Is there any reason you can't just leave current the product as-is and keep running it on autopilot, with the only expenses being hosting and the occasional security vulnerability mitigations?
You mention you had 100K users - I'm assuming those are paying users. Could they not keep using the product (especially if they've already onboarded)? Or are there significant ongoing costs beyond hosting?
Products don't run themselves. Software must be upgraded because of security patches; if you don't keep up, after a while you can't because of skew. Customers require support when stuff goes wrong. Infrastructure changes from underneath you. SDKs change all the time. The law itself changes what is allowed or what is required.
Depends on what kind of product. I've built an app that I haven't touched in many years with about $1M in monthly revenue (extremely low margin) and it's all good. Yes, it hasn't had any security patches in years and it's just a matter of time before it gets hacked but no big deal. If shit really hits the fan I will just shut it down. Not offering any support. Customers know I don't add anything. Not sure what law would affect anything.
> I've built an app that I haven't touched in many years with about $1M in monthly revenue (extremely low margin) and it's all good. Yes, it hasn't had any security patches in years
You have a product bringing in $12 million per year (EDIT: I misread the profit remark originally, apologies to Kiro), and you can’t be bothered to do basic security updates?
> it's just a matter of time before it gets hacked but no big deal. If shit really hits the fan I will just shut it down.
You’re basically waiting to get hacked and your response plan is to just shut it down? And turn off $12 million in annual revenue because you didn’t feel like applying security updates?
Are you sure you mean $1 million per month in revenue? Because this doesn’t make any sense at all.
If this is true and accurate, you can at least see why this wouldn't apply to virtually anyone else running a high-profit software app, right? Especially not something like Friday.app which includes customer data.
taking a guess that your app is an API wrapper of some kind? the $ you move is basically through your account from customer to service provider on each call and you charge some low flat rate per month for access?
That really depends on the product and how you built it. With platforms like Google App Engine or Heroku, there's no infrastructure to take care of and the only thing you have to patch/update is your own code. Customer support can be an issue, but some products are naturally self-service. Or cheap enough that there's no expectation of quality support.
I do think you need to plan for this sort of thing if you want to be able to walk away (even for a short vacation). If your natural inclination is to start with k8s, you're going to need ongoing devops work in perpetuity.
> You mention you had 100K users - I'm assuming those are paying users
Definitely not. A company of that size with 100K paying users (so like $10M+ ARR) would be considered wildly successful. In their case it was probably a tiny tiny fraction of that.
Did you try asking users to pay? I.e. tell your users, you're shutting down unless everyone starts paying. It could be Kickstarter style in that X number of users have to put in their payment information by some date, or you still shut down. That way, there's no chance that some people start paying, but you still shut down.
Great question. I wish Pebble had done this before shutting down. I would have paid double for my pre-ordered Time Steel 2.
Wyze did this recently with their subscription, which they let you pay as little as $0 for. They forced anyone who didn't subscribe onto a lower tier, which only stored still images instead of videos in the cloud.
I believe couple of days ago Wordpress made some changes to their pricing and some people immediately reached for their pitchforks. We all have an inherent tendency to associate greed to any business asking for more or any(!) money.
I believe for that reason, for some founders it is, "you either die a hero or...."
One of the things I appreciated about Friday was the information you all provided about remote work, and the book you wrote named "The Anywhere Operating System"[0].
Would you be willing to keep the information you provided up as a statically hosted website so that the knowledge is not lost to the ether of the internet, accessible only via archive.org[1]?
I knew we needed to build a suite of tooling, as our goal was to be a "hub" for the most important stuff at work. In retrospect, we built too much product.
If I start another company, I will spend all my time focused on solving a very big pain-point with a few simple product.
With Friday, I wanted to keep the product simple, but the people we talked to always were talking about the "yet another tool problem" - so there was a desire to consolidate. How I interpreted this was that we needed to build the "suite" vs. spending all our time on one feature.
I could go on and on about what I would do differently, but I'm thankful for the opportunity and have learned a lot that will (hopefully) make me more effective in the future :)
This answer is so generic, but so apt. Everyone can throw around phrases like KISS or MVP or try to implement methodology like agile, but it's so hard to just identify _what_ you want (or need) to build.
