Startups: It’s not Thelma & Louise
Last Friday, June 21st I sent the following message out to our community of users, colleagues, friends and supporters. Many people have reached out sharing knowing and kind words about our journey and choice to wind down our venture, as well as their appreciation for my choice to pull back the curtain on what is statistically a common road for many founders. Several folks asked that I share our story here. I’ve made a few grammatical and non-substantive updates for clarity. The title was inspired by the great advisor, Ada Ryland.
After two wonderful years, JuiceBox Hero is discontinuing service as of June 28, 2019. While this is not the end-goal we had in mind, in so many ways this venture was incredibly successful. However, there were some foundational obstacles we were not able to overcome with our model, in our window.
Inspired by the candor of fellow founders like Avni Patel and Sahil Lavingia and out of my commitment to female founders in particular and innovation for this space specifically, I’ve taken some time to share some background and FAQs below.
Let me first start with some key info for those currently using the site: please retrieve information from your accounts by June 28th. It’s been important to us that we have accurate, up-to-date info about daycares and preschools on our platform. Because we will not be maintaining the integrity of the data after June 28th, we will be discounting the search and account features after that date.
Since launching the site last year, we’ve had the privilege of helping more than 7,500 folks with their most important search.
Thank you all for your trust, your feedback and for the honor of your referrals.
Beyond the parents and providers who’ve used JuiceBox Hero, we also want to thank and acknowledge everyone — and we mean everyone — we’ve had the privilege to work with (mentors, crowd-funding supporters, cheerleaders, competitors, friends, and our families). Thank you.
While the journey of JuiceBox Hero is coming to a close, we know that our small but mighty team’s commitment to innovation for women, families, and under-represented markets is far from over.
Thank you again for joining us on this journey,
Laurie
So, what happened!? The Skinny:
Two years ago I embarked on a mission to bring to market a modern way for parents to find daycares and preschools. We did that — and more. Yet, we were not successful in reaching our ultimate goal of raising what we needed in our time-frame to execute further on our venture. We tried, and opted out of, potentials for pivots; we pitched for game-changing partners and acquisitions that did not ultimately convert.
(For those of you who saw us pitch at the MassChallenge showcase Thursday night, we were still in it! Even though most of this message was already drafted, we also had a Hail Mary of a final acquisition conversation that closed the following morning. Obviously, it did not convert. What a nail biter!)
TLDR: We tried to go to the moon with a ladder; it didn’t work!
Did we do *everything* right? Of course not! Did we do our best? Yes. I am confident we left it all on the field.
I acknowledge the contributions of so many and, as the founder, I take full responsibility for all of our wins and losses. I believe in my core that everything we take responsibility for we have the opportunity to impact. I have the humility to know that maybe the challenge was me! (Or timing, or geography, or luck.) But, one thing I know for sure is if the reasons for XYZ are always external, then outcomes remain impossible to impact — and, it’d be foolish not to acknowledge the very real circumstances in the landscape. It’s important to hold both things at the same time.
The Whole Enchilada
For those of you interested in more than The Skinny, keep reading…
Countless conversations have been had with key users, customers, advisors, mentors, family and friends. Those in this world may know the following, and have asked a lot of the following questions. I know there’s a lot shared below, but the journey is a lot. It’s my hope that some of it can be useful to others, specifically other under-represented founders or non-traditional markets. (I know reading similar dispatches were helpful to me — thank you to those who took the time, opened your journey and shared.)
Level-Setting
In case you’re not familiar with this biz, here’s some background so we can all be responsible for what.is.up outside of a vacuum.
- New business are hard: 50% succeed in the first 5 years
- Startups are hard: 10% succeed — only 1% ever receive outside capital (and not all businesses are built for outside capital)
- Marketplaces are hard
- Raising money for a women-led startups is hard: only 2% of all venture funding is invested in (white) female founders (.02% is invested in women of color)
- Innovation inclusion for women’s use cases is also hard
- Ethically deriving capital from the economically depressed ($77b) childcare market is also hard
^^This list is a tough one: hard + hard + hard + hard. It details a landscape founders like me are excited to sink their teeth into — it’s a feature, not a bug. That being said, having eyes wide open about the landscape is key to charting a course that increases the already slim odds of success. It’s my aim not to discourage anyone from going for it, just to share one more founder’s perspective about preparing appropriately for the journey.
