This story was originally published August 15, 2012.
Earlier this month, my business partner and I decided to close HireVoice, the business we started in November 2011.
It’s surprisingly easy to close a business, but it comes with a grieving period. Hopefully, I’m not writing this too soon…
How HireVoice came to be
In 2011, I came back to Canada with way too many business ideas. A friend of mine dropped his boring job and we started brainstorming full time.
All projects seem about equal until you have to make a decision.
I wanted to avoid the problems I had with my previous startup, bootstrap a company to greatness and get over my fear of partnerships (I had had bad experiences).
This is about the time that the Lean StartupTM came out, so we used it.
For weeks, we filled sticky notes with ideas, problems, market insights, trends; everything to make well-informed, rational market decisions.
Once we narrowed the list to a few opportunities, we started validating through cold calls, surveys and landing pages. We also started looking for the missing partner.
The same week my original partner decided to leave the business, a technical co-founder joined. The wheels were in motion, we were going in employer brand monitoring, a direction I had half-chosen.
With the wheels in motion
The week my original partner left was the week I convinced Louis- Philippe to join. I was having serious doubts, but I had sold him on a business I was trying to believe in.
If you’re not passionate about going at it every morning, you’re probably not working on something you love.
Focusing on the wrong things
I had learned that with half the time you get half the results. For HireVoice, I was all-in, committed to success or, at least, piling up debt.
Because my partner and I didn’t have prior expertise in HR or recruitment, we had to build credibility, a network of contacts and learn the basics so we got advisors early on.
You lose a lot of time learning a domain, which isn’t yours. You will never be as credible as a subject matter expert with established industry contacts. Get one!
In retrospect, we probably lost four months learning recruitment and HR. That’s four months we could have spent getting clients.
Because I was full-time on HireVoice and validating a product was a part- time job at this point, I was investing time in socializing HireVoice with the investment community and all kinds of smart people.
There is such a thing as too much strategy. Advisors don’t always help.
Although this felt like momentum, it was sidetracking us from focusing on Product-Market fit (the only thing that really mattered).
Advisors are not real victories. Funding is not real validation. These things only sidetrack you from getting s*** done.
Focus is key when launching any business, but small wins were probably not celebrated as much as they should have been. We were doing good things, but my impatience was causing unnecessary stress.
Momentum is essential to motivate team and partners. Small wins are significant and must be celebrated.
Watching a car crash
We started validating products with customers in the first few weeks and were always getting very positive feedback. We started building the first module of our solution because it felt like we were on the right track.
“Interesting” is a distraction. Watch out.
Our first product was the first step of the employer brand assessment cycle. It was logical, but in retrospect, we should have chosen the module that solved the biggest pain.
We released our first module to pilot customers. There was no demo possible; it was high commitment from the get go. It took months for any of our pilot customers to run tests.
Shorten time to demonstration of value of your product to increase engagement.
Nevertheless, people were getting excited about the potential of HireVoice. We even celebrated too early the signature of a customer.
A client is not a client until he has paid money for your product.
Everyone we met in recruitment was getting excited about our passive candidate perception module. The idea was to tell HR recruiters what passive candidates (candidates not currently looking for work) think of their company as an employer. Right… so, we built this module as well and went selling.
It’s very hard to sell information without established credibility.
It was a challenge getting passive candidate data. We honestly thought we had a good model.
User acquisition is never an after-fact. Always know how you’re going to acquire users.
We could have made the user acquisition part work, but ultimately, what made us change product was the fact that companies were not buying. It was just interesting.
People don’t need more information; they need better knowledge.
We tested two more products to help companies harness perception of their employer brand, but those products were probably a bit ahead of the curve.
Strategy is the fun part. It’s what people love doing. Don’t try to automate.
We were also seeing the limitations of the Lean Startup methodology. Since B2B is relational, you can’t just change product every week.
Landing pages and mockups don’t create a lot of trust.
A second breath
In the process of finding product-market fit, it’s very easy to lose track of what you, as an entrepreneur, want. Because of the nature of the information we were trying to sell and the price of our product, we were targeting large companies and I had to wear fancy pants to work.
It was never something I wanted to do. It just kind of happened.
At this point, HireVoice was part of the MIT entrepreneurial program. Their approach focused on identifying the biggest pains of a target market. For a month, I met with HR managers, directors and VPs and was able to identify their pains, budgets, needs, buying processes, team structures, etc.
We realized that we had been fooling ourselves in thinking that employer brand perception was a significant problem (or that it was a valid starting premise). It was a problem but it didn’t hurt enough for companies to pay for our solutions. We made the decision to go into recruiting.
At this point, we had a clear picture of our target end user and target customer (not the same in this case). We were following the right process, and we did a lot of good things:
- We established trust and relationship by becoming partners in the recruitment success of in-house HR recruiters (your success is our success);
- We set up a customer development panel with five or six target end users. They were helping us solve their own problems;
- We were offering full-featured pilots with extra customer support for a base fee.
Those ideas were looking mighty promising.
Bootstrapping a startup when you’re 30 and have a rent to pay is incredibly hard. Beyond the monetary aspects, it is very hard on perception (people think you’re crazy) and personal relationships. Becoming comfortable in that situation is one of the hardest things I have done.
Validating products is also creatively tiring. At some point, it is possible to run out of ideas for new products. We were validating products faster when summer came around but, eight months in, we were tiring out.
It was hard to escape comparisons to LinkedIn.
Good luck getting money if your substitute products are free. Perceived comparables are more important than actual comparables.
At this point, my partner told me that he wanted to cut his losses and move on to other things.
I’m not sure if it was a failure in leadership, but it was definitely a failure in creating sustainable momentum.
I wanted to do one last round of validation before closing HireVoice. I built an ideal product that did everything a recruiter might want (a magic product) and went out pitching.
Running the regret analysis
We had built (or built part of ) five products at this point. We knew we had great customer research and knew the problems of our target end users, but the motivation was not there anymore.
My magic solution was interesting… but no one was throwing money at it.
In the end, I did what I do with every big decision. I asked myself if in one, two or five years I would regret closing the door on HireVoice. The answer was no.
The bulk of the pressure in a self-funded business is self-created. In retrospect, most nights spent working could have been avoided.
It is unfortunate but:
Not all problems lead to sellable solutions.
Time to move on.
The hardest thing with failing is telling others. Only people in the startup community perceive failure as part of a process.
As was the case with Flagback, my previous startup, I have learned enough through HireVoice to justify the monetary investment (a little more than a Bachelor’s degree).
I was able to get over my fear of partnerships and realize that I work well with complementary partners.
Overall, I could not honestly recommend starting up in recruiting. It’s a slow-moving market dominated by what LinkedIn is or could be doing. Budget for technology is limited; HR is usually perceived as a cost center. End users are rarely the buyers.
Moving forward, I will be taking a bit of a step back, but generating direct sales will be the focus of my future endeavours. I’m looking at unsexy startups.