We're looking at a major revamp/rewrite/refactor of our main product that previously had been built with the idea of being able to solve every problem our customers face. This decrepit, aging codebase has so many bandaid fixes for every conceivable "what if" scenario that it's just become unmaintainable.
Maybe the "yet another tool problem" can be addressed by making your tool easy to integrate with other tools, rather than trying to build a big all-in-one suite.
This was precisely our approach, but we built our own features for the "gaps" that we believed existed in the other products.
If an existing app was doing a decent job, we didn't want to compete with them. The issue is that we ended up arriving in this "dead-zone" where we didn't replace an existing tool and pull budget from an existing category of tooling.
It depends on if their target audience was small companies or enterprises. It may have made a difference, but it wouldn't have changed much for Enterprise customers. At BigCo (a global telecom[0]), it was much easier to add business from a vendor that we already had a relationship with than it was to purchase anything from anyone we didn't. It was also, of course, much easier to buy software/SaaS from one of the existing, boring, established vendors than lesser known/smaller ones. There was a mess of "Purchasing" involvement, legal, and everything else just to set things up so we could make the purchase. I don't know what Friday was for (had never heard of it until, today), but it sounded like it was something that would be company-wide, probably, so sneaking it in with an "expense card" isn't likely going to be defensible.
Then there's the "easy to integrate" side. Expect it to have to pass security reviews if it's SaaS of any kind and will touch any of our IP[1], and particularly detailed ones if it's very easy to "integrate with."
Azure AD Login was easy for us at "BigCo", but tied up several days of more than one grumpy security architecture team member's time with a variety of pen-tests that are required before they'll grant approval for it in our domain. That goes up exponentially to the impossible pretty quickly if it wants permissions to access things on our end via OAuth grants; even things that are typical (profile photo).
IT Architecture might get involved if there would be a need to make sure it worked with our systems, minimally to set up monitoring for it if we're making it available to a large amount of staff because if it goes down, we'll get a million calls into our 4-6 person (state-side by contractual/security requirements) Help Desk over something we can't do anything about and we're going to make sure we have a way to react to it when that happens. Someone's going to have to learn how to do any administrative/integration requirements, because configuration changes, we merge with companies somewhat frequently, and someone's going to have to make sure they know how to set it all back up, correctly, later -- just in case -- even when it doesn't make sense. Likely, BigCo want it to be used, so someone's going to have to write copy for an article for the company landing page explaining what it is, how it works and what problem it solves. There'll be other activities related to this when adoption doesn't take off. IT will have to dedicate some time to tracking usage to make sure we're getting ROI on it when the quarterlies come around and they have to justify every recurring expense, including the ones outside of the sticker price, all over again, and it's easy to trim off the add-on. Plus, they're often the ones who take the budget hit in the first place.
Legal/HR/The Business(tm) might get involved if employees can communicate, uninhibited, through it -- just like they do with E-Mail while they apply a flobbidy-jillion set of restrictions/disclaimers bits of nonsense around. We were not a Defense Contractor, we were just big, spread out and had a lot of employees. At scale, you end up with increasingly many who lack common sense, and a small fraction who still need to be warned about Nigerian Prince scams when one slips through. In a strange alteration of Rule 34, someone will upload porn to it or store porn on it if it is possible to store things on it. For the person who wants the product, it's going to be requiring phone calls, follow-ups, and general "going to bat for the vendor's product" against a hurricane-force headwind.
In fact, an add-on might be less likely to be purchased -- by BigCo, anyway -- because it doesn't do enough to pass the "Why do we need to tie up all of these people to bring this easy-to-integrate product into our environment when they can just use (some terrible excuse for a thing by comparison)?" The "we don't need that bad enough" answer is usually the case for Add Ons, and having a number of ancillary capabilities to distract with sometimes makes it more attractive to "the business" side of the above groups, which has the ability, often, to over-ride all of the rest of the "No"s going around.
