Why I Killed My Startup
It's been over a year since I killed my startup, and a few weeks ago I revisited the spot where I decided to do it. It's about time I talk about it
Startup discourse is heavily influenced by Survivorship bias, which I believe vastly warps people's perception of what a startup is actually like. When people do acknowledge the warts of startup culture, they are often only included as part of a dramatic narrative that sweetens a triumphant conclusion. This is an honest (as honest as I can be) rendition of my failed company, and the motivations to why I killed it.
I started working on a startup with one of my best friends right at the start of the pandemic. The pandemic helped the stars align. Before this, I had been working on a cryptocurrency project called "Saito" while living in Beijing. Saito had all the qualities of an early stage startup environment. I lived in an apartment which also functioned as our company office. My roommate was also my boss and cofounder of the project. I had a fantastic few years travelling and working across Asia, but when the pandemic hit I started to get worried about Canada closing the borders on me for an indefinite period of time. Once the virus started to take off in Italy, Iran, and South Korea I knew I had to return while I still could.
By beginning of March 2020, I was back in my home country. No one at this point in the West was really taking the virus all that serious, even myself despite all that I had already seen. I had other things on my mind, such as a close friend of mine, hitting me up about his startup idea. Particularly, he was looking for a technical cofounder to help him get his idea off the ground. Even before I was back in the country, I'd been trying to help him find a technical founder to no avail. All the while, however, I was entertaining the notion that I would step into the role myself. I think this started to dawn on him as well, as ours calls started to become less about networking and more about the startup idea itself. Eventually, my curiosity got the better of me and I decided to jump head first with him into the startup world.
The startup was named "Storied", and the big idea was to build a new engagement tool for HR professionals which we very marketably branded a "People analytics" platform. Before starting the company, my cofounder had been talking with HR professionals about how their tooling could be improved, and felt that there was an opportunity to combine better metrics with engagement data. Kind of like if JIRA met Lattice, where correlations between HR initiatives could be directly tied to employee feedback all in one platform.
At the beginning, I felt prepared to take on building a company. I felt that working on an early stage startup like Saito had prepared me adequately for what to expect building a startup from scratch. Working on Saito taught me to be scrappy. It taught me the importance of getting a product out quickly then iterating on it through user feedback. However while both my cofounder and I knew these abstractly, we didn't necessarily follow these principles. In the course of a year we had rewritten most of the application from scratch 3 times. We were constantly building new time-intensive features that would never see the light of day. We had talked to hundreds of people, but we were only able to convince one organization to use our product (which we offered to them for free just to have users). An entire year went by and we hadn't made a single dollar.
I kept asking myself "What are we doing wrong?". Our website looked good, our app looked stellar thanks to my cofounder's design skills, and everyone we talked to said that what we were building is awesome (not "awesome" enough to give us any money though). I spent many nights thinking about what it would take to move the needle.
After the first year passed, things were looking bleak. Our main problem was being unique enough to stand out from the competition. Most HR engagement tools aren't rocket science. A lot of them are are merely glorified survey builders with slightly better analytics and report building. The market was already saturated with these types of products thus the service we were offering was heavily commoditized. Everybody's pricing in this space was a race to the bottom, and unfortunately what we had built had only marginal improvements to what was being offered by other platforms.
The two products that dominated our space were CultureAmp and Lattice. These platforms were already massive when we first started building Storied. Both of them were venture capital supported and had been around for years. They had already extended their services beyond solely employee engagement. They also provided performance and growth tools, which we knew was exactly what our potential customers were looking for. To put it bluntly, we weren't doing anything novel enough to be able to compete with the big guys.
