Startups How we almost got acquired by Facebook and failed. Here's what I learned. |
- How we almost got acquired by Facebook and failed. Here's what I learned.
- People who joined early stage startups and the startup failed, how did that affect your life?
- Leader - Employee Relationship
- Market analysis for beginners.
- Founding our first SaaS startup
- Joining a brand new startup, help me assess risks? (I've done some work already, I promise)
- How is the ownership of a startup affected by new investors?
- Accountant recommendations for tax filing
- Looking for a board game manufacturer
- Is there a best time to launch social channels?
- What are the benefits of using a sollictor to incorporate?
- 'Disposing' of a profitable side project that's going nowhere?
- Is a finders fee at series A normal for an early stage advisor?
- Code vs no code platform for MVP (and product)
- From Prototype to MVP
- Multi-Member LLC. Signed Letter of Intent, No Operating Agreement. Business went South. No product. No launch. What can I do for my annual due diligence in taxes and compliance?
- Leaving a company halfway through month - vesting options get prorated?
| How we almost got acquired by Facebook and failed. Here's what I learned. Posted: 27 Jan 2021 06:03 AM PST This is not a happy ending story. The beginningIt all started back in 2014. I had a startup whose clients were advertisers. It was a platform for users to review video ads in exchange for online points that could be redeemed for money or coupons. Watch and ad; rate it; be rewarded. Simple. After 100 campaigns I kept hearing it would be wonderful to connect their offline ads (e.g. TV ads, billboards, magazines, etc) with our platform. Advertisers wanted real insights and analytics from their offline advertising investment. As dedicated founders we started working hard on this concept: "from offline to online with your phone". Within 4 months we had our first version. I remember showing it to our friends and constantly hearing "Wow this is brilliant! It's like Shazam but for videos". I was ecstatic! The investmentThe revenue was coming in but it wasn't recurrent. It was difficult to enter the yearly advertising budget. Advertisers assumed our platform as an experiment (mainly to get feedback) and not as a serious distribution channel — despite the fact we picked at 100,000 registered users. We needed investment to grow and build the new technology's infrastructure. It wasn't cheap to maintain a technology that recognized millions of videos within 4s. More on this latter. In 2015 we raised $0.5M from angels and led by a VC. This allowed us to grow our team to 7 members and accelerate product development. We were ready to storm the world! The pivotIn retrospect, our product decisions after the investment killed our startup. We shifted our focus from the local videos ads review platform — where we had 100k users and 60 clients — to a global video recognition consumer product. We created an App — like Shazam — that recognized millions of videos. Our goal was to have advertisers make their offline assets interactive and invite their audience to download our App and use it to unlock "something". The practical end was the same as the QR code. How cool is that? Scan a video and "magically" show related content on your screen? Exciting, right? Wrong. Very few people downloaded the App. It turns out the barrier of downloading the App was too much for the reward (whatever the brand wanted to offer). Don't get me wrong, we did some cool campaigns with Kia, Unilever, or Volkswagen. But again these were one-shot campaigns. Basically an investment in innovation from the brands. After long days discussing our future, we thought of something. What if our technology was embedded in native apps like Snapchat, Facebook, IMDB, or even in the Operating Systems of mobile devices — Android and iOS? This would mean everyone could easily interact with their offline environment and get something in return. Brilliant! Interactive The Walking DeadThis is now 2016 and we had a new strategy. White-label our technology and allow anyone to embed it in their platforms. We built SDKs for Web, Android and iOS and off we went searching for customers. One of our main goals was to have TV shows interactive. Allow viewers to point their phone to the TV and delight them with a new experience. In this quest, I scrapped all my network, cold reach on Linkedin, went to conferences, traveled between London, New York and San Francisco. I ended up talking to all major TV networks — Comcast, BBC, FOX, PRISA, Viacom, CNN — and closed a contract with FOX. This was a pilot experiment where FOX would use Portugal as an assessment market. It took us 9 months (!) to close the contract. Even so, we started to see the light at the end of the tunnel. The worst part was over, we could take our learnings from our local pilot and catapult it to the world. We will change how people consume TV and will take our place in the