So what happened? It looked like everything was going so well. Yet, yet here we are.
Yes. Things were going well. Some things.
In many important ways we were successful — and *on a bootstrapped budget*:
- We first engaged in customer surveys and validated a huge problem — several huge problems actually — in a huge $77b market. The fact that we were able to hold both our focus and the bigger picture on these sets of problems is also worth noting as a huge accomplishment.
- I recruited a top-flight engineer and serial entrepreneur to build our MVP, on equity — and every other team member the same way. (Our in-kind labor costs totalled $975k at market rate)
- We brought our idea to market (you’d be surprised how many startups don’t even do this…)
- We generated $100k+ in earned media that drove traffic and contributed to the building of this category in Texas and beyond
- We acquired 7500+ users, earned referrals, testimonials & more from happy parents!
- Our Monthly Active Users was 53% — (people were coming back (!) proving that this “consumer purchase” is, in fact, a journey not a one-time use)
- Our leadership and vision earned marquee partnerships and champions in both the public & private sectors from the United Way of Central Texas, Partners in Parenting, Promise Venture Studio, IDEO and more!
- Our venture was selected for competitive accelerator spots & recognition from media and mentors from Austin, Chicago and Silicon Valley to work on this problem and capture the value its solution provided.
However, we also discovered key challenges we could not overcome with the capital and window of our team.
You might notice what’s not on that list above: revenue, investors.
No revenue isn’t always a problem for venture-style businesses; no investors + no revenue = challenges for most founders without tremendous self-funding.
As we self-funded on a tiny amount of cash, sweat equity and vision, we also worked in a methodical manner, moving the ball down the field week by week.
Every quarter we set goals that broke down into weekly KPIs to evaluate to make sure we were moving forward. As a boot-strapped founder aka our biggest investor, one of the things I leaned into uncovering was the unknown. What did our customers think? Ask. Lean into it. Find out. Step on the scale. Be a request for the feedback, the complaints, the hard lumps, the data.
Given my background in the data-driven world of political campaigns, I know it’s all about the #s (you win or lose on Election Day given your win # — you win on 50% + 1 or you don’t…). So, when I got to a point where I knew I needed help, I reached out.
With the help of advisors Ada Ryland and Wayne Lopez, we set up data-driven operation to get clarity on what and why we measured — and the outcomes. “If X were true/false, then the whole thing would succeed/crumble”. We were consistently on the hunt for the layered logic of that puzzle. If you’re a founder/product manager/business owner, I encourage you to find that out!
This spring, we had the good fortune to add Breck Baig to our team. She turned out to be instrumental in helping us define and execute some key experiments of late that gave us all final clarity around a few foundational assumptions of our model. One of the last sprints confirmed our model was not one we want to pursue without a sizable capital investment.
About investment
In many ways, JuiceBox Hero was so proud to have been self-funded and people-powered. For two years, JuiceBox Hero ran on $35k of cold-hard cash and $975,300-worth of sweat-equity I recruited from people-power on the JuiceBox Hero team (yes, we track those investments!). We haven’t tracked the countless hours of mentorship, but many of those conversations were game-changing and impossible to value.
That being said, there is only so much great advice anyone can implement without capital.
It turns out that starting with $35k wasn’t enough. I know, I know lots of people start with less. But, many, many (successful) ventures start with a lot more.
(pro tip: unless you’ve already got 1m users or an amazing MRR, be wary of telling investors how cheaply you built something cuz unless it’s OBVIOUSLY the GREATEST THING EVER, you’ve just priced it at “cheap”. That being said, in a particularly testy afternoon, I once challenged a Silicon Valley VC to show me a founder with our progress for $35k! He then called me “a real bone-crusher of a founder”. It was a compliment.)
But I digress…
When I read this post about how it takes $250k to start a business I had an “a-ha”. This! This is why it feels like we’re standing on the side of Mt. Everest in flip-flops in a fanny-pack. Because we were not outfitted for this venture*.
*If you can bootstrap your business, it’s not a true venture-backed business. Bootstrapping is AMAZING! But, it’s not the venture way.
I’m like so many founders who are unstoppable in the face of horrible odds. But also, when a key mentor said that many founders (like me — extraordinary people with ordinary bank accounts) are not leveraged for this sort of financial risk, I knew he was right.
