(Photo by Juliana Reyes)
Bob Moul wants you to know that he failed.
The Artisan Mobile CEO wanted to build “a major, permanent software company in Philadelphia,” but that plan didn’t pan out. Not only that, after he sold the company this summer, he wasn’t able to repay all his investors.
It wasn’t pretty. There was the rumor-mongering*, the “months of agony.”
“I had heard of the death spiral,” he said. “I had never seen the death spiral personally. This is not a fun place to be.”
It was the most stressful time of his whole 30-plus year career, and he wants you to know about it because, as he puts it, the only thing worse than failing is not learning from it, or worse yet, not sharing the story with the community.
Moul, the former Philly Startup Leaders president and frequent spokesman for the tech scene in business and local government circles, took the stage last Thursday at PSL’s annual Founder Factory conference to offer up what he had learned from his failure. Some former Artisan staffers, like Chris Baglieri, Kevin Jackson and Dustin Kempner, were in the crowd.
It was an incredibly honest talk, one that he punctuated with humor (he described post-Artisan life this way: “I grew a beard and went out to the desert, drank some tequila and had a long conversation with Jim Morrison“) and hand-drawn diagrams (“Here’s another thing that happens when you fail: nobody does your graphics anymore”). He also took full responsibility for the mistakes he said he made, often using “I” instead of “we” or “the company.”
We’ll get to the nitty gritty of Moul’s talk, which was packed with hard-won advice for entrepreneurs, but first, a word about the significance of his presentation.
It’s not easy to admit failure. Especially in the tech scene, where failure, it seems, is a concept that’s paraded around by founders only when it’s convenient. It’s like everyone wants to point to failure as a prime tenet of #startuplife until they actually fail. At that point, it’s easier to disappear and not answer any questions or spin it as a success and move on.
And it makes sense. As we’ve covered the Philly tech scene, we’ve attempted to interview many founders once they’ve called it quits, so we’ve thought about this one a lot. If your company goes by the wayside, why should you be honest about it? Do you owe that to the community? It’s a lot easier to save face. We get that.
So why was Moul doing the exact opposite? (And he wasn’t sugarcoating it or deflecting blame, either.) Because he felt a responsibility to the tech scene.
“If I’m gonna be a leader in the community when we have success and leap out there and say, ‘See what’s possible! Look at this! We can do this!’ I also have to be a leader when it doesn’t work,” Moul said.
He continued: “We’ve gotta stop sweeping things under the carpet or trying to spin them into success stories when they’re not. … If we’re going to improve as a community, we have to embrace these things and look at them head on.”
Moul’s role as a tech scene leader puts him in an interesting place to give this talk. You could argue that he’s an ideal person to talk about failure, protected because he’s in a place of power, well-regarded and well-loved by the scene, with years of success behind him. Still, that same status could also make it harder to own up to failure, if you fear shattering a certain image of yourself.
Regardless, we think it’s remarkable that a community — our community — can hold that kind of power, that it can drive someone to get up on stage and talk about the death spiral and call attention to every mistake he made. Maybe it will have that effect on other people, too.
He was moving too fast.
That’s what really did Artisan in, Moul said. Yes, he had made mistakes, but he could have recovered from them, if he had just slowed down.
He described the process of running Artisan as “driving down a dark, winding road and stepping on the gas.”
In the end, Artisan “built something that no one was ready for,” he said.
They had built a product that aimed to let companies change their mobile apps as easily as they updated their websites. But did customers really want that? Moul said if he were to do it again, he would start small, with a simple initial product, build a following for it and then add features from there. He also would have gotten more feedback from prospective customers.
Here’s some more of the advice he gave.
- Keep your burn rate low until you prove your business model and traction. Moul said he “staffed up way too quickly.”
- Don’t get caught up with being first. “[Being] first only buys you so much,” he said. “Building the right product is way more important.” But, Moul said, he was “absolutely obsessed with being first to market.”
- Don’t hire a VP of sales at your early-stage tech company. If the CEO can’t figure out how to sell it, that’s a problem, he said. “I delegated sales and I will never do that again,” he said.
- Don’t worry about what people are going to say. “You’re running the company for your shareholders,” he said. “Not the media.”
- Don’t get caught up with past successes. An audience member asked Moul, who had executed two successful exits (Boomi to Dell and SCT to SunGard), if he was a “victim of his past success.” Moul said yes, that it was too easy to say, “This is just like Boomi” and apply the same strategy to Artisan.
- Accept a modest pre-money valuation. Because that’ll set you up for the longterm instead of forcing you to hit certain revenue milestones to raise your next round.
- “Remember the dark side of [taking] other people’s money.” For one, once you take other people’s money, he said, it’s always about a return. Moul didn’t go into details but he said, “When the shit hit the fan, I saw behavior that I never saw before in my life. You will see human nature in its rawest form. People are gonna optimize for their own good. That’s a really bad place to be.”
Lastly, if you know that someone’s in the midst of failing, ask what you can do to help.
“When you’re in that death spiral, man, it’s like you’ve got leprosy,” he said. “Nobody wants to talk to you.”
He said he wished someone called him and said, “Hey Bob, how can I help?”
“I’m telling you guys, if you ever find yourselves there, call me,” he said. “I wanna help you.”
*Yes, we will admit to a role here. We emailed Moul and a handful of Artisan staffers when we first caught wind of a possible sale.-30-