Startup Postmortem: Changenuity
We haven’t formally announced it until now: Changenuity has officially shut down since mid-2018, after two years in the running.
We’d like to extend a huge thank you to all of our users, partners, mentors, and team mates for believing in our product, and us. We loved building our product for you, and we are incredibly grateful to have had you in our journey.
What happened?
We failed. As cofounders, we were exhausted and conflicted. We disagreed on where we wanted to take our product, and how we wanted to do certain things.
It’s taken us almost a year to fully reflect on our experiences. It’s tough to work on something for two years, only to fail at the end.
We wanted to write this blog post to explain what went wrong, and what we could have done better. It’s the final nail in the coffin for our startup. For our fellow founders and changemakers, we hope this post can help them avoid our mistakes, and repeat our wins.
What Changenuity was meant to be
Our vision was to help people find jobs where they could make a meaningful impact on the world.
It came from our personal pain point: “How do we find good jobs in sustainability and social impact?” — because there was nothing out there for university freshmen like us, nor for most people in general.
We wanted to build a platform that could allow people to change the world in some way: work on international development projects; build clean tech; work in corporate social responsibility; launch the next social enterprise.
We got somewhere. We had a functional beta platform, 100+ signups, and what seemed like a solution to the right problem. Our alpha platform had 35 organizations on it, and we helped a few users find groups and projects to join. A bit of grant money meant that we didn’t need to worry too much about our costs for the near-term, and getting accepted to MIT’s startup bootcamp was nice validation.
Of course, in retrospect, our metrics were laughable compared to what successful startups have achieved. Yet, for a team of amateur, part-time student founders, we got further than we could have imagined.
8 Lessons We Learned
Here are only the most important lessons we learned. We learned much more than can be recounted in a few hundred words.
1. If you’re going to start something, make the time
Building a great startup requires a massive time commitment.
As co-founders studying engineering, we easily had 100–120 hours of coursework a week. It left little time for anything else. The weeks we worked 30–40 hours on our startup, we were exhausted. The weeks we worked 10–20 hours, we made too little progress.
We told ourselves that if our startup had traction, we would drop out of school. But traction is hard to come by if you don’t have the time to build it. By the 2-year mark, we had exhausted our capacity to keep grinding onwards.
Looking back, our number one priority should have been our startup, and we failed to take the leap of faith required to make it so. We should have deprioritized anything that was not our startup, whether that meant taking fewer courses, or spending less time looking for jobs.
2. Cofounder fit extends beyond a shared vision
Like many new founders, we thought that a good cofounder was simply someone who shared your vision, worked hard, and also had the guts to start something.
As we found out the hard way, that’s not true. In addition to all of the above, the founding team should:
- Be able to work well with each other — that means having similar work ethics and compatible personalities
- Have complementary skill sets, rather than similar
- Be willing to be coached by their peers, and change themselves to better serve the vision and team
- Be willing to forgo other opportunities in favor of the startup
- Ideally, have some sort of “special sauce” — perhaps one cofounder is a genius salesperson, and the other is a genius engineer
If you feel like you don’t fit well with your cofounder, change something or stop working with them. A cofounder mismatch can cause many problems later on that you won’t experience now.
3. Make sure every team member has a cofounder’s mindset
At Changenuity, our team had two cofounders and three web developers.
Really, it should have been five cofounders instead.
An early stage startup can’t motivate its team members with money or equity alone — because money is scarce, and equity is worthless for an early stage startup.
The startup needs to motivate its members by having them participate in its vision beyond simply helping build it. Everyone needs to believe that the startup is part of them in some non-trivial way. Only then can they passionately devote themselves to it.
In other words, you need to make sure everyone on your team feels like they’re a cofounder.
While we as cofounders were intensely passionate about the problem we were solving, it wasn’t so true for the other members of our team — a consequence of the way we structured our team.
4. Be candid
It’s tough to tell people outright that their work isn’t good enough, or that their work ethic needs improvement. When you and your team are all partners (or equals), you may feel that you don’t have the right to criticize.
At Changenuity, we often beat around the bush trying to explain things to each other as diplomatically as we could. But it’s simply ineffective when you need to get things done.
Euphemize when possible, but don’t BS. You need to be OK with offending someone with the truth.
5. Focus on the right customer segments
We were building a two-sided marketplace: we connected mission-driven freelancers with mission-driven companies. We received great interest from freelancers, but the reception from companies was lukewarm.
Because we wanted companies to post contracts for freelancers who had signed up on our platform, we focused on talking to companies and pursuing leads there.
Although this was logical, it also meant that we kept trying to convince people (companies) who weren’t as interested in our idea in the first place.
Rather than try and grow two sides of the marketplace at once, we should have focused on growing only one side first, in order to attract the other. We should have focused on engaging the freelancers first, in order to build a big enough network of freelancers that companies would be interested in hiring from.
6. Stop perfecting, start launching
We would build a release version of our platform every 2–3 months. We would clap ourselves on the backs for finishing, but then point out all the imperfections and tell ourselves that we should just have a “soft launch” and rebuild.
We ended up building many iterations of our platform, none of which we heavily pushed for users to use. Although our platform did improve in form and function, it went to waste — there weren’t people actively using it.
7. Make sure your platform has single-user utility
Although we signed up 100+ beta users, we didn’t have any companies put out contracts for freelancers. Without job postings, months went by without anything to engage our freelancers who already signed up.
When building a marketplace, try to include features that users can use on their own, without interacting with other users. This is single-user utility. For example, Instagram allows users to edit their photos, regardless of whether they actively participate in the social network.
8. Even if you delegate tasks you aren’t good at, you still need to be knowledgeable about them
We were hardware engineers trying to lead a team of software engineers to build a website. We did not know web development.
Our limited time meant that, even though we taught ourselves a bit of web dev, we didn’t know enough to properly manage our product. We didn’t know what was easy to implement, and what wasn’t. We always had to wait for our team to fix bugs, rather than fix them ourselves.
You can’t manage a product if you don’t know how it’s made.
What now?
Our team is still committed to our vision of advancing sustainable development in the world. Changenuity was our first adventure towards our common dream, and though it was a failure, we learned a great deal.
Successful or not, every startup has their analog of the Paypal mafia, and we’re no exception. Our team has gone on to Silicon Valley’s tech giants and the latest hot startups, top accelerators like Alchemist, and struck collaborations on new products with Google X.
No matter where we go in the future, Changenuity will have been an important stepping stone in our journeys.