After a year in the initial excitement of building a startup had worn off completely. Despite being a two person team, we used Slack for all of our company communication. At this point I hated being on Slack. The only news I got through Slack was either more work that had to be done, or a catastrophic message that something had went wrong, and I had to drop everything to go over there and fix it. Even though we only had one user, it brought with it the pressure of keeping everything running smoothly in production. Any big changes or pivoting becomes significantly more difficult when you have to manage user data. Pretty normal startup software stuff, but with my level of experience I made a lot of mistakes in trying to keep things up and running, and probably shaved a few years off of my cofounder's life due to my sloppiness.
If you're thinking to yourself "this sounds awful, why would anyone do this to themselves?", there is a reason. You fall in love with the extremes. The highs of startup life are extremely tough to beat. In a startup you are always moving from one problem to the next, and these problems are constantly punching you in the mouth. But you're also throwing a few punches yourself, and when you finally get a punch to connect and you get a win, there's really no beating that feeling. It's pure triumph, through your own strength and will you were able to make a tangible impact on the world. You can see a straight correlation between your effort and your achievement. It's all right there in front of you, and it is uniquely satisfying.
But there comes a point where the anxiety is constant and the wins are few and far between. Come March of last year, we had maybe 4 months of runway left to work on this full-time before we both would need to find other employment. It was make or break, and spoiler alert, I broke.
I was a first time CTO without a lot of expertise. I had only one job out of college, which was working on Saito. I had done some internships before in some more traditional companies, the one with the most name recognition easily being Shopify. But beyond that, I don't have too much to my name.
I wanted to use Storied to level up my skills even further, but what I had not anticipated was the constant anxiety shipping the product and keeping bugs out of production as a solo developer on top of a break-neck pace of development. The system I had built was, fragile, to say the least. I was constantly in fear of something nuclear happening, then having to go in and fix it before our few customers became irate.
My perspective changed when I had a change of environment. I went with my girlfriend back to her hometown to visit her parents. I was stressed about my startup (who isn't), I wasn't able to relax and enjoy myself over the weekend. But being in a different space allowed me to reflect on my stress instead of just experiencing it. Given that we had a hard deadline in play now, I came to realize that I was more stressed about us possibly succeeding than us failing. I had reached a point where I was actively hoping that we would fail, so that I would have an excuse to move on from our startup and go work on something else. At that point, the worse thing that could happen is that we found more customers, found a way to keep doing what we were doing and keep moving forward. This is obviously a perverse motivation to the success of the company, and for the sake of my co-founder and not subconsciously sabotaging the company, I had to stop working on it and come clean to my cofounder.
Say what you want about quitters, but deciding to quit that startup was one of the best feelings in the world. I was vividly reminded of how good I felt when I made that decision, having just revisited the hiking trail where said decision was made. After the decision, walking around with my girlfriend and her parents was blissful. All of the stress and anxiety that I was carrying trying to make this failing thing work just disappeared. I could be happy, I could be present, I didn't have to keep fighting anymore. It was a huge weight off of my shoulders.
Ultimately, the reason that the startup died was because I did not do the due diligence in discerning whether this was a problem that I genuinely wanted to solve with my entire being. That's the bar for creating a successful startup, you need to find a problem that you're willing to dedicate yourself entirely to solving.
I started working on this startup with one of my best friends because I saw his passion in solving this problem, and I wanted the opportunity to build a tech platform that was completely architected and written by me. I wanted to test my skills and see what I was capable of creating. That to me was a fantastic opportunity, and I despite the rest of our failures this venture did accurately assess my skills. I knew where I stood and where I was lacking.
However, when push comes to shove and you're debugging something late into the night, your commitment is tested. Your will is formed by how badly you care about the problem, not about how much you love the technology. Unfortunately, my feelings of stress and anxiety about maintaining the venture outweighed how much I cared about the problem I was solving. It left me with no other choice but to kill my startup.
It's trite to mention this but it’s true; you do learn a lot about business and yourself running a startup. I learned that for me to invest that level of commitment, I need to be obsessed. Anything else won't get me through the hard times, to keep going when everything is stacked against you.
