In part 2 of this post, I was faced with a difficult choice in 2013: change direction and focus of the current startup, or start fresh. Starting fresh meant admitting failure, and in some ways, giving up. And I don’t like giving up!
In my mind, by keeping it going I was fanning the embers to make it ‘big and better’. Whether entrepreneurial over-optimism or my own experience set (part of my career was in operational turnaround and rescue), I wanted to avoid losing any time and momentum.
Two legal entities, a ready-made brand (relatively undeveloped, but trademarks set up and some people already knew us), a six letter domain name, software integrations, cloud server accounts were all ready for redeployment to the new product focus. There were difficult choices to make.
Base instincts (or bias) won, and I took over the existing company infrastructure and my cofounder generously agreed to dilute to make way for new recruits. I dove into months of deep customer engagement with the goal of turning the ‘sheds’ into fully functional ‘buildings’. A rescue of ‘drowned honour by the locks’ to borrow the phrase from Shakespeare.
Looking back today, I’m not sure that the few months I avoided losing would have made that much of a difference in the medium term. But, at the time, the clock was ticking and the threat of failure hung above me like the mythical sword.
Pivoting off the existing brand and infrastructure saved me time then. But as I discovered along the next part of the journey, there can also be negatives.
After a pivot, the story isn’t as clear any more, and conversations connecting the past to the present take up more time. It’s difficult to share your vision when you are dissecting why the first proposition did not work the way you expected. And when selling to customers who knew your first proposition, reducing the new proposition to a few seconds and easily digestible phrases isn’t easy.
I think it’s a natural tendency to try to repair what you think is the key to unlocking customer engagement. Multiple modules meant multiple products to connect and maintain. And multiple sets of competitors and messaging to refine. When you’re lean with a tiny team and are adapting to customer feedback to crack use cases, it’s very difficult to choose which feature or bug to attack first.
Technical debt can slow one down further: tradeoffs to get to market faster come back to haunt you. The classic, enterprise-first mistake really hurt us: user experience and interface improved with painstaking iteration (not having consistent design resources didn’t help), but it’s so much harder to simplify inefficient build and UX.
The monster you don’t see, however, is the one that restricts innovation. With an improving product set and customer engagement, the focus stays on improving what’s already there and evolving the roadmap. Along the way, new ideas get left behind because they’re either out of peripheral vision, or (more likely), they won’t work with the legacy architecture. It’s a fraction of what a financial institution has to deal with today, but even at 2-3 years old, technical debt can seriously limit options.
Myopia walled in by code!
Mentoring other fintech startups took me out of my own tunnel and triggered introspection. Applying brainpower to someone else’s challenges can be refreshing and helped me pull myself out of the daily grind to revisit all our assumptions and rescan with fresh lens: I could see we had gotten into a self-perpetuating cycle. Breaking the cycle was both painful and freeing.
The accounting channel helped us build a daily cashflow product that businesses could trust. And the time we’ve spent with customers from all over the world has been amazing. But passion and emotional attachment aside (which have had enough driving time in this journey!) it was time to step back and re-assess the likely metrics in this segment. It’s difficult to ignore sunk costs in a channel, and all instincts lead to building off what is there. But when objectively comparing one channel’s costs, sales cycle and likely acquisition patterns against another, practicality prevails.
Letting go of what we see as ‘sunk but rescuable’ hurts. Sinking further or getting stuck and stagnating hurts more. Resilience and reinvention has its limits. Just because you can’t see them, doesn’t mean costs aren’t there – the meter keeps ticking and opportunity costs add up.
Repeatedly, I surveyed the paths ahead and picked one that makes more sense to me today. One, my journey and previous career has well-equipped me for, and one that better serves my mission to simplify cashflow. Personal goals and business goals intertwine, but that’s what keeps one motivated to work 14+ hours every day.
Talking it through internally, the decision was quick.
Last quarter we discontinued Bilbus, the accounting channel add-on. This chapter needed to be closed before starting the next journey. No more extension!
Reflecting back on everything we did to reach the stage where people relied upon, trusted, paid for and referred our product, it’s difficult not to wonder whether we would have been better off taking shorter, narrower journeys. Pivoting and adapting can make for a longer, evolving trek. On some journeys, I think there’s no other choice and there are few shortcuts. Other paths, I believe, could be more simpler. Never a dull moment on the difficult road to product-market paradise.