“Most startups never ship anything,” the director of our accelerator told me on the last day. “You guys won’t have that problem.” And I was confident we wouldn’t. After all, I have a 13 year track record of shipping software at Microsoft, and while I was head of product at Cuddli, I got several versions out the door. Everyone we knew in the information security industry thought we were working on the Next Big Thing (TM). So the last thing I expected to have problems with at PCPursuit, the stealth mode startup I’ve been working on since the beginning of 2016, was shipping. I figured hiring would be our biggest challenge.
However, nothing could have prepared me for how difficult it is to build and ship a product that requires partnering with giant, slow-moving companies, particularly companies that aren’t in the software industry. Our technology, a product for integrating digital authentication with physical access control systems, was both innovative and interesting to potential partners. In fact, the two market leaders in the space we were pursuing were willing to partner with us and we managed to get a deal with the largest of the two.
However, the business processes of large companies are designed to make deals with very large companies, not small two-man software houses. It literally took 6 months to get a deal done with the company we needed to partner with. Once we got the deal done (and paid the substantial onboarding fee), we found out we’d have to build our product for every currently supported version of their product. This was a very heavy engineering lift, much more than we had the resources to build.
Now, don’t get me wrong. I have absolutely nothing bad to say about the companies we started to build partnerships with or the people in them we worked with. A lot of people really stuck out their necks for us and took career risks going to bat for us. There are just certain categories of software that startups aren’t well suited to build and business critical enterprise software that requires negotiated partnerships — as it turns out — isn’t one of them. It’s just too heavy a lift for a startup without any resources beyond what’s left of $50k in accelerator capital, most of which went toward living in Washington DC to complete the accelerator.
Right around the time we figured out a path forward, Microsoft announced a solution that covered roughly 80% of our scenarios in the enterprises we were targeting. They demonstrated a proof of concept and development framework, and I could see the writing on the wall. It’s not like we didn’t still have a good business (because 20% of mid to large scale Windows enterprises is still pretty big), but we just didn’t have a big enough potential business to ever be able to raise the amount of capital needed (about $1.5M) to build and qualify the product. After we built the product, we’d still have an enterprise sales cycle to get through.
I know what you’re thinking. Before you say “Why don’t you just Lean Startup a SaaS MVP built by Romanian students on Bootstrap” remember that this isn’t the kind of product that is well suited to the slapdash engineering usually done by startups. You can do that with a dating app. If you let your users down, they’ll meet someone else. But with enterprise authentication software, this is the kind of stuff that is both really hard to sell and has to be right because if you screw it up, literally nobody in the company can work. And before you say “Why don’t you just add some AI and call it good,” I know at least a bit about AI having supported Microsoft’s most cutting-edge research in the area when I worked in MSR. I know you have a quota, young VC associate grasshopper, but authentication needs to be an authoritative, affirmative decision. No information security manager wants some dumb AI getting it wrong, and for that matter dumb AI adds no value to the scenario anyway. And no, we’re not going to try to wedge a blockchain in there somewhere to get funded either because blockchains are slow and authentication needs to be fast.
Sometimes — and this might be hard to believe — a highly experienced and deeply technical founding team has actually thought through the technical decisions they have made. But I digress.
Anyway, we pivoted. We knew the money wouldn’t be there to build it, and we were out of runway, so we took on a project more or less out of desperation. It was doing work for DUI attorneys proving that alcohol breath testing machines are flawed. They are in fact flawed — we proved that. But when we wrote a report proving it, a large company that made the machines threatened to sue us. And that’s where we are now.
I don’t see a future in this. My cofounder doesn’t see a future in this. And at some point for me personally, working on startups has to be sustainable. Since February of 2014 I have lived on couches and in a garage and sometimes in my car. I had 8 roommates at one point in order to try to stay afloat. I’m having to do side work far below my skill level in order to keep working on startups. And I know that even though I’m learning a lot, at some point if I keep doing this I’m going to become unemployable.
I’ve been driving past homeless camps and in the back of my mind, I’ve been wondering where I’ll put my tent when my savings finally run out. This isn’t healthy and it needs to stop.
So I’m giving myself a Christmas present this year. We’re pulling the plug. Not immediately as far as the corporation itself is concerned (it’s wrapped up in a legal dispute that could eventually get us a settlement, so any remaining resources in the company will go toward maximizing that), but I’m not going to work on this full time anymore. My cofounder got the better end of the deal; he stayed in his full time job and never had to leave it.
What’s next? First, I’m blowing a huge wad of my miles and points on a trip to South Africa and St. Helena. It’s something I have wanted to do for years and I’m not sure when or whether I’ll have any free time in the next several years so I’m doing it now. I need some time to clear my head and this is a good place to do it.
After that, it depends what I can convince someone to pay me to do. At a minimum, my MBA and Microsoft experience should qualify me as a Burger King assistant manager and at least the minimum wage in Seattle is $15 per hour. However, there is a specific problem I want to fix (robocalls), and a specific company (Google) where I want to fix it. I know Google isn’t obviously the right place to do this, but obvious things haven’t worked and I have a specific solution in mind. I’ve gotten to the right people there, and we’re talking. Failing that, if I can convince Apple to let me build an anti-robocall feature in iOS, that’d be a good Plan B. And The Evergreen State College, the school where I have been teaching an entrepreneurship class, might have an option for me as well (we have been talking, and I want to help them, but it ultimately has to be sustainable). Might you want to hire me? Now is probably a good time for us to talk.
So, to wrap up: Shipping is actually really hard. Even very experienced software teams fail to ship. On its own, the technology is difficult enough to cause failure. Bad technology can cause a business to fail after you ship. In our case, failure to ship had nothing to do with the technical challenges: every roadblock we ran into, at every stage, involved business problems. The technology you ship has to work, but the business also has to work.
And we failed.
We lost all of our investors’ money.
And two years.
This is my fault.
It doesn’t feel good.
Merry Christmas from my family to you and yours.
