Why I Pulled the Plug on My Startup After Just 6 Months
Hi there, I am Andrei, a full stack developer, building SaaS products on the side of my 9-5 job. I am here to share my experience of shutting down my first business, Krumzi, after just six months of launching.
The Idea Behind Krumzi
Krumzi was a recruitment platform that aimed to replace the messy cold DMs on LinkedIn. Recruiters could go to a page and select the skills they needed, and be provided with a list of job seekers who could do the job. The platform had a lot of features, including a candidate management system for recruiters, where job seekers had custom resume templates that they could export, track their job applications, and more.
During the 6 months that it was running, the platform had ~1200 accounts and pretty big interest from job seekers, but unfortunately, it made 0 sales.
Reasons for shutting down
Loss of motivation
When I started building Krumzi, I was passionate about the idea of helping job seekers find better opportunities. But as time passed, I realized that getting people to actually pay for the app and use it regularly was a major challenge. I received a lot of positive feedback and great ideas from job seekers, but the lack of monetization and engagement was demotivating. It kept getting more and more difficult to continue pouring time and resources into the project.
Too much work for a $0 revenue business
As a solo founder, I found myself constantly juggling multiple responsibilities. Although I did quite well considering it was my first big project, it felt like every time I made progress in one area, there were ten more tasks to complete, and the progress I was making was just not enough. This ended up with me burning out and being angry at myself for not doing enough.
The complexity of building a two-sided marketplace
Building a two-sided marketplace was a major challenge, especially as a first-time founder. Recruiting platforms rely on both job seekers and recruiters to be present and engaged. Getting traction on both sides simultaneously was very challenging. Also, the competition in the space was intense, which made it even more difficult to find customers.
Lack of expertise in the niche
This was one of the biggest challenges I faced while building the app, and I believe that this is why it was doomed to fail. When I started building the platform, I built it from the perspective of a job seeker. I had a lot of ideas, and as I kept building, new ones kept coming as well. As a result, over 1200 workers signed up after the launch in just a few months, and I received really good feedback from them. But after launching, I soon realized that recruiters had different needs and expectations. I did my best to engage with them and learn more about their pain points (I asked friends working in this industry, I joined groups and asked questions, and I directly engaged with them). But the answer was pretty much the same every time: "I would never buy a product built by someone who hasn't worked in recruiting and understands our pains," which I eventually got tired of hearing.
Obviously, no sales
As with any business, the main goal is to generate revenue. Unfortunately, Krumzi didn't make any sales during the six months it was running.
My main takeaways after this experience
- Passion for an idea is important, but it's not enough to sustain a business. Without a solid revenue model, it's difficult to continue investing time and resources into a project.
- Building a two-sided marketplace is challenging, especially for a first-time founder. Overcoming the "cold start" problem and getting traction on both sides can be difficult, particularly in a competitive space.
- Lack of expertise in the industry can be a major challenge. As a founder, it's important to understand the needs and pain points of all stakeholders (in this case, both job seekers and recruiters) in order to build a product that meets their needs.
- Solo founders have to juggle multiple responsibilities, which can lead to burnout. It's important to prioritize and focus on the most impactful tasks, rather than trying to do everything at once.
- Failure is a part of the entrepreneurial journey, and it's important to learn from it. Instead of dwelling on what went wrong, focus on the lessons learned and use them in future projects.
- It's possible to find relief and excitement after shutting down a failed business, as it opens up opportunities to try new things and take on new challenges.
What's next
Even though I’m sad because it was my first failure, I also felt relieved at the same time and excited for new opportunities. It's never easy to let go of something you've worked hard on, but it's important to acknowledge when something isn't working and to move on.
I have decided to keep building products and move fast, break things, and move on if it doesn't work. I want to find the things that I enjoy building and that have a market demand. I have already taken the first step in that direction by building and launching the MVP for Notescribe in 30 days.
If you are interested in following my journey, I’m sharing every win and failure on my Twitter account @andrei_terteci.
Thanks for sharing this, Andrei. It must have been really hard.
I faced failure too back when I tried to work on a 2 sided marketplace with recruiters & software developers and it's quite ironical that I too shut down after making $0 revenue. In my case, I lost motivation within the first 3 months
But you've learned a lot. That's definitely going to help you with Notescribe. Good luck!
