R, Ra and M were the 3 co-founders of a SaaS company, I met first more than a year ago. R and Ra were related to one another and M had worked at a company that R was a client at. R was the “domain expert” and knew the business problem fairly well, whereas M was more the “tech person”. While M was not a developer per se, he was most technical of the 3 co-founders.
Ra was the “business development” person whose role it was to talk to customers, get some “partnerships” signed and talk to potential investors. (Side note: I dont understand business development roles in any small company. Either you are a sales person or you are a developer. Everyone else is overhead). In other words a catch-all bucket.
Ra was asked to join by R, who felt that between M and himself, they both did not have enough of a sales background and decided to get someone they could trust to do the role.
Ra himself was previously a new business development executive at a large corporate bank. He had done well at the bank and had made his way to associate vice president in less than 5 years. He had very little knowledge about the space in particular or passion around it. He wanted to do a startup and since he was approached by R to be a co-founder, he was pretty excited about it.
For the first few months, getting potential customers to talk to, with respect to the new product they were building, was not difficult. Most people who R knew were interested and keen to talk and learn about the new product. Ra was involved in all discussions and was trying to get up-to-speed with the intricacies of the market and customer problems.
R was the most passionate of the lot and knew the most about the problems, while M leveraged 2 external outsourced resources to get the initial prototype ready. Things were going well apparently and I met them at the Microsoft accelerator during an event.
4 months later I heard that Ra had left. I did not meet Ra, but R had spoken about him highly, so I was curious why he left.
R said he could not close any new deals and did not “understand the market”.
While I pointed out that R knew about this before since Ra was not a market or domain expert, he evaded the question with “but I expected him to learn quickly”.
When I spoke with M separately he mentioned that Ra never got really passionate about it and there was little effort on Ra’s part to understand the market. While he felt that Ra setup a lot of meetings with other potential customers and investors, none of them really “closed”.
Ra, sent me a LinkedIn request a few weeks ago. In his invite he mentioned he was working in a new project and would like to come and meet me. Over email I quickly asked him why things did not work out. He said that in his perspective the market was clearly not ready for the product and he found that he could find better things for him to do with his time and he “lost interest” because he found a really awesome new idea that he was focusing on.
The final in the series why startup founders split is something I have heard from 2 teams, so I dont necessarily think I have enough data yet to confirm that this is a trend, but its important to document.
The shiny new object syndrome occurs when the company does not have enough or sufficient traction and the founders finds something new that they would rather do.
There’s a lot to learn from the story above that talks to more than why they really split, but the bottom line I gathered was Ra was not completely bought in and did not have the passion for the space, so the shiny new object got him more excited than anything with limited traction.
While I think its fair to lose passion for something you dont see too much traction, many a time I have personally seen that you need to spend a lot of time before you really get significant momentum.