, most awful decision I ever made in my entire life. It cost the company a ton of money and 2 months of lost work effort to resolve the situation, not to mention the incredible stress this put on the entire team. And now we were without a technical product leader.

Losing a cofounder is like getting divorced. Nobody wins.

The lost time, lost momentum, lost runway funding, and the lack of technical leadership in the company were crippling to our moonshot.

Always have at least three people on your Board of Directors with at least one independent director.

Challenge #3: The Engineering Roller Coaster

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When we were just a hardware company, my co-founder and I were quite capable of designing and manufacturing a device, but we needed a software engineer to help us. I was ecstatic to find out that David, the lead architect who helped me start my first company back in 2010, was available. He joined Candl on January 1st.

At first David was doing great, but in February he started to get very sick. He was in and out of the hospital. They ran all sorts of tests but the doctors were completely flummoxed but his situation.

It turns out he had benzene poisoning, which can take months to recover from.

David made a very slow and steady recovery, and by October he was seemingly back to his normal self, but the work he was able to do until then was very limited.

Whenever possible, have someone who can step in for a key engineer.

After our co-founder left, David assumed responsibility as acting CTO. This was a huge ask of him given how far from recovery he really was at the time. He drug himself out of bed, flew to Boulder, and had a summit with the engineering team. We had to let go of all four engineers as they weren’t working on anything useful at the moment, and were without direction.

For the next several months (June, July, August), we made halting progress on the product side, but tremendous progress on the BD/marketing side. We began negotiating deals with several carriers such as Vodafone, Tracfone, Republic Wireless, and Ultra Mobile, as well as large retailers like Target and CVS, and other partners such as USAA, GoGo, Airbnb and IAC. We fine-tuned and honed our go-to-market strategy, and set up a launch plan.

Unfortunately, the product just wasn’t coming together. It was unfair to put so much on David in his condition, but I didn’t know what else to do.

We brought a veteran startup founder and CTO onboard, but unfortunately he wasn’t able to commit full-time to Candl at a rate we could afford. We eventually found a fantastic CTO who had 16 years of experience in the carrier industry and also wrote his own code. He joined the company for warrants. He and David clicked and all of a sudden there were code commits and real progress every day.

But by the time this new CTO came onboard, we were running very low on funds, and just couldn’t get things put together in time. It was incredibly frustrating to have to shut down our product development efforts right when we were finally making progress for the first time.

Great CTOs who write their own code, can lead a team, and are pleasant to be around are worth their weight in Bitcoin.

The Decision to Wind Down

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The CEO’s first responsibility is to not run out of cash. Ever.

1. Our product needs to launch and be generating revenue

2. A lead investor prices the round

Unfortunately neither of these pre-conditions were met. Our product team only really started to gel in the months of October and November, but by then were were out of funds. And while several really great investors were helping and encouraging us to get to those pre-conditions some way or another, we never had an investor take the lead position. The round fell apart.

Momentum in a fundraising round happens fast, and can fall apart even faster.

My wife Nicole and I had poured everything we had emotionally and financially into building Candl. They say a startup only ends when you run out of money and the will to continue. And we had hit our red line on both.

I was holding Candl together by myself for 6 months. That was after a year working to get it going without any income, 4 months away from my family at Techstars, and the trauma of our co-founder’s departure.

My wife and I had a long conversation about what we could do without the funding in place, and agreed that we couldn’t continue without some family income. I am the breadwinner for the family, and it was time for me to go get a full-time job to cover the bills and pay down our debt from starting Candl.

Your health and your family have to come first. No investor would ask you to risk personal bankruptcy or divorce.

The red line is different for every entrepreneur. Be clear about what that line is for you and your family.

We don’t have enough company funds to completely pay everyone we owe, so I am personally liable for the rest of the shut-down costs, and will do my best to try to make everyone whole. I take this responsibility very seriously and believe it’s important to over-communicate and do the best for everyone involved.

I’d much rather sink into a post-startup depression in my bed for a month, but I owe it to those who believed in us to give them everything we have until the very end.

If you have to wind down a company, more communication with your investors, creditors and employees is always better.

Our Very Best Effort

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It’s easy to point at the illness that befell our lead software engineer and the trauma caused by our technical co-founder’s departure and say ‘that’s why we failed’. In truth, we shut down because we ran out of money. I was responsible for getting us to the next round, and I couldn’t. As the CEO, my first job is “don’t run out of money”. And I ran out of money.

The reasons we ran out of money were partially because our technical team only came together at the last moment, but also because I was overwhelmed as a solo founder. And because we were a mostly remote team. And because eSIM became the de-facto standard for carriers while we were building our proprietary solution. And because we pivoted twice. And because we lacked product leadership and industry experience.

And because of so many other things.

In the end, we simply didn’t do enough to keep things going. I made mistakes, but I’ve become okay with the mistakes I made. I’ve learned to own what is mine, and let go of what isn’t. I did my absolute very best, and so did everyone who was with us to the end.

Own your mistakes, but learn to let go of things you can’t control.

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Team Candl. August 2017.

I’m also tremendously proud to have met all of the people on this journey. From everyone at ATDC in Atlanta, to Patriot Boot Camp, to Techstars, and beyond, I’ve made life-long friendships and find myself surrounded by literally hundreds of talented, driven, inspired, and compassionate friends and fellow fighters.

Conscious Leadership teaches you to see the world as a series of learning moments.

I’m also a better father and husband too. I asked a lot of my family, and they gave without hesitation. Now it’s time for me to give them peace of mind and a lot more attention.

If you look at everything as a learning moment, even mistakes and failures can teach you something new.

What’s Next

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Candl will continue to exist as an entity, albeit dormant. When the time is right, we will come back to our dream of building something that makes connectivity a fundamental human right. Whether that becomes a part-time side project, a venture-backed company, or a boot-strapped non-profit…we’ll see.

While it’s not the really cool app we were building, we’ve decided to make the carrier plan list we built for US users public. If you’re thinking of switching mobile plans, you might want to check out this spreadsheet.

Over time I will make public our investor updates, some of our tools and techniques we used for communicating as a remote team, and blog about all of the things I learned through this experience. I’m excited to share my knowledge and experience with fellow entrepreneurs who are earlier in their journey. You can follow me on Medium or on LinkedIn, or you can always email me.

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So close to being a reality.

We were so close. But we didn’t make it. And that’s okay. For now, we’ve blown out the Candl, but I’m looking forward to the day we’ll light it again.



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