A beginning is the time for taking the most delicate care that the balances are correct. —Dune
On March 11, 2015, we announced the shutdown of LayerVault. This was the first public acknowledgment that things were not good at LayerVault.
In January, we made the decision to lay off the staff and help them find new employment. Throughout February, those remaining attempted to operate LayerVault and Designer News. Unfortunately, that plan was not feasible. LayerVault as it stands is too technically complex for a team of two to operate.
Previously in August, 2014, while looking down the barrel of the gun, we realized we needed to raise money to keep the company going. In October, 2014, we closed a small bridge round from existing investors. Little did we know, we were already well into the Fatal Pinch.
Earlier in 2014, we had tried and not succeeded in raising additional capital. Our numbers did not justify the round size that we were asking for. Before long, our deal was shopped and we were up a creek. We did not realize it at the time.
At its biggest, LayerVault was 13 employees located on 2 continents in 4 different timezones. We punched through the beginning of the Series A crunch. We raised a small Series A about a year after raising our first seed round in the summer of 2012. We had built up a certain braggadocio in the design community. We were going to do it.
From the outside during this process, things looked peachy enough. Because we ran Designer News, the collective startup community—at least those that I talked to—assumed LayerVault was equally successful by proxy.
The LayerVault service was a completely different story. We had a few companies that loved and relied on us, but not nearly enough. We suffered from catastrophically high churn, and didn’t realize how big of a problem that was until it was too late. We weren’t talking to customers in any regular manner. Although we were showing positive revenue growth every single quarter, that growth had a dirty secret. We were growing, but we were also churning at an alarming rate. In short, we did not have product-market fit.
When a company winds down, you spend a lot of time reflecting on what could have been. Had we handled that differently, would the company have survived? It happens a lot slower than you think. No one big thing usually kills a company; it’s usually a slow death. Some companies that you assume are doing just fine may be on their last legs.
So, to the best of my ability, I submit the following essays into the startup hive mind. Hopefully several readers will glean something from them. These are essays that I wish I would have existed four years ago as my journey with LayerVault was just beginning.
The essay titles are as follows:
- My startup was not special, and neither is yours
- Know the fundamentals
- The Hourglass
- The Importance of Talking to Customers
- The Price of Distractions
- The Purpose of Private Betas
- New York vs. San Francisco, 5 years later
- How to Build a Syncing Product
- Second Thoughts About Remote Work
- The “Face” of a Company
- The Importance of API-first Development
- The Importance of Frameworks
- Dealing with Competition as a Startup
These will all follow a few common themes which can be succinctly summed up as: read everything Paul Graham has written, preferably in the first two months of your new side project. When reading things not written by Paul Graham (my own included), keep in the words of Paul Buchheit: “All startup advice is over-generalization based upon limited life experiences.” Take these each with a grain of salt, but be honest with yourself if you see some of the issues I will write about.
These also represent a small subset of the things that could be written about LayerVault. These essays are what I can and will write about the company. Some things I can not write about, due to NDAs or pending asset sales. Some things I will not write about because the details are too personal.
All in all, these essays might be just shy of 50% of the total wisdom to be derived from the arc of LayerVault.
At the very least, I hope you enjoy it.
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