A Postmortem On My 2nd Failed Startup, PubLoft
Edit — I brought PubLoft back. Show time :) — 7/12/18
As young people, we think the world needs saving. The difference between us and many other generations before us is that we’re growing up in an age where changing the world is as easy as creating seven lines of code or a single button. We’re growing up in the age of the internet, which opens up the opportunity for impact 10x compared to our parents or grandparents.
Unfortunately, this increased access to the internet is positively correlated to our ambition to change the world. We see others do it, so we want to do it too. We all want to. At least the friends I surround myself with do. Who doesn’t want to have a massive impact? A byproduct of changing the world is usually getting rich. That would be nice too.
Well, here is my story about my failed effort to change the world. Why did it fail? It failed because of my ambition. Let’s get into it.
About a year and a few months ago, I was feeling discontent with my job and was feeling pretty ancy every day. I started to work on side projects in the morning and night to give me some work that I really cared about but it just wasn’t enough. I wasn’t feeling fulfilled or challenged by my work, and I wanted to do something else. Not just anything. I wanted to start a business.
After some brainstorming with friends, I decided that I wanted to write blog posts for startups. Like an idiot, I thought it would be really easy to get customers so I quit my job with an empty savings account started formulating a plan of how I was going to get customers. No LLC yet. No business bank account. No customer validation. Wrong order, Mat. This was going to fail before it even got started. Turns out, I could sell.
I needed to target companies who would be open to giving a new company a chance. Startups with founders who respected hustle. I immediately checked out the running list of Y Combinator startups and emailed everyone from the last 5–6 batches. I got a lot of no’s. I got a few “fuck offs”. I got many no responses. But..I got three yes’s. Jeremy Cai was the first person to give me a chance. At the time, he was COO of OnboardIQ, now Fountain. He saw something in me that no one else did. Then Rob Hayes followed. Then Emily with GrowSumo. I was getting customers. We were in business. I set up the LLC, walked into Chase to set up a business account, and got an EIN so the IRS can take all our money. It was getting started. Holy smokes, this is actually working.
One month later, a gift from up above was placed in my lap; A giant contract from 500 Startups to help them with their growth playbook. It was like…seed funding but it was coming from a customer. It felt so good. When that money hit the account, I almost didn’t know what to do with it. It felt good, that’s for sure.
Fast forward a few months and things are going well. I’m still making sales like a madman, we scrapped our low paying customers and added in higher paying ones. We were doing everything right. Everything was playing out how it should have been. We were growing a business, and we were doing it with no investment and no loan. I was paying writers and supporting myself. It was honestly impressive. I impressed myself at least.
The YC Bug
In August, after Ethan Naluz (my co-founder at the time) and I met up at SkySong, we decided we were going to apply to Y Combinator. We had traction. We could get in. But, we needed a big vision. They only take in future billion dollar companies so we had to convince them that this would be us.
This was the start of the end for PubLoft. 6 months before it eventually died, this decision. This moment is when PubLoft started to drift and I started to drift with it.
Anyway, we decided we were going to be the company that employed the world after the robots took all the jobs. To be fair, I do care about this problem. I do think robots are going to make future jobs harder to find. But that’s a post for another time. Ultimately, PubLoft was going to be the brand that every contractor and freelancer in the world worked under. Crazy vision? Yes, but I still believe in it. Unfortunately, I won’t be able to see it through (for now). But here we are. We are a $3,5000 MRR company and our vision is to be the place where people work after the robots take all of the jobs. We were set for YC. Traction + Vision = Ticket into YC. I was 100% convinced we were getting in. We even got picked for office hours and met with YC partner Dalton Caldwell to talk about PubLoft for 30 minutes. It was a done deal.
Fast forward a month…We didn’t get in. I was crushed. I was SURE we were getting in but no, we didn’t even get an interview. In addition, around this time, Ethan decided to focus more on his studies and other passions. I don’t blame him either…He wasn’t passionate about content and blogging. He needed to do him, and I’m glad he did because he’s crushing it right now.
But here I was, no YC (which drove so many decisions up to that point) no cofounder, no direction. The only thing I had was a business that was growing rapidly month over month. It was growing so quickly, I didn’t even know how to handle it. It just confused me even more why we didn’t get into YC.
So, I took a few days to recalibrate, and I started doubling down on PubLoft. I started to spend more time on it, making sure we were growing every month. I started to charge customers more, add on extra services, contact the press, and even starting to talk to investors. I was DEAD SET on building a billion dollar company. A $20,000MRR agency didn’t interest me. It was changing the world or bust. It wasn’t always like this but YC got inside my head. I needed to get in. I needed their approval.
Over the period of the next few months, I struggled. It was all self-inflicting. I tried to morph PubLoft into something that was innovative..Something that would change the world. This included, but wasn’t limited to, implementing blockchain technology in PubLoft, hiring a full stack developer for PubLoft, automating every system I could (at the expense of the business). This was all for the sake of scaling. It’s all about scale. Scale or bust.
