Five Lessons for Consumer Tech Startups in Springpad Shutdown
“We fought the good fight. It’s pretty emotional.”
That’s Springpad co-founder Jeff Janer talking about shutting down his company after six years and almost $10 million in venture funding.
Charlestown, MA-based Springpad ran out of money while trying to raise a Series B round, Janer says. Its digital-organizer product, which had about 5 million users, will be discontinued on June 25. (The Verge first reported the shutdown, and the Boston Business Journal and others have since covered the news.)
Janer says he will spend the next month winding down customers and shutting off the lights. Then he’ll take some time off, and is thinking about starting a CEO peer group for tech or VC-backed companies. Springpad had 17 employees as of March.
Springpad co-founder Jeff Chow, who previously worked with Janer at Third Screen Media (acquired by AOL), is joining Google in Kendall Square, along with Springpad’s top four engineers: CTO Pete Aykroyd, head of engineering Chuck Garofalo, lead Android developer Kyle Lampert, and Web developer Regis Gaughan. They will work on the Google Play Newsstand app, which has some similarities with Springpad—it takes digital content and makes it presentable for sharing and consumption.
Janer declined to comment on rumors that his company had been in discussions with Google, or others, to be acquired.
Springpad brought on new CEO Jacqueline Hampton last August, as part of an effort to gain mainstream adoption. Before that, Janer and then Chow had served as chief executive. The company’s product had evolved from a digital filing cabinet to more of a personal organizer using a notebook format; the latest incarnation was an expert-guided content organizer on topics like cooking, travel, and parenting. Springpad was compared to bigger names like Evernote and Pinterest, but wasn’t able to get enough traction.
Xconomy has reported on Springpad quite a bit over the years, so it seems fitting to pull out some lessons from its demise. In that regard, Janer was forthcoming about what he and his team have learned.
The big lesson is not “don’t do a consumer business” in Boston, Janer says, but rather, “think long and hard about how it’s not the same as everything else.”
Janer breaks down his takeaways into five categories:
1. East Coast vs. West Coast
This is the common lament about building a consumer-tech company in Boston. With the area’s historical strengths in enterprise software and hardware, there aren’t as many local investors focused on consumer tech. And generally speaking, West Coast VCs are less likely to invest in a Boston company than one in their backyard, Janer says. “It’s more difficult here,” he admits.
2. Product-market fit
Everyone seems to harp on this as an important step, but it’s somewhat overblown. “I think we actually achieved product-market fit early on,” Janer says. “There was a need for people to store their stuff and sync it across multiple devices. But that does not a business make.” His takeaway: “We built a cool product, but we didn’t build a business.”
3. Revenue model
Do you build a user base and then worry about making money, or vice versa? “We went back and forth,” Janer says. “But unfortunately we didn’t grow fast enough to roll out an ad-support model.” He says Springpad thought about advertising as a revenue model from the start, and the company stayed away from putting up any pay walls so it could get the most users possible.
4. Business issues
It boiled down to using a “freemium” model versus advertising—and Springpad ran out of time getting either one to work. “I would say, think about building a business from the start,” Janer says. Still, Springpad might have ended up in the same place if it had gone freemium early but didn’t take off fast enough. (Even Evernote probably has to make money from enterprise customers to become a huge business, he says.)
5. Distribution and user acquisition
Springpad did a decent job getting free distribution through app stores, blogs, and media. But its brand partnerships “were too little, too late,” Janer says. And when it came time for that, he says, “the motivations and wants for the Peter Walshes of the world [subject-matter experts and influencers] are very different from what a brand wants. Should we have focused more on one or the other and just gone deeper? We should have gone sooner, is the main thing.”
Ultimately, a consumer-focused offering boils down to simplicity and a unified message about “what’s your unique selling proposition,” Janer says. “We were always different things to different people.” He suspects it would have worked better to “focus so you’re marketing vertically.”
That’s all easy to say in hindsight, of course. The bottom line: building a consumer-tech company is tough, and it’s pretty much impossible to predict which products will take off. Springpad gave it a good shot and reached a lot of people, which is about all you can ask. We’ll be watching to see what else might come from its experience.