Goodbye Two Way Labs, I barely knew ya
When I left ASICS back in June 2017, I had no idea what I wanted to be when I grew up. In addition to resting and spending time with family, I was in full on existential crisis mode. As I blogged about at the time, I felt a duty to work on something of great purpose, but I also wanted to enjoy my work and there didn’t seem to be much at the intersection of those two things.
Fast forward to May 2018, and I was finally starting to feel recharged and ready to get back at it. I didn’t have a specific idea to pursue yet, but I did uncover an area that seemed interesting to experiment in: live, interactive mobile TV. I teased that a bit on social media, and unlike with Runkeeper where we were basically unfundable in the early days, an institutional round just kind of showed up. I was nowhere at the time. I had no team. I had no specific vision to pitch. I didn’t even have any slides. But I was an entrepreneur that a venture firm I respect a whole lot had known for a long time, I had now been through it once before, and I had a big market I was interested in experimenting in. And I guess that was enough.
I had real concerns about raising money when I was nowhere, but the firm assured me they knew it was an expedition and not a company, that I would not be pressured to scale prematurely, and that if I got a few months in and didn’t find anything I wanted to pursue, I could just give the remaining money back and be done with it. With those assurances, and a long, trusted relationship with this firm, I closed a round. I added a couple of other funds I felt similarly about, not because I needed the money, but because I had always wanted to work with them and now seemed like as good an opportunity as any to do so.
The plan was to build a studio that brought several “shows” to market in this live, mobile, interactive video format. I didn’t know which shows, but the thought was we would stand up the infrastructure and assemble the talent to bring these shows to market, and then we would experiment in different areas until we found some concepts that worked. Since I was moving right into building mode, I assembled two of the best early stage builders that I knew — Joe Bondi and Tom Boates, two out of my initial three partners in the earliest days of Runkeeper. We also added a couple of contractors, who were focused on the television and video production side. It wasn’t necessarily a purposeful venture, but it was an emerging market that was early and evolving quickly, and it seemed like it would be a lot of fun to experiment in.
As we set down this path, we pretty quickly uncovered some concerns with this direction. The media business was hard and getting harder. Live TV delivered via mobile was even more expensive to produce than traditional media, and even harder to monetize. And we didn’t know the first thing about making good television. In hindsight, I think there were other issues nagging at me that I have now come to more fully understand, but those were the ones that caused us to hit the pause button on that market at the time.
We turned our attention to looking for other markets to pursue. We looked at a ton of markets, and actually found several that were worthy of investigating. But something was holding me back. We would get a week, two weeks, or a month in, and I would lose interest and start chasing something that looked shinier. This was a troubling pattern, and I didn’t fully understand why this was happening. Was it that we just hadn’t found the right market yet? Was it PTSD from the grueling ride I had with my last company? Was it a flaw with the process we were following to evaluate these markets? Was I just not cut out to be a 0 to 1 founder?
I tried to be introspective about why this was going on and how to put an end to this frustrating cycle. I came to realize that when I started this company, I had never really resolved the existential crisis that I had faced during my time off. I remembered that for me, purpose was paramount and that I still hadn’t figured out what my purpose should be in this next chapter. I was longing to focus on finding my purpose first, then determining the right vessel to fulfill that purpose second. But I found that by raising venture capital from day zero, we were committed to a (venture backed software company) vessel first, and were now searching for a place to apply it. This came to feel backwards, confining, and a hindrance to figuring out my purpose, which was the most important thing for me to be doing. Not on anyone’s clock. Not with any expectations. And not with any guarantee that I would end up building a venture backed software company, a software company, or even a company on the other side.
I made the hard decision at that point to give the remaining funding (~87% of the initial capital) back. This was not an easy decision. And I feel terribly for the false start. But if I was feeling this run down already (which I was), and this confined and uninspired, there was no way I was going to have the stamina to see this process through to a successful enterprise. If I hadn’t made that hard decision, I am convinced the outcome would have ultimately been the same, only with me a lot more run down, the team more frustrated, and ultimately returning even less investor capital. Sometimes the hardest decisions are also the ones that are most necessary to make.
I want to give a special shout-out to Phin and Josh at First Round Capital, Hunter and Satya at Homebrew, and Rob at Nextview, as well as the handful of angels that participated in the round. You guys were so incredibly supportive, and behaved EXACTLY how I would have hoped. I would be absolutely thrilled to work with any and all of you again in the future, and I hope that we have the chance to do so. Thank you for believing in me.
On the purpose front, as it turns out, what I think is my purpose for this next chapter has been staring me in the face all along. For sake of focus and brevity I am not going to talk about that in this blog post, but I will post another one soon to share some of the things I am thinking about.
Goodbye, Two Way Labs. I barely knew ya.