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I worked for a startup with a well liked paid product built through iteration (test prep product). Then it was dropped on the ground and discontinued cause they

I worked for a startup with a well liked paid product built through iteration (test prep product). Then it was dropped on the ground and discontinued cause they raised a hundred million and now needed to build the founders vision, a free consumer project designed and built for years without showing it to potential users. Didn’t work out. So I’ve seen that happen.

daanlo 8y ago
It is so sad when too much money destroys products / companies. IMHO great products are only built when the ultimate stakeholder is the user and this can get very difficult to maintain when you are effectively not financed by your users.
patothon 8y ago
do you mind me asking what was that service? not even the company, but more the product itself?
mo1ok 8y ago
Shit, this sounds like a previous startup I left. Product-market fit acquired, growing steadily, near-profitability. Then Series C, and sudden pivot to more ambitious product. A few months/years later (I left before this, seeing the danger) most of the staff gets laid off. :\
sonnyblarney 8y ago
This is basically a gross misallocation of these kinds of investment deals, but you're probably right and it's all too common. It says something about oversight as well. There is a very real rationality behind SoftBanks ideal that they want to do things 'big' and 'dominate'. So, so many markets go to a single or small number of winners, and the surpluses tend to go to one winner. SoftBanks strategy of finding 'something that is working' and then giving a company maximum firepower to basically replicate that thing and dominate globally, makes sense for them. Now - some things don't scale well, and some things need a lot of market adaptation ... but the logic is sound. Softbank 'threatening' a company that doesn't take their money is not very nice, at the same time, it's not really a threat, rather it's just the communication of their rational strategy: 'we take companies that have figured it out and give them the means to win the market'. Logically, if ABC Corp doesn't want to go that route, they'll be looking at DEF Corp and GHI Corp.. This is not new, just the scale if it all seems daunting. The difference we're seeing in scale is due to the new reality that it's no longer about 'winning America', now it's about 'winning the world'. Much in the same way Hollywood films now, the big ones, are designed for international markets and without a theme, the stars, a story that will 'win' globally, the massive budget cannot be justified. The notion of companies pivoting on something that's working, towards some 'grand vision' is kind of sad, but in a way understandable ... every one of us Entrepreneurial minded people have an 'irrational' bone where we want to 'do this thing' that compels us forward, it's just a matter of being very pragmatic about it. $100M is a big round B or C or whatever, it's there to scale something, not to 'find a bigger product market fit'. It's one of the classic mistakes of taking on too much money ... but it can be mitigated by really thoughtful leadership. If you take the money on the right terms, and spend it only as you needed it surely it can be mitigated, especially with the right kind of coaching, maybe by people who have been there.

daanlo 8y ago

It is so sad when too much money destroys products / companies. IMHO great products are only built when the ultimate stakeholder is the user and this can get very difficult to maintain when you are effectively not financed by your users.

patothon 8y ago

do you mind me asking what was that service? not even the company, but more the product itself?

mo1ok 8y ago

Shit, this sounds like a previous startup I left. Product-market fit acquired, growing steadily, near-profitability. Then Series C, and sudden pivot to more ambitious product. A few months/years later (I left before this, seeing the danger) most of the staff gets laid off. :\

sonnyblarney 8y ago

This is basically a gross misallocation of these kinds of investment deals, but you're probably right and it's all too common. It says something about oversight as well. There is a very real rationality behind SoftBanks ideal that they want to do things 'big' and 'dominate'. So, so many markets go to a single or small number of winners, and the surpluses tend to go to one winner. SoftBanks strategy of finding 'something that is working' and then giving a company maximum firepower to basically replicate that thing and dominate globally, makes sense for them. Now - some things don't scale well, and some things need a lot of market adaptation ... but the logic is sound. Softbank 'threatening' a company that doesn't take their money is not very nice, at the same time, it's not really a threat, rather it's just the communication of their rational strategy: 'we take companies that have figured it out and give them the means to win the market'. Logically, if ABC Corp doesn't want to go that route, they'll be looking at DEF Corp and GHI Corp.. This is not new, just the scale if it all seems daunting. The difference we're seeing in scale is due to the new reality that it's no longer about 'winning America', now it's about 'winning the world'. Much in the same way Hollywood films now, the big ones, are designed for international markets and without a theme, the stars, a story that will 'win' globally, the massive budget cannot be justified. The notion of companies pivoting on something that's working, towards some 'grand vision' is kind of sad, but in a way understandable ... every one of us Entrepreneurial minded people have an 'irrational' bone where we want to 'do this thing' that compels us forward, it's just a matter of being very pragmatic about it. $100M is a big round B or C or whatever, it's there to scale something, not to 'find a bigger product market fit'. It's one of the classic mistakes of taking on too much money ... but it can be mitigated by really thoughtful leadership. If you take the money on the right terms, and spend it only as you needed it surely it can be mitigated, especially with the right kind of coaching, maybe by people who have been there.