Reflecting on the Groopify journey (part 1)
Success? Failure? How big? How small?
Note: This is the first post of a two-part series where I reflect on the Groopify journey and go through the learnings we have made along the way. In this first part, I discuss the overall assessment of the journey and attempt to answer some questions such as “Did we succeed?”, “Did we fail?”, “What was the magnitude of our failure?”, etc. The second post, which covers the specific learnings we made you can find it here.
Moving on from a company you’ve personally built up and grown and to which you have dedicated nearly every second and all your brain power over the last 3 years is never easy. In our case, that day has come. As we recently announced, Groopify will soon be discontinuing its operations, its mobile apps will be shut down and that the company will cease to exist as a standalone entity. Moving forward, part of the team that created Groopify will be joining Paktor to lead some of its strategic growth efforts. More info about it here.
Albeit difficult (and for some even traumatic), moving on is a great opportunity to reflect. To reflect on the achievements, the mistakes, the journey, the learnings we’ll be carrying with us going forward, our legacy, etc. (asking questions such as “What did we learn?”, “What did we do well?”, “Did we fail?”, “What could have been done better?”) as well as on the key and crucial things we could have done differently. As Miguel, one of my co-founders, has pointed to me many times, he felt we should have no regrets as all the decisions we made were clearly and thoroughly thought-through and, at the time, probably seemed like the best choice. The benefit of looking back now, though, is that we have a much broader perspective and can see how some decisions (while, at times, made in a vacuum) had far-reaching effects elsewhere or we missed out some inputs when making them. Obviously, this exercise carries an inherent hindsight bias but, still, provides a unique opportunity to think, write it up and share it with the world. While one normally underplays third-party accounts (although there are hundreds of public ones out there one typically thinks “no way will that ever apply to us — we’re better, smarter and cooler”), re-living your own journey, replaying every single crucial moment or fork stuck in the road and, more importantly, just going through the experience altogether is something quite unique that we’ll certainly leverage in the future and can’t be learned by reading a few blog posts. One has to walk the walk. If we’re ever in this battle again (which hopefully happens in a not so distant future), we will be wiser and will most certainly be able to not only avoid all the mistakes and pitfalls of this venture but also get to the point where we left this off much sooner. Rather than taking 3 years to get to a pre Series A stage, I feel like we could take 6–12 months — this is huge as it could reduce our time to market, our opportunity cost and could build up greater barriers to entry in our specific vertical or niche.
To fully gauge how we did, we carried out numerous sessions (yes we did a few, and with different lenses: co-founders, all-team, with investors, 1-on-1’s, etc.). In them, we essentially outlined and tried to answer 3 questions:
- Did we fail? (covered in part 1)
- If so, to what extent? If not, why not? (covered in part 1)
- What are some of the learnings that could have, in hindsight, made us change course and continue on our upwards trajectory to become a multibillion dollar business developing apps used by tens of millions of users globally? (this is covered in part 2)
Just to provide some context, just under 3 years ago, Miguel, Alex and I started Groopify as an idea to connect compatible groups of friends offline and out of the need to simplify the last mile in social interactions and relations (or what happens between the moment we connect online or on mobile and when we actually meet in person) thanks to technology. Connecting online or on mobile has never been easier but while all apps out there are meant to bring us closer together, we end up spending most of our time chatting, browsing and stuck to our smartphones. We browse, we swipe and we chat. But we hardly meet and we hardly live. In our day and age, it’s more about ego and the pleasure of being liked or having conversation requests from dozens of potential suitors and not so much about experiences.
Here’s a couple of pictures of us when we started back in 2013.
As we held these sessions, more and more comments and observations pointed to those initial moments. Why? I guess, one needs to consider the entire journey to fully-assess how we did. And I tend to agree with that. Starting a company is by no means easy. Taking the leap, considering the opportunity cost (one of my co-founders left Amazon, the other Indra, a global and leading Spanish IT consulting firm, and I, myself, turned down numerous offers post MBA to start Groopify) and the initial and follow-on investments across all rounds is very hard. Most people never even consider starting up their own company as a career choice. It’s hard, it’s frustrating, it makes you feel hopeless and lost, it’s something you don’t know, it makes you feel uncomfortable, it’s something that makes you be on your toes every day, it’s a daily learning experience, it makes you get rejected a lot. All in all, it’s a huge challenge. When you start, sure you have this amazing vision (some iteration of “Changing the world”, “Conquering the world”, “Make a dent in the universe”, “Reinventing/Disrupting an industry”, “Defying the status quo”, etc.) and you dream big. As natural optimists, our team sure did. You still probability-adjust your vision and realise it will be a massive challenge. When we started in September 2013 as a group of 3 friends turned co-founders, our expectations, broadly speaking, were:
- Create something from scratch that real people out there used and valued and, until then, no other company was doing in our target market
- Validate a very simple MVP (lean startup) based on an identified pain and get enough data to then build a tech platform and applications
- Build and lead a multi-disciplinary team
- Raise some external pre-seed funding (couple of hundred thousand euro at the time sounded amazing) to help us grow — we had limited savings so we gave up on the bootstrapping path — and validate what we were doing and also, us, as a team
- Have fun creating and growing something together. Friends and business partners for the win
This list is pretty broad and doesn’t really address the long term. Maybe this was one of the flaws of our initial steps. More on that in part 2.