I didn’t see this beautiful machine in front of me that I built. I couldn’t recognize that I built a machine that could have liberated me from a job for the rest of my life. By this time, we were $4,500 in MRR, wildly profitable, getting referrals from customers, and things were really on the up and up. But it wasn’t enough for me. I needed to keep growing. I needed to save the world. I needed to build a billion-dollar company. I couldn’t curb my ambition. Well, this caught up with me.
Most of my time was spent innovating PubLoft, not managing it. I wasn’t good with its finances and never left much runway in the bank. I also wasn’t prepared for December, when no one likes to purchase anything.
The graph below is our revenue growth. See that dip towards the end of the graph? ? I thought that dip was the end of the world. Literally.
Why? Because YC talks about growth. Grow every month. It was embedded in my head. Grow every month? If I don’t grow one month, I must not be worthy of YC. Well, December we didn’t grow and I lost it. It forced me to work my tail off to make ends meet in January. I worked harder than I ever had before. I was more stressed than I’d been. Not stressed to manage the business. Stressed that I wasn’t going to be good enough for YC come April (application deadline). Stressed that I wasn’t a good enough founder to build a billion-dollar company. I was focussed on the wrong things.
Well, at the end of January, my luck ran out. I had an episode of Kleine-Levin Syndrome for 10 days, came back out, and popped. I make some decisions that I regret… decisions fueled by burn-out and lack of clarity.
11 months. $42,000 in revenue. 20 customers. Harvard and Brown students reaching out to help. Meetings with the PHX Business Journal. A future full of adventure, wealth, and impact. All gone. In an instant. All because I couldn’t curb my ambition.
Some may say “no, you just had bad luck with health and made one bad decision towards the end”. I would tell them no. I was focussed on the wrong things 6 months before PubLoft died. KLS didn’t kill PubLoft. No decision killed PubLoft. My ambition killed PubLoft. It was hard to digest this. PubLoft was really really really a great idea, one I could execute on, and one that was working…very well. It took me months to get over what happened. When I say months, I’m not lying. Four months. Like..up until a week ago.
I was never content with what I built. I always wanted more. I wanted bigger. What I had was never enough. Some may say this is a great trait among founders. For me, it brought PubLoft down. If I would have spent the time I spent learning about blockchain and instead, put that into making PubLoft better, I have NO DOUBT that PubLoft would be here right now, making $25,000+ a month.But no. I needed to change the game. Being good enough wasn’t enough. I needed to be the best. Even worst off, I needed to be the best today.
This clouded my judgement and led me down a path that I wish I didn’t need to go down. But this is life. You make mistakes. You learn. You try again with your newfound learnings. With that, I have a few tips for first-time founders in dealing with their ambition
Tips For Young Founders Starting Out
Don’t Start Big. Start Profitable.
I hear a lot of people say “start something that matters” or “solve real problems”. I used to say this too. I won’t anymore. Instead, I’ll say “start something that someone else will pay for”. It’s the ultimate validation that you’re solving a real problem because if you weren’t, no one would pay you for your solution. I promise you, if you start with something simple that a few people pay for, grow it, you will be able to solve bigger and audacious world problems in the future.
But you won’t be able to solve those problems if you don’t build something sustainable now. I’ll never be able to solve the problem I sought out to solve because I got ahead of myself. Don’t get ahead of yourself. Make money today. Change the world tomorrow.
You Are Not Your Company
Your self-worth is not tied to the success of your company. I can say that now that I’m 4 months out from working on mine. If you’re in the thick of yours, you won’t beleive it but you need to try. If your business is killing it, you’re not a superhuman better than other humans. If your business is tanking, you’re not worse than other humans. Decouple the two and you’ll be much better off.
I had anyone in Phoenix available to mentor me. Not just go through the motions but REALLY mentor me on a weekly or biweekly basis. I never took anyone up on it. Due to this, I was a lone wolf and my ambition was the death of me. Maybe mentor would have helped me see more clearly. In fact, I’m sure of it. So get mentors. And don’t just say you have mentors. Actually meet with them. Mentors need a mentee. Be one.
Focus On The Basics
PubLoft was successful and I didn’t know how to handle it. Instead of doubling down on what was working, I spent cash on software I didn’t need. I hired people I shouldn’t have hired. I spent time thinking about things I shouldn’t have been. When you’re working on your startup, focus on managing cash flow in the beginning. Cash isn’t king. Cash flow is king and Customer hapiness is Queen. Focus on those two and you’ll be okay.
Lastly, Curb Your Ambition
You’re not going to change the world today. You won’t tomorrow either. If you do change the world, It will take decades. So why don’t you take the pressure off yourself and commit to making the company a little better every day. Do that for ten years and you will have accomplished what you set out to do. Ambition is needed when starting a startup, don’t get me wrong. But too much of it will cripple you. And don’t make up a giant vision just to get into YC. It will mess with your head.
This might sound weird but I’m happy, even after all of this. Sure, I will never know what would have happened if PubLoft got through that rough patch. But it didn’t. WHAT I DO KNOW NOW is I am less stressed, I can spend more time with my beautiful girlfriend and my amazing friends, I can focus on my health, and I can work on side projects again. I’m happy. I’m not “hustlin” every day anymore. But…I’m happy. Are you? If not, maybe you should curb your ambition.