“Our business failed, here is what I learned”
The very personal story why success is not a straight line, written by Bradley Doering, Business Owner homerenu
In 2017 I quit my job at Tesla to start a company with the goal of dramatically changing the renovation industry. At the time, I was 22 years old, and I can confidently say now that I knew basically nothing about the world or how it works. I had learned a few basics about business in university, and had some moderate success running a small renovation company in the GTA before tackling this project, and I thought that was enough to get started. In March 2018, my Co-Founder and I moved to Vancouver in an effort to start fresh. We had a few hundred bucks each, no backup plan, and a passionate desire to make an impact in the world.
During our first 3 months in Vancouver, we began gathering data by going house to house and knocking on stranger’s front doors. Oftentimes we were greeted with, “Who are you? Get off my porch”. Every day we would march through different neighbourhoods for a few hours in an attempt to cover about 100 doors per hour and hopefully gain some business. I strung together Google My Maps, Zapier, and a Google Sheet so that we could track every response that we got and visualize the data. In total we knocked on over 4000 doors in 3 months. (this impressed our first investors because it showed that we had some grit). The effort resulted in $175,000 in renovation revenue, a heatmap of neighbourhoods that were willing to buy from strangers at their doorstep, and hundreds of potential future customers.
Once the ball was rolling, we decided to divide our tasks so we could be more efficient. I took care of sales and management while he focused on building the true core software product. We microwaved potatoes and onions for every meal - often burning our mouths as we rushed to get back to work. At one point we started measuring the costs of things in potatoes and it became a running joke - “Dude, that Google ad campaign could have bought us 300 potatoes! It better deliver results!”
One of our friends even sent us a study about the effects of a potato-only diet, and reassured us that there were no harmful short-term effects. We didn’t have a car, so we would like to our customers' homes and chain up our bikes a few blocks away so they wouldn’t notice. Every week, we experimented with new strategies to try and push the company forward, most of them ended up being crazy stories that brought us all closer. Our team started saying, “That’s one for the podcasts” whenever we did something nuts to reinforce our efforts of doing whatever it took.
As exciting as it all was, of course there were challenges. When bootstrapping a startup, even when things are going well, everything seems to be on fire. I remember revenue soaring after our initial product launch and investors finally starting to answer my calls and emails. But, at this exact same time I was sweating through my sheets at night and popping awake at 3 in the morning because I was so stressed.
Finally, after bootstrapping for 2 years and achieving 6 figure monthly sales, we closed a modest amount of funding - under a million bucks - but it felt like we had proved it to ourselves. We had what it takes. This was the opportunity we needed to change up our business model to reduce our liability and stress, and to hire a couple of extra hands to help us scale the business.
At this time, we were profitable with an ambitious team of 5. We were truly a band of misfits with a big vision. Everyone worked like hell to move the needle, and we had a lot of fun doing it. One time most of the team actually slept over at the company office. We brought sleeping bags and air mattresses and worked until the late hours of the night.
The venture markets were frothy at the time, and with our growth trajectory we were certain we could raise more funding when we needed to, so we decided to hire a few more software engineers and begin burning a bit of cash.
Our company was growing at a similar rate to our heavily funded competitors (like 20-50x our funding), and our product velocity was 2-3x what theirs was with a team 1/20th the size. We were very proud of our outsized success, which further pushed us to accomplish more.
With the growth we were seeing, we decided to move into a bigger office space in downtown Vancouver to prepare for more employees. The space was about 5000sqft and it cost as much as a 500sqft WeWork office, so it felt like a good deal. We had enough space to set up a mini basketball court, a projector with a retro gaming system (a gift from one of our contractors), and we even had a boardroom!
What we later found out was that the boom in our customer base was more related to the macro-environment than our product launch. Don’t get me wrong, people loved the product, but during Covid-19 everyone was staying home and the renovation industry saw outsized gains.
By the end 2021, the market started to cool off and our growth began to slow - right when we were set to close our next round of funding. In addition to that, a few major IPO flops had many investors “waiting to see” what would happen.
This paired with about a dozen other mistakes or problems, caused us to run short on cash (for the sake of brevity, I’ll spare you the details). With all of the tech talent that we hired, the office space to house them all, and our regular operating costs, we were burning around a hundred thousand dollars a month. We had about $400k left.
We rallied our team with our imminent death in full view, and we managed to double our website conversions within a week through some clever hacking, marketing experiments, and a lot of late-night teamwork. This bought us a bit more time, but with growth slowing it wouldn’t last forever.
It was at this time that we made the tough decision to begin layoffs and cut back on the size of our team. Layoffs are incredibly difficult, especially at a small startup, because every member of the team has contributed to build the business from nothing. Not only is it horrible to leave someone you care about without a job, but it’s magnified because you know that they love the business just as much as you do and they are forced to say goodbye.
We did our best to support our teammates with finding new jobs, and paid as much severance as we could afford at the time. Most of our teammates understood the predicament, and we managed to part ways amicably - I still maintain friendships with some of them today.
On top of the layoffs, I also managed to sidestep our way out of our office lease which saved us $20k per month. We started hot-desking at WeWork to try and save on costs. Graciously, one of our investors put in some additional capital on a SAFE to keep us afloat while we navigated the turbulence.
Over the previous year, we had quite a few offers to purchase our company but we turned them all down because we knew we could grow it faster ourselves. At this point though, we began reaching back out and checking the temperature for new offers.
A couple of companies were interested in our team and IP and we even received a term sheet, but the deal fell through when they couldn't complete their fundraising round and their cash reserves dried up.
It turns out, we weren’t the only company facing these headwinds. Several companies, especially large ones, had to tighten their belts. Mass layoffs ensued across the entire tech ecosystem, including the big players like Google and Meta.
This is when the music stopped and we had to quickly grab a chair. We were forced to lay off a bigger portion of the incredible team that helped build our company from the ground up. So, with our team gone and our funding spent, we decided to close down the business and return whatever funds we had to the customers who trusted us with their deposits.
Nobody prepares you for what happens when you fail in business. What follows is a nightmare. After facing burnout and torment for the last 6 months or so of running the company, I took some time off to really think through everything that had happened and try to be intentional about my next role.
I'm passionate about solving the problems of the renovation industry, and after my experiences, I am better equipped to build a successful venture in this space.
Success is not a straight line, it comes with up & downs!
Bradley Doering