Why we’re shutting down Hivebeat and what we’ve learned along the way
We’ve decided to shut down Hivebeat on October 1st. All users have been notified and we’re helping them export all of their data.
Almost 2 years ago, Emil Rasmussen and I started building a social event discovery platform for students. We got into 500 Startups in Mountain View, but during the accelerator we decided to pivot and build a SaaS product for organization management. We never really nailed that market and we’ve now taken the ultimate decision of shutting down the company.
Although this is one of the hardest decisions we’ve ever made, it does feel like the right one. We’ve tried all the things we wanted to try and we have a pretty good sense of what went wrong:
- We never hit real product/market fit. We built a product that was too generic for a very niche-based industry.
- Our product was great, but it wasn’t a 10x product. We had a much prettier product than the competition, but we were always lacking features in every niche.
- We were trying to do too many things at the same time. Both product-wise and marketing-wise.
- A transaction-based business model makes it hard to predict revenue, which made our growth curve look like a rollercoaster.
There are probably hundreds of other things we didn’t do right. However, it’s pretty safe to say we’ve learned a ton along the way.
Most of the learnings are not rocket science in startup land and they are things you can read in many other startup blogs. To be honest, we probably knew about all of these pitfalls from the beginning. However, although you know all this stuff theoretically, there’s still a very big chance you’ll fuck up anyway. Simply because it’s hard to build a company.
I’ve tried to put down some words about our most important learnings.
Keep it simple, stupid
As mentioned above, we were trying to do too many things at the same time. Listening to your customers is critical, but don’t always let them tell you what to build. Your customers know the problem, but in most cases they don’t know the right solution to the problem (remember the story about Henry Ford and the horses?). That’s your job to figure out. We didn’t realize that and we therefore ended up building too many features with no real vision for where the product was heading.
Product/market fit should really be your first priority
A big problem about the growth mentality in startup world is that most startups try to grow too quickly in the beginning. They focus on growth even before they have a product that’s ready to grow. We did that as well. We tried to scale before we knew who we were selling to and what they wanted. We should’ve spent more time with our customers before throwing money at ads and other acquisition channels.
Paul Graham says it well in his essay “Do Things That Don’t Scale”:
Airbnb now seems like an unstoppable juggernaut, but early on it was so fragile that about 30 days of going out and engaging in person with users made the difference between success and failure. — Paul Graham
Don’t get me wrong here. You shouldn’t spend two years in a basement working on a product before you release it. When you feel like you’ve cracked the nut, go crazy with ads. But if ads don’t work, it’s probably because you don’t have the product right yet.
Build half a product, not a half-assed product
Finding product/market fit is hard. Especially if you’re not completely sure what you’re trying to sell — which is often the case in the early days of a startup. Therefore, it’s great to build an MVP (Minimum Viable Product) and test it on potential customers.
However, it seems like lots of startups get the idea of MVP wrong. We did too. Instead of building a great and very simple MVP, we built an unstable product with too many features.
Beware of the “everything but the kitchen sink” approach to web app development. Throw in every decent idea that comes along and you’ll just wind up with a half-assed version of your product. What you really want to do is build half a product that kicks ass. — Jason Fried
We tried to build all the cool features we could possibly think of before knowing whether the core product was great or not. That gave us a lot of technical debt and we ended up spending time fixing bugs instead of adding features. That’s not a great way to find product/market fit.
Accelerators are not magic pills
We had 4 incredible months in Mountain View, California as part of 500 Startups’ batch 15. We met so many smart and inspiring people and really got to know how Silicon Valley works. We made friends for life and I will recommend every ambitious startup to go for a spot if you can.
That said, it’s important to understand that these accelerator programs don’t magically fix everything in your startup. You don’t suddenly become a TechCrunch headline over night just because you squeezed yourself into one of the prestigious programs in San Francisco. It does certainly help, but it still comes down to you finding customers and making money. And you better do it quickly because your batch mates are crushing it right next to you.
If you however join an accelerator with a growth mindset and a startup that’s ready to grow (that means having or being very close to product/market fit), you just tripled your chances of success. 500 Startups (and probably other programs too) are packed with smart people who can help you take your startup to the next level.
On to the next one
Failing sucks, but the great thing about failing is all the things you learn. We’ve learned a ton and we can’t wait to start a new company. We have a few ideas that we want to test and we’ll make sure to tell you when we’re ready.
Also a very big thank you to our team members Nash Lomeli, Sune Thomsen, Roxana Jula and Mladen Angelov. I’m looking very much forward to working with you again in the future.
On to the next one :)