Thanks Goutham!
Indeed, there were a lot of learnings and I'm sure it's going to help a lot with all the future projects ^^
Thank you for sharing your journey. I completely agree with you that working as a solo founder while having a 9 to 5 job without a revenue model is very challenging. However, receiving positive feedback from your users is a significant achievement. In the start we faced a similar situation with our product, Churnfree, a customer retention tool. The good thing is that it is my passion, and I have expertise in the industry, which keeps us motivated and dedicated. I'm glad you have started your new journey, and I wish you the best of luck in your product's growth!
How long did it take for you to complete that stage? And how is your company doing now?
Thank you!
Very good article, you have a really clear vision of what worked, what failed, and what was difficult... I'm sure it will help you succeed in your next projects!
Unfortunately, I really could relate to this sentence "it felt like every time I made progress in one area, there were ten more tasks to complete" 🥲
Oh, and achieving what you've done on the side of a 9-5 job is no easy task at all 💪
Thank you, Wassim!
It's difficult to let go, but sometimes it is necessary :(
A while ago i wrote down all my past failed projects (actually about to have a twitter series on this) and every single one of your take away is the same as I had.
I'd love a link to that if it's public 👀
Do share a link to the thread when you post! There are always things to learn from these kinds of reflections
i really admire you for sharing this. I have found myself also feeling so de-motivated lately and deflated. It's so difficult to know if it's just a burnout phase or if it's time to pull the plug...
Thank you!
When something like this happens, I think that the best thing to do is take a break. After that, once you come back with a clear vision, you can tell if you really lost motivation or if it was just a phase.
Thanks for this sharing. I am in the journey of building a recruitment platform as well... And I don't have that experience in recruitment too. Now I can feel the pain...Haha... God bless me.
Good luck! It might work out for you ^^
Thanks for sharing! Good luck in your next project!
Thank you!
Thanks for sharing your story and takeaways Andrei! Yeah, building a two-sided marketplace is soooooo challenging, you need to make sure two parties need your product, that's 2x difficult.
Thanks for the share Andrei! It was interesting reading up on your takeaways from your experience.
I am very interested in hearing stories like these. Sometimes it is really easy to get caught up in the "I went from 0 to 55k MRR with my weekend project in 2 weeks" frenzy. Then I start feeling like I have to make it with whatever I finally get around to building. This is a leveling story for me. Brings balance to the force, if you will.
I like that this community welcomes sharing of both success and failure. Both are good teachers.
I wish you all the best in your next experiment. This time around, I hope tou have many small wins!
Thanks for the thoughts, Rudy 😊
Running a two-sided marketplace myself, I know exactly what you mean, it's a big chicken-egg situation and the key to solving it in my opinion is to know the market well enough, which means also in terms of knowing enough people who will join as paying customers.
Good luck!
You are right, it's a complicated business and not worth trying if you don't have a very well-structured plan in my opinion
Do you think it was mainly a technical problem or a business/idea problem that was the biggest cause of failure?
Business/idea. Coding is the easy part, unfortunately. Another hard-won lesson.
Your site Notescribe signup form is sort of long which isn't good. I usually just sign in with Google so for me it wasn't bad, but still.
Thanks for that. I'll think of some ways to make it smaller or add some more social providers :)
Thanks for sharing this. I know it could be difficult do it.
I am starting my first project and this is useful for me, thank you.
About your new product, It's good, I like the idea. I will see it and try it in my project.
Good luck!
Thanks! Glad I could help 😊
What didnt worked as planned?
When you start, you make at least a summary plan on how you want to find users, and how you want to make money from the app/webiste.
For example, if you build a travel destination website, you find visitors by creating content and promoting it, and make money by promoting hotel affiliate offers.
To learn from this experience, you need to find out what didnt worked. Were you unable to find visitors? Or were you unable to make money?
It's a bit more complicated than that. On the job seeker side, it was going great. People were interested and willing to try it, so at least 50% of the plan was going great.
On the other hand though, recruiters were reticent and not willing to try it out, not even on a free plan. They probably thought that it was a waste of time.
I don't think that reaching them was the problem, but rather the fact the people were not willing to try and therefore pay for an app that they haven't heard about and considered they had better options.