At BigCo, an add-on requiring anything that the "good enough to somewhat OK" solution/solutions we already have kind-of sort-of covers doesn't stand much of a chance of being purchased. The one thing that can get in the door is the simple solution that solves a big problem, especially if there's nothing else out there that much of any part of it from any of the big vendors. I spear-headed a small handful of those. It has to be amazing and some reasonable combination of inexpensive, simple to maintain, highly available, non-critical if down (many, many things are unexpectedly critical).
[0] I worked there about a decade for 17 years, incidentally, most of it remote at an organization that was notoriously against remote work ... basically against a major service we enabled and often provided for other businesses. I worked as a software developer in the architecture organization working primarily on security-focused projects (figure that out) and had to go through this process enough to make my soul die a little.
[1] Basically, everything. At least, anything that would have a reason for the company to purchase it.
You mentioned in your post that your primary reason for shutting down was that you didn't find sufficient evidence that your product/service was meeting the needs of your users. Was there also pressure from investors to shut down due to this lack of evidence, or was this a personal decision made based on your principles?
I made the decision after a lot of reflection. We still had ~6 months of runway so I could have spent more time "pivoting" around.
The issue was that what I was hearing from prospects, customers, users signaled a bigger issue that could not be solved with a product tweak or two.
At the end of the day, I felt like the story I would need to tell a future investor (and new/existing employees) would increasingly become disconnected from the reality I was experiencing talking to customers/users.
I didn't feel at peace about it at all. I considered it to be a form of lying.
This is a great answer, I felt the same way about my previous start-up Ayvri.com
We make enough to cover our costs, so I've kept it going for the last 2 years.
As I kept looking for new ways for us to grow, and what pivots might work, one of our existing investors said to me [paraphasing] "we'll invest more if you know what to do with it, but I [the investor] think you should start thinking about what your next thing is. We'll invest in that, but there comes a time you need to move on".
That chat was really impactful, they were happy to see us launch a product, get customers, and try to build something really amazing (and we kinda did).
The same team that created Ayvri (most of us) have come back together to create https://soundmind.co - we haven't taken investment yet, but the same investors are ready to back us when we do.
Did you have that kind of support from your investors @Lukethomas?
I think many of us are so scared of letting our investors down, but I am super happy with the character of our investors, who supported us in the best way possible.
much respect. those are hard feelings to deal with especially given you had users, customers, investors, and a team to think about as well, none of which you can easily and cleanly ask for advice on this matter.
There’s an alternate reality where the founder didn’t raise money and kept the autonomy to nurture the product. Not every product can be bootstrapped but from a glance this one could be (and was!)
I get the same question every time I shut down something. No, I don't want people to see my embarrassing spaghetti code. With that said, I haven't shut down any critical products so it has been more like "would be nice if you made it open source" but my point is that there are many non-obvious reasons not to open source something.
Another is that I've randomly put credentials in the source code that I don't want leaked (again, my code is an ugly mess full of shortcuts and hacks). Yet another is that it would be impossible for someone to host themselves because I don't even understand it myself.
I get your point, because I'm "baking" some code I would like to open source one day and cleanups are in order.
However, when you're closing shop dumping the code out there for others to figure out how to run, even if you can't help them set up an env from scratch still helps. I also think we need more spaghetti code out there, would help teach new developers how to maintain and refactor "legacy" code.
The credentials in source code thing, I thought by this time would have been a "solved" issue, but I guess some people still yolo it :). Credentials in source code, are the equivalent of password on post it notes ;)
> Credentials in source code, are the equivalent of password on post it notes ;)
While not the best security, post it notes are immune to hacking and really hard to leak without a home intrusion.
Credentials in source that won't be shared is a pretty efficient hack. Often it happens by mistake - eg. when you hard-code that credential into a bash script during testing when you're trying to curl a new API and then push it by mistake after a coworker asks for you to share your progress on a new branch for review.
Shameless plug: if anyone needs to get credentials out of their code, EnvKey[1] makes it really easy (disclaimer—I’m the founder.) We just launched our v2, which includes a free cloud tier for up to 7 users, or you can self-host it. Give it a try and sleep better at night :)
Agree, I think the fear of someone finding a vulnerability and the original author being held accountable is high enough for almost nobody to open source their code.