TV innovation history. We were ready to build a $1B company. After several negotiations with FOX we were able to add our technology to three shows: The Walking Dead, MacGyver and Prison Break. What a victory! All the major shows were interactive. FOX will advertise the shows are interactive, people will scan the TV and have an amazing, memorable experience. Win-win-win. When the first results started to come in… well let's take a detour first and come back to the results later. Entering FacebookDuring 2016 I was mainly traveling demoing our technology to as many people as I could. Besides TV networks I've met with Google, Amazon, Snapchat, Verizon, Blippar and Facebook. Our goal was to integrate the technology in their existing apps and make their users interact with the world connecting the offline and the online seamlessly. The main feedback was something like: "amazing technology, great demo! But (there's always a but) something like this isn't on our product roadmap". Except for Facebook… It was late 2016 and I've met with a Business Developer Director. Here's how it went:
After exiting the meeting I vividly remember the next five minutes. As I went through the lobby I decided to seat on a couch to recover from the excitement. There I was, all alone, in one of the most incredible buildings in Menlo Park after a meeting in one of the biggest tech companies in the world. I found myself looking at the ceiling and smiling for no apparent reason. The M&A processAfter the Facebook meeting, we discovered we had a potential new market to unveil: copyright infringements detection. Users uploaded copyrighted content with small changes (e.g. by tempering with the audio pitch, by slightly rotating the video and by changing the original video with many different techniques) to bypass Facebook's algorithms. Because our technology was designed from scratch to recognize videos from low-resolution images, we were pretty effective in recognizing tempered videos. We recognized videos that were rotated, mirrored or cropped. Our algorithm didn't use audio. We even recognized a bunch of different videos inside one. Here's a demo with a) 10 trailers in the same video and b) a rotating video. We arrived in 2017 with our FOX partnership generating mediocre results. No relevant revenue was coming in and the user interaction data wasn't exciting. We learned that people need a huge reward expectation to take the effort of scanning the TV. Without undisputed usage from viewers, FOX was gradually losing interest in pushing the technology and the opportunity faded during the rest of 2017. In February we started talking with the Facebook team. They wanted to test our technology at scale. We thought it was a fair request and agreed to be tested without any compensation. We signed NDA's and were comfortable enough discussing the internals of how our technology works. After a couple of meetings to discuss the technology, Facebook started to test us with hundreds of hours at a scale we were never able to test before. It was scary as hell! We were all extremely nervous to see if the servers' architecture wouldn't crash. When the first results started to come in we were shocked… 95% accuracy and 0.13% false positives. This was incredible for us! This was paired with the audio industry leader: Shazam. My eyes started to tear up. We were tremendously proud and happy about this achievement. Facebook wasn't…
Caption: Facebook's engineer email rejecting us Did you feel that punch in the stomach? I surely felt it. It was so unfair to have amazing results on our side and receive this email. When we asked about the differences — to understand what went wrong on our side — we got this:
Caption: Facebook's lead engineer email really rejecting us We felt kind of used and disrespected to be honest. Remember this was a two months process with several emails and calls between us. It was one of the most difficult moments of my professional life mainly because of the expectations I've built. We were devastated. I was immature enough and almost took it personally. At the end of the day, it was business as usual for a big company like Facebook — they ended up acquiring Source3 to help them solve the problem. For us, it was a Technical Knock Out. If someone from a big company is reading this and it sounds familiar, please take a moment to rethink the way you say no to a startup. Especially if you've been interacting daily or weekly for the past months. Invite them for a meeting or call and explain them the general decision process. It will take you half an hour and it will make a huge difference for the startup. Believe me on this… Unfortunately, after this, we weren't having solid revenue from our FOX partnership. After discussing with our lead investor we decided to close our doors in an unfortunate ending to what could have been a tremendous success. Lessons LearnedSo many lessons learned! We could have done so much differently. It was a rollercoaster ride with so much emotional commitment. It's a challenging exercise but I'll try to generally sum up the main learnings from the whole journey. Here's what I learned:
