One spring day a couple years ago, I worked up the courage to ask my boss if he wanted to go for a walk. I had to talk to him about something.
We wandered around Madison Square Park, and I told him it was time for me to transition out of my role at General Assembly.
“Do you know what you want to do next?”
“I want to make visual, interactive books that are designed for mobile. Hopefully start a business around it. I’m not exactly sure what that will look like, though.”
I had no clue what it would look like.
But — I believed that if someone invested a lot of work, time, and love, it could happen. It would be possible to create a totally new way to read, one that would connect with readers’ brains in a deeper way than ever before. It felt so inevitable to me.
So I quit my job.
Fast forward two years, to June of 2017.
We’ve built a great product (an app that has illustrated summaries of bestselling non-fiction books), raised some money from world-class investors, assembled an amazing team of people that love working together, gotten featured by Apple, attracted over 1,200 paying customers, been downloaded nearly 100,000 times, and reached over 25o,000 readers on the web. Even more exciting: Hardbound readers have tapped through over 20 million pages of content! And almost every day people send us notes telling us how much they love our product.
Honestly, I’ve never been more happy working on anything in my life.
But today is not happy.
Normally, when I write, I try to use a cheerful tone of voice. This post isn’t like that. Sometimes things just suck.
Here’s the situation:
A couple weeks ago I had to tell the Hardbound team that I need to start helping them look for other work. We weren’t going to be able to pay them for much longer. Our bank account was running dangerously low, and although I had been 100% focused on fundraising for a long time, it wasn’t going well. I talked to 72 investors, but I wasn’t able to close the round. We were making about $2,500 a month (better than zero!) …but spending around $13,000 a month. So we were a long way from profitability.
Now, everyone has moved on but me, and I’m trying to figure out how to move forward.
For the time being, we’re not going to be able to release any new stories (it sucks, I know 😖), but the app and website will stay up. I am not ready to quit just yet. There probably will be some big changes, but I am not finished.
Why didn’t the fundraise work?
It’s impossible to know for sure why investors said no, but the explanations they sent me usually fit one of these two themes:
- We had OK but not amazing user growth. About 7k people were reading our stories every week, but that number wasn’t growing fast enough to get people really excited. Our theory was that if we were creating a lot more content (and started to invest more in marketing) then the numbers would improve, but many investors saw that as too risky.
- It takes a lot of time and money to make a Hardbound story. Each one needs to be researched, written, edited, and illustrated. With a team of 3 part-time freelancers, we could make one story a week. Any faster, and the quality would suffer, alienating our users. (We tested this. And besides, we’d rather die than turn into yet another shitty content farm. The world doesn’t need any more of that.) Many investors thought it would cost us too much money to make enough content to satisfy user demand. Our theory was that the content we’re creating (book summaries) is evergreen, so it should be judged completely differently than a digital media company that has a content farm churning out hundreds of posts a day. Unfortunately, investors didn’t buy that story.
But of course, with venture capitalists, you never really know what they’re thinking.
They see a lot of good companies that they would like to invest in, but their time and money is limited, so they have to say “no” to a lot of companies they genuinely like and want to succeed. It’s a really hard part of the job.
When it comes right down to it, all early stage venture capitalists have to make decisions on a gut instinct. There are probably subtle things that nobody fully understands that impact their final decision.
In thinking about how this all played out, I have come to accept some things about the universe:
First, I can’t control things that I don’t control. Someone else’s decision to write a check is one of those things. I can only influence it, by focusing on my own execution.
The second lesson is a bigger one: I learned how to accept responsibility for a pretty big failure — without hating myself.
The temptation to avoid ownership of a failure is extremely strong. In high school, I competed on the debate team, and I noticed that when people lost, they would blame it on the judge about 80% of the time. That always struck me as wrong.