If the company publishes the code, then closes, what's the harm? Any hard-coded creds would be invalid and any license violations wouldn't matter because there would be no company.
I'd love to hear about these "non-obvious" reasons, because I can't say "I'm embarrassed by my code" sounds like a good excuse after convincing people to move to your platform, charging them a subscription for it, then kicking them off with only 60 days notice.
And "I don't think others could figure out how to host it" isn't a reason not to release. It costs nothing but a pretty insignificant amount of time to publish it, so even if it's "impossible" to re-host (and history would say it's not), I really don't see a reason not to let people try.
I think you're mistaking me for someone else. Otherwise I don't know where you got 60 days from but it's not true - I give them 0 days notice. I also never convince anyone to "move" to my projects. I tell them from day 1 that they should use it at their own risk but for some reason people insist on using it regardless. In fact, if anything I try to convince them not to use my platform (me: "it's really bad and early" they: "it's ok" me: "it probably won't work" they: "it's ok"). So don't hold me accountable for things like that.
I see I wrote that very clumsily, sorry. I was talking about the Friday shutdown and replied to your comment as a general response to the reasons for not releasing code. Obviously personal projects or anything else you don't market and sell/rent out to people are completely different. fwiw, I'm quite similar with my personal projects, but if I took people's money for something and then had to shut it down, I'd do everything in my power to enable them to keep using it without me.
A software developer who is trying to sell products to businesses, software on which those businesses would rely, admits to creating an "ugly mess" of "spaghetti code ... full of shortcuts and hacks" and to embedding security credentials in the SCM.
I wish you no ill will, but goodness, talk about an anti-ad for your products.
Creds should be outside the SCM, and there are varying levels of "best practice" - vaults, environment variables of CI servers, text files with strict permissions outside the SCM, etc.
You would be surprised how many businesses run on equally bad or worse code. At least I'm honest about it.
Your tips are true but not very helpful. I know it's bad or I wouldn't call it an ugly mess. I have better practices nowadays regarding credentials but all my projects always spiral out of control some way or another. If it's not this it's something else but I'm never proud of my code.
As a freelancer/indie dev when someone asks me to share a codebase I wrote, I get worried.
Freelance projects are bounded by NDA. And my personal projects are bounded by shame.
If I am worrying about credentials, code cleanliness, documentation etc I wouldn't have any time or energy to turn my stream of free flowing ideas into code.
That's a terrible way to think and oddly an excuse I hear a lot. If that's the case, there would be no OSS software, every OSS starts off crappy and full of bugs and usually not even close to finished.
The goal of OSS is not to show off your skills as some elite programmer.
> every OSS starts off crappy and full of bugs and usually not even close to finished.
I think the quality/bugginess isn't as much of a factor as the fact that the codebase was not written with the intention of becoming OSS. Things like lack of documentation, hard-coded secrets, inflexible hosting/deployment, etc. are difficult to account for after the fact. And if you ignore these things and just "throw code over the wall", then virtually no one will even look at your code, let alone use it. Kind of a waste of time just to indulge a few self-righteous commenters on some message board, if you ask me.
A lot of OSS software was written with the intention of being open-sourced, so many of the things that make open-sourcing a previously-closed repo difficult are considered upfront.
Easy to say, harder to do. I get anxiety just thinking about it.
What's the goal? You make it sound like I have an obligation to do it for some utilitarian reasons, while in reality maybe one or two previous customers would use it while migrating to something else. It's crap software with much better OSS alternatives already.
It either dies with me or dies as an abandoned repo I need to be ashamed of.
I am just jumping in not to pressure you specifically to dump the source but in my experience in quant finance and music software development (hobby), I see kind of a tragedy of the commons especially in finance. If more people made their source available upon winding down a project it would drive down costs in the entire industry and indeed the whole tech ecosystem.
Reimplementation saps alot of productivity from the economy.
Someone in the business likely is in-scope for licensing decisions and on the facade this sort of decision probably looks noble and altruistic. To answer your question, "is it possible" - yes.
