Anonymous Tumblr Chronicles Life After the VC Rocket Crashes
Earlier today an anonymous founder created a Tumblr called My Startup Has 30 Days to Live, chronicling the advice from investors that left him unable to make payroll. How does a once profitable and bootstrapped company morph into the startup walking dead? By following the contemporary formula for startup riches: boosterish article in the tech press, join a top accelerator, give good deck on Demo Day, cash the VCs checks, crush it . . . you're the next Dropbox.
Instructions from investors to focus on vanity metrics and abandon revenue-producing clients sound like the same bubble-eyed thinking that gets startups more venture funding if they don't know how they'll make money or haven't tried. Don't get it? Well then you just have grokked growth yet.
After hitting the "the top of TechCrunch" and getting an offer from "very well known accelerator," the anonymous founder was told to abandon his plans to raise a seed round: "we were thoroughly convinced that we had to continue on the VC rocket-ship in order to matter to anyone":
We listened to our investors
They were proven entrepreneurs that had made millions (sometimes nefariously…) and they believed in us. If only we would:
- “Make feature X free”
- “Stop focussing on revenue, someone else will pay the bills”
- “Grow $VANITY_METRIC so you can show a hockey stick at demo day and look good”
- “Cut out that pesky client that generates 80% of your revenue, they’re a distraction on the road to executing $OUR_BIG_VISION”
We drank the Kool-Aid and went all-in. By the time demo day came around, we had cheques being written and were all over the press. Still, I had this nagging feeling eating away at me. That nagging feeling was disbelief.
That "million-user strong kind of traction" never materialized. And the founder blames himself for that.
I made the decision to start this blog in the middle of the night last night while lying in bed next to my sleeping wife. Just one of the many people I will have disappointed due to this failure. (However, undoubtedly one of the few that will still love and support me afterward). This week, I need to speak to the other founder and fire our first employee before he leaves on a planned vacation. He’s a good developer, but I won’t fucking make payroll next week if I don’t clear him and his severance out of the company.
What advice would those same investors give him now?
To contact the author of this post, please email nitasha@gawker.com.
[Image of Y Combinator's Startup School via Robert Scoble/Flickr]