Despite all learnings, the cold reality is that this was a failed startup… but I'm trying it again. This time I'm doing things differently. Hope you guys had a good read and learned a thing or two :) Let me know if you have any questions. EDIT: I'm overwhelmed by your feedback, support and love. Thank you so much! I've been getting a lot of questions about my next step / startup. Follow me at Twitter as I continue to share my learnings and document my journey as a founder. [link] [comments]  |
| People who joined early stage startups and the startup failed, how did that affect your life? Posted: 28 Jan 2021 12:23 AM PST What are your experiences with early stage startups, when you joined them, particularly in the technology domain and when the company failed, or even before that, how did it affect you and your family? How did you prepare yourself to take that gamble and when did you realize you made a mistake? Even if the startup did work, was there any reason you moved out of the company? [link] [comments]  |
| Leader - Employee Relationship Posted: 27 Jan 2021 10:32 PM PST Hey everyone, hope you are doing great. I have been wondering about the paradigm of relationships between bosses/leaders and employees, whether in a young startup or a big corporate, I would really love your professional insights on this. On a scale of 1 to 10, how do you think the perfect relationship should be (mainly from the employee's POV), with 1 being super professional and 10 being super friendly/personal. Moreover, do you think that cons would outweigh the pros in a very personal relationship developed over time while working together? I would really appreciate your experienced opinions on this, [link] [comments]  |
| Market analysis for beginners. Posted: 27 Jan 2021 07:10 PM PST So I am looking for some guidance in this part of my business plan. It's something I'm passionate about and Geographically I'm in a good place for the idea I have. But I'm struggling to find something that sets me apart. What is the best way for me to begin sifting through all the information out there when I don't know 100% what I'm looking for? That said I have my dad willing to back me up financially if I need it but I'd much rather do it myself until I need the help or see the room for growth. I'm trying to take this all one step at a time as I know it isn't made over night but it's beginning to feel overwhelming what I don't know. If anyone could point me in the direction of some literature to read or strategy on how to do this step correctly, I'd be very appreciative. [link] [comments]  |
| Founding our first SaaS startup Posted: 27 Jan 2021 09:08 AM PST Hello fellas, My partner and I decided to found our first software Startup (SaaS). We found a capable programmer, laid down the ground concept and now look for ways to execute. First, let me tell you our elevator pitch so you can grasp a broad overview of the startup we want to found. We want to create the first European Stock market Community for retail investors like you and me to discuss, chat and find likeminded people. Later on, we want to utilize our community's knowledge and insights to equip the ever-growing pool of investors with the right tools to manage, analyze, and operate their Portfolio to ensure lasting success. So now you know what we want to build. However, now we need your guys to help. Since building a product out thin air isn't an easy task to accomplish, we would like to know. -What are the first steps to consider when building a product -What are the main things to consider when starting a (SaaS) Startup? -What tools & method are suitable for developing a service? -tools for -competitor analysis -project management -Behaviours of users -What are the right questions to ask at the beginning? -What to consider when designing the first iteration of UX? Are we even asking the right questions? If yes, we would look forward to hearing your answer, and we are open to any suggestions. Lastly, I want to highlight one fact again. The most important question which keeps constantly crossing our mind is how to build a product/service? It's such a broad term so how can you boil it down to it's smallest bits. (First principle thinking) Thanks in advance [link] [comments]  |
