The Fat Lady Cometh – Shutting Down startupSQUARE

(originally posted at blog.startupsquare.com)

 The Fat Lady Cometh   Shutting Down startupSQUAREOn Dec 1st, startupSQUARE.com will thank it’s very generous alpha users and the support we’ve received from peers and mentors alike before closing our doors and shutting down.

Why?

We’ve demonstrated that there is significant demand for this type of service, we have 46% product / market fit based on Sean Ellis’ suggested measurement method, and we have users so enthusiastic about the idea that they just send us money. Still we’re shutting it down.

There’s a lot that’s gone into that decision, more than would fit into one blog post. So this won’t be comprehensive, but I’d like to explain a little bit to our users why we’re taking this course.

Time for a Pivot

It’s been very clear over the past few months that we’re overdue for a big zoom in pivot. We spent much of Oct looking at our metrics and trying to figure out what to focus on and how to get to revenue or a funding opportunity. One thing that came up again and again in our discussions is that we were trying to do too much at once given our resources. startupSQUARE is trying to be:

  • A place to find co-founders and advisors for startups (a discovery engine)
  • A place to brainstorm ideas (ideation)
  • A place to find the best resources for your startup

Any one of these topics is enough for several websites. By trying to tackle them all at once, we bypassed our Minimum Viable Product by several orders of magnitude and in doing so, we didn’t focus on enough basic value to keep our users coming back.

In addition to that product pivot, there was a strong possibility we’d need a market pivot. We’d been engaged with tech entrepreneurs as an early adopter crowd, but the needs of the tech crowd are more focused to finding co-founders, which is not a large demand for brick and mortar SMB entrepreneurs. SMBs however represent a much larger market and a much better opportunity for monetization.

The tech entrepreneur market may be more inclined to try out a new service like this, but also represent significantly different needs than the larger market. So they aren’t early adopters so much as a niche market segment.

Fork in the Road

 The Fat Lady Cometh   Shutting Down startupSQUARE

We therefore decided we needed to focus and look at some strategic alternatives which included:

  • A simple mailing list for people looking for co-founders or advisors
  • Reviews of startup resources (Yelp for startups)
  • A social network for SMBs to get business advice (an on-line environment similar to SCORE)
  • Continuing on with startupSQUARE as an amorphous entity
  • …and many more

All of these ideas had one of two difficulties. They either represented a small market opportunity that was unlikely in the short to medium term to generate revenue sufficient to sustain a team of three people working full time, or they were highly risky opportunities which would require substantial additional development.

Regardless, we’ve come to the conclusion that taking startupSQUARE to any of these alternative ideas does not make sense for us. Despite the current mini-angel bubble for funding, we are not comfortable raising funding without concrete metrics which show our business model to be solid. As such, we will be disbanding to focus on our own projects.

The End?

We have been approached by two parties and counting who are interested in taking startupSQUARE to the next level and we’re more than happy to discuss this if we think another team can succeed. After all, it stands to benefit us as entrepreneurs as well!

At this point, we the discussions have not proceeded very far. If we’re able to hand it to another team, then it is certainly possible that startupSQUARE may continue. But for now, we’re going to assume that that’s not feasible and start work on our next projects.

My Personal Goal

After learning a tremendous amount since moving to San Francisco a year ago, I’m excited. I’ve made some big mistakes in my management of startupSQUARE and I’d like to turn those mistakes into expertise with practice practice practice.

I’ll be taking that learning and implementing four startups in four weeks in Dec (and perhaps January) to improve my ability to focus on Minimum Viable Products. One of those projects will be a simple co-founder mailing list as a public service with no pretense of trying for revenue. This is one aspect of startupSQUARE that is very successful, seems to provide real value to users, and will not take much development to implement.

I’ll also continue blogging so that I can pass the know-how we’ve acquired to the next team working in this market.

 The Fat Lady Cometh   Shutting Down startupSQUAREThank you!

So, on behalf of Manuel, Marcel and myself, I’d like to thank everyone for trying out startupSQUARE, giving feedback, donating to support our costs, and pushing us harder. We really appreciate all the kind thoughts and honest criticism we received.

So…what should I post next? Tweet to tell me what to write:

Show me how to test product market fit!

or

How can I do lean startup in my friggin' huge company?

9 comments

  1. Hi Tristan,

    Its said to know the news. Really appreciate all the time that you spent over emails telling us about the project. It was great interacting with you.

    Ashish

    • Tristan says:

      My pleasure! I hope we will have a chance to do more in the future.

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  3. Keith says:

    I think this is an app inside something bigger, maybe. I have been to all the cofounder-type sites and they are all piece-of-action-models with very little value. Either they cost me over a $100 to list something, or I do not have an easy way to submit a simple pitch that will be honestly viewed. I submitted a great pitch to gust.com, and investors would never look at the video, exec summary, business plan etc. They would just look at the one-line pitch and the numbers and move on, less than a minute on average. There was no way to communicate the team, the value added development construct, and no way to see the vision. All speed pitch events are like this. Average Joes in the audience could be thinking about ways to build revenue or add value in service and yet the so-called experts run the show. We need a new model, something that is pitched to small business owners first, then advances to verified users, then to a third group and maybe a fourth and then maybe to potential co-founders. Let an idea be vetted properly in a natural democratic republic for entrepreneurs. When it finally gets to the potential co-founders, value has been recognized and should be seen. You could even charge for this and pay really good raters. If there is no value in the open market of business needs or users demands, it never gets to a co-founder’s inbox, and consequently never to a potential investor. Sounds like I am rambling. Instead, I am disturbed that I have to let a potentially good co-founder go because he wants me to fire everyone and rebuild with his team. Now I am back to square one.

    • Tristan says:

      Kickstarter is a start at this approach where ideas are vetted by actual customer interest.

  4. enrique says:

    Tristan,
    I really liked startup square. My startup began with a similar concept, but quickly began reshaping based on user feedback. We pivoted several times and are currently focused on enbling connections between large organizations that need innovation with early stage ventures able to leverage a large organization’s scale to grow. It has been a long process, and we are optimistic (not surprisingly). It’d be great to connect via phone to share with you our story and get your thoughts. Pls let me know.

    • Tristan says:

      Sure, please drop me a line via the contact form and we can chat.

  5. Luis says:

    Hi, just knew about the project on Twitter but I see its not alive any longer.
    Was it intended to be some kind of idea sharing + incubator + accelerator concept all in one place?
    I do think there´s an opportunity for that concept: people is too focused out there, and most of the startups desperately need a holistic approach.
    I think an startup is a ‘continuous road’, not a series of stages…

    • Tristan says:

      It wasn’t an incubator or accelerator, but it did have lists of startup resources and the vision included something angel list like.

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