When Will Twitter Buy or Compete with Pocket?

A decent chunk of my blog posts are inspired by things that other people tweet that catch my eye. Recently @hunterwalk tweeted out about how Evernote or Twitter should buy my favorite read it later service, Pocket:

When I saw that tweet, I immediately thought that Twitter is a much more likely acquirer for Pocket than Evernote. While I love Evernote and use it every day, Pocket is all about links to content I want to read later and that’s how I use the service. That’s valuable information about my intent and interests.

You know who cares about the value of links as a measure of intent and interest? Twitter sure does. Look at their history of taking control of other people providing links to content shared on Twitter. They have a history of moving to take control of 3rd party services that are aggregating information about links and sharing activity:

-Bit.ly was replaced by t.co for link shortening
-Twitpic and yfrog gave way to native image sharing with pic.twitter
-I can only assume that Twitvid and others will eventually give way to Vine and some native video hosting or sharing service

I also think that Twitter cards are going to give Twitter even more insight into how people consume media objects on Twitter – they know the value in understanding how content is shared and consumed on their network.

Twitter doesn’t have its own version of a Read It Later service. As it has done with other services in the past, the Twitter client gives you the option to choose a Read It Later service. Twitter has already moved aggressively to control the content I consume and share in real time. The next frontier in better understanding my interests is in also understanding information that I find interesting but choose to consume later.

To be clear, Twitter has integrated Pocket into its core application, so it does get signal data on how often a given piece of content is saved on Twitter. They also get all of the data about other content I share via email or other services as well. But I think of Pocket as my personal newspaper and adding Pocket to Twitter’s arsenal of services would give them an even wider perspective on what Twitter users care about and read when they are not on Twitter. As someone who believes that Twitter will continue to focus on monetizing through interested-targeted advertising, knowing what I read and care about on and off Twitter is valuable interest targeting data and I can see why Twitter would value that.

As always, comments are open. Or you can message me on Twitter @chudson.

4 Reasons Why Android-First Strategies Haven’t Worked (Yet)

About three years ago there were a handful of companies that set out to build Android-first or Android-only startups. All of those, including the one that I co-founded, had a thesis on why focusing on Android first or exclusively was a wise strategy. With a few exceptions, most of those companies, including mine, have not yet been successful. The reasons all vary, but I wanted to lay out what I thought were the perspectives on why Android-first or Android-only strategies would work and why they haven’t worked for most companies as of yet.

This is not to say that there aren’t companies, particularly in games, where usage and monetization are sufficient to support an Android-first or Android-only strategy. You can look to those companies as examples of why it can work when certain conditions are present.

Most people working on Android strategies from the start adopted one of three core strategies, each of which I will summarize below. All three strategies generally supposed that Android would get better – the devices would improve, monetization would improve, and developing for Android would get easier.

“We will be like [insert iPhone app] but for Android.”

The basic logic of this strategy was that many of the iOS-focused companies who were building great applications would not prioritize building for Android and this would leave a gap in the market for Android-focused developers. One of the early targets was Instagram – Instagram did not rush out an Android version of their application and that left a hole to build the “Instagram for Android.” The theory was that while those iOS-focused companies stayed focus on iOS, the Android-focused companies would find good traction on Android. Doing so would create Android-focused competitors with whom their iOS counterparts would have to reckon. The end game for this strategy was to either a) build a real beachhead that would yield an interesting company based on audience or traction or b) be well-positioned to get acquired by another iOS-focused competitor when they wanted an Android play.

“We will focus on Android first and then launch on iPhone when we work out the bugs and user experience.”

This was another common strategy I heard articulated by smart people. The goal for these folks was not to be Android-only and ignore iOS but rather to use the nature of Android and Google Play (no gatekeeper on pushing updates, more freedom around app promotion and customer acquisition and the large, rapidly-growing audience) to test out concepts and ideas which would later either migrate to iOS or become multi-platform mobile products or services. The core thrust of this strategy was that the ability to push updates and tinker with an app on Android was a faster path to learning than dealing with the iOS ecosystem. And, as a corollary, there was a belief that lessons learned on Android could be applied to iOS development.

“We will become good at developing Android and learn its ins and outs until monetization catches up with iOS.”

This is what I call the patience strategy. It was basically a recognition that Android was not, at the time, a compelling monetization platform for developers when compared to iOS. Rather than trying to force the issue, a set of developers decided to hunker down, focus on Android, learn the platform from a technical and distribution standpoint, and grow as quickly as the platform would allow. This strategy assumed two things. One key assumption was that the lessons learned in the early days of Android would have lasting value going forward and would be hard to replicate. A second assumption embedded in this strategy was that being in market and learning would confer an advantage relative to waiting until the platform was more stable and attractive and jumping in them.

