It’s the conversation you hope you never need to have: when you have to tell workmates, investors and family it’s time to quit; time to give up on the startup to which you’ve dedicated the past few years of your life.
In part, it’s this experience which has motivated Melbourne-based entrepreneur, Simon Walker, to do something that might seem a little insane: he’s heading to the US next week for LEEAP.in and Shoe String, along the way visiting 10 cities in just 20 days, and shooting a documentary.
His goal is to show Australian startup founders what it’s really like building a startup in the US. He’ll ask about how they raise money, which incubators are the best, and who you should talk to if you’re planning a trip.
From LA to San Francisco, Seattle to Austin; Walker will partner with local videographers in each city to shoot a series of webisodes about the startup scene in the US. He’ll be asking what’s hot, and what’s not in each city; in an attempt to provide Aussie entrepreneurs with an idea of what it’s actually like to run a startup in the US.
“At this point, I have an opinion on what it’s like, but it’s only based on what I read in TechCrunch,” says Walker. “I thought, what if I could find out what it’s really like?”
He has arranged meetings with CEOs and investors in each city. He’ll be interviewing people like the ex-CEO of MySpace, Mike Jones in LA; representatives from Madrona Venture Group in Seattle, and even drop by the Harvard Innovation Lab in Boston.
Walker says the goal is to get the whole trip sponsored. He’s already locked in a few companies: Optus Innov8 are covering the flights and UK-based Startup Stay (which matches travelling entrepreneurs with somewhere to stay) are organising his accommodation. There are around 20 other startups and service-providers supporting the project.
This all follows the decision to move on from his startup, Taylor Ventures; and the app which he had built with co-founder Damon Garrett. After three years trying to make it work, Walker realised it was time to leave. It was made even harder, says Walker because of the obligation he felt towards the group of investors which had put more than $200,000 into the business. He says it was one of the hardest decisions he’d ever made.
“We raised investment on an idea, on an untested product. We needed to find out earlier whether there was a real problem, and find out whether what we were doing was actually going to address it.”
The trouble was getting people to come back. Walker says it’s challenging to create ‘stickiness’ with an app: you’re competing against every other app on someone’s phone.
“Why would they want to come back to the app?” he asks.
His advice to others: don’t raise money on a hypothesis. You need to test the idea and make sure you’ve got the right product, to solve an actual problem.
It got to the point where developing a new product would have meant another investment round.
“It doesn’t matter how much money is on the line. You come to a point where you’ve got to realise it’s not going to work.”
Over the past few months he has been freelancing as a UI designer and product manager, but that’s on hold for the moment. He’s spent the last month working long days fielding emails, scheduling meetings and seeking sponsors, in preparation for his US trip. The plan is to spend a day or two in each city to get a perspective on the startup scene in some of the bigger hubs. Walker will blog his experiences along the way. He’ll also upload videos taken in each city to Viddy.
Connecting with people has been easier than expected, says Walker. Using Startup Stay has really helped. Walker says because you stay with local entrepreneurs who offered to host you while you’re in town, they’re usually happy to connect you with their own networks. He sent an email to each host asking who them for their top five list of people or places to visit in each city. Then he asked for introductions, or tracked people down online.
“I guess the opportunity of what we’re creating sets a different precedent for people. We’re here to show off these cities.”
Walker sees the trip as a way to find out what’s going on in the US. He’s thinking about where to next, and says he’ll see what he learns from the trip.
“I really want to understand the realities. You don’t want to make major decisions based on assumptions”.
Disclosure: FLT’s Alan Jones is also co-founder of The New Agency, which is one of the service providers supporting Walker’s project.