As entrepreneurs and business owners, it’s not fun to think about failure. Actually failing is far, far worse. You release a fantastically craptastic product that you think everybody wants. Turns out nobody wants, or even understands it – not even your friends. Before you know it, the wheels have completely come off and you’re back to square (minus) one.
Yes – this is our story of failure.
However, fortunately for us, the story doesn’t end badly, and in fact, it’s still being written (keep reading). But in light of our learnings over the past year, we figured we’d share our story to the bottom, the laundry list of what “not to-do’s” when starting a company and/or building a new product and finally, the steps we took to put the pieces back together.
ChubbyBrain: Unusual Name, Unintelligible Product
For lack of a better analogy, we were trying to build Yelp for investor-backed startups and middle-market private companies. In your mind, replace the thousands of local businesses on Yelp with private companies and layer on some wiki elements and you’ll have a decent idea of what we were envisioning: a place where people can find and provide information about private companies/startups, and also review them.
Awesome idea, right?! WRONG!
Where the heck are we gonna get all this data about startups?
First and foremost, we’ll use technology we’ve built to aggregate information about startups. And we won’t stop there – ChubbyBrain is a wiki. Everybody loves wikis! We’ll just open our doors and people will provide lots and lots of data.
Who’s gonna review these companies?
Tons of intelligent people just can’t wait to share their opinions about startups. We’ll attract the type of commentary you’d find on Y Combinator‘s Hacker News or Quora, i.e., smart people opining on the viability of startups and their business models, products, etc.
We slapped ChubbyBrain together, data and all, and launched in 2009 with roughly 15,000 companies in our database.
In fairness, we excelled in building technology to aggregate and structure company data, and this has laid the foundation for some of our more successful products which we’ll cover in a bit.
But more to the point of this blog post, we almost instantaneously became a magnet for unsavory websites who were desperately seeking a link. And this was complemented by a sparse number of reviews where anonymous commenters would either spew venom about one of their competitors or blasting an ex-employer who they had a beef with. And as for the wiki? We found ourselves spending more time moderating spam than anything else.
“YOU BLEW IT!!” – Robert DeNiro, CopLand
So where did we go so wrong?
Customer Non-Development Model – This may very well be “the mother of all mistakes” we made along the way. We were strict adherents of the non-lean/non-customer development model which meant that customers were not to be talked to. We like data and talking about different business models and their relative merits/demerits and so we figured there is a community of several million just like us. The original ChubbyBrain was a happy marriage of our interests wrapped in customer indifference. We never talked to users/customers to see if this would be of interest to them. And so customers ultimately told us through their indifference that they didn’t care about our idea. Not good.
Like a Printer/Fax/Copy Machine – We were trying to be a credible data company and a community. Most companies struggle to be good at just one thing, and we decided we were going to be good at two. Bottom line – We are data guys. We’re good at data. We like data. Community was about things we didn’t have as much familiarity with, i.e., social media, game mechanics, community building, etc. These were things when we started that we honestly had little insight into given the composition of our team. Even those who know these things intimately will admit it can be difficult. As novices, the task was even more daunting.
Community by Luck, Not by Work – Related to the above, building community is hard. We fell into the “build it and they will” come school of thought (although even when they came, we still weren’t in good shape). Users didn’t review because there was no enlightened self-interest for them to do so. Nobody wanted to edit our data for the same reason. People submitted companies to our database mainly looking for a link. Since we were interested in companies that have received external financing or with $5 million in annual revenues and not becoming a link farm, only 1 of 100 companies made the cut which required more effort on our part to moderate . Community building is hard work.
Branded Like a Mullet - Mullets (for those unfamiliar, here’s some info) have been described by some as business up front and a party in the back. Our branding was similar. Our name, ChubbyBrain, is memorable, a bit playful and a touch irreverent. We, however, generally put out personality-less, fact-based analyses to show how good our data was (there were some exceptions). Instead of making our name and content/approach consistent and hence an asset, our branding mullet confused people.
WTF Homepage – In the history of websites, we believe we developed one of the most unclear and hard to decipher ones ever (screenshot below). Our friends would make comments like “overwhelmed” when asked about our homepage or people would say things like “I wasn’t sure what I was supposed to do”. Even better, some people would say “Oh I get what you’re doing. You’re trying to match investors with companies needing investment.” People were so confused by our homepage that they made up a business model for us. The problem with our homepage ties most closely to our printer/fax/copy machine issue. Since we weren’t sure what we were trying to be, we threw a bunch of stuff against the wall (our homepage in this case). And nothing stuck.
Feature Potpourri – When it came to certain website design elements, we didn’t know what customers wanted (see earlier point about customer non-development) and so instead, we thought “let’s take elements from sites we like and tweak them” and we’ll get the same magical effects on our site that they’ve gotten. Wrong. Features don’t work in a vacuum. They work because you take time to understand your customer and then build features to accommodate them. Oops.
There are probably many other small things we screwed up, but the other ideas all felt like flavors of the above.
But as mentioned, this was a battle lost – not the war.
All Hope is Not Lost – Customers Discovered?
Some things did go well, notably:
- In the last year, we had about 500k visitors to our site. Unfortunately, we confused most upon arrival and so they left quickly.
- We succeeded in getting a fair amount of press for our data (Forbes, Fast Company, Inc, Xconomy, ReadWriteWeb, etc) as well but unfortunately, referred visitors also hit our cesspool of a site and left quickly.
- We grew our database of companies to nearly 85,000 with data on 20,000 investors and acquirers including angel investors, venture capital and private equity firms, state and federal grant programs, corporations, corporate venture units, incubators, etc.
Most importantly, there were two segments that stuck around and got past our unsavory veneer and saw that we have some pretty good data. These groups are:
- Investors (and the larger investor ecosystem, i.e., bankers, lawyers, governments) – They wanted to access our data in different and deeper ways.
- Entrepreneurs Seeking Funding – We got dozens of emails per week from entrepreneurs asking if there was a way to use our data to determine which investors they should talk to.
Seeing this interest, we pivoted (yes we love startup jargon)
To serve investors and the entire ecosystem who we heard from, we launched CB Insights, a subscription platform that offers faster, friendlier, comprehensive intelligence about private companies. It was built after talking to customers this time and has been holding its own on the data front with the big boys.
To serve entrepreneurs, we remade ChubbyBrain as a place to leverage our data in ways that would benefit them. Our first tool is the free Funding Discovery Engine (FDE), which emerged directly from the question we repeatedly got from entrepreneurs to the old ChubbyBrain – who invests in businesses like mine?
We have lots of things in the works for ChubbyBrain – all of them using data as a foundational element. In the meantime, if your business is seeking funding, you may want to learn more about the FDE.
And of course, let us know what you think of our second take. Email us at team(at)chubbybrain.com
This time, we’re actually listening to customers
Cheers and thanks for reading.
Our old WTF homepage can be seen below.