In somewhat of the same situation right now. Pretty helpful reading about your experience and how things were planned out.
Glad I could help!
I worked on a job portal before and it was very, very hard to make money (and the churn was crazy!). You need a dedicated AE who follows up with leads constantly.
Some learnings:
Exactly what I am thinking. I am building a job portal as well. So it makes big difference to operate as a media publishing company or a job matching platform. What I am thinking is, to survive the first phase, I can only be the media publishing company, and drive the traffic.
what I am struggling is how to get the first batch of job inventories to at least make the new portal like a real one.
To make money from display ads, you need serious traffic. Like 50,000 views to make $2,000 or so. Even worse, the competition is often very, very high (unless you really niche down).
You can scrape other job portals and put their job on yours and you can also try to extract the emails/phone number from other portals and tell them that you are free portal. Recruiters will love you.
If you want my honest opinion - don't do a job portal. There are extremely strong competitors (who have done branding and link building for 10-15 years) and it's a race to the bottom industry.
Thank you for the opinions. I will carefully think about it. Scraping is ok. I am just thinking about the fair use of info on other job boards or whether there is legal/copyright issue to just put scrapped data from other sites on mine.
It is indeed really difficult. The ads model could have worked since there was some traffic, but that wasn't my goal. My goal was to help people find better jobs and not spamming them with ads.
Thanks for sharing!
Agree. Not the highest calling of mankind to make jobseekers click on display ads.
Some other model which has generated some traction is booking individual shifts (in the blue collar sector) (i.e. work as a cashier tomorrow) and then you can take a cut of the daily salary. Jobseekers like the flexibility and employers can pay less because it's not a long term contract.
Having said that, if someone doesn't show up to their shift or if the boss is mean, there is only one person to blame: you. Also this is not what you set out to build.
Good luck on your next endeavour. Working at a marketplace has really improved my tech/marketing/seo skills.
It's been six months to my SaaS flairpost.com too. Active userbase is close to zero and obviously, it's making $0 MRR.
I am not planning for any upgrades to this saas now and move on.
Sometimes that's the better choice, even though it's a hard one
Thanks for sharing! I worked on a very similar product a few years ago (during COVID), and although I did manage to generate revenue ($19/month subscription from jobseekers), I faced similar issues onboarding recruiters.
I also ended up shutting it down.
It's a really tough industry 😅
I appreciate you sharing your story. I know it can be difficult to talk about failure, but it's important to remember that it's not the end of the world. You can always start something new.
Attend industry events, join online forums, and connect with professionals to learn about the industry and meet potential clients and partners.
I went through your website. Notescribe looks like a promising product. Well designed website, features of the product are clearly explained, pricing is reasonable. The website could be improved further, and it makes sense to put more information about the company and its team.
Couldn't agree more on takeaway number 2 & 4. At times it becomes challenging to manage even after prioritizing , I use RICE scoring for this purpose & it helps.
Letting go is tricky, you can't do it too early and it hurts more if you do it too late. I guess you develop conviction after 2-3 iterations.
All the best for your next venture.
Thank you!
Hey Andrei,
thanks for sharing this, it shows that you really reflected on this and analyzed what happened. I can totally relate because I've been there several times (started something, then shut it down with 0 sales).
That's what made me think about the "marketing first" approach. For my current startup, 2Quiet2Market.com, I found the people first who are interested and invited them to a waitlist (email list). Then I built the thing and was able to make a few sales. Now I am tweaking the business model to make it really sustainable.
Maybe, 2Quiet2Market can help you market your Notescribe product successfully. Try the free plan to see if it's your cup of tea.
Good luck with Notescribe!
Matthias
Thanks, Matthias, I'll have a look!
Hi @andreiterteci, it sounds like you've had quite the experience working on Krumzi and not being as successful as you had hoped. I can certainly relate to this. Always good to remember that a lot of successful founders have encountered multiple failures before realizing success. By this logic, it sounds like you're on the right track.
I checked out Notescribe. It's a cool product but looks like you're building in a similar space with existing incumbents (Trello, Assana, e.t.c.). What are you doing to Niche down and specifically target Indie Hackers? How do you plan to differentiate? Have you found a problem that Indie Hackers have with work management that is not solved by other products in the space?
That's true, the competition is very high indeed.