But the alternative isn’t so great, either! In the days following the Terrible Conversation (when I had to tell everyone we couldn’t pay them anymore) I beat myself up pretty badly. My incompetence directly hurt people. And to make matters worse, I know a lot of people that have raised a lot of money for their startups. “Why couldn’t I pull it off???”
Obviously, that kind of thinking just makes you depressed. So I figured out a way to subtly shift the question into a more productive gear.
Instead of “Why couldn’t I do it?” I asked myself “Why didn’t I do it?”
Couldn’t implies there is something about me that makes success impossible.
Didn’t just means it didn’t work out this time, but that I could have done it. There are certainly decisions I could have made, and actions I could have taken, that would have set us on a course to successfully raise money.
So why didn’t I? That’s a question that shifts you into curiosity-mode. It gets away from blame (fixed mindset) and into learning (growth mindset). It makes clarity much more attainable.
And, as a bonus, it feels much better!
So, what am I going to do now?
I see a huge range of possibilities:
- Try to get acqui-hired and pretend I didn’t fail to fundraise, as is the tradition in our industry (“our incredible journey!”, etc).
Hint: I’m not going to do this.
- Go it alone with the same model as before, except now I make all the stories myself, slowly building the business.
- Reflect on everything I’ve learned, and experiment with making fundamental changes to our model.
- Press “pause” for a minute to catch my breath.
The first option doesn’t appeal to me. Besides the dishonesty of pretending you didn’t fail, I really don’t want to quit this yet.
The second option is tempting, because I have no significant new data that changes my mind about Hardbound’s potential. Investors are wrong all the time. But if I just jumped into that, I would need to spend all my time working on new stories and I wouldn’t have very much time to learn from what just happened. So I have reservations about immediately jumping into this route.
This brings me to my current, short-term plan: a hybrid of options 3 and 4.
I’m taking a minute to take care of myself. I’m thinking deeply about everything we learned. I’m asking myself which parts of our original vision were right, and which were wrong. I’m talking to people a lot smarter than me. I’m thinking of new ideas that might solve some of the challenges we faced. I’m open to change, basically. Side note: if you have ideas, feedback, or suggestions, I would love to hear it! My goal now is learning.
But, no matter what happens next, I know what my goal is:
I want to use technology and storytelling to help people widen their perspective, deepen their empathy, and sharpen their knowledge.
There’s an image in my head that helps me make sense of this:
I’m driving towards the horizon in the desert.
For me, the horizon represents a world where everyone is living their best possible life given the limitations of the universe. The particular angle I’m coming from is progress on the intellectual/emotional front. The closer I get, the more progress I make towards that goal.
Here’s the thing about a horizon: no matter how far you go, or how fast you’re going, it’s always beyond your reach. There is no permanent success. No destination. It just feels good to accelerate.
I remember what it felt like when we raised our first round of funding, or when our CTO, Joe joined. It felt like we were speeding up! I used to be puttering along in a little skateboard on my own, but now we were building a car together, moving towards the horizon faster than before.
If I hadn’t failed at fundraising this year, we would have turned it into a little airplane. But the horizon would still be just as far away. No destination.
Instead, the car ran out of gas, and it’s just me now.
Yes, that massive deceleration hurt like hell, but now I’m doing exactly what I imagined I would do in the unfortunate event that the car stopped: I am crawling on my hands and knees towards the horizon. Soon, I will stand up and start walking. I’ll gather material to build another skateboard. Maybe find new partners in crime, or maybe the universe will be good enough to me so that I have the opportunity to work with the same people again.
Even after that happens, no matter how fast I go, I’ll never touch the horizon. But I will know where I am going, and why.
Turns out, that’s all you really need.
Thank you so much to everyone who has believed in Hardbound and contributed to what we did. A very special thank you to my fiancee, my family, team, investors, friends, internet friends, and anyone who hasn’t unfollowed me on Twitter for constant self-promotion of Hardbound ;)
In the words of a man I deeply respect:
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.
Truer words were never spoken.