Also right: all of the investors who said “you’re not raising enough money” → nobody wants to get half-way across the river.
So, we worked to raise capital.
Early on we reached out to friends & family. Turns out my network (of politicos and do-gooders) is not one of accredited tech investors (meaning they meet income and net wealth thresholds and choose to make investments at all, and specifically in startups).
By the by, women donors, I recommend diversifying some of your capital distributions to reap that ROI to keep doing good… (+ this is a whole ‘nother blog post…)
Undeterred. We boot-strapped some more. We side-hustled. We raised a small crowdfund on our way to what we thought was an institutional raise. (Thank you Ifundwomen supporters!)
We pitched. And we pitched. And we pitched. We pitched everyone from Angels to partners at Andreessen Horowitz on Sand Hill Road. We got real close a couple of times to great investment partners. (Y’all know who y’all are — and I’ll be calling you again with the next thing…)
We turned down investments that lacked integrity: a) a well-meaning champion offered the down payment he was saving for a house, b) a venture capitalist encouraged us to sell the email addresses of moms who use JuiceBox Hero to formula companies for $100 each, c) a well-known social impact investor expected our early-stage startup to solve systemic poverty with an investment of $100k.
And, there were unexpected delays and conflicts from some incredible innovation partners committed to childcare and early childhood education (ECE). Just in the last four weeks, it became clear that three of those deals were delayed until (at least) the new year.
At the same time, it became clear that bootstrapping further was not an option our team could pursue. And, while working to build the business we want, a competitor in California secured resources to far outpace us.
Do I think we’re still better? Of course I do. I’m a wild-eyed, competitive founder with totally unique-to-tech expertise in this area.
Also me:
When the writing was on the wall about the reality of resources in this market, did I try to join forces? As a sober, mission-driven adult, yes, yes I did. (They were gracious in the conversation yet declined — at least for now. For the sake of parents everywhere, I look forward to their success!)
Regardless, resources can buy so much distance/market share — especially in a winner-take-all category — that a sub-par product/execution is very likely to win the market. (Hello Chris Yeh!) Related: when people say that execution is the most important metric of who will win, keep in mind that executing a fundraise is almost paramount.
So why didn’t we raise?
First, lots of people don’t raise. Less than 1% of all startups raise from Angels and VCs. With all the hype it’s hard to believe that’s true but it is!
For those unfamiliar, there’s a very specific model for investable ventures and, while we had one, the kind of capital we needed — swing for the fences category-building B2C software capital — wasn’t readily available in Austin. (We have the consumer market, but not investor market for what I’m selling: B2C software.)
But, I didn’t know that for quite some time.
There’s a consensus in most places that an MVP, early traction, and great team (all of which we had) gets you in the door for an investor conversation. Where there isn’t consensus is what metrics meet the bar for “early traction” and who qualifies as a “great team”. That’s relative. Either can mean a few users to $100k MRR; deep domain expertise (check!) or Ivy League pedigree (nope!).
And, when compared to Silicon Valley, those bars get higher to meet (with the resources from this market…). So, we found ourselves, like an awkward teenager, in the in-between. I found myself running a blue candidate in a red district. That dog don’t hunt.
With hindsight, my unsolicited advice to other founders in this position is to crowdfund (equity or traditional). If you have a consumer solution, particularly one for women or people of color, even if it’s software, don’t wait for the “minimum $25k check”. The people writing those checks may not get your market/problem/opportunity. (We once had an investor say, “won’t women just figure it out?” Um, yeah. Of course we will. That’s all we do all day long. That’s all every person does until a life-changing application is developed that addresses their problem.)
Or, I’d recommend consumer-facing founders start networking with the Angel groups in Silicon Valley immediately. Like all relationships, they take time. Spend your time with customers who have proven they buy what you’re selling: California has shown the capacity both in capital and in imagination afforded by that capital. (Yes, we have an Angel group in Austin but, a) with many of the companies going through their process two or three times before funding, it seems to me they’re looking for later stage progress, and b) given Austin’s history of B2B enterprise software sales it seems to me that many Austin angels are executives (not former founders) who stick to what they know (B2B enterprise).)