For me, as an indie hacker, the biggest issues that I had when I was using those tools were splitting my time between coding and marketing and losing a lot of time on planning the next weeks. And also the overall mess, especially if you are working on multiple projects and end up having a lot of boards. So I just built an app that solves that for me. It's an app that I will be using for all my future projects, so I wouldn't be sad at all if it fails because I at least know that it helps me better organize my time and work more efficiently.
Sometimes, the whole "never give up" thing can be risky. This is great and shows how sometimes it's totally cool to say, "Screw it!" and move on to something else. Good for you for giving up on this project, but not on your dream. Best on luck on whatever comes next on your indie-journey!
Thanks! I totally agree, but I think the "never give up" refers to your dreams. It's completely fine to give up on a project that is not working, move on and try different things in my opinion.
Why did you want money from job seekers? It's ALWAYS the companies that should pay for finding talent. They are the ones in need. I doubt any job seeker (especially in TECH) would pay for a platform when they are the hot commodity.
The companies is also where the money is at. That's why recruiters exist! They get up to 10% of the yearly salary as a signing bonus from the companies.
I didn't 😅
I'm sorry if I didn't make that clear. The job seekers had all the features for FREE, which is why a lot of them signed up. As for the recruiters, there was also a free plan there with limited functionalities and also a paid plan. At that point, I was just trying to get people to use the app and see things moving, but it was much more difficult than I thought.
I would never have thought that bringing recruiters in would be so difficult, after having already so many candidates.
Neither did I, but recruiting people are pretty reticent when it comes to using new tools. Couldn't convince them to use the app, not even on a free plan
I think you were a lot closer to the win than you give yourself credit for.
If you have a pool of qualified candidates, you are sitting on a goldmine.
You could have tried a use-it-or-lose-it pricing for recruiters by telling them to pay you first and if they don't use the services at all, they stand to lose their money. If they use it and don't find even one worthwhile candidate, you'll refund them inverse pro-rated on how long/how much they tried.
E.g., if they reached out to > 10 candidates or searched for candidates > 12 times in a month, you'll refund them entirely. If they reached out to 5 or searched 6 times, you'd refund them 50%. (Made up numbers for illustration)
That could have worked, but it was a challenge to even get them to check out the app, let alone signup.
Thanks for the positive thoughts though, I appreciate it!
It's another lesson learned which will help you in your future endeavours!
It sounds like you made the right call and have learned some valuable lessons, actually you've done really well to recognise the blockers/failings so quickly - so many people I see online who lose 1.5-2 years before making that call. Now you can move onto new challenges :)
Yes, I guess I'm lucky in that sense, not having to spend 2 years before realizing that it's doomed to fail. Thanks!
Hey, I'm also working on a marketplace and I know what you're talking about...
I'm curious. if you had traction even without a sale, have you thought about trying to sell the business on https://acquire.com/ or a similar site?
Good luck on the new adventure!
I guess there was some traction from the job seeker's side. I don't have the data anymore, but after 6 months there were a bit over 1200 accounts created. But still, recruiting staff was a different story. They wouldn't try it out, not even on a free plan.
I thought about selling it but decided not to in the end because, as far as I know, it's pretty tough selling a startup pre-revenue and it feels like it wouldn't be worth the trouble.
Thanks for the positive thoughts 😊
Good perspective here, let's connect!
"As a founder, it's important to understand the needs and pain points of all stakeholders (in this case, both job seekers and recruiters) in order to build a product that meets their needs."
that's rellay important, as you say above, i think the problem is resolve ' job recruiters's pain points', that's rellay diffcult. Many company has skill Evaluate model, but it still can not evaluate a developer well.
So, that's not your personal problem, that's a big problem.
Keep going, Bro!
Thanks!
It was indeed a huge challenge that I ultimately couldn't solve and felt pretty bad seeing all my efforts go to waste, but in the end, I guess we just have to accept reality as it is and move on.
You are right. There is no waste, it will feeback you sometime.
Hi @andreiterteci
To build something like this, product wise only takes a few days - use a WordPress theme.
The recruitment market is so fragmented with millions of propositions. So it comes down to your ability to gain traction.
