Brad's Books and Organizations

Books

Books

Organizations

Organizations

Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

« swipe left for tags/categories

swipe right to go back »

SayAhh Has Shut Down

Comments (23)

Our friends Dick and Jane have decided to disband their company. The last two months had been tough for Dick and Jane – each of them felt the other wasn’t living up to their commitments. Praveena was working hard on the product, but as she observed the tension mounting between Dick and Jane, she started answering calls and emails from the recruiters who had been hounding her since she left her previous job.

One night, a few weeks ago, Dick finally acknowledged to Jane that he was feeling incredible financial pressure. Dick and his wife Mary never really had agreed that Dick should take the plunge and start SayAhh. Dick was struggling to admit that he wasn’t fully committed to this path, even though he had been really excited about starting the company. While he was taking a salary, it was modest, didn’t cover his monthly expenses, and the combination of financial and daily work pressure were causing a lot of friction at home. Dick told Jane that Mary was being awesome and that she’d keep being supportive, but it wasn’t working for them as a couple.

Jane was surprised but calm. She felt it was important to bring Praveena into the loop since since they were all partners now. Over dinner, Dick, Jane, and Praveena discussed where they were at and how Dick was feeling. Praveena acknowledged that, while her relationship wasn’t causing any stress (she was involved with the founder of another company) she was having a lot of trouble working in the unstructured environment of a startup. She admitted that she was having serious conversations with a very large technology company in town about joining them as a PM for a product she was really excited about. Dinner went on a long time, had a lot of emotion in it, but ended without any specific resolution.

Jane didn’t sleep at all that night. She couldn’t believe that she’d missed these signals with each of her partners. She thought they were each as committed to SayAhh as she was. She went through a huge range of emotions dominated by anger, frustration, sadness, and depression before getting a clear grip on what she wanted to do just as the sun started coming up. A mentor of her’s once said “don’t ever make a final decision when you are tired” and she wanted to heed that, so she decided to tell Dick and Praveena what she was thinking when they got to the office, but leave it open for a final decision through the end of the weekend.

The conversation in the office was anti-climactic. Each of the partners had the same sleeplessness night and they all shared that as hard as it was to admit, they didn’t feel like they could go forward as a team for various reasons. It was not an angry conversation, but it was a sad one. But honest. They agreed to disband for the weekend (it was Thursday), have a long, quiet time thinking over what they wanted to do, and get back together first thing Monday morning.

On Monday, at 9am, Dick, Jane, and Praveena decided to shut SayAhh down. Dick had already talked to his previous boss who welcomed him back if he wanted to come back. Praveena had gotten a final offer from BigTechCo which she had a week to accept. And Jane had decided that she wanted to keep working on a startup, but wanted to hit reset, find different co-founders, and take more time making sure the idea was sound before they started spending any money.

They had $32,000 left of the original $70,000 in the bank after paying off all of their bills. The founders decided to split the remaining $32,000 between Jane and Praveena based on their capital investment, so Jane got 5/7ths and Praveena got 2/7ths. Jane took on the task of winding everything down, sending out notes to all of the people who had helped them, and Dick, Jane, and Praveena agreed to collectively hold their heads high, stay friends, and be glad that they called it quits before things spun out of control.

  • http://freepository.com John Minnihan

    That reads like a recounting of an actual experience.  Is it?

    • http://www.feld.com bfeld

      Probably. It’s not a specific one I’ve had, but a composite of a bunch of stuff.

  • http://www.pointsandfigures.com pointsnfigures

    Glad you wrote about a failure.  We can learn just as much from that as we can from success.  Good luck to all of them.  Hope they have plenty of gas in the tank for a new journey.

  • http://twitter.com/yoavlurie Yoav Lurie

    Bummer! Right before Christmas! Brad, I know it’s a hypothetical company, but, I was really hoping for a better outcome. Will Jane go on to bigger and better things? Do Dick and Praveena come work for JaneCo when she has 100 employees and is taking the world by storm? 

    • http://www.feld.com bfeld

      Well see. But there will still be a Finance Friday post periodically so they’ll likely show up in the future.

  • http://twitter.com/alberthartman Albert Hartman

    Didn’t mention if Sayahh had taken any outside investor money (just the $70K)? I would have doubted that outside money would be happy with founders divvying up the remaining bank deposits. I would have expected a 3 person crew to have already shipped product and solicited some angel investments? It would have made interesting reading to see how the advisors & investors took it, and what the legal costs of closing the entity down was (yes I know it was hypothetical).

