(originally posted at blog.startupsquare.com)
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
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.
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.
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!
orHow can I do lean startup in my friggin' huge company?