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Archive for October, 2010

It has been a few months since I decided to table Zodah and join Bain Capital Ventures, but alone from a handful of close friends and advisors, I feel I have not properly communicated what happened and how we came to our conclusion. Time always provides for perspective, and after a few extra months of reflection I’d like to take the time to share the highlights of my decision process.

When we started our private beta in early May, our goal was three-fold: 1) to test out our hypothesis, 2) learn how we could iterate and improve our product and 3) raise a seed round to fund the next phase of development.  We launched to mixed results, but we quickly (and more importantly) pinpointed a group of loyal and avid early-users who validated our hypothesis. Every day we gathered new insights (from both promoters and detractors), and after a few weeks, we had begun to build out a pretty robust 12-month development plan. By the end of June, a few things were clear: we had built the foundation for a really easy to use application, we had identified and validated a large opportunity, we had a lot of work to do to take our solution from a “nice to have” solution to a “need to have” solution.

The above was the essence of our sell to investors. Our affiliation with DogPatch Labs and First Growth Venture Network put us in a position to meet top-tier investors and advisors interested in working with Zodah. After our initial pitches, our focus and next steps were clear, build traction! Easy, right? Wrong. Once our goals were within reach, things became complicated. To build traction we needed to make significant iterations to our back-end model (not that it was poor, it is just inevitable with any startup), and in order to make significant iterations we needed either significant time or added resources. Given our shrinking runway, we soon realized we had a major problem.

As we approached the end of July, it appeared we had a significant runway problem without a clear windfall in sight (there were a few glimmers, including a potential exciting exit). Instead of recapping the emotional rollercoaster that followed, I’ve included an expert of a note I wrote to friends and mentors that explains what came next:

I wanted to send you all a quick email updating you on a few items. First, I wanted to let you know that Andy and I have decided to table Zodah for the time being – extremely sad. After our private beta launch, we received really good feedback from our beta users, but given the nature of our business, because we weren’t able to secure a seed round before our runway went dry we were forced to decide whether or not to push forward or look for an alternative solution. We are committed to investigating potential partnership opportunities for our solution, but at the same time have decided to also investigate other personal opportunities. This was an extremely difficult and emotional decision, but I do believe the right and responsible one given our diminishing runway and personal constraints.

 

The opportunity that presented itself at Bain Capital Ventures has made the transition palpable, but not any less difficult. Of course, I still go to work everyday and torment myself with what went wrong (lots) and what I could have done better (most of the blame probably lies on my shoulders); but the ability to look forward, however, is what I believe distinguishes any true entrepreneur. So instead of wilting at the news of new services in our vain, I am extremely grateful and excited for my opportunity to learn at BCV and to have grown from my experiences with Zodah over the past year and a half.  Over the next few years, my goal is to learn about the world of investing, both early and growth stage, but to also take what I learn from the great team at BCV to further my success as an entrepreneur.

In the end, it is sad to see the Zodah dream come to a halt. I’ve personally, however, learned a great deal from both my experiences with Zodah and all the mentors and advisors who took the time to help and guide me over the last two years. Even though thing didn’t end the way we had anticipated, I’m extremely grateful for the opportunity – without a question in my mind, I would do it over 10 times out of 10. Now as I look forward, I am excited to begin a new phase in my career and apply everything I have learned; only time will tell where the next chapter will lead…

Update: After writing this post, we finalized our exit to Hearst Corporation. Given the fact it was mainly a tech / talent acquisition, most of this holds true, but I wanted to clarify for those who might be confused.

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