    • http://www.feld.com bfeld

      They didn’t raise any additional investment. In the previous posts, the only investment was $50k from Jane and $20k from Praveena.

  • Charles

    Not to bring out the Grinch Feld. ;-)   It sounds like Jane needs to work on her leadership skills.  She had the most money in the company, was an original founder and I assume the CEO of SayAhh.  One of the most important part of being a CEO is leading which includes; Vision, Authority, Motivation and Delegation among others skills.  These are all skills that she CAN learn from Books, Videos, Classes, etc. Regardless of her age can and should never stop learning.

    Jane wants to continue with the company and has roughly $22k to do this.  Now there are other questions that need clarification; Who retains the rights to the work done, Who owns the assets (Domain Name, Code, Software, Hardware, etc), Can Dick or Praveena make any future claims if Jane makes it into a profitable company (This is lightly referenced in Venture Deals, which I highly recommend!) and other aspects not addressed here.

    While I understand that this is a fictional company the above very much applies to the real world and should weight down on ‘Jane’ if she plans on pursuing with this or any similar company.

    What are your thoughts Brad?

    Merry Christmas, Happy Hanukkah, Good Day.

    • http://www.feld.com bfeld

      Jane, Dick, and Praveena agreed to liquidate the company and release each other from any future IP issues. They all went their separate ways. As part of this, Dick and Praveena decided to let Jane keep the core IP, the small amount of hardware they had, and any other random assets since she had put up the bulk of the money.

  • Vivek Chandrasekhar

    Hmm, I am a bit confused . Is this just a fictitious scenario (I see from the comments ) or a real company. Googling and WHOIS-ing didn’t bring up any relevant results, so I am gonna assume its the former. Were you just demonstrating an example of co-founder conflict or just a continuation of the finance fridays. Nevertheless, it was useful in more ways than one. Btw, the earlier posts on financials were quite informational. Merry Christmas & Happy Holidays.

    • James Mitchell

      Brad is talking about a fictitious company, not a real one.

      • http://www.feld.com bfeld

        Correct – this was a fictitious company that was the basis for the Finance Friday series that I started a few months ago.

  • http://www.asoftwarestartupguy.com David Miller

    I have two thoughts and I’m not sure which one I believe. First, given the current environment and availability of seed capital, this series was always designed to be a parable and word of caution to everyone out there with startup fever. This is, more often than not, the likely outcome of every startup and Brad wants us to understand this reality. And second, given his schedule and commitments, Brad lost interest in this story-line and this provided the most graceful exit for the obligation of continuing the series (to our collective loss).

    Brad, I love your stuff so I want to believe the former (but I secretly suspect the latter).

    • http://www.feld.com bfeld

      Definitely the latter in this case. I had fun working on this series with the gang from Booth, but it started to feel like a homework assignment for me. They were busy and I was always cramming in last minute effort and feeling pressure to get something up. So – ultimately we decided to end the story of SayAhh.com. I’ll keep periodically posting things for Finance Friday when I feel like it, but not continuations of this story.

      I love your notion that it’s a parable and a word of caution. I definitely tried to incorporate a useful scenario into the shutdown.

      • Brandon Burns

        i’m sure we all understand, but it still breaks my heart. this was, in my mind, supposed to be the case study for how to make it… and then it failed. 

        can we at least get one last post where SayAhhh launches a hail mary pivot with a down and dirty MVP, one that’s so great it gets them into TechStars and (we presume) they live happily ever after? 

        it may be fantasy, but isn’t that why we read great stories anyway? aren’t those the stories that inspire the next great generations of entrepreneurs to go do great things? 

        give the people some inspiration!

        • http://www.feld.com bfeld

          Sometimes things fail. That’s reality. And when they do, it’s best to call it.

  • Pingback: Is This Thing On? « This Is Not A Job

  • Pingback: super cheap car insurance

  • Pingback: low cost auto insurance in michigan

  • Pingback: limo hire London , limousine hire London , limo hire , limousine hire , hummer limo hire ,London limo hire , London limousine hire ,

  • Pingback: auto insurance

  • Pingback: Butler

  • Pingback: Moraga

Build something great with me