I always hated hearing about startups “sunsetting.” It seemed like this sort of euphemism that people would use to avoid the harsh truth; your company didn’t work. Now I find myself in this same position, understanding that it’s really hard to admit that something you poured so much time and effort into has come to an end, even though I know that it’s the right decision.
I’m writing this article to talk to my customers, stakeholders, mentors and friends to help them understand why it was that Stakk didn’t work out. Because, as a naïve 16-year-old, I never even considered the fact that the company would eventually fail.
It’d be very easy for me to say that a lack of finances meant we had to close shop, or that the timing wasn’t right, but really during the COVID-19 pandemic I had time to step back and have a look at the foundations of the company, and realise that while we had grown so rapidly at the beginning and all seemed to be well, there were a couple of key limitations that proved too big to overcome.
Predominantly, this is the social regulations that govern the way that people interacted with the company.
When I first launched Stakk, it was perceived as, “that initiative that a high-school student started to help out other high school students,” and the response was overwhelmingly positive. Everyone loves the idea of helping out the neighbour’s kid by offering him a little bit of pocket money in exchange for some help around the house. Then we had the added benefits; we’d source the student and vet them, had insurance, made payment easy, effective review systems and more. In that first month we managed to pull in more revenue than I thought I’d do in my first year. I felt invincible.
Over that year I did everything I could to push people toward recurring bookings and flatten out our revenue, as I found that during the colder months people were less willing to make bookings, and school made it hard for students to do longer jobs during the term.
And this worked, we managed to get into a position where we were consistently doing a moderate number of bookings month-on-month, without spending excessively on advertising. As a first time startup founder, and a 17 year old doing 40 hours of school work a week, I thought I’d done pretty well.
But, then the pandemic hit. Bookings fell dramatically, students were annoyed that they weren’t receiving as many jobs. We were just scraping by and losing money every month. But, I saw the pandemic as an opportunity. As had previously happened in the months following the GFC, I figured people would start looking for more affordable service options, leaving Stakk as a viable option. So, I started to expand the areas that we offered services in. Moving out from our small operating area to try and service all of northern Sydney, and this is where the biggest problem really hit me.
As soon as we pushed out of that area, Stakk was no longer this positive ‘by-students-for-students’ initiative. It became abundantly clear that people saw this faceless company, thinking it was taking advantage of vulnerable children, taking 20% of what they work for, while being unable to cover injuries to any of the students as worker’s compensation insurance wouldn’t cover our independent contractors. It diverged from the reason I started the company in the first place, to help other students out.
So, maybe millions of dollars in funding for branding would’ve been able to overturn this idea in the space of a few years, maybe it couldn’t, but that wasn’t an option anyway.
So I was left with a decision to make. Continue to operate in our small area with our hundreds of loyal customers, maybe slowly grow outwards through referrals, or call it quits, change my focus, give myself some time to find a new startup idea with larger growth aspects. And I guess you would’ve figured out by now that I’ve opted for the latter.
While it’s really difficult to give up something you’ve put so much energy into, all startup founders chase growth. I never started Stakk to be comfortable, my goal all along was to be the leading employer of high school students in the country, and then the world. It was never meant to be a small local offering. So while it’s hard, I think I’m making the right decision in moving on.
Besides, I learnt a lot, met a lot of great, talented people, and have experience that’ll certainly help me in the future. Even though it’s all coming to an end, I’d do it all again in a heartbeat.