The Team and the Challenge
I first launched PeepNote, a contact and relationship management tool for Twitter, in 2009, during the Rails Rumble. I was interested in participating in the 48 hour development competition, both for the challenge of creating an app in that short amount of time, and for the focused opportunity to launch a startup. Launching a startup can be a difficult thing to do when you are working a full time job, but focusing on this competition provided a specific deadline for motivation, a team of four to get the work done, and a set aside time with extra incentive to do the work.
At the time, I already had my best friend since age 7, Steven Pothoven, as a co-developer, but needed a designer. I had decided that unless I could find a top designer for the project, I would pull out of the competition. For me, design is a crucial part of any functional app. It’s not the most important part, but I believe its important enough for the success of an online service, that I would never consider launching one without a design expert on the team.
It was not easy to find someone. I attended the Front End Design Conference in 2009 in St. Petersburg and put the word out that I was looking for a designer. I wanted one from Tampa, but sadly, there just weren’t many in this area at the time who had experience with applications.
It was coming down to the wire and I was getting nervous, but then I met a fantastic designer online: Josh Hemsley. We chatted online, and not only did he accept the challenge to be on the team, but he ended up participating on my team in the 2010 Rumble as well for Commendable Kids and also designed the original We Are Tampa Bay and my personal blog. After adding Josh to the team, I also asked Linda Olson, (we were working together on Wombeat.com at the time) to assist with testing, content writing, and the creation of a demo video. The team was set, and there would be many long hours to prepare prior to the actual 48 hour competition.
Why PeepNote?
At the time, Twitter was still in the early adopter stage, and I was struggling to keep track of the new people I was meeting online. I wanted to be able to take notes on those I followed, remember why I followed them, where I first met them, etc, and to tag them for easy sorting. I also wanted to be able to search my notes and their bios, and create Twitter lists from those tags. It was out of this personal need that the PeepNote idea originated. The team was set, the idea formed, and we spent the next month planning out how we would go about building it in just 48 hours.
The Competition
At the time, I had years of experience managing the creation of online software services in Java and for large multi-million dollar companies, as well as a few years as a Ruby on Rails developer for the Miley Cyrus web sites. I had been an amateur entrepreneur since I was a child, but had never launched a small “startup”, and particularly not in such a short time frame. It was a fun challenge to complete so much work in such a little time. My number one goal wasn’t to win, but was to illustrate just how much could be accomplished with proper planning, a strong team, a competent product development manager, and the Ruby on Rails web development framework.
237 teams competed worldwide, with only 137 actually finishing on time and able to submit their entry. Of those, 22 were selected by an expert panel to enter the final round of public voting. PeepNote was selected as one of the finalists and after public voting finished, we were 8th. It was also picked as one of the best by Mashable. We were tired after 48 hours of building, but it was well worth the effort, and the experience was priceless both in memory and in the experience gained.
In the end, the majority of comments both from voters and from judges was that they could not believe how much we had accomplished in just 48 hours. Mission Accomplished.
To Startup or Not to Startup?
After the Rumble we were flying high. The judges comments, finishing in the top ten, the numerous write ups online, all encouraged us to continue with PeepNote post-Rumble. At first we were polishing things we had to skip during the Rumble, changing some things we were forced into by the time constraints. Then we began adding other functionality to make the app more enticing. As time went on, our designer had to move on to other things, and my co-developer could not spend the extra time in the evenings that I was able to. I spent the majority of nights for the next year improving PeepNote. The catch was, however, that at even 10 hrs a week of extra time, beyond my family obligations and more-than-full-time job, it would take me 16 weeks to duplicate the time spent during the Rumble from 4 full time people. It was slow, and I was only product building at this point.
As time went on, I lost site of the big picture. I was heads down building, but so busy with everything else that I wasn’t paying attention to what customers wanted, or even more importantly, to who my customers actually were. I continued to be emboldened by users comments, and even comments from some other successful founders and investors. I knew I had something, but the time burn was intrusive in life, and yet was resulting in very slow progress, and certainly no money.
We finally released the pro plan. It was the first attempt to make money from all these people that loved the service. But no one converted, at least not for a long time. As I began interacting more with potential customers I realized that my target audience was not what I thought it was. It wasn’t people like me who were heavily using Twitter for career networking and wanted to keep track of how I met people and what I knew about them. Instead, the only people that would pay for the service were companies. Companies that wanted to use it to track potential customers; a CRM.
