Startup Life: Should You Join a Startup Accelerator? (The Tragedy of NoBadGift.com)
I remember a year and a half ago when I first started to delve into the world of Tech Startups. It seemed like a magical place full of digital fairy dust and server rooms crammed with cotton candy. Money apparently was like mana from heaven, high quality mentors appeared to be willing to help naive 20 something founders find a way to the promised land of success. I was genuinely sad about the fact that I run profit focused tech businesses and have no interest in investment from Angels or VC’s. It seemed that these bright eyed tech startup founders who were taken under the wing of the mythical people of those who had successfully exited their own startups were truly blessed.
It’s funny how over a year and half your opinions can change. It’s bemusing to see yourself go from the edge of jealousy to the firm footing of contempt.
One of the startups I ran across that I was truly impressed with was called NoBadGift.com. It was a gem of an idea. It was not just a viable concept, but a reasonable business. The founders were smart, friendly, and had the technical talent to do the work that needed to be done. It was everything a startup should be…
The idea of NoBadGift.com was that it allowed you to no longer get “bad gifts”. We all hate bad gifts. I hate bad gifts. My wife hates bad gifts. Everyone I know complains about what to do with bad gifts given to them by well meaning loved ones. “How long till I can give this piece of crap to Goodwill?”, “Are they going to actually expect to see this… thing… on the wall when they visit?”. The first attempt to kill bad gifts by the market place was Gift Certificates and Cards. Sadly this was not the best of solutions… Many times they get lost, or… the recipient doesn’t want to shop/ eat at the place the card is from. At the end of the day it’s still a “bad gift”, and the attempt to make someone happy only ends up creating more conflict. And so this is where NoBadGift.com comes to the rescue… (Or should I say DID come to the rescue…)
NoBadGift.com was a web app that allowed you to create lists of gifts you would like, and then let your friends and family crowd fund them. So you created an account. Then you created a wish list. Then on the wish list you could manually type in different items you would like, and the price of them. So I could type in “iPad Mini” “ and put the price at “$329”. Then my loved ones could log in and using a credit cad add funds to individual items. So grandma could add $50 for a set of new tires, and my buddy could chip in $20 for a bottle of Johnny Walker Blue. At the end of the day the money actually just went into your PayPal account so you could decide how best to spend the money. So if your buddies chipped in $200 for an iPad, but really… you did need some new tires… you could just pull out the funds from PayPal and actually spend the money as you please. (It was at your own risk to not buy what your dear old grandma gave you money to buy). This was a great concept because it makes givers feel as if they are giving something more intimate then cash, but for the recipient it was great because in fact they were getting cash so that they could make sure that they could spend it on what they really need.
The genius of this system was that it was a slight of hand that makes everyone happy. Personally I don’t like gifts. The greatest part of being a technical professional is that I make enough money to buy whatever I want. If I can’t afford it then sadly neither can grandma. Unfortunately I then have people every birthday and Christmas buying me all kinds of odd stuff just so they can feel like they gave me something to make me happy. Because of this I was really looking forward to using NoBadGift.com. There are only 2 things I really want for the holidays. One, buying goats to send off to Africa. Currently I ask people to donate to the Heffer Foundation, but my hope was that using NoBadGift.com I could simply create a wish list with “Goats for Africa” and put a $1000 value by it. Then after Christmas I could just send off a check for however much I received. The only present I really would like frankly is a big ass Koi. I have a very large pond at my house that I have stocked with gold fish and 24” Koi and really the only thing I long for that I’m too timid to buy myself is a good 36”+ fish. Even as a successful geek I still feel sheepish about spending $600+ on a fish, BUT… if my friends/ family/ and fans wanted to chip in for it… who am I to say, “No”?
So when I met the guys of NoBadGift.com almost a year ago I saw the vision of their project and immediately became a fan. They “got” my problem, and they had created a beautiful solution. It was functional, and simple. The very name said it all. It was a pitch, a story, an emotion, and a solution that was all contained within a domain name. To simply utter, “NoBadGift.com” was to tell a story of our times. All they asked for was a 5% or so commission that paid for the service and the credit card fees.
Beyond the the app I genuinely liked the founders, and honestly figured they had what was required to succeed. So many months ago it seemed all they really needed to do was add Facebook integration to their site, and then they would be ready to pound the pavement and do the tedious work of building a business. It seemed as if by this point they would be earning profit, gaining traction, and would be models of what it was to be a successful startup.
But then… then they were accepted to the accelerators.
Startup Accelerator Programs are supposed to be an invaluable institution. The idea is that you take good people, with good ideas, give them money, resources, and mentorship and be able to “accelerate” a startup from almost nothing to a viable project in 3 months. As a tech business guy I can say that this looks good on paper and intellectually seems feasible.
For those of us that have run successful businesses we know that in fact it is not rocket science, and the main hang up for most founders is simply getting them past the mental hang-ups that keep them from feeling as if they should be able to succeed. It is shockingly difficult to convince people that it is OK to earn $1000 an hour, or be able to make a huge profit off of seemingly easy work. If you have a good idea, with a good profit margin in a market that is large enough then you just need people who are willing to work hard enough to do what needs to be done and they will be successful. Easy Peasy…
So accelerators are supposed to give the seed funding, work environment, mentorship and so on to launch founders and their startups to success. But what if… what if the accelerators are run by idiots?