| Joining a brand new startup, help me assess risks? (I've done some work already, I promise) Posted: 27 Jan 2021 09:49 AM PST TLDR: I'm planning to leave my full time job to join a new startup, and I want to know if I'm overlooking any major risks. My current situation: I'm getting market rate for a senior engineer in a tech city, at a mid-sized company that doesn't suck and has long term stability. It's nice. My wife and I have a pretty good chunk of student loan debt, and not much savings. So I'm unfortunately not in a position to take much risk. The opportunity: The startup has three founders with patents, and a clear path to productization of the IP. They've all been involved in successful prior startups. They have an unusually large seed-stage investment (about $20M), and they are beginning their first hires outside the founders. I know one of the founders personally, and she wants me on the team. I won't take a pay cut, and I'll get a .5% equity share. She says they are planning a three-year runway with the current funding. So this sounds fantastic, right? A free equity lotto ticket, market salary, interesting work, and new contacts (I don't have a lot in the startup world yet). And it seems like the worst case (assuming I do good work) is that I'm job hunting again in three years. Am I missing any pitfalls here? I've never been in this position before. It seems too good to be true, so I'm just trying to do my due diligence. [link] [comments]  |
| How is the ownership of a startup affected by new investors? Posted: 27 Jan 2021 03:03 AM PST As example, a company needs funding. The business is worth, let's say 100k. Theres is a single owner, owns 100% of it. That owner wants to raise money and sell 20% of the company to an investor. For 20k. Those 20k in cash belong to the owner, not the company itselft. Then the company is still not funded and the owner is 20k richer, yet there is no new capital in de company. How does this work then? Does the owner then lends those 20k to the company so it can raise capital? [link] [comments]  |
| Accountant recommendations for tax filing Posted: 27 Jan 2021 12:30 PM PST Hi all. As we approach tax season, I'm wondering if anyone in this sub has recommendations for CPAs to help with tax filings. Specifically, I need to issue K1s for all partners and file taxes for the LLC. Last year we spent $1500 on an accountant and I feel that's a lot. What have people spent in the early stages, especially when there was no revenue? How did you find your respective accountants? [link] [comments]  |
| Looking for a board game manufacturer Posted: 27 Jan 2021 11:27 AM PST Does anyone have any recommendations for a manufacturer of board games? I want to line one up, as a buddy and I are looking to launch a board game soon. Ideally they can handle everything from the board game mock up (we have a pdf of the design), the board itself and the game pieces. Has anyone here worked with any that were reliable, good communication, fair pricing, etc.? Thanks in advance! [link] [comments]  |
| Is there a best time to launch social channels? Posted: 27 Jan 2021 05:18 AM PST Hi all, I've been working on my start-up for over a year now, keeping it under the wraps. We previously explored launching our social channels in May last year, but I'm glad we never did as we've come a long way since then and things are far more professional looking. We're now approaching a point where we are ready to post content we've built up over the past year, have lots of creative content to post on social channels along with BTS content, and could push the button tomorrow if we wanted. My question is whether there is a best time to launch a social channel, based off the fact that we would like to do a Kickstarter campaign in Summer time. Would it be too early to start releasing information now, or would we be better of in waiting a month - upgrading the website a bit more so its more professional looking - and then launching it 2 months or so before the campaign. My worry is we might lose the hype by the time the kickstarter comes around, especially if there is a delay in its launch, however I do appreciate the quote 'The best time to plant a tree was 20 years ago. The second best time is now' [link] [comments]  |
| What are the benefits of using a sollictor to incorporate? Posted: 27 Jan 2021 08:31 AM PST I am looking to incorporate a start up jn the UK and hoping for some words of wisdom - Our MVP is almost there and I've started to look at incorporating, mostly to protect IP at this point. We will have 3 directors/shareholders. I know its only £12 (+ £40) to go direct through company house but I've also spoken with a couple of sollictors - i figured I will need contract/IP/shareholder agreement advice and thought it would make sense if they helped incorporate us too. They've charging £500+ just for incorporating us. So my question is - is there a reason for going with the sollictor that justifies that cost? If not, how would you recommend i do it? Any advice greatly appreciated [link] [comments]  |
