“There’s a lot of glorification of startups and being a founder. People brush the failures under the rug, but that’s the worst thing you can do. You kind of have to face it head on,” says moot aka Christopher Poole. So rather than raise more money for his remix artist community Canvas and game DrawQuest, later today he’ll announce they’re closing. “No soft-landing, no aqui-hire, just ‘shutting down’ shutting down.”
[Update: DrawQuest and Canvas have now published blog posts confirming this article and telling their users what’s going on. Moot has also penned his own eulogy for his startup, and will be writing more in the future in hopes of educating other entrepreneurs.
In a touching part of his post-mortem, moot opens up saying “Few in business will know the pain of what it means to fail as a venture-backed CEO. Not only do you fail your employees, your customers, and yourself, but you also fail your investors—partners who helped you bring your idea to life.”]
What’s different about this trip to the deadpool is that DrawQuest was actually doing relatively well. Launched a year ago to inspire people to take on daily bouts of creativity through drawing challenges, it reached 1.4 million downloads, 550,000 registered users, 400,000 monthly users, 25,000 daily users, and 8 million drawings.
“We’re doing better than 98% of products out there, especially in the mobile space.” says moot, but he admits that traction is “Shy of that all important million (monthly users). Where we failed basically was one: to crack our growth engine. But importantly, we were never able to crack the business side of things in time.”
Perhaps if DrawQuest was the plan all along, it could have survived long enough to grow and monetize, but it was on a short fuse. Moot originally raised a $625,000 seed round led by Lerer Ventures in May 2010 to start DrawQuest’s predecesor Canvas, a media-centric forum where people could post, remix, and discuss visual Internet art. Then he raised $3 million more in June 2011 in a Series A led by Union Square Ventures’ Fred Wilson and joined by SV Angel, Lerer Ventures, Andreessen Horowitz, Founder Collective, and Joshua Schachter.
It wasn’t until February 2013 that DrawQuest launched, and that tardy pivot left moot lagging far behind where he needed to be. “We built this app with less than half of our runway remaining. You have to do twice as much with half as much time. It’s really freaking hard.” For seed stage companies it might be easier, but proving you’re worth the valuation of a Series B upround requires incredible metrics that are tough to reach if you have audible late in the game. “People trivialize pivoting but it’s truly a hail mary, and it’s rare that people can pull this off.”
DrawQuest got some traction, but found that selling paint brushes in a drawing app is a lot harder than selling extra lives in Candy Crush. There’s just not the same emotional ‘I can’t play if I don’t pay’ urgency. “I definitely have a new appreciation for game designers,” moot tells me.
With Canvas/DrawQuest’s headcount incurring serious costs, moot searched for someone to acquire his startup. “We approached a few companies and no one was buying what we were selling. [We were] never trying to win any awards with our brushstroke algorithms, so from an IP standpoint [there wasn’t much to buy]. The nut that was interesting was the community, but it wasn’t really clear what exactly this community would do for their business.”
After running “Wild West of the Internet” image-sharing site 4chan since 2003, moot was actually looking forward to not being the head honcho for once. “I thought we were doing great work and we could continue to do great work as part of a bigger organization. I had kind of psyched myself up for that, but then…” no deal materialized.
“Ultimately we decided we wouldn’t go try to raise more money – it wasn’t really on the table because we just hadn’t created enough value” says moot. That’s a rare admission of failure in the success theater startup. Most founders trumpet their funding rounds and growth milestones but slink away when things go pear-shaped. Poole’s willingness to be humble and transparent is admirable, and could increase willingness of investors to back his future projects.
So today he’ll announce that Canvas is shutting down in the next few days, and users will get an email with a link to download all their content.
As for DrawQuest, moot says “I’m going to try to keep the servers up as long as I can. As of today all of the company’s employees are going their separate ways…but I’m hoping that between in-app purchases and whatever money is in the bank we’d be able to keep the service alive for a bit longer. We think it makes sense to pay our AWS bill until we’re completely out of money which will hopefully be a few months.” Perhaps even longer as moot dreams that maybe “some white knight comes in and says ‘I want to chip in for the server costs’.”
In DrawQuest’s goodbye post, moot writes “We hope you’ll all continue to spread the importance of daily creativity, and inspire those around you to draw more often. While DrawQuest may not be around next year, you all will be, and we hope you’ll leave the world a better, more creative place.”
And as for moot himself?:
“I’m a free agent for the first time in over 4 years because I was in college when I dropped out to start this comapny. I’m definitely not trying to start another company anytime soon. I need to decompress and refelect on what I’ve learned and take some time to myself because it’s been a bit of an emotional rollecoaster. You start to appreciate why the best investors are the best investors. In our final hour everyone was so supportive. It’s made the difference between me being an emotional wreck and me being in as good of a place emotionally as you can be when you fail.
Most companies fail, and unfortunately we are one of those companies. Those are the odds.”
Comment