Ethically, however, it doesn't really check out for me. If the software is a core part of your business and the (or one of the) primary reasons an investor has joined your business then it's at the very least a bait and switch to make such a decision without their involvement. To a big VC or private equity firm this may infuriate some but have little monetary impact; at a much smaller firm this could be highly damaging.
I'm also fairly certain that whatever harm comes from this decision would put the CEO in personal liability, potentially all the way up the decision chain.
The issue isn't who gets to make "day-to-day business decisions" (i'm not sure how you characterize licensing source code as open source as such, but it doens't matter).
The issue is that shareholders literally own the property owned by the company, that's what it means to be a shareholder. Including intellectual property.
Announcing you are shutting down a company, and then, without board approval, the CEO giving away what assets remain... is super sketchy and probably illegal, probably stealing from the shareholders (or even more likely other creditors, if they exist), who would probably like to partially recoup their losses from sales of any remaining assets. What those assets are you are giving away are, say, a fleet of cars, or the intellectual property of source code, legally the same.
Imagine if a car service company announced it was shutting down, and then gave away all it's cars, instead of selling them in an orderly fashion and distributing profits to anyone who was owed money, including creditors and shareholders.
Given that with a company going out of business a lot of people are going to be losing money and wanting to get what they can out of any assets... the time to release as open source is really before you go out of business.
Well giving away all company IP for free isn't a "day-to-day business decision". If the company is shutting down the assets go to the investors, and they can choose what to do with it.
His story on https://www.failory.com/interview/friday suggests it's making 10-25k MRR. If he can run it on autopilot with just occasional bugfixes and support queries, he's still got a very nice "lifestyle business" that will probably keep yielding for a couple years.
I think your idea fails for at least a couple key reasons. First, a lot of customers will probably migrate to competitor if they know the product isn't in active development anymore, so the MRR will likely drop over time. Second, investors are not going to just give up their equity while the owner directly profits off their investment, there would have to be some type of buy-back, and the owner probably doesn't have that kind of money.
25K MRR is enough to support a team of maybe 1-2 people, which probably isn't enough to answer all their customer queries, keep the infrastructure up and running and continue marketing efforts to ensure revenue at least doesn't go down year to year.
there are certainly numerous success stories. i have friends who "recapped" and went on to be quite financially successful, but that is likely the exception, not the rule.
As someone in the productivity space [0], it's hard to build a sticky enough product since there's a lot of churn.
There have been many apps that have shut down in just the last few years, such as this and Woven, that I wonder if the money is not in such consumer (or even prosumer) apps like these and instead is in firmly B2B territory, where you can charge at least $100 a month, a market that would be a lot more sustainable user base than the fickle hands of B2C.
Some unsolicited feedback: integrating my todo list with my calendar is something I would love.
However I have no idea what Artemis actually is or does based on the homepage.
Does it only work with Google, or can I bring my own CalDAV? Is it an app, or a website? Does it cost anything? What does "signing up" actually entail? Is "forgetting to add breaks" some pain point I have that I didn't realize I had?
Thanks, the landing page is pretty old now, I'm working on a mobile app right now that is like a time tracker integrated with your to do list items, and eventually it'll integrate with your calendar, it'll cost some X dollars a month, where X < 20, not sure on pricing just yet.
But to be honest, I don't think consumers will pay much for subscription software, while businesses will. I'm thinking of pivoting to B2B, a calendar API product that other companies can integrate into, something like that.
Sorry to see this. In 2004, I worked for a major national non-profit in the US. We built our own internal web portal that is essentially what Friday is. Since then, I've seen a lot more interest in this space. Microsoft SharePoint is one of the main ones but, I think, only because it's from Microsoft and integrates well with Windows networks. From a product standpoint, SharePoint is just not very good.
Someone is going to come in and own this space one day for sure. The need is always there.
I'm suprised they're shutting down because of a lack of a buyer/investor rather than making it and keeping it as a successful business. Are the goals these days for a big buy out?