You have done well compared to us (https://skilledup.life) for gaining 1200 users within 6 months. It took us 364 days to gain 1000 signups.
https://www.notescribe.co/ nice. Why not tap into https://skilledup.life to build your team? If you are pre-revenue, for £30 months subscription, you can assemble a team of 100 if you can manage it.
All the best with your second product.
Manoj
[email protected]
Hi Andrei!
just saw your post on your project. I'm interested in a conversation with you on what you've done, how it works, goals, etc.
what you have might fit into what I'm hoping to need in a bit of time.
Ping me with your email if you're up for a conversation.
thanks!
You can send me a DM on my Twitter account @andrei_terteci and I'd be happy to answer any questions that you might have to the best of my knowledge
Hi Andrei,
Thanks for getting to me. Unfortunately, I don't do twitter/fb/etc.. Social Media for the most part, I find to be a time sync!
I'm working project targeting US colleges. - cheap textbooks, tying local businesses into the process as advertisers. If this starts to work, a part of our roadmap is the ability to have a recruitment process. While we're no where close to this point, might be useful to have some conversations with you.
If you're interested, hit me up.
[email protected]
thanks!
ps. is there a running copy of the site somewhere that we can tae a look at to get a feel for what it has?
thanks
-bruce
There isn't unfortunately. It's been shut down.
Shutdown ehh! Arrgghh... (always ability to throw it to github and let others inspect f you wish!).
If you're interested in a possible further more in depth conversation, feel free to reach out to me. It might prove valuable.
thanks
Commercial viability:
A startup's market viability is one of its most important aspects. Subsequent to sending off my endeavor, I understood that the economic situations were not quite so positive as I at first expected. Despite conducting extensive research and validating my business idea, growth was slowed by unanticipated obstacles. It was hard to stand out and gain an advantage in the market because of the abundance of similar products. It became increasingly challenging to achieve the anticipated growth and profitability due to the low demand and fierce competition.
Financial Limitations:
Working a startup requires significant monetary assets to cover different costs, like item improvement, promoting, and functional expenses. Sadly, my startup ran into financial difficulties earlier than anticipated. Our initial financial projections were not materializing, despite our efforts to obtain funding and attract investors. It was unsustainable for the business to continue without a significant infusion of capital because of this lack of financial stability, which posed a significant threat to its long-term viability.
Dynamic Teamwork:
Any startup's success is heavily dependent on the team's collective efforts and synergy. Unfortunately, team dynamics issues hindered our progress at my startup. Our ability to work together effectively was hindered by disagreements, despite the initial enthusiasm and alignment. A toxic work environment that hindered productivity and morale was created by miscommunication, differences in work styles, and a lack of shared vision. Perceiving the adverse consequence on the general execution and the potential for long haul harm, I went with the difficult choice to break up the group and reevaluate the fate of the endeavor.
Individual well-being:
It is easy to become consumed by the demands and pressures of running a startup as an entrepreneur. However, personal well-being and mental health must always come first. I noticed over the course of six months that my overall happiness and quality of life were being negatively impacted by my constant pursuit of success. My personal relationships as well as my professional performance were affected by the long hours I worked, the constant stress, and the emotional strain. I decided to put my mental and physical health first by terminating the startup because I was aware that continuing on this path would be detrimental to my health.
There can be different justifications for why somebody could choose to reassess their startup after only a half year. A few possible reasons include:
Absence of market interest: One chance is that you found there was inadequate interest for your item or administration. You may have discovered, despite your initial market research, that the intended audience was unable to pay for or adopt your product on a sufficient scale to support the business.
Limitations on finances: Running a startup can be expensive, and if you had major financial problems in the first six months, it might have influenced your decision. You may have concluded that it was impractical to continue due to insufficient funding, cash flow issues, or difficulty securing additional investments.
Concurrent landscape: The presence of solid contenders or market immersion could have made it hard for your startup to acquire a traction or separate itself. In the event that you found it progressively testing to hang out on the lookout and gain an upper hand, it might have impacted your decision to close down.
Problems with co-founders or team: A startup's success can be significantly impacted by internal conflicts, disagreements among co-founders, or difficulties in assembling a cohesive team. You might have concluded that putting the project on hold was preferable if you encountered persistent issues in this area.
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Ok, now there are ChatGpt bots in the DMs lol
I was wondering when this would start happening 😅