At this point I began to pivot but the functionality set this new target audience wanted was drastically different from what I’d just spent the last year working on and I was burned out. We had some larger companies interested in using it, “if only we could add…”. At 10-15 hrs a week at most, that wasn’t easy to do. I realized the only way to turn this into a real business would be to invest money; substantial money. I needed more developers and a designer in order to respond to what what could make money. Then, to make matters worse, Twitter changed the API, and all the features of the Pro plan stopped working. I was faced with the need to rewrite a huge portion of the functionality in order to continue.
At this point, I reviewed the numbers and they didn’t look good. At what I thought I could charge, combined with a smaller niche audience, it didn’t give me confidence that the return on investment would be worth it. Even more importantly, the entire project was missing a crucial element: my passion. The passion was gone. For months I had no idea why. This was what I had wanted wasn’t? I built a product that users loved and were using. I was proud of it. In the end though, that just isn’t enough. I had no free time to do what I wanted, and since the 2009 Rumble I now had other applications I wanted to work on (like Commendable Kids). I also had no passion for working with it as a CRM and with the new target audience. That wasn’t why I had gotten into it in the first place, and the pivot had turned it into something I could no longer find easy motivation to do. I had to fight to make myself work on it.
In the end, PeepNote was never a startup. It was a side project, a fun challenge, and I learned more from the experience than from any conference I ever attended, any book I’ve ever read or any class I’ve ever taken. But it was never a startup. That word gets thrown around so easily these days as if every side project in IT is automatically a startup. Long before the Internet ever made anyone a penny there were hundreds of thousands of IT side projects. No one ever referred to them as a startup. For some reason today, almost everyone labels their side projects a startup. To me, its not a startup unless the primary goal is the making of money and you are attempting to do so. As well, you must be investing not just your time but your money. If you aren’t willing to take out a loan to invest into it, and you aren’t actively attempting to convert people to paying customers, you are just having fun with a side project. That’s nothing to be ashamed of. The more honest you can be with yourself, the more heartache you will save and the less time you will waste.
I know its not sexy to have a side project. I know having a “startup” sounds so cool, particularly when you can put it on your blog, tweet about it, and attend conferences where you can identify yourself as a founder. But if you aren’t building it with sound business principles, you’re a fraud. I say that, not to crush your dreams, but to free you from using it as a crutch. Today, its become accepted that everyone has a startup and no one expects any of them to actually make money. But when we do this, we do a disservice to the entire startup community and we lower our own expectations. It would be far better if we all started with side projects, powered by passion. Build it, share it, tweak it, and gather feedback. If you have aspirations to make money from it, interact with the early adopters and ask them straight up, if they would pay for the service and how much they would pay for it.
You’ll have to go all in if you want to make the move from side project to startup. You’ll have to sacrifice your hobbies, any other fun projects, and certainly your own money. As well, beware, the bulk of time needed to be spent for a startup, vs. a side project, will be customer acquisition and communication. If you love to build projects first and foremost, you probably aren’t going to have great success turning it into a profitable startup. Most people I talk to, developers and designers a like, believe that 90% of the work is building the product. I would say that 90% of the work of a startup comes post build, which is why building the smallest possible product is crucial. You must get to that 90% of work as soon as possible to save you a long year of sleepless nights building something no one is ever going to pay for. Don’t do like I did and spend a full year building before you find out who is willing to pay for it and what they are going to want it to do in order to spend their money.
The Conclusion
As a side project, PeepNote was a complete success. It worked, it looked good, it was usable, and people have used it since 2009. I have aspirations, however, far beyond that. I’m a builder and a creator by nature, but also a business man who wants the things I create to profit. For me, the two have to go hand in hand. I have another venture or two that I’d like to focus all of my time on, and so because of that, PeepNote will be closing next month. The journey for this side project has come to an end. If you have data on the site, you will need to make a copy of it within the next 30 days, before we shutdown the service. It’s been a great ride, with a lot of great memories. We appreciate all the support and kind words we’ve received and I will never regret any of it, even the mistakes. The entire experience was invaluable and will make my next venture far more likely to transition from side project to a startup.