Once you take seed funding you're locked into a raise and re-raise treadmill until you grow sufficiently to find an exit. VCs/seed shops aren't there to help you build a lifestyle business. They're trying to either fail fast or get a 10x multiple and move on, which means either an IPO or (far more likely these days) an acquisition.
Maybe I'm a rarity in this, but I actually prefer paying for services that are not VC funded. That way I feel like I am less likely to have the rug pulled out from under me.
Geckoboard is an interesting opposite example of this. They took a seed round more than ten years ago and have been slowly and steadily maintaining the business, resisting further rounds. I don't know their finances but they seem to continue to be doing well.
And that does happen occasionally, but they're rare and it doesn't go on forever.
Bandcamp was similarly private for 15 years after taking a few rounds of funding, but they eventually got acquired, and I guarantee you that's because those investors pushed for an exit while the projected future revenues of the company justified a higher valuation.
I myself worked for a company that was private for 12 years after seed funding and five rounds of VC capital. But eventually we were pushed into a (poorly conceived) acquisition.
The merry-go-round always stops. It's just a matter of time.
The subtext is: it wasn't a successful business, so the only option for survival was to try to find a buyer/investor to fund it on the promise of future success
Unfortunate, I still think forum software for running companies is a good idea. I suppose https://threads.com/ is the main product left there - I can't help but think their pricing model makes a lot more sense than Friday's.
How ironic ... He interviewed at Failory[0] in successful venture section. In just 2 years, the product will be moved to the mainstream failed startup section of the website.
Failory (and probably a lot of the Silicon Valley-influenced business world) should stop considering a startup a success when it raises money. Success is long-term profitability.
Wow I'm sad I never found this while working at my previous company. I've wanted a lot of what this provides, and considered building it myself.
I wonder if the emphasis on task management is a contributing factor in it not taking off. Anecdotally, most places have a task management system already, switching systems is a heavy cost, and building a good one is actually a ton of work in the long term.
I'd be interested to see an app that focuses more on the culture aspects here – kudos, user profiles, events, search. Most companies don't have solutions for these, and bringing them into one place could be valuable.
Hey, I'm the founder. We worked really hard to not position ourselves as a task management tool, but instead, a tool that integrates with existing systems.
Task management is extremely competitive and we didn't want to play in the space. With that being said, we viewed our job as an interface to "glue" the work together, no matter the source.
> we viewed our job as an interface to "glue" the work together, no matter the source.
Glue and integrations with third-party systems are important, for sure, but were there any other jobs that customers were expecting more of, rather than this one?
I don't think it's fair to include this one with the other "growth & engagement" bullshit we typically see go belly up.
This company only raised a reasonable amount of money (450k according to https://www.failory.com/interview/friday) and had a real product people were paying for.
I'm curious – why couldn't you raise more? Like you said, a couple million is nothing in today's market. You have a real product, real users. Why did no one give you another round of funding?
First off sorry to hear that the Friday journey is ending here.
This is a really interesting response to me - some peoples gut instinct is “keep going until you figure what that something is.”
Im curious if you could elaborate here about what story you found on the ground and what made you believe that you were quite far from building the right product?
It's a shame so many tech companies think they need to be always "seeking investment". I don't see any reason this couldn't have been a nice little lifestyle business, but no, we need to feed the investors with boundless growth.
How much longer will people continue trusting venture backed startups that are almost guaranteed to go belly up within 24 months?
Instead of building on all of this work we keep blowing it up and reinventing things because VCs only want unicorn outcomes. As an example, YC startup graveyard could be full of flowers if these projects were open source and we had a better user driven funding model to keep them going after the business folds.
> How much longer will people continue trusting venture backed startups that are almost guaranteed to go belly up within 24 months?
A lot.
We are raising generations that hail hashes representing urls to some origin server hosting a picture of a stylized horse (till the origin server doesn't shut down or changes the resource) over real estate, traditional stocks or even just luxury or anything you can touch or use.
We hail as heroes few dozens of crazy dudes putting all their life savings into meme stocks and picture them as heroes fighting against "the system".
We hail as heroes controversial entrepeneurs, generally sociopaths full of themselves, rather than hard working common people.
