By Matt Hunt
Most startups will fail. Everyone in the startup community knows that failure is a more common occurrence than success, but just how much?
So why do we hear so little about failed startups in Minnesota?
You’ve mentioned before that the idea for inSphere came from your personal experience. What was the manifestation for inSphere?
Often when individuals find themselves in a job transition they are seeking to quickly expand their personal network with as many introductions as possible. They are hoping for quick outcomes with an introduction, a forwarded job opening, or a referral to a potential employer. This rarely happens.
It isn’t until people start building a deeper relationship that this type of support occurs. inSphere was developed to help people build these deeper relationships. I described it as “CRM” for an individual’s professional relationships. I now see the term PRM “Personal Relationship Management” being used a lot.
When I found myself in transition I was meeting between 10 – 15 people a week. I could hardly keep up remembering anything about them. I turned to others in the same situation and what I heard was that were using Excel spreadsheets to manage their relationship network. Having come from a business that developed SaaS based solutions I was surprised to see there was no one else working on this problem?
In 2013, the professional networking site LinkedIn added “relationship tracking” functionality to their site. Did you see this as a direct threat?
While I was working on inSphere I mostly focused on what I was doing. I was trying to get my offering right by building something to meet the needs of my users.
At the time LinkedIn had significant scale with close to 200M users, they had completed their IPO so they were flush with cash, and they were the de-facto professional networking tool – they were the 800 pound gorilla.
While their functionality was still just a fraction of what I was trying to create, I knew they could easily own relationship management.
Before you decided to shutdown inSphere operations you mentioned that you were putting the company on a timeline. Can you explain more?
I had my product in the marketplace for about 18 months. Somewhere around the 12-month time frame I was getting the inkling that it might not be working. The primary measure I was fixated on was the number of users and paying users.
At the time I was not focused on the product since I was receiving positive feedback every time I demonstrated it to potential users.
Instead I was focused on marketing efforts. Feeling as though I could (or should) do more. So I put myself on a 3-month timeline, with an additional 3 months if I could show significant progress. Really what I was doing was trying to hold myself accountable to the business.
How difficult was it for you to make the final decision to shut down the business?
It was really rather easy – easy and relieving. I stepped back, as unbiased as I could, took a look at the state of the business. Where we were today and what efforts had we tried. I assessed what could be done differently to keep the business going. In the end it was easier to discontinue the business rather than try and move forward in a new direction.
What are some things that you learned from the experience?
- Being Humble – You have to be willing to do it all. Especially if you’re a solo entrepreneur you have to be willing to take on all aspects of the business. You have to learn things you never expected you might have to learn and to manage tasks you don’t particularly care to.
- Highs & Lows – There is tremendous satisfaction is seeing your vision take life and to actually see people using it. On the flip side of that you also can experience the low of the lows when something isn’t going the way you had planned. But through all that you come back the next day and continue on because you still have confidence in what you’re doing.
- Generosity of Others – I was amazed that so many people were willing to give their time to help me be successful. They were willing to speak the honest truth, tell you their stories, and pour their hearts out to you. This was extremely important in the early days.
- Team Effort – It takes more than one person to move your idea forward whether you have employees, contractors, or friends willing to lend a hand. Recognize those people along the way and make sure they understand how important they are to you.
From your vantage point, how supportive is the local venture / entrepreneur community with failed startups?
I don’t think it is. Of course everyone wants to speak of the success story but given the failure rate of start-ups today, we should be more willing to share our stories.
I have learned so much along the way from others, I would think that someone else might be able to learn from what I did or should have done. Just this year at MinneBar I sat in on a presentation where someone talked about his failed start-up. It was the first time I had heard someone honestly pour their heart out in an open forum. The room was packed and there were many questions for this person. I think the community is clamoring for more of these types of debriefs.
Do you have any advice for those that are thinking now about starting their own company?
Yes, do it! You will never regret it regardless of how it turns out. Also, talk to a lot of other entrepreneurs. Learn from what they did, didn’t do, and what they would do differently.