Having set out with ambitious plans to enlighten and empower homeowners, we failed to execute the original vision for Haven and ultimately made the difficult decision to shut it down. I believe we underestimated the complexity of creating a consumer focused business and overestimated our ability to build such on a limited budget.
Nearly everyone has asked the question, “what would you have done differently.” While the answer is “everything,” here are a few of our lessons learned.
“The tragedy of this closing, for me, is that only now do I feel like I have the skills to have done what needed to be done.”
- Craig Sturgis, Co-founder and Head of Product
Money, money, money, money, moneeeeeyyy…
With the background and network of the three co-founders, we were able to raise more than $1,000,000 in just over two months — pre-product and pre-revenue. We knew we’d need more money, but because of how smooth our seed round seemed, we assumed another round would easily be raised when the time came. Unfortunately, that wasn’t the case. As we looked at the market opportunity, we believed we needed to go big and built for scale out of the gate — to the tune of nearly $85,000/month. Without revenue or even a known engine of growth, this was a catastrophic mistake.
Can you hear me now?
Sensing investor eagerness to participate in our seed round gave us an unwarranted level of confidence that we mistook for validation of customer acceptance. We had sold the vision of an omnipotent app that would solve all the world’s problems, but rather than vigorously test our hypothesis, we looked for data that supported what we wanted to build. Confirmation bias in hand, a lot of our work seemed to be optimizing for fundraising rather than creating value for customers.
If you build it, they [won’t] come
We spent nearly six months seemingly burrowed in a hole building a product and not talking to homeowners. We are smart people, hired a great team, and assumed we’d have product market fit out of the gate. Wrong. We had built an interest list of nearly 1,000 people in our targeted zip codes prior to launch, but should have done a lot more. There’s no reason we couldn’t have found ways to deliver actual value in ways that didn’t scale from the very beginning. Unfortunately, it wasn’t until after we launched that we started seeing what our customers actual pain was.
Seek clarity early
Near the end, one of our investors said to me, “this is it, you’ll find great clarity in crunch time.” While he was right, it shouldn’t have taken us so long to find it. Your capital runway is the amount of pivots you have left. At the seed stage, you have to focus on building something that your customers love and will actually use. For us, we discovered that most homeowners don’t care about proactive preventative maintenance. Rather, they just react to problems after they find them, but are frustrated by how difficult THAT problem is. Your solution doesn’t have to be perfect, but it does need to be something that solves a real problem.
Solve *A* problem
We tried to boil the ocean on day one. There is a reason the home services market is so fragmented. We tried to teach homeowners what they didn’t know, get them to care about it, connect them with a service provider, provide a transparent dynamic pricing engine, route service calls to the nearest provider, control change orders, facilitate transaction charges, and keep a record of all maintenance done to a home… and we wanted to do it for everyone! It would have been a lot smarter to go find the homeowners who were already paying service providers to take care of nearly everything in their home and find a way to get in the middle of those transactions. As long as you do something well, your product doesn’t have to do everything.
No path to sustainability
All of this put us in a position where we were unable to raise additional capital. Building any business is hard, but building a B2C business where you don’t control the “supply” of your product is really hard. Not only would our unit economics not work until we had scale, there were a lot of things that lined up against us during our quest — Amazon and Google made forays into the space (this spooked investors), well funded coastal startups gained more traction (Porch, Alfred, Handy, Pro.com and dozens of single service marketplaces), and the elephant in our backyard, Angie’s List, has a 20 year history of not turning a profit.
Hindsight is a bitch
I do believe the concept of Haven will exist in the world. With the convergence of the Internet of Things (IoT), the convenience economy, and big data, it seems inevitable.
About Jim Brown — Experienced Marketing and Sales Leader
After attaining the rank of Sergeant in only four years of service in the United States Marine Corps, I’ve spent my entire professional career in sales and marketing. I’ve had the fortune to consult companies like FedEx, 3M, Sears, Claire’s, ADT, HHGregg, Cummins, and Ingersoll Rand on how to increase their revenue on the internet.