We are creating generations of ever more connected but lonely individuals desperately trying to find their place in the world, and somehow, we tell them that money is the answer for finding that place and purpose.
There is no shortage of people desperate for "making it" with ease and willing to take huge risks.
Go on reddits or boards related to personal finance, risky crypto speculation and meme stocks are discussed more than taxes, education investments or simple funds.
I think VC craziness is going to increase a lot and spread to places and countries where it wasn't the norm, that's up to you to decide whether it's good or not.
I would love to see startups adopt a "poison pill" clause that automatically switches their code over to the MIT license the moment a company goes under.
The bigger risk however isn't just that a company goes poof, but that the IP gets purchased for pennies on the dollar by some other company. This is an escape hatch that I don't think many investors would give up willingly.
Yes, that's definitely an issue with my company. We serve a pretty small niche and provide services to a few well funded competitors, I've gotten a few acquisition offers that would have really hurt my other customers if the deal went through.
Since it's a core feature but not a differentiator for their businesses I'd love to just make all of it open source and charge all of them to keep maintaining it but there's not an easy way to do that currently without devaluating it.
Code escrow and SaaS escrow are both guarantees that exist. Larger customers can negotiate it if they aren't sure what will be the future of the company. Redis (back when they were called RedisLabs) used to offer that for their proprietary components several years ago, although in hindsight it clearly wasn't needed in their case.
Sounds like a cool startup idea -- a company like codekeeper.co but for documenting and open sourcing a product given they go poof. All the legalese that would entail and integration with source control included, of course.
The VC model requires continuous unicorns with clean exits in a sea of misses to be able to hit the typical 30% IRR they promise to pension funds, endowments, Bill Gates and Co, etc. Lifestyle businesses are actively avoided for this reason.
It's one if the reasons I avoid working for bootstrapped startups or startups with no-name VCs.
Ideally no and traditionally it wasn't. VC was originally intended for big, high-risk, high-reward technical ideas like semiconductors (Intel, Nvidia), widespread software e.g. Google, medical devices, biotech, etc. In general, taking a novel approach to something or doing something totally new.
Only in recent times did pumping and dumping yet another B2B SaaS app become in vogue and usually by not tier-one funds. There is a reason the big, famous funds are oversubscribed and limited to big, famous institutional investors.**
** The same applies to other funds e.g. Hedge Funds. Only the very top consistently perform anywhere near their promises and the rest are ways for groups to try to get their foot in the door.
Top tier firms are actually the ones most guilty of it these days. They raise huge funds (thanks to Softbank) and attempt to buy their way into monopoly positions by selling dollars for 50 cents, manufacturing growth and then dumping the companies on the public market (these days through SPACs). Public markets are no different than private, it's the same group of individuals just further down the chain, with the same incentives to push up valuations knowing that stonks can only go up and when things go bad we'll be on the hook to rescue them, or if things are not catastrophic they'll just write off the losses or let main street investors on robinhood catch the falling knife.
I think the question we need to ask ourselves is if they would exist without VC in the first place. A bunch of bootstrapped startups able to eek out a living through a relatively small number of subscriptions sounds wonderful, but is it realistic?
I'm planning on starting a company within the next few years. I would not do it if VC money weren't on the table. I have a family, bills to pay, exactly $0 in generational wealth, but I'm well paid.
I do not have the excess capital to throw at working on problems at the scale that I want to or in the segments that I'm interested in. Any money that I spent to work on these companies would be gambling with the future financial stability I can provide for my son. Providing him with the safety net necessary to pursue atypical career paths or interests is one of my top priorities.
VC funding is the only way that starting a company is possible for me. The existence of VC funding is the only reason I'm even ideating about these large problems. It's an equalizer that puts those of us without the same set of options at a level playing field.
There could be other financing options that wouldn't hinge on astronomic outcomes to be sustainable. We could have crowdfunded incubators where potential customers provide seed capital and sign on to sponsor the project, and imho it would align incentives a lot better than "maximizing shareholder value" with bait and switch business models.
Some software. Do you think companies catering to public sector or the enterprise are high margin in the first few years?
