The idea is dead.

Long live the idea.

How killing one startup made our next one better


Last week, I issued an Order of Execution; a death sentence.

Doing it filled me with heartache, and yet it was essential for my business and consistent with everything I stand for as an entrepreneur.

The life I sentenced was that of a perfectly-wonderful app for families called Kinly. It was a product invented by my friend and partner, Matt Johnson, and created by our company, GoKart Labs.

I loved this app.

Imagine logging into Facebook to find only your immediate family. How fun, right? Share and save what’s most important with those you love most. No creepers, stalkers, or social stigma. Totally private. Kids check-in. Mom and Dad know where they are. Beautiful.

That was Kinly — Facebook for Families.

Kinly had a huge addressable audience and several powerful macro trends pointing in its favor. It was a big, innovative, purposeful, and beautifully-realized idea.

It was also a Big. Fat. Failure. And now it’s dead.

Who would be dumb enough to build another app?

Since 2008, my business partners and I have created seven new companies. They include the highly-respected and industry-awarded Sophia (acquired in 2012 by Capella Education Company) and an even more popular Minnesota news platform, BringMeTheNews, which boasts over a million monthly users. Across the enterprises, we’ve raised over $13 million in investment capital and — most importantly, to us — have created over 100 highly-skilled jobs.

In other words, this isn’t a hobby.

We didn’t go into Kinly lightly or blindly. We were extremely familiar with the statistics about apps and their chances for success — something approximating a snowball’s chance in Hell. And yet, into the fire we went, snowballs firmly clutched.

Kinly didn’t start off as a big-fat-dead-failure.

It also didn’t start out as Kinly. Our app actually began life with the name Family Room.

“Imagine,” Matt said, “if you had a version of Facebook just for your family.”

Given our shared dislike of Facebook at the time, he didn’t need to say much more. I was hooked. Micro-networking was gaining steam. Facebook had upset many users by showing too many ads. Privacy was mentioned in every other sentence in any conversation about digital.

As an incubator, GoKart Labs has a disciplined stage-gate process for developing any new idea, and this was no exception. We put the idea through its paces.

At this point, we had invested $35k worth of our own time and talent to go from idea to initial pitch deck to a strong business case with multiple paths to revenue, and a working prototype to boot.

Now for the hard costs

Up to this point, we had only invested soft dollars into Kinly. That is, time and talent of GoKart’s finest. And while these costs sacrifice other billable revenue, it’s important to realize we weren’t writing actual checks.

But when we moved to take Kinly to market and make a serious go at it, we brought in a seasoned product leader (part-time) to help us formulate and execute a go-to-market plan.

At this point we could have gone after early investors, but we believed in the product and knew that GoKart Labs had resources and cash to get Kinly to market and generate early traction.

We figured that with a base of users, some strong customer ratings, and lots of usage, we would then be in a much better position to gather investors and at a valuation that would make it all worthwhile.

With a small, but focused marketing push we were driving family sign-ups with strong early indicators. After a month, over 50% of new family sign ups were using the app daily.

Here was our fun little jingle and a TV interview about Kinly.

And then a miracle happens?

In my experience, to be an entrepreneur requires irrational optimism. You need an over-developed belief that things will work out or you would never launch a business. The trick, then, is to know this and then surround yourself with more skeptical voices.

This is where investors are especially helpful. Among other things, investors are uniquely good at keeping entrepreneurs sober. And accountable.

Kinly needed investors and we launched without any. Worse, we convinced ourselves that we could run a startup without a full-time leader. Big mistake.

Everyone believed in the idea, but no one’s mortgage was going unpaid if this didn’t work out. GoKart’s product leaders were involved, but we had regular client work, too. In the end, we were attempting to do this part-time. And we, of all people, know better.

After the initial flurry of downloads, accolades and activity reports, things slowed down in a hurry for Kinly.

On a daily basis, we opened the dashboard activity reports and swallowed the hard reality that we were failing.

Death by (no) distribution

There’s a saying that you’re not a true entrepreneur until you’ve failed. I like to think of it a little differently. I think it’s much easier to live once you’ve died.

The death of Kinly made us painfully aware of something a friend and fellow Twin Cities entrepreneur, Phil Soran, emphasizes constantly.

You must solve for distribution.

Meaning, no matter how great your idea, or product, or service, it means nothing unless people know about it and can access it.

We knew Kinly needed a large marketing budget to drive awareness and adoption, but we chose to kick that can down the road. By postponing the investor challenge, we also postponed — and thereby ignored — the distribution challenge.

And Kinly is dead because of it.

Good idea. Well-designed experience. Happy users. But we didn’t solve the funding problem that would solve the distribution problem.

Put another way, we solved 99 problems out of 100. But it only takes one to kill you.

So what do you do if you’re an entrepreneur in this situation? If you’re lucky, you start all over again. And the first problem you solve is the one that killed you last time.

The idea is dead. Long live the idea.

Fortunately for us, ideas are a renewable resource.

Even before Kinly’s death, GoKart’s collective eye twinkled with a new business we’ve spent the bulk of 2014 working on and will launch as a brand new company in 2015.

As previously stated, the first problem we’ve solved with this new idea was distribution. We know how we’re going to make this one known.

Have we solved the other 99 problems yet? Of course not. However, thanks to Kinly’s death, we’re sharper, stronger, and more focused coming into this one.

Dying will do that to you.