| 'Disposing' of a profitable side project that's going nowhere? Posted: 27 Jan 2021 01:08 AM PST About 4 years ago, I started a small SaaS project for helping businesses solve a specific problem, and promoted it to some of the companies in the space who were dedicated to that problem. This was relatively successful - over the past 4 years, my client base has grown to about 25 customers and an ARR of $100k. I have some great clients, and 2 in particular basically rely on me to run their business / make up 70% of my revenue. There have been plenty of scaling problems over that time, so I've either thrown money at the problems or worked long hours to solve them (this is a side project that I've been running on the side of work / study). In 2020 I probably spent 10-15 hours a week working on the business doing sales or technical maintenance, and occasionally took entire weeks off of work to upgrade parts of the code. However, I initially drastically overestimated the size of this market, and over the past 18 months it has become clear that I currently serve about 50% of the total demand for my service. I have tried to branch into related areas / solve the same problem in other industries, but have had really limited success. The system's gross margin sits at about 70% and without paying myself for my time, my profit is probably $40-50k/yr. That's nice, but my day job pays me 3x that, so I'm really struggling to justify spending the time/effort/stress to keep it running. Overall, I really feel like I'm wasting time maintaining a business that's going nowhere when I could be trying new things and growing new businesses. I've spoken to a couple of website brokers, and they have basically said that because I rely so heavily on two clients for revenue, that it's unlikely to sell (because there's a risk that they cancel their contracts). I'm really at a point where the sensible option seems to be closing the business completely, or throwing it on a website auction site and seeing what someone's willing to pay. Has anyone been in this situation before? What did you do? Are there other options that I haven't thought of? [link] [comments]  |
| Is a finders fee at series A normal for an early stage advisor? Posted: 27 Jan 2021 01:36 AM PST Hi all, Currently early stage D2C startup (mobile app), released paid MVP 1 month ago with good traction. We're formalising an agreement with one of our advisors, who has been a great help so far and added value. We're offering options for their time. I expect that they will be very useful when it comes to our planned seed raise later this year. They have asked for a clause in their contract for a finders fee at Series A - 5% of funds raised from any introductions, on a success fee basis. Is this normal? This is my first startup so any thoughts / advice would be welcome. Thank you! [link] [comments]  |
| Code vs no code platform for MVP (and product) Posted: 27 Jan 2021 03:40 AM PST Hi, I want to build a web app and I am currently a software engineer so I have the know how to do a lot of the work. The issue is it will still take a lot of time to build an MVP and do it properly. Is it worth looking into no-code platforms such as bubble.io? I have given it a quick look and it looks confusing to me. I have also attempted to use Figma and InVision for wire mocks and they too confused me. I really want to get continuous feedback on what I am doing but I am really not sure if I should code it all or do it with tools designed for wire mock, MVPs and general feedback. I have been told coding is a waste of time and no code tools can do it all but I really don't know if that is the case. These no code tools state months of work in a few days [link] [comments]  |
| Posted: 27 Jan 2021 02:59 AM PST Hi guys, Thanks in advance. [link] [comments]  |
| Posted: 26 Jan 2021 10:08 PM PST Business Partners and I have a Multi-Member LLC splitting 50/50 in the Wellness Industry 2019 incorporating in California straight out of college. Letter of Intent was signed. Operating Agreement is incomplete and business just went South. No formal dissolution process since. Broken team. No product. A mess. I went through a phase of depression trying to find an answer on how to solve this problem with performing my due diligence on anything renewal related - Annual Taxes, Business Licensing, EIN, etc with all this legal jargon and technicality in opening-up shop as my step forward to the 'American Dream', but I overlooked and overshot my expectations way too high. What can I do to get this off my plate? [link] [comments]  |
| Leaving a company halfway through month - vesting options get prorated? Posted: 26 Jan 2021 06:47 PM PST I am leaving a startup company on the 15th of a month. I have a large number of shares vesting each month (well past the cliff). If vesting is on the 1st of each month, would I typically be allowed to buy 1/2 of that month's shares, or would I lose them? I am interested in "typical" policies or experience of others -- having policies for this type of thing are not a strong suit at this company and I think citing common practice elsewhere would be helpful if common practice happens to be on my side. I did ask HR and they were not helpful. If it matters, this is in California, where employee protection laws around "wages earned" when leaving a company tend to be pretty good. Not sure if that applies here, though. [link] [comments]  |
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