We shut down our startup this week. And we couldn’t be happier.
Let’s back up a bit. About a year ago, we started working on a startup called It’s Agreed. It was going to be the final word in online document signing. As freelancers, we’d always struggled to find a good way to get our contracts signed. The existing digital options—whether web-based or built-in to programs like Acrobat—just didn’t do it for us. And naturally, we hated having to sign stuff on paper. What do you do when you find yourself wishing for a better piece of software? You make a startup of course, which is exactly what we did.
It was a long and slow grind, with all the ups and downs two entrepreneurs can have without actually quitting their day jobs. We built a product, launched it, and even demoed it at a big tech event. The reaction was lukewarm. So we went back into our developer cave and started building version 2.0.
We were going to blow it out of the water this time. Our app, still in development, was the slickest and simplest out there, bar none. Even now, we can’t imagine a better way of designing a contract signing interface. And we were going to give the core product away for free. Unlimited signatures, unlimited contracts, all at zero cost to the user. We planned to make money selling some add-on features for people who signed a lot of contracts.
We had about a month of work left until launch. And then we discovered a new competitor. Venture backed, already launched, with big industry players attached. What really hit us hard, though, was that their product was almost identical to the one we were developing. Even the pricing was essentially the same.
Obviously, we don’t think they stole our idea. There’s no possible way they could have seen our unreleased app. It’s clear that they just thought the problem through like we did and came to the same conclusions about how online signatures should work. Kudos to them for nailing it.
It was time for some soul-searching—or rather, hard-nose business calculations. We racked our brains trying to find a way to compete with these guys. Price? Nope. They were giving it away, just like us. Simplicity and elegance? They maxed it out. Features? They had all the important ones, but not too many to get in the way. Marketing? They had a budget and celebrity backing, neither of which we had. It’s not that they beat us on every axis. The problem was, they at least tied us on every one. There just wasn’t anything to give us an edge.
So in one evening’s time, we decided to pull the plug on a year-old startup.
But even though we quit, we’re not quitters. We don’t like sitting around without a project to be passionate about. So on to the next startup, right? Wrong. We realized that this game just isn’t right for us at this point in our lives. We don’t want to quit our day jobs and hustle for venture capital. We don’t want to give up the option of going back to school, or moving across the country, or becoming a monk in the Himalayas. And without going all-in, we just don’t think it’s possible to compete with the people who do. We’ve always felt that how we do something is just as important as what we do.
It wasn’t just It’s Agreed that led us to this conclusion. Our previous startup, Dish Notes, fizzled out for the same reason: Well-funded, full-time teams came up from behind and overtook us. That, too, was an evenings-and-weekends project.
The landscape facing startups today is very different than the one where bootstrapped companies like 37signals got their start. Competition is far, far fiercer. There’s a tremendous amount of noise as huge numbers of startups vie for a bit of customers’ limited attention. And arguably, venture backing is more important now than ever before, if only because eschewing it puts you a step behind in the arms race.
But don’t think this is a lament or a complaint. We don’t take the prevailing market conditions personally. Indeed, we’re happier now than we’ve been in a while, and here’s why.
Rather than do another startup, we decided to do what makes us happiest: making cool things. That’s always been our favorite part of the startup game, and now we want to strip away all the other parts. Instead of trying to make money and having nothing to show for it, we’re going to focus on small projects that make us smile and yield tangible results. Instead of one giant, abandoned codebase, we’ll have a bunch of little pieces of art and code that we’re proud of. And who knows: Maybe someday, somehow, having this body of work will help us in a future business endeavor. Because we’re not necessarily out of the startup game forever—just for now.
We’re going to let passion be our guide. Open source projects, pixel art, HTML 5 games, whatever floats our boat. As our inaugural post under the new purpose of Headquarters LLC, please enjoy this, our (possibly ill-conceived) mascot for the moribund It’s Agreed:
It’s an elk, by the way. We just thought he should have a permanent place to live.
Click image for full-size, non-blurry version.