Consumer apps can often get away with scaling ARR and slow incremental growth, but many of these are only feasible due to the existence of VC backed SaaS.
It also has a high start up cost—meaning the owners would have to be able to support themselves, their families, and pay for whatever costs the company needs until people are willing to pay for the software. That is, if such a day ever comes.
Not necessarily, you can take another job to pay the bills. Or if you're in the UK we have dedicated benefits schemes to fund people starting a business.
There's really no reason why all of this software needs to be cloud based, other than vendor lock in. For collaboration software we should have a way to self host or pay for managed hosts.
I am considering it. I have a fiduciary duty to try to fetch a fair value for the assets, but if no one wants the codebase, I'd consider opening it up. Still TBD as I just announced this a couple days ago :)
That makes sense. I was mainly wondering for old/past companies that don't end up selling their code base versus for Friday specifically. But maybe thats the answer, most companies end up selling their codebase and it does get reused. Good luck on everything!
I’m a huge advocate of this, and have seen it play out well with the Linux Foundation and Mapzen. In this case, their employees seemed to be very thoughtful about how their projects could live on and be useful beyond the company lifecycle.
Aside from the code getting a license and legal audit, finding a trademark sponsor was important to them too so that someone doesn’t come along and re-commercialize their free and open work under the old brand.
On the flip side, this process is a lot of extra work to do in a very busy and risky time for a buisness. Efforts to open source may fail and I understand when people in charge choose to spend their time prioritizing their employee’s needs first, technology second. I can understand why the open source priority isn’t practical if the company doesn’t plan for this possibility ahead of time.
for open sourcing you have to be careful about licenses.
As long as you are not "distributing" it is absolutely fine to mix GPLv2, Apache License and proprietary code you got from some vendor all together. But as soon as you distribute this, it becomes messy.
And then come all the question on technical integrations, ego ("ugly code!!"), ...
Why not? As long as we're not locked in, if a product is good and we're early adopters we're getting the benefits from it that other people who are afraid to dip their toes in the water aren't getting.
Isn't this a risk with apps in general, not just VC backed ones? I skimmed the blog post and it sounds like they had a hard time monetizing the product. That could happen with a bootstrapped project too: someone builds something cool in their spare time, launches it, gets enough users to spend more time on it for a while, then realizes it's too hard to monetize or they want to work on something else or whatever and shuts the project down.
More open source contributions are always good, but they don't accomplish much in the case of SaaS offerings. Ultimately someone has to pay to run the servers.
Sure, but 90% of software doesn't need to be cloud based and with docker and k8s it would be hard to distribute an app like friday for users to self host. AWS and GCP could be a cloud app platform where each enterprise could run all of their apps on a single cluster instead of paying for 20 different SaaS offerings running on different clusters.
I imagine how tough this decision has been - thanks for making Friday and for delighting many users with your product these years. We started building DailyBot (https://www.dailybot.com) some time ago, and here we always loved the Friday approach and the UX of your tool.
With good will, we are here to help you or support your users community in the time to come.
Interesting, I just saw a physical billboard ad for this on the way to Melbourne Airport on Tuesday. I was actually surprised it was still up and running. Unfortunate that we're losing more competition in this space.
>Funding is getting tight. If you're not profitable or don't have a plan to be soon, it will be tough.
Funding is NOT tight -- it just doesn't last forever and investors eventually want returns.
With Fast, they raised $130m, had 400 employees, a run rate of $10m a month and made a whopping $600k in revenue. The staggering level of incompetence from every single person not just on that executive team, but of the firms who invested in Fast, is something we haven't seen in years.
Friday seems to be quite different. They did $2.3m in seed based on Crunchbase and that was in 2020 and never managed to find product market fit. That's a completely different problem than simply not being profitable.
>Current market dynamics dictated the death of these startups. If this was last year, they would have gotten funding to survive.
Fast would not have received the funding to survive (if it received any additional funding it would have been predicated on probably cutting staff at least 60% if not more).
People are literally raising every single day. Funding might not be at the peak frothy levels it has been at before, but these are hardly bear times right now.
