Here’s What Happened At Fluent

Fluent is shutting down, or so you may have heard. It’s no surprise that a startup has failed – most do. It’s no surprise that an ambitious, bite-off-more-than-you-can-chew startup that went so far as to proclaim it was inventing “the future of email” is shutting down – that’s a hefty order for anyone to fill. And it’s no surprise that a company based in Australia (which to most VC’s may as well be the moon), couldn’t raise enough funding to continue …well, that’s no surprise, but it’s pretty sad.

What may end up being the bigger takeaway here for anyone daring to tackle one of those frighteningly ambitious startup ideas is that they should know that they’re taking on a damned near impossible task. Because if anyone can build a better Gmail, the one that’s best positioned to do so is Gmail itself.

Investors: Fluent Is “Too Ambitious”

That’s what Fluent co-founder Dhanji Prasanna tells me, at least, when I asked him if anyone could ever really take on Gmail. And Fluent’s potential investors agreed. “Many thought getting users to switch from Gmail was too ambitious,” he says. This, even though Fluent wasn’t asking people to actually switch email providers. It was just another way to interact with the service, similar to Sparrow. A new UI.

It also didn’t help that an investor pulled out at the last minute, due to a conflict of interest. “We could have taken the rest of the round and kept on, but then we’d be back at the raising table a lot sooner than we liked,” says Prasanna.

But the fact that Fluent was a new URL, as opposed to an app (like Sparrow), was a sticking point. “In both the literal and metaphorical senses, the muscle memory of `` is just too powerful to overcome,” Prasanna told me, when explaining what happened at the startup. “This is not to say you can’t build a popular email service, but what we attempted was an enormous uphill challenge.”

Co-founder Cameron Adams agrees that it’s not something you can take on, if you don’t have the funding in place. “While trying to raise funds, the feedback that we got was that it was a great product and a great team but there was some trepidation at attacking the established email space,” says Adams. “We needed proof of quite large user numbers and growth – something we couldn’t supply with our own money.”

Gmail’s Baseline Is Too High To Beat

Prasanna also feels that the company got too caught up in trying to be a better Gmail, and early user feedback only served to highlight how far Fluent would have to go to beat the baseline Gmail had established. “Gmail is a fantastic service – it is the app I used the most bar none before Fluent,” he says. “For most users it is good enough. And therein lies the problem.”

“We were building feature parity with Gmail, while we should have been building out a can’t-live-without value feature like attachments or search,” he adds,  “i.e., something people would part with money for.”

Prasanna then recounted a story of meeting the CEO of Zimbra, who told him that he would simply walk out on a client if they were using Gmail – it’s just not worth trying to beat them, he told Prasanna. “There are a hundred little reasons why I think Fluent did things better than Gmail, but for most people Gmail is good enough,” Prasanna says. “And even if someone buys those hundred little reasons, they don’t necessarily add up to a single forcing function to switch.”

Turning Down Acqui-hires & What Comes Next

In any event, he insists that the decision to shut down came long before the Sparrow acquisition by Google. And like Sparrow, they too had “acqui-hire” options presented from “the usual suspects, as well as other red-hot Valley startups.” But the founders wanted to move on to different things that appealed to each of them on a personal level. “Ultimately, the financial motive didn’t rule the day. I like to think we deserve some credit for that,” he says.

The good news is that their dream – that is, one that speaks not to building a Gmail killer, but of building a service that makes sense of your data and helps you discover new things – has not been entirely killed. It will just sit on the back burner for a while, Prasanna says. Or maybe it will be incorporated into new projects in the future, he muses. But none of the founders are working on email-related projects now. Adams is working on a design startup called Canva. Prasanna is joining a stealth mobile apps startup in San Francisco. The third co-founder Jochen Bekmann is keeping his project under wraps for now.

Can anyone kill Gmail? Maybe one day someone will, the founders still believe. But they’re going to need a large runway to do so.

Prasanna will be posting more about his thoughts later today here on his blog. He adds that he doesn’t speak for the whole team.