Episode Summary: (BNS) How To Know When To Kill Your Startup
Podcast Title: Techmeme Ride Home
Host: Ride Home Media
Episode Title: (BNS) How To Know When To Kill Your Startup
Release Date: November 16, 2024
Introduction
In this insightful episode of Techmeme Ride Home, host Brian engages in a candid conversation with Kara Bornstein Marin, the founder of the now-closed startup, Stashpad. The discussion delves deep into the lifecycle of a startup—from inception to shutdown—highlighting the critical learnings and challenges faced along the way.
The Genesis of Stashpad
From Twilio to Entrepreneurship
Kara describes her journey from being a software engineer at Twilio to founding Stashpad. During her tenure at Twilio, Kara discovered her passion for customer interactions, which ignited her entrepreneurial spirit. She noticed a common pain point among software engineers: knowledge management.
Kara Bornstein Marin [02:21]: "Knowledge sharing, knowledge management, it's a pain point."
Identifying the Problem
Through extensive research, Kara and her team identified that over 90% of software developers relied on basic note-taking tools like Apple Notes or plain text files for managing vital company information. This approach was often disorganized and inefficient.
Kara [02:21]: "We started with the concept of making like a power developer notepad."
Armed with this insight, Kara initiated Stashpad Lists, aiming to provide a more organized and powerful alternative to existing note-taking solutions. This vision led them to Techstars, where they honed their product through rigorous customer research and successfully raised a $1.8 million funding round.
Product Development and Early Challenges
Minimal Prototype and Initial Feedback
With initial funding secured, Kara and her team began developing the product. However, the early prototype was not very intuitive, leading to usability issues during investor demos.
Kara [05:31]: "The prototype level product... there was a lot of work to do to make it really intuitive."
Despite these challenges, the team pressed forward, dedicating six months to a year to build out the product as envisioned.
Evolving the Product Vision
As development progressed, Kara reflects on the importance of staying true to the core vision while remaining adaptable. The team received mixed feedback, particularly from early adopters who influenced certain feature developments that didn’t ultimately validate the product's direction.
Kara [09:22]: "We needed to be more rigorous with... building against what we know versus what people are saying."
Pivoting from Stashpad Lists to Stashpad Docs
Identifying the Ideal Customer Profile (ICP)
Despite positive feedback during the Product Hunt launch, user growth remained stagnant. A pivotal moment came when after a strategic pricing change, Kara realized that their true ICP was senior software developers with ADHD—a niche that highly valued structured note-taking to manage their workflow effectively.
Kara [14:22]: "...senior software developers with ADHD... it’s solving a real problem for them."
Rebranding and Exploring New Channels
To better align with their ICP, the company rebranded from Bytebase to Stashpad and experimented with various marketing channels, including podcasts and influencer partnerships. However, these attempts yielded limited success, underscoring the need for a more focused approach.
Kara [17:50]: "We tried a bunch of different channels, but none were picking up as we hoped."
Developing Stashpad Docs
Recognizing that their initial product wasn’t addressing the top priorities of their ICP, Kara and her co-founder pivoted to Stashpad Docs—a streamlined, collaborative alternative to Google Docs. This new direction showed promising growth initially, with 50,000 docs created in a few months.
Kara [28:11]: "Stashpad Docs was really a bet on growth... we were seeing usage tick up."
Struggles and Decision to Shut Down
Growth Plateau
Despite initial enthusiasm, Stashpad Docs failed to sustain its growth momentum. User engagement did not translate into consistent adoption, and the anticipated flywheel effect was never realized.
Kara [36:38]: "Not solving a top priority problem for our ICP... we were not seeing enough differential to sustain growth."
Financial Constraints
With limited runway and the inability to secure additional funding due to stagnant growth metrics, Kara and her team faced the harsh reality of shutting down the startup. The primary factors leading to the closure were:
- Misalignment with ICP’s Top Priorities: The products did not sufficiently address the critical needs of their ideal customers.
- Overhiring Without Product-Market Fit: Raising funds prematurely led to an unsustainable team size without validating product-market fit.
- Ineffective Problem Validation: Their focus on knowledge management was too broad and lacked the specificity needed to drive substantial growth.
Kara [38:55]: "The difficulty that we were having trying to fundraise towards the end was really just a reflection of the limited growth that we were seeing."
Learnings and Takeaways
Rigorous Problem Validation
One of the most significant lessons Kara emphasizes is the necessity of rigorous problem validation. Understanding and prioritizing the real problems faced by the ICP is crucial before scaling a product.
Kara [48:39]: "Being really open to problems for the ICP... let's see if there are patterns in there and if we could solve it."
Importance of Authentic Customer Engagement
Kara highlights the importance of engaging authentically with early adopters and being open to pivoting based on genuine needs rather than superficial feedback.
Kara [48:40]: "Our way of going after it was flawed because we stayed too strongly with notes and docs instead of being open to other problems."
Embracing the Startup Journey
Despite the eventual shutdown, Kara reflects positively on her entrepreneurial journey, valuing the experiences and connections made along the way.
Kara [48:40]: "It was an incredible experience and the people that I got to know and learn from along the way... I couldn't be more grateful for the opportunity."
Moving Forward
Next Ventures
Undeterred by the closure of Stashpad, Kara is now channeling her expertise into Relay App, a modern automation tool designed to streamline workflows across various platforms like Gmail and Slack. This transition underscores her commitment to solving pressing problems with user-centric solutions.
Kara [50:44]: "Relay App is a modern automation tool that just makes it very easy, it's very intuitive to automate different parts of your workflow."
Navigating Job Searches Post-Startup
Kara shares valuable insights on transitioning from a failed startup to new opportunities. She emphasizes the importance of leveraging personal networks, being clear about career goals, and maintaining authenticity during the job search process.
Kara [53:27]: "People in the tech industry being so open to talking if you're vulnerable and also very specific with your asks... led us to our next roles."
Final Thoughts
In conclusion, Kara Bornstein Marin's journey with Stashpad offers a profound case study on the complexities of startup life. Her honest reflections provide invaluable lessons on the importance of validating problems, understanding customer priorities, and maintaining flexibility in business strategies. For aspiring entrepreneurs, Kara's experiences underscore that failure is not the end but a stepping stone to future success.
Kara [48:08]: "The fundamental choice of the problem had, had flaws in it for us."
Notable Quotes
- Kara [02:21]: "Knowledge sharing, knowledge management, it's a pain point."
- Kara [05:31]: "The prototype level product... there was a lot of work to do to make it really intuitive."
- Kara [09:22]: "We needed to be more rigorous with... building against what we know versus what people are saying."
- Kara [14:22]: "...senior software developers with ADHD... it’s solving a real problem for them."
- Kara [28:11]: "Stashpad Docs was really a bet on growth... we were seeing usage tick up."
- Kara [38:55]: "The difficulty that we were having trying to fundraise towards the end was really just a reflection of the limited growth that we were seeing."
- Kara [48:39]: "Being really open to problems for the ICP... let's see if there are patterns in there and if we could solve it."
- Kara [53:27]: "People in the tech industry being so open to talking if you're vulnerable and also very specific with your asks... led us to our next roles."
Conclusion
This episode serves as an honest exploration of the highs and lows of startup life, emphasizing the critical junctures where strategic decisions can make or break a venture. Kara's openness about her experiences provides a roadmap for others navigating similar entrepreneurial challenges.
For more detailed insights and updates, listeners are encouraged to follow Kara Bornstein Marin on Twitter @KarajaKarajeline or reach out via email at carrelay@app.com.