VyB is no more: Lessons from building (and shutting down) a startup in college - Technical.ly Philly

Growth

Aug. 3, 2020 7:45 am

VyB is no more: Lessons from building (and shutting down) a startup in college

Drexel University student Adit Gupta on what went wrong — and "incredibly right" — along the journey of the location-based biz ratings startup he cofounded and ultimately closed this spring.
VyB cofounders (L to R) Adit Gupta, Nico Cohen and Mason Cohen with Chief Creative Officer Tom Falzani.

VyB cofounders (L to R) Adit Gupta, Nico Cohen and Mason Cohen with Chief Creative Officer Tom Falzani.

(Photo courtesy of VyB)

This is a guest post by VyB cofounder Adit Gupta. A version of this essay previously appeared on Medium.
Three years. More than 1,000 days. Over 26,000 hours spent obsessing over revolutionizing the ratings and reviews industry.

This essay captures my perspective on what it’s like to build a company from the ground up while in college — and it’s also a self-analysis of sorts to help others who might be in similar shoes throughout the journeys they are pursuing. This essay also captures things that went wrong, as well as things that went incredibly right. Startups are a roller coaster, with the highest of highs, and the lowest of lows.

The last thing this piece should do is deter you from causing positive change in the world — we as entrepreneurs obsess over solving problems that we face or we see others face. Startups should not be made for social status, but more-so for changing the status quo. The only person holding you back from pursuing your dreams is you.

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In 2017, I cofounded VyB Technologies LLC, the company that would be the “next big thing.” The problem we were trying to solve was that of false information on the internet. It started with malicious people’s identities, and then later pivoted to ratings and reviews of establishments.

I met my cofounders through a mutual connection, at a Bob Evans in Mount Laurel, New Jersey. All three of us were young, ambitious and (felt) unstoppable — so we set out to make a company together. While we had not worked together before, we wanted to make it work out for the sake of building a revolutionary product. Going into the junior year of my undergraduate education at Drexel University, we started to pursue this idea, and later discovered there was a viable market that our product could fit into.

When we had first come up with the idea of VyB, as a location-based social media platform, we spent almost one and a half years building and refining our product. We spent almost no money building the product, but in retrospect, our time was our money — and we spent way too much of it launching a commercial-grade product on the iOS and Android store, with a budget of $100.

Ultimately, even though we had built significant “clout” we still had not attained significant customer adoption. Many factors including team, COVID-19 and lack of product-market fit caused the derailment of our efforts — however, this journey has been spectacular. In this process, we had accumulated many accolades and grants as well as a significant amount of prize capital to continue pursuing our startup idea. We had showcased at CES, received a six-figure term sheet from a Philadelphia-based investor, and even built a kick-ass team of 15 amazing people.

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Doing it over, here’s what I’d do again and what I’d avoid:

Team

Your team will make or break you. Choose cofounders, early hires and even interns wisely. Pick the people who you’d have no problem giving a six-figure salary (hypothetically speaking). Pick the people who you can learn from. Pick the people who make you happy.

Many people ask the question of whether they want to work with people who are experts but hard to work with or novice but eager to learn and crush it. In reality, these are extremes and you will rarely find these reality types. While every situation is going to be different, I’d recommend working with a rockstar who truly bring tangible value to the table (a hard skill: coding, designer, super salesman, etc.) AND with the internal desire to learn and grow over time. While this applies heavily to cofounders, it also applies to every single team member you bring on. Your first hires will shape the trajectory of your startup/project — so take your time and don’t rush here.

Some of my favorite resources to help with conversations related to building teams:

Another aspect of team building I discovered was that you need to spend the time to coach and grow each team member. The culture you set interacting with your team members will directly impact both long-term vision execution as well as short-term customer interaction. Something that helped us was to define the values, culture and vision in the early stages of our company.

Market

Understand the market before diving in. Understand market trends, incumbents in the industry, if the market is growing or retracting, and if the capabilities you are developing already exist. Think about the customers, what products they currently use, and what will make them stop using an alternative product to use yours. This is particularly the most important part of your company’s ideation process. As you think about your solution to the problem you want to solve, you need to see how saturated the market is that you plan on entering.

When we started VyB, we did not do a deep study of the market we were entering. Reviews and rating marketing is incredibly saturated. You have Yelp, Foursquare, Google Reviews, Trip Advisor and so many more. What we did indeed do well was to highlight our value proposition and the key difference in our service (honest and real-time reviews). We started with a problem that we faced, not considering the adversities present in creating a direct to consumer product in the reputation management space.

The VyB app as of October 2019. (Courtesy image)

When starting a business, it’s important to study the companies that tried to solve the problem before you, learn about the companies that failed and succeeded before you. To take it a step further, it might help to gather relevant information from sources like Pitchbook and Crunchbase regarding fundraising rounds, relevant investors in the space, and other vital information you can learn.

Idea

Ideas are a dime a dozen. Execution is everything. Don’t be afraid to share your idea with anyone and everyone you meet. Nothing is more annoying than people making you sign an NDA to tell you a startup idea. It takes multiple years of 50 to 100 hour workweeks to execute your idea and get traction — so be confident that you can outwork whomever you tell your idea to (in most cases, people just want to help!).

When starting VyB, we also fell in the trap of thinking about cool ideas that would end up helping the world. While this is easy to do, take the harder route of reflecting about problems you face or see others facing. Taking the problem as your guiding compass will often lead you towards various solutions that could solve that problem. The next step now is to fail fast with several solutions until you pivot into what solves the problem in the best way. This particular solution is what your customers should be willing to pay for, or abandon a competitor and use your solution for.