The sad fact of the matter is that it’s a lot easier to appear successful then it is to be successful. You can use buzz words to mask tepid accomplishments and make them seem significant. Everywhere in the startup world you hear of “successful” founders who have “exited”. To “exit” means that they sold their startup and that it did not fail. But what gets glossed over is that you can in fact have your startup acquired for $1 and that the founder could then still claim to have successfully exited. So a person who exited for $100 Million really is distinguished little then the one that exited for $100,000. Now $100,000 may seem like good money, but if the founder wasn’t taking a real paycheck for 2-3 years then at best that means they were making around $30K per year…
Why this becomes an issue is that in the current economic environment more investors and governments are seeing Startup companies as a way to jump start their local economies. They think, “If only we could create a Facebook here!”, and they see the creation of accelerators as a way to accomplish this. Governments help fund them to boost possible future tax revenue, and investors fund them because other investment options are currently in the toilet. So once they decide to create an accelerator they then need the actual mentors to do the coaching and advising for the new startups. The problem is… the best people to mentor have either already been snapped up, or they are in fact mentoring the members of their own startups.
So as with any business venture the best people that can be hired are not necessarily the best people for the job.
And so we come back to the tragedy of NoBadGift.com. An amazing, gem of a startup has spent a half year being “accelerated” and has come out the other side an unusable, uninspired, travesty.
NoBadGift.com has been turned into Given.to . The name was changed because the mentors said that NoBadGift.com would turn off the women folk. They were told “Bad Gift” was not what women wanted to hear. So now instead of having a name that was inspired, that told a story within 3 words, they now have a name that… …. sucks…
Given.to does not say what the service is. Does Given.to relate to a Charity? Religious Group? Self Help Dogma? Who knows..? Who cares..?
NoBadGift.com was dropped because it supposedly was not appreciated by women, but being that Given.to is a non .com domain name they seem more then happy to alienate the majority of web users that automatically assume all domain names end in .com .
When they changed the name I thought it was a bad idea, but figured their mentors might know what’s best. Once I tried to use their site the other day I realized the name change was probably the least tragic of the changes.
When I went to their landing page I was surprised to see that after receiving as much help their home page looks like something more appropriate for a web analytics service. Lots of words… few pictures… absolutely ZERO emotional connection to the user. When I look at the home page I don’t feel excited. I don’t feel happy. I don’t feel a rush. I see yet another crappy web service…
Again I was willing to try to look past this. I was surprised the design was so bad, but if the app still did what I thought it would then I could be brought back.
So I created and account, named my first Wish list and happily clicked the button to “Add Items” and was confronted with a “Select Your Category” box. “What the hell is this crap”, was my first response. I then sighed and tried to find where I could manually add items. Unfortunately that function is now gone. You have to add items from the sources that the creators have already added. The single defining point of NoBadGift.com was that I could ask for whatever the hell I wanted. I can create an Amazon wishlist on Amazon.com if that’s what I want…
Shaking my head I then clicked on the Amazon.com link to at least see how the site functioned.
Imagine my reaction when “All” clothes washing detergent was one of the first things to show up on the Amazon.com list. This is akin to talking to your significant other about having the septic tank pumped right before our about to have sex. It’s just a complete turn off. Gift giving is supposed to be exciting and magical. Clothes detergent is neither.
I then clicked on “Experiences” and they seemed to offer random crap from everywhere other then where I live. With a desperate hope I clicked on “Social Good Gifts”, but there was only one item listed and I’m not even sure what they did.
With a heavy heart I then exited the site and sent a message off to one of the founders to “wish him the best”, but tell him it’s a pretty crappy site.
When he responded I then logged back into the site so I could give him some specific complaints and… became totally lost.
The main Account Page is a usability nightmare. There’s no rhyme or reason. There’s numbers and dates and a stream and they don’t make a darn bit of sense. Worst of all I couldn’t even figure out how to get back to the wish list I had created.
By the end of trying to use the site I only had one thing to say, “This is complete and utter garbage”. The entire thing is uninspiring, unusable… just horrible…
Over a year a beautiful thing was pivoted into crap.
On the face of it it seems that Given.to has been successful. They have gotten funding. They have been part of 3 accelerators. They are now regularly showing up in the media, and the founder has been on Huffington Post Live a number of times.
Too bad that going into the number one gift giving season…. the season that they should come into their own and prove that they can be a contender in the Zillion dollar gift giving industry… their app is worthless… After a year of hard work they should be sitting back waiting for vindication from the marketplace. Instead…
So I would advise you to think long and hard before applying to, and accepting a slot at an accelerator. Given.to is an egregious example of what comes out of them, but by no means is it the only horror story.
It’s not that hard to make money in tech business. Over the years I have seen countless people take advantage of smart techs to either profit from them, or drive them into the ground. Please don’t assume you need “BizDev” guys, or Investors or such. Too many of them are charlatans that only seem impressive because you don’t know the full story.
Accelerators are being created on a large scale because many people are desperately trying to find ways to jump start the economy and create investment opportunities to fund everything from tax revenue to pay for schools, to bring returns for pension funds so that retirees can be paid their benefits (and yes for rich people f buy their 20th house). Unfortunately the reality is that the accelerators are like every other business venture. Some are good. Many are not very good, and far too many do more harm then good.
Do your home work before you join one. Make sure you agree with the advice you are given while there. Stay true to your vision, and don’t lose sight of what you’re trying to accomplish just because someone who you’re told is “successful” would have you do something you don’t agree with.
In Startup land failure is not the worst thing that can happen to you. Spending a year going down the wrong road and giving away equity in your company to idiots only to see someone else take your basic idea and corner the market on it can be far more heart breaking…