When Startups Fail: Christopher Herot Talks Frankly About Zingdom’s Shutdown

Part of the reason high-tech entrepreneurs are attracted to Silicon Valley is the perception that it’s a place where risk-taking is encouraged. West Coast venture capital firms not only excuse failure, so this perception goes, but celebrate it: if a high-tech entrepreneur doesn’t have a couple of tanked companies on his resume, he probably wasn’t being innovative enough. By contrast, the perception about investors in New England is that they penalize failure, which therefore becomes a taboo subject.

Both perceptions are probably exaggerations. But whereas West Coast companies come and go like the butterflies in Santa Cruz, it’s still unusual to hear any of the details when an East Coast startup closes down. That’s why a blog post last week by Christopher Herot has been attracting so much attention.

Herot was co-founder and chief technology officer of Lexington, MA-based Applied Messaging, which later became Convoq, which later became Zingdom. Founded in 2002, the company made Web-based business conferencing software that competed (unsuccessfully) with WebEx, and later released a consumer-oriented click-to-call system for initiating anonymous phone calls or instant-messaging sessions from web pages on networking sites, dating sites, or classified-ad sites.

On December 9, Herot posted an obituary of sorts for Zingdom, explaining that despite the project strategy adjustments and three rounds of capital over five years—Bay Partners, North Bridge Venture Partners, and Polaris Venture Partners put in about $30 million altogether, according to PE Hub—the company “never achieved the traction that would have provided the necessary return on capital” and was closing its doors. Herot’s account was remarkably frank and unvarnished, lamenting, among other things, that the company had spent too much time perfecting software features that users didn’t want.

Given that Herot didn’t seem to have any hangups about telling Zingdom’s story, I called him up last Thursday to see what other insights he could share into the rarely-discussed process of coming to grips with the failure of a product—or a company. Here’s the writeup of our conversation.

Xconomy: That was a very unusual piece you posted. We don’t hear much about that side of the startup process—when things don’t turn out as the founders or investors envisioned.

Christopher Herot, co-founder and CTO of Zingdom, formerly ConvoqChristopher Herot: They say success has many fathers and failure has none. There are always articles about the miracle of somebody starting a company in his garage and selling it three weeks later for a billion dollars. But there’s very little written about the other outcomes that can happen.

X: What did you hope to achieve by telling the story?

CH: I guess there were a few reasons for writing the post. One was that it was just kind of therapeutic. Also, I was thinking that somebody should write the definitive story before it all evaporated from our memories. There is also a very practical reason: The company is winding down and I’m helping the investors sell off the IP and helping the engineers find homes. In the old days, you started making phone calls. Now you just write a blog post and everybody knows about it immediately and responds appropriately. I’ve already gotten quite a few inquiries about both the IP and the engineers.

X: How common do you think it is for technology startups to end this way?

CH: Let me put it this way. There’s this myth that everybody makes money in Las Vegas, because when your friends go there, there are only two outcomes—either they come back and tell you how much money they made, or … Next Page »

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Wade Roush is a contributing editor at Xconomy. Follow @wroush

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