Startups today are sexy. They're glamorized and intensely fetishized predominantly by people who have never done them (or from people who are looking to massively profit from an endless pool of founders). Take some advice from someone who has done them, you won't be successful running one if your only desire is to create a startup for the sake of it. When you create a startup, your sole focus should be on the problem you're solving, and if it isn't you're eventually gonna kill your startup just like I did.
I like how raw and real this post is.
Striking out on your own is scary. You are living off savings. Money that you made steadily grinding away working for someone else (quite possibly in a job you disliked, quite possibly in a job that put you under a lot of pressure) dwindles away much more rapidly than you are comfortable with. Surprise expenses will no longer be covered by your next paycheck. Every dollar spent is gone forever. That is painful.
Nothing happens unless you or your co-founder makes it happen. There is no default schedule or routine, no existing processes in place, no-one to hold you accountable.
From 2012 to 2014 I spent about 11 months working on 4 different startup ideas (this time was not contiguous -- I worked for about 18 months between idea #3 and #4). My startup experience was frustrating. Ideas #1 and #2 ended because my co-founders bailed. Idea #3 we really tried to make work, but my co-founder and I argued about everything. Idea #4... idea #4 was a miserable, frustrating, pointless waste of time. My co-founder was working on it for the wrong reasons (they were ex-consulting and were obsessed with getting into an accelerator before we'd committed to an idea). I was also working on it for the wrong reasons. I'd drifted away from wanting to work on a particular idea, and from aiming to solve a particular problem, and instead was pursuing a vague mix of goals. We didn't work together for very long, but I derailed my own plans and put myself in an awkward situation which then made it very tempting to take another job for which I was a bad fit (by coincidence, that was working at an early stage startup in China).
Once I finally quit that job I felt very much like you did while hiking. Deciding to drop my startup ambitions was liberating. With time off to reflect I later realised that I'd drifted away from my own ambitions. After idea #3, I told myself I wanted to work on something "personally meaningful"... and over the following year made this more specific: an idea with a clear purpose -- that is, a goal with a clear "why"; a creatively interesting product that provided clear value to people; and ideally something that built on top of a fundamental trend in technology and which was congruent with my personal life philosophy. Idea #4 was none of these things, but I somehow convinced myself that my co-founder was aligned based on certain things they'd said, and ignored warning signs to the contrary.
When you deal with raw reality, reality will punch you in the face if you delude yourself. At least you know you're learning when you get those reality-punches -- plenty of people manage to cocoon themselves from the consequences of their own delusions. It's true that every failure contains a lesson (perhaps a tightly-wrapped lesson), but failure also carries a heavy cost. I lost a lot of respect for the overly-positive feel-good BS merchants who gloss over these painful truths (and almost always wind up sweeping their own screwups under the rug). The plus side is that once you learn to deal with reality, your odds of success become much, much higher. You set goals and actually achieve them. (Partly as you learn to only set goals that you can actually accomplish.) It's almost magical. However, you do then realise that other people's delusional BS becomes a major obstacle to success, so you have to become ruthlessly selective in who you deal with. If you know how to set goals, and be consistent, and be brutally honest with yourself, and anticipate and plan for challenges, and keep learning as and when you need to, and how to identify your "foxhole comrades" (the people you can rely on when the bullets are flying), and how to avoid or neutralise jokers, meddlers and scumbags... then you will find yourself becoming much, much more efficacious, and you will find the goals you set very often get actualised!
In some ways it's good that we're entering another tech/startups downswing... the entrepreneurial world became way too frothy over the last few years. People were achieving pseudo-successes without learning any valuable lessons or building anything of substance. Maybe the downswing will restore some sanity. (I don't enjoy the prospect of a recession, but this one is long overdue, and many people are going to take some painful "reality punches".)
Anyway, great post! I hope you keep writing and reflecting on your experiences.
Thanks for this post. I also quit the startup that I found with my friend. The reason for quitting was pretty similar. I was depressed and tired. I got health problems connected with the digestive system.