In the tech startup world that we proudly live in, yesterday was “Shut Down Tuesday”; three venture-backed products in a row succumbed to defeat. Celebrity founder Chris Poole announced that DrawQuest (despite having significant user traction) would be shutting down as “it didn’t represent a venture-backed opportunity”. CarWoo! admitted that it failed to deliver the best car-buying experience and dove into the dead-pool. Outbox decided to quit after finding out that the unit level economics did not quite work out for its offering.
According to Shikhar Ghosh, a senior lecturer at Harvard Business School, 95% of startups fail to see the projected return on investment. The very best founders are paranoid about solving a specific problem and focus all their energy trying to realize their vision. Failure is not an option for them; DrawQuest was Chris’s second product (after the first one flopped), CarWoo!’s team has to join forces with its top competitor in order to realize its sound vision and Outbox’s founders are now working with the same team on a different product.
Real entrepreneurs find solace in the struggle of trying to arrive at their Ithaca after a long journey. Most of the time their vessel sinks into the ocean. But the foolish, perseverant and ultimately lucky ones will eventually make it to Ithaca.
Pope Francis is the first non-European pope in 1,200 years. Less than a year into his papacy he has already transformed one of the oldest institutions in the world, one that “measured change by the century”. He is leading by example and he can relate to everyone; even the young. Thus, Time named him as the magazine’s Person of the Year 2013.
He beat Edward Snowden.
What is less well known about Pope Francis is that in 2011, he submitted his resignation letter to the Vatican (a requirement for all bishops aged 75 or older) and he was preparing to retire in his hometown in Argentina. His resignation was never accepted by Pope Benedict’s office; blame the Vatican’s bureaucracy. It is really fortunate for the world that God had other plans.
Sir Alex Ferguson managed Manchester United for 27 years and is one of the most successful and widely admired managers in the history of the game. During his tenure at the club, Manchester United won 13 Premier League and two Champions League titles. Sir Alex was appointed manager in late 1986 and in his first three years he won no trophies.
December 1989 was self-admittedly “the darkest period [he had] ever suffered in the game”. Journalists and supporters called for “Fergie” to be fired and United’s Old Trafford had banners declaring “Three years of excuses and it’s still crap …”
It was expected that Fergie’s team would lose the the match against Nottingham Forest on December 28th 1989 and he would consequently be sacked. Fortunately for the world of football, United won the game 1-0 and went on to win the FA Cup during that season, ending a 23-year trophy dry spell. Sir Alex led United to win 38 trophies until his retirement from the game in 2013.
In the tech-startup world, where the odds are always against the founders, startups eventually fail when they run out of cash. Even the most successful startups came close to running out of money at some point. There are always things that go wrong (e.g. missed business deal, poor customer reviews, low employee morale, failed funding, etc.) and the swing between highs and lows is simply insane. Founders can get burned out, can hate each other and often consider quitting because their life feels like hell.
Most tech founders I know work really hard, as they believe that “genius is one percent inspiration and ninety-nine percent perspiration”. There is a lot to be said about perseverance, the ability to change things (aka pivot) and simply being there when the tide turns. As Woody Allen said, “Eighty percent of success is showing up.” If the product idea has legs, the founders listen to their customers, and they have the ability to time the market well, the story may have a very happy ending for them.
Airbnb now adds 30,000 new rooms every two weeks. In its first 1,000 days it launched five times before taking off. At some point the founders were selling boxes of cereal in order to be able to pay the bills. YCombinator offered them admission and Paul Graham famously said “You guys won’t die, you are like cockroaches”. For most of the world today, Airbnb seems like an overnight success, but the truth is that its founders are made of steel.
Cold Brew Labs was founded in 2008 and launched a mobile shopping app called Tote. The founders wanted to help consumers browse clothes, shoes and accessories, save the ones they like, and receive sales notifications to go and buy them at nearby stores. They raised seed funding and were successful attracting early users, but the app was not really driving any transactions.
However, the founders noticed that the users were amassing long lists of their favorite items. Ben Silbermann (and his co-founders) were smart and bold enough to pivot. They launched Pinterest, a visual discovery and planning tool that helps people collect stuff online. Thanks to its founders’ ability to change things, Cold Brew Labs got a whopping $3.8 billion valuation in its fall 2013 Series E round.
Snapchat is now a consumer phenomenon, but when it launched under the name Picaboo in summer 2011, most people that were exposed to it didn’t really get it. By the end of the summer the company only had 127 users. Following this, the founder/CEO returned back to Stanford as a senior and the founder/CTO joined Revel Systems as a software engineer.
Legend has it that Evan’s mom told her niece about Snapchat and she subsequently started using the app to communicate (have fun) with her friends during class. By the end of 2011 Snapchat had reached its first 2,000 users.
Lessons learned: a) Always love your mom. b) Make sure to survive and be there when the tide turns.
Easier said than done.