Tell how a startup/product died for a stupid or unexpected reason

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Years ago a major company acquired another major company and there was a major reorgnization that resulted in a consumer software service that is now a household name, turning out a few billion in revenue. The acquiring company also has an accelerator, and I worked at a startup that went through it.

We were trying to get a piece of that pie - we had the relationships, and even had successfully gotten the product into the hands of the users who were begging for licenses to incorporate it into the new service. But we ran out of runway before a check was signed, everyone got laid off, and the product will never see the light of day.

Fundamentally the reason it failed was that we put all our eggs in one basket, and we were trying to sell shit to people who couldn't pay for it even if they wanted to.

This big business had a particular culture that could be called, "decide by committee" (I forget the actual name of the process). Essentially, no one in the business was really empowered to do anything by themselves - every decision had to be approved of by a group of stakeholders, in a meeting. If the decision is a good one everyone shares in success, if it is a bad one everyone shares in failure (although one could argue everyone takes credit for success, and no one takes blame for failure).

This is bad in theory and worse in practice.

What killed the deal was that the people we needed to sign off on the purchase were almost never in the same state, let alone the same office. And this was pre-covid when remote meetings were not considered viable at that business. It took eight months to negotiate the sale and another 6 months to schedule the meeting to sign off on them.

I was laid off about six weeks before the meeting happened, when we ran out of money. By the time it did, the other company was offering to acquire the startup for less than what they would pay for the software.

There are a lot of morals to this story that seem obvious in hindsight, but it's easy to get lost when you're burying your head trying to reach some milestone that is unachievable.

BTW I'd love to hear this as a podcast as a tonic to the "How I built this" podcast's survivor bias

In the age of fax machines, we had a DOS TSR app that essentially did background UUCP style file transfers; with a couple of UI frontends for email-ish messaging and file transfer. (Yes, "multitasking" in 15kb, it dribbled stuff out on the timer interrupt)

The stack of ideas for using the basic capability was tall; we had plans for all sorts of things; but we needed to do a heavy round of actual beta testing because DOS.

Take the notion to the CEO for signoff; he says "what? people have to leave their computers on all the time for this? no one is going to do that!" and cancels the whole project.

I heard someone actually bought the code from them later, right about the time Windows finally got an official TCP/IP stack. Whoever that was, I pity them. Nasty ASM code.

Yik Yak was fun to use in college. It was anonymous and all the campus goings-on were on there. Sports, parties, you name it -- funny quips about classes or jokes. For some reason Yik Yak decided to force handles into the app. Everyone left it.

We closed ~$7m deal. the first of many more to come. Partner decides to steal the product, try to sell it himself, thought nobody would find out. He ruined many millions in profits but lost only ~$500k in court. No justice.

Not really unexpected reason, however very unexpected outcome (at least in my eyes). CEO hires a manager, later that manager takes over the startup and fires CEO.