Some $.02 on that: It’s totally understandable for people to invest in what they understand! However, investors who earnestly say, “I don’t understand B2C” might brace themselves for the unintentional subtext:
Considering that women make 85%+ of all consumer purchasing decisions, y’all ought to know what the ‘C’ in B2C stands for: ‘C’ stands for ‘women’. So, when folks say, “I don’t understand B2C”, it’s essentially saying “I don’t understand women!” Here’s the good news: should you chose, you have a founder with unparalleled domain expertise on the case.
Maybe Austin will create that capacity in capital and imagination after some big exits, or with people moving to Austin from capital rich markets, or maybe not…
There’s an adage that people went to California for the *idea* of gold → speculative investing. Versus Texas where we see oil coming out of the ground and get excited to drill for more (growth investing).
In the meantime, Austin has 80+ accelerators but for founders without access to early capital — in the first two years — they die in preseed. The result is that Austin has an incredible entrepreneurial workforce, but the funnel for founders/exits is broken. And, like everything, the deficit affects the underestimated most. There’s a particularly acute leak in the pipeline for non-traditional founders.
For my political friends, believe this: despite all the innovation hype, there’s not CADW or Annie’s List for women startups. Yet…
EMILY’s List exists in spades (great! If you can get there…)
Maybe that’s not a problem for some. But, for those interested in the (data-driven! out-sized!) ROI on the ventures of under-represented founders, there first has to be an investment…
I do know of forces afoot in Austin to impact this. I sincerely applaud anyone working on this opportunity. I’ve heard directly from a few currently working on this that they’re taking the long view, a measured approach — that’s great! And, it seems to me that the timeline of their actions aren’t likely to impact founders like me in the next 6 months. I hope I’m wrong about that.
I do remain hopeful about the long-game. And, I remain frustrated by the time and effort deployed to mentor or strategic plan the eco-system’s way out of a funding issue. If it seems hard to figure out how to impact funding without writing checks — that’s because it is really hard to do something illogical. Signing a check moves the needle; I’m not sure signing a pledge does… We shall see, I guess.
The question that is clear to me is not whether the founders are stepping up; the question is who is joining them.
(hint: we are the ones we’ve been waiting for)
Is childcare a venture model?
TBD
It’s a $77b market that is ripe for “disruption”. And, I believe whole-heartedly in an ethical, human-centered for-profit, model that can deliver venture-style returns and social innovation. I see it. I believe in it enough to have risked greatly on it — and share my vision of a giant civic infrastructure build with anyone who would listen. We got started on it and I’m happy to join forces with those working towards this goal.
What I see is a great opportunity for early childhood education experts combining with the wizards of consumer marketing to reach parents where they’re at in their search for “daycare”. I see consumer markets harnessed to wag the dog of public sector employers (government, military) and then the private sector. I see a TON of conscious capital opportunity in there, too.
I’m encouraged by the emergence of leaders, networks and funds in this space including Promise Venture Studios and the great folks at IDEO.org we had the pleasure of working with on their caregiving project.
I am also trepidatious about what I see as a risk posed by hyper-capitalistic venture capitalists either missing the opportunity or exploiting it* because of a lack of domain expertise.
*A social impact investor I highly respect took on what I consider to be a predatory lending company: a fintech operation offering 18% interest loans to women so they can finance daycare and stay in the workforce (like any finance company, the loans were secured on the wages from their employment, a default resulted in collections).
I also recently saw a post from a VC I respect immensely hailing the model of successful marketplace returns based on undercutting supply costs — and in the same post she pointed to the example of childcare. Trouble is, the childcare industry is based heavily on human capital that is already underpaid. Do you want someone already making $12–17/hour watching your kid to make less (so a LP can make their returns…)? Yikes.
This all points, in my view, to the competency with this market. People are trying, and we should keep trying. But, this is simply where we’re at, now.
On the other side, I lament the budgets and detailed explanations of ECE wonks working to sell a white-paper vision in a smartphone world. (Let’s be clear: their data-driven, human-centered design is pristine.)
We need the diversity of these POVs to bring a new model.
And, the funding needs to come at the preseed stages — after all, those with domain expertise and a commitment to human-centered design are unlikely to have venture network… and vice versa.
I believe this is the impetus for the genesis of Promise Venture Studio — an incredible network of ECE innovators led by Matt Glickman (BabyCenter) and Karen Lein (YC). They just celebrated their one year anniversary and I look forward to what they’ll bring forth in the coming years.