This is a good transition into the MVP (minimal viable product) for your idea. This is essentially the easiest thing you could make to test whether your solution is something people would even think about using. For most startups (except hard science, space tech, healthcare and such), building an MVP will be relatively easy. The analogy that I often like to give is that your MVP is an ugly and dented looking soccer ball, that you want people to kick multiple times until it becomes something close enough to a sphere.

Here are some of the best MVP-related books and resources I found that helped me in my journey:

Fundraising

Fundraising is a full-time job. The fact of the matter is that you need to have a solid reason to fundraise. I realized that most startups that fundraise in college do it too soon, without proving they have a viable business. We made the same mistake at VyB. To fundraise effectively, one must spend the majority of their time on this process. Here’s a guide I wrote describing the differences between different fundraising methods.

Something we did quite well was to apply to every single competition and speaking opportunity available. This was perhaps the best way to get exposure, great advice from leaders and an expedited pipeline for fundraising opportunities.

If we had to do it all over again, I’d make sure to not underestimate the time commitment of fundraising. I’d also make sure to plan meticulously before starting to fundraise. The further you are in terms of product-market fit, the easier fundraising will be.

I’ve realized that building a business just to fundraise should not be the goal. The goal should be to build a business with strong unit economics, such that you can achieve profitability from the get-go.

If you are in college, fundraising might be slightly more difficult, as investors will question your commitment. However, some of the benefits may also be an added selection list of VCs and funds that are specifically for college founders. Here is a fantastic resource that outlines the university startup fundraising ecosystem.

Technology

The MVP should take the least amount of work needed to create a solution that proves to be effective. Your MVP does not need to be scalable, nor should you overthink problems you might come into years down the road. Your MVP will only serve one purpose, which is to validate your core hypothesis.

In terms of VyB, we architected a very advanced software piece with too many bells and whistles, without truly diving into the one important feature that we needed. We spent almost a year, writing hundreds of thousands of lines of code — whereas our MVP should have been something we should have hacked together in just a few weeks. Here is a great example of how the founders of Zappos and AirBnb validated their “big bet.” Lesson: Keep the MVP simple — and if you can get away with not writing any code at all, do it!

Advisors

Be thankful for great advisors. It’s important to have mentors that inspire you, push you toward thinking about things critically. However, don’t be stuck in “analysis paralysis.” Each advisor will tell you a different thing. Your role as the founder will be to analyze these data-points and make the best judgment call as per your intuition.

I would advise all founders to have diversity in their advisory board. I have found people who are just three to five years more advanced in their business to be the most effective advisors/mentors to have. This is because they might have just gone through the challenges you are going to go through. Reach out to subject matter experts when you truly are stuck with a specific issue. Be mindful of the advisors’ time and be appreciative of their help. Here is a fantastic article a good friend shared with me back when I was having analysis paralysis.

Finances

Be lean — don’t waste money on stuff you don’t need. Don’t buy a thousand t-shirts before validating whether people will even consider downloading your product. Your goal should be to validate your hypothesis with the least amount of cash spent.

This should not be hard — especially if you are building some sort of software. Today, we can build authentication, whip up cloud computing and process payments with the click of a few buttons. Such services have made it so easy to hack together a product that you should not waste time or money elsewhere. Building a world-class product will triumph over short-term branding. People might forget a brand, but they will not forget the overwhelming emotion that comes from using a truly great product.

Another mistake made in our journey was to pay too much too fast for services that increased our monthly burn rate — such as Hubspot premium, Github premium, etc. If you can get things for free (even if you have to email customer support), make it a habit to save every cent. This is something I learned from how Amazon founder Jeff Bezos operates. He is incredibly frugal, and as founders, we must all do the same.

In terms of finances, it will help to have a monthly tracking set up Excel sheets or something similar. You should keep into account every single cent going in and coming out of your pocket. There’s a saying: “What is not tracked is not managed” — so making it a point to track your expenses will be beneficial.

Lastly, another way to think about expense prioritization is to question, “Does this charge improve customer experience with our product?” If the answer is no, you must reconsider the charge.

Mental and physical health

Please take care of yourself. If you don’t exist then your dreams, ideas and vision won’t come to life.

Make exercise a habit, and rely on self-awareness to know when to get a mental wellness check when you need it. Over the past years, I experienced the benefits of a healthy lifestyle. An entrepreneurial venture is taxing, and creating a mental and physical health routine will keep you running for the long term. It might be helpful to get a workout buddy that can keep you accountable — this can be quite helpful when you are not motivated to go workout alone. In terms of mental health, each university often has mental health care that is included in the tuition — so take advantage of this!

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If you are considering starting a company while in college, there might be a lot of factors at play. Understand that you’ll need to make sacrifices in this journey. This will affect your relationships, grades, internships and more. But do not be afraid, as this will not define the rest of your life if things do not work out.

Working at a startup in college will expand your knowledge horizon exponentially, and this was the selling point for me. Starting and growing VyB was sort of like a mini-MBA. I learned topics related to finance, negotiation, marketing, technology, legal and so much more. Wanting to be an effective founder will teach you many life lessons and concepts that are beyond your years. The journey to building value from something is truly special and I recommend most university students to spend their time in college trying to solve a problem they are excited about. Being in college perhaps might be the best time to start a venture — given you may have the least life responsibility, you can stay financially lean, and you will create a network of other founders/mentors that will provide lifelong value.

Building a company and entrepreneurialism is a gamble — however, you’re betting on yourself. If you do not bet on your success, why would others? While building businesses is not everyone’s cup of tea, from my first “real” startup, perhaps the biggest lesson I learned is to know when you should bet on yourself and your success.

Companies: Drexel University
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