Based on those expectations from September 2013 (sure they may have been vague and we didn’t step up the ambition and stakes until later on), we succeeded. No doubt about it. Here’s how those expectations stacked up against what we achieved:
- Create something from scratch that real people out there used and valued and, until then, no other company was doing in our target market — Our product was used by hundreds of thousands of people across 8 countries in Europe and Latam. In those markets, we were the first movers and introduced a real innovation in the way people met offline
- Validate a very simple MVP (lean startup) based on an identified pain and get enough data to then build a tech platform and applications — We built up our first MVP (a web app) in just under 3 months and started gathering data and making our first sales within 100 days of incorporation. We then rolled out a proprietary API and 4 mobile applications
- Build and lead a team — Recruited and lead a world-class team of c. 20 people across tech, marketing, growth and business roles
- Raise some external pre-seed funding (couple of hundred thousand euro at the time sounded amazing) to help us grow — we had limited savings so we gave up on the bootstrapping path — and validate what we were doing and also, us, as a team — Raised a total of c. €2m in external funding
- Have fun creating and growing something together. Friends and business partners for the win — Sure thing. And we’re still best of friends, which is pretty damn important all things considered
That being said, fast forward 3 years later and these initial expectations had dramatically evolved, we were now looking to go head to head with industry leaders (i.e. Tinder) in our segment (group dating), were planning to add more verticals and were growing internationally and expecting to reach 1m users by the end of 2016. We had stepped it up big time. Based on these expectations (Q4 2015 and onwards, or when we closed our €800k seed round and set the expectations bar) we clearly failed. The goal was to cross the chasm, to get to product market-fit and to get close to a self-sustaining business model. So one could argue that vs. 2013 expectations we succeeded but vs. 2015 ones we clearly under delivered.
In essence, we were successful in turning an idea into something people used and valued, in getting well funded and creating and leading a world-class team. And this is awesome. Most people (those who start up, as obviously those who never do aren’t even factored) never actually manage to get to that point, so we feel lucky that we even got there. We defied the odds by starting something and by growing it to the point we did. From an intangible perspective, we were also able to provide a great working and growth environment for all members of the team. All past and present members of the team grew and evolved tremendously and felt like Groopify was, if not the, one of the best places they had ever worked at and the most kick-ass team of them all. As a team leader, ain’t no greater reward than that. Period.
Where we came up short was in scaling. We never managed to reach product-market fit and to cross the chasm. It was thus an execution fail, and we only have ourselves to blame. Maybe this was a product of the intrinsic deficiencies in the foundations we had laid (more on that in part 2) but still a failure when the stakes were at their highest.
Groopify was never more than just a fad, a niche app used by hundreds of thousands of people. That sucks, but it’s the truth. We were, to a certain extent, locally relevant (in all the markets we were in), but didn’t truly massively disrupt the market. And that’s what you ultimately want your startup to become — the next big thing in your industry. At least, that’s the mindset we were in for most of the last year or so. We had big hopes and we were hungry. But maybe we were too foolish along the way.
Finally, and maybe most importantly, we didn’t manage to deliver the return our shareholders were hoping for. As CEO (and as a management team) the main duty we were tasked with was to maximise value for our shareholders. We didn’t get there. And that totally sucks.
Still one has to move on, stay positive and think about the bright future ahead. I still come out of the last three years much more complete from a professional and personal standpoint. In no other job or professional experience could I have learned, evolved and grown in a more exponential way that by co-founding and growing my own tech startup to the point that we did. I feel I have compressed 10–15 years worth of hard and soft skills into just 3 and that I am miles ahead of my career curve. One’s career is a long, winding and challenging journey. Let’s think of the past three years as an overall satisfactory first chapter to be capitalised on going forward. And although the value we extracted from a financial standpoint was limited in this venture, I remain more bullish than ever on the net present value of my career. Patience, resilience and perseverance.
Onwards and upwards.
Note: If you feel like checking out part 2 of this two-part series where I cover the specific learnings we made you can find it here.