It was Spring of 2001, and I was in grad school, working hard to launch a software startup. We had just inked a deal with MD Anderson Cancer Center, a huge hospital network in Texas, to commercialize the software they had developed internally to run clinical trials. As graduation approached, we started meeting with investors and talking to potential customers. Interest levels were running high all around.
It was heady times-- we were about to enter a huge, deep-pocketed market, backed with the brand association of one of the most renowned clinical testing institutes in the world.
Then reality hit.
The more we dug into the software, the more we realized it was "spaghetti code", strung together over the previous decade by multiple engineers at multiple MDA facilities. Further, the researchers who'd build the code were, God bless 'em, more interested in curing cancer than in commercializing their work vis-a-vis our new company. They offered virtually no help or support, and without them, it was clear we were going nowhere.
FROM THE ASHES: STARTUP CONSULTING
We abandoned the deal a week after graduation. I had been so focused on trying to launch this company, that I missed the entire on-campus recruiting season. With zero job prospects keeping me in Texas, I moved back to San Francisco to sort out what to do next. The absence of any job offers meant that everything was an option. I loved working with startups, and had had some good success helping companies write VC-focused business plans during Bubble 1.0, so I hung out the startup consulting shingle under the name VentureArchetypes.
It was a fun ride. When we started VentureArchetypes in 2002, things were at a nadir in the startup ecosystem in the Bay Area, so it was a good time to get in and get positioned for the next boom. VA grew rapidly over the next several years, and our service line expanded from business plans to financial models & pitch decks then onward to include operations, interim CFO support and "deal consulting", which generally meant helping startups raise capital.
BEGINNING OF THE END
Fast forward a few more years: things started shifting in 2008 as the financial crisis spread and Sequoia Capital's "RIP: Good Times" foreshadowed the startup funding "nuclear winter" that hit next, and we downsized. Simultaneously, the nascent Lean Startup movement started gathering steam, which emphasized fast iteration and being reactive to customer feedback vs. detailed, forward-looking strategic planning (one of our core offerings).
Now fast forward again to 2011 / 2012. The early stage financing market was suddenly awash with fresh capital as everyone and their brother became an angel investor. Kickstarter (one of our earliest clients) was rapidly blazing new trails, ushering in a boom in crowdfunding. AngelList, which started as (literally) an email list sent to angels with a few hand-picked deals, had expanded dramatically, and was effectively commoditizing fundraising.
What had once been a lucrative business-- advising and 'packaging' companies to meet with VCs-- was needed less and less. The process of finding investors, which had previously entailed hours of laborious research + networking, was quickly shedding such "friction" and was instead becoming a fast, market-based process, driven by a founder's social network, social profile, strength of the idea, and traction.
In short, the "mystery" of fundraising was gone; and since mystery = margin, this heightened level of transparency meant our core business was threatened. I saw the storm clouds on the horizon; it was time to adjust our sails, change our heading, and remodel the ship.
ADAPT OR DIE
As I write this, I've just finished responding to half a dozen email inquiries and just as many calls from entrepreneurs seeking help building a pitch deck or business plan. The prospective customer phone line definitely hasn't stopped ringing-- most markets take awhile to dry up-- but I've noticed both a decline in the average quality of the startups calling, as well as in their ability & willingness to pay. The cool kids have moved on; the writing is on the wall that I won't be able sell business plans or CFO services forever.
Thus, earlier this year I decided to scratch an itch I've had for quite some time-- the desire to productize my consulting work. My thesis is simple; although AngelList has done a beautiful job of making it easier to find investors and get in front of them, it's still a huge pain in the ass to manage the deal process with multiple investors at a time. In addition, once you've raised funding, you still need to communicate with investors frequently and effectively, all the while minimizing the huge time sink of hiring, planning, and corporate housekeeping.
Thus, Foundersuite was born. We aim to do all these things and much more. It is our goal to remove the 'mystery', friction, and chaos of running a startup by turning financing and operational chores into simple, get-'er-done software tools. Call it CFO-as-a-service, or incubator-in-a-box, or an entrepreneurial starter-pack; whatever. I just call it purposely (and purposefully) putting myself out of business.
EAT THE WORLD
To note, this playbook isn't new. As Marc Andreessen expertly detailed in his post "Why Software Is Eating The World," startups have been replacing traditional industries for several years-- think Netflix over Blockbuster, Amazon over Borders, etc. But now this shift is occurring in white-collar service industries as well: TurboTax did it to accountants, and we're starting to see it happen in law (Legalzoom, Rocket Lawyer), public relations (HackPR, PRServe), investing, and many other fields that once supported entire industries of expensive knowledge workers and expertise-driven middlemen.
As YC alum Jason Shen recently wrote on his blog:
"From Wall Street to the Billboard 100, systems that encode human knowledge into decision-making systems have created billions in value and upended jobs previously assigned to the skilled, the fast and the thoughtful (people that is)."
It's true. I believe whole-heartedly that if you're not actively trying to put yourself out of business by productizing or automating your work, some scrappy startup will do it for you. Especially if you're a knowledge worker in a service industry, the time is now to take the plunge and start building that startup idea you've had rattling around your brain.
Just be sure to use Foundersuite as you launch and grow. :)