Said another way, JuiceBox Hero is older than this leading incubator of ECE innovation. < — That’s a metric!
There is so much to say on this topic. I’m happy to discuss with other under-represented founders as interested. Or, if you’re a funded venture, I’ll be happy to discuss what kind of consulting or partnership might look like. Just get in touch and let’s wrap about ECE and parenting tech!
Couldn’t we just hang in there a little longer? Could we have done more?
Maybe. Like most big decisions in life, we’ll never know “the ghost ship that did not carry us”.
This past Tuesday night I had a convo with a top Silicon Valley advisor — someone who has seen it all — and even he, too, admitted the trap of “hustle porn” vs. the wisdom to walk away.
Throughout my career I’ve chosen many uphill battles, winning many, and losing, too. (There was also that gutsy couple of years I decided to sail to Panama.) My experiences have left me a seasoned risk mitigator. In sailing it’s said, “There are old sailors and bold sailors. But there are no old, bold sailors.” In many of our women’s campaigns offices there’s a poster that reads, “No woman is required to build the world by destroying herself”.The truth is I am not willing to do anything to make it happen. (And, let’s be honest, it’s very likely that you aren’t either.)
I do feel the momentum for innovation in this space — there’s a wave coming and I don’t know when it’ll crest. We had hoped we’d be able to hang on to ride it. In the meantime, without funding, we faced what likely looked like 18–24 more months of grinding slog in the doldrums. Maybe this wouldn’t be how it would go; I’m a “make your own luck” kinda gal. So, maybe if we worked harder or pivoted into a crowd-funded runaway train, or got that grant or lucky break, or changed our pitch and won the startup lottery funded beyond our wildest dreams. Maybe we’d be the ones that beat the odds!
Or maybe, we found it was our time to stop betting on the maybes, mights, hopefullys, “keep it up!”s and “fingers crossed!”.
Maybe someone else will catch the wave, or we will, in a different boat. I’d love that.
What’s next?
Are you serious? Didn’t we just do something? JK. JuiceBox Hero people love that there is “no top of the mountain”. Plus, after years on the campaign trail, I know there is life after loss.
But seriously, this team made it really far on a hard road. They’ll surely be making gobs of money and impact for years to come. So, if you’re into that, get in touch:
- Youssef Chaker & Breck Baig are amazing resources in the tech community. They’ve both moved into a new chapter but I know they are forever interested in amazing opportunities to lend their expertise and leadership specifically to the under-estimated.
- UPDATE: I am *mortified* that my OG post failed to recognize the foundational partnership & contributions of Caroline Garry. Caroline is a *brilliant* branding & UX leader and design thinker. She brought the earliest sketches of JuiceBox Hero into full color (literally) and is the most count-on-able human I know to get the intricacies and dignity of people’s journeys right on the money.
- Ada Ryland continues to help founders gain clarity and navigate through some tricky territory in the early stages. Get you some of that!
- Marc Nathan is an incredible business advisor, founder whisperer and connector. Should you be lucky enough to get an hour with him, he’ll leave you with homework that you should do!
- Andrea Troncoso is amazing with people — in English or in Spanish — as they navigate big life changes (hello moms!), she’s a diligent researcher & QC leader.
- Me! It was suggested to me that after two years of hustle, hustle, hustling, that maybe I should spend some time putzing around in a bathrobe. But, I don’t “bathrobe” well. I don’t dabble well. I like to give it my all, or why bother? I am not burnt out. I’m simply sober out this opportunity, with these resources, at this time. I’m like a collie, I need a job or I tear up the blinds. That being said, I’m looking forward to seeing my family a little more. Maybe going to the gym. Definitely open to the next (funded) mission-driven big opportunity. I’m fascinated by and whole-heartedly believe that when we solve for the HXC, we unlock tremendous general market potential. So sign me up for innovating on use cases or mapping intelligence logic for women and people of color (you know, the global majority!).
Last but not least
Aside from the incredible team I had the privilege of working with, and all of our families, there’s another group of people I could not have done this without: Female Founders TX.
This home-grown community is extra-ordinary. These women. Wow. I stand shoulder to shoulder with some of the smartest, grittiest, sassiest innovators in the country. These women are fierce and we have each other’s back.
As one of them, I want to acknowledge them and by way myself: it takes something significant to stand in front of the world, every day, and dare.
