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Archive for the ‘Zodah’ Category

Until you truly experience failure, it is hard to fully appreciate the feeling.  For better or worse, up until this past summer I truthfully had no idea what it meant to fail. I’ve read enough blogs and posts in my time to learn about “failing fast” and “closing gracefully,” but until this summer, those learnings were a mere façade of the truth.

Now I’d like to be prideful and say that Zodah wasn’t a complete failure (personally, the experience was a learning success), but in the binary world that we live in, it probably should be considered one.  Our goal was to fundamentally alter the way households interact with their bills, and thereby, billers; since we recently shut down operations a few months back, we obviously did not quite get there (update: it turned out we exited to Hearst Corporation instead).  Along the way, there were a few things I did right, however, many more things I did wrong – but by going through these experiences I’ve fundamentally altered how I approach startups, and life.

To best describe what I’ve learned, I’ve created a list of key insights from the last few months at Zodah:

  1. Failure is emotional because startups are emotional; if it’s not, you’re not that invested in what you’re doing. More generally speaking, being an entrepreneur is a 24/7 job, that isn’t actually a job – even if your not building, you’re always working or brainstorming…you’re life becomes the same as your startup. It is an extremely strange feeling, but it seemed as if everything I said and thought had to do with Zodah, days merged with one another, and I literally didn’t spend a night without having dreams (nightmares) about use cases. Therefore, after spending every single minute wrapped up in your mission, realizing it was time to shutdown shop can be extremely traumatic.
  2. Making key decisions requires one foot on the ground and one hand in the sky, or in other words, a balance of realism and unfiltered vision is critical to be a good leader and successful entrepreneur. In the last few weeks leading up to our decision to close down Zodah, I must have flipped flopped a few times a day – to continue or not continue? At this juncture, realism was absolutely critical in helping us make (what now even more than ever) feels like the right decision. However, there were many times along the way where more realistic people (most of my peers) probably questioned our judgment or our plans; but with the recent successes of some of our competitors (and their subsequent interest in our business, our knowledge), it was evident had I not pursued the less sane path, we would have never launched and made clear the gaping holes in the current system.
  3. Runway is absolutely critical, therefore, do whatever is necessary to give yourself a $50K cushion to work with (either through savings or family/friends) before going to far down the rabbit hole. Seed cash not only gives a startup the freedom to purchase necessary hosting space, and hire part-time contractors or full-time hackers, but it also allows for runway – time to iterate and flexibility to test and experiment, while also keeping the food on the table and the lights on. I was recently asked by a friend “what can be done with $50K as a startup?” The truth is if you are building an Internet startup and have $50K, there shouldn’t be an excuse not to have enough to iterate and discover whether or not your product can gain traction. This lesson is not a fun one to learn the hard way…trust me.
  4. Details matter, being anal yourself is better than expecting someone else to get it right. Unlike any other job in the planet, being an entrepreneur requires finite precision and attention to detail both toward your product and your organization / culture. No matter if you are a hacker, front-end developer or visionary it is vital to an early-stage company to maniacally pursue and execute your vision down to the last detail (or pixel in my case), because if you don’t, no one will. The product is what you are selling, it is your job to make sure it looks and performs the way you envision; the company and culture is what you are building, don’t for a second lose sight that this is 100% in your control. I don’t think he knows this, but I thank Saar Gur for his advice here – before we met, I can now say our day to day journey was more aimless than focused; after we met, not a single product or company detail was unintentional. We built a good, clean app, and had it not been for this learning…well, I’d probably not be writing this now.

I apologize for the rambling, but I don’t like being trite. A lot of people claim that failure makes an entrepreneur successful. I don’t think it’s important to fail before succeeding, nor do I believe you always learn by failing. The act of trying, however, is far more important – hopefully you succeed, but if you fail, the act of trying new things and learning via each experiment makes the experience worthwhile.

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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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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