Broadly speaking, I think all of these strategies have proven difficult and I have some thoughts as to why that has been the case.

The cost for waiting to address Android as an iOS-focused company has proven to be low.

Probably the most difficult market development for the Android-first crop of startups has been that the cost of ignoring Android for iOS-focused companies has proven to be pretty low. For companies that build really great applications on iOS, waiting to release on Android has been okay. I look at a lot of the larger companies, including both Instagram (when independent) and Facebook, where their decision to wait did not create a window for a viable competitor to emerge.

The technology and design principles that can propel you to success on Android don’t necessarily map to success in iOS.

Another challenge, particularly for the folks who chose to start on Android and migrate to iOS, was that the design principles and technical skills that can lead to success on Android don’t all translate to iOS. I think this is particularly true when it comes to UI and UX. I use an Android and an iOS phone every day and I can say that Android gives you a lot more option to use menus and submenus to hide stuff and I, as a user, have more buttons to use to navigate when I’m inside an app. And it has to work on a variety of screen sizes and form factors. In many ways, the iOS experience is more constrained and the general way I use iOS apps is different.

The benefits to getting in early and learning are still unclear.

Three or four years ago, Android was really a mess. It’s not perfect now, but it has come a long way. The platform itself does more for developers than it used to. Fragmentation is still an issue, but the core OS has gotten better, as have the devices. So there’s a legitimate question as to whether lessons learned in 2011 and perhaps even 2012 still apply if you are starting Android development today. In some cases, getting in early allowed a company to build a really strong market position and defend it – see Dragonplay in the world of poker apps in Google Play. In many other cases, those early entrants simply confirmed that building on Android was hard and maybe was a good deal of pain for an uncertain amount of gain.

The lack of consistent per-user monetization limits the ability to invest in paid user acquisition.

I think people have written pages and pages about how Android per-user monetization is not on par with what you see on iOS. That is true for many (but not all) categories. The challenge in low per-user monetization for startups is that for many, paid user acquisition is part of how they plan to grow. That per-user revenue provides the funds required to support advertising and paid user acquisition. The challenge, at least in my opinion, seems to be that while Android users are less expensive to acquire (when compared to iOS users on average), the return on that spend is not always high enough to support paid user acquisition. So that basically takes paid user acquisition off the table as a growth strategy for many companies not in games or other high monetizing questions.

Ironically, I think the net result of the lack of success for Android-first or Android-only strategies has been that iOS companies now think about tackling Android earlier in their lives, even if they don’t do it right away. In my conversations with mobile startups, they all know they’ll have to answer the Android question even if the answer is that they’ll address it later.

As always, feel free to leave a comment here or send me your thoughts on Twitter @chudson. I’m particularly interested in your thoughts if you have started an Android-focused company or led Android development at an iOS-focused company.

Tempo, Sunrise and Why Calendar Apps Matter

I wrote an old blog post about the challenges for startups competing with core apps on the major mobile platforms. As is the case with many things, competing to replace core app functionality (email, calendar, photo, messaging) is a high stakes game with big rewards and lots of risk. And I’m not an investor in any calendar company (I use Tempo and Sunrise both on my iPhone and Google Calendar on my S3) so lets just get that out of the way.

I’d argue that if you gave me your email logs and your calendar, I could make an educated guess about your interests and how you spend your time. A few thoughts on why I think calendars are interesting:

Email is messy and hard when it comes to divining context and insight, but I think calendars are actually way easier. Calendar data has more implicit structured signal than email and hence is (potentially) easier to understand and evaluate.
Calendars have dates, times, duration, and context about who else is involved in a given appointment. While there is value in being smart on top of that data (did I actually show up to that meeting, who created it, etc.) the base layer of structures info is useful and interesting in and of itself. It’s a good structured data store for divining intent, interest, and other nuggets if value about how a person spends his or her time and what matters most. Hours of the day are fixed and how people spend them (according to their calendar) is a valuable nugget of information.

Most stock calendars are feature-light and power users want more
Whereas email has advanced a lot, most stock calendars are still really basic. They tell you where you need to be and where. But they don’t give you much context on who you’re meeting. Many don’t make it super easy to share your location or ETA of you’re running late. And they don’t encourage or prompt you to stay in touch or follow up on what happened in the meeting. As such, I end up using tools like Twist to give people updates on my ETA when I wish it was really just baked into my calendar. The same is true of tools like Refresh, which I use to keep notes and info on people who I’ve met. A lot of the 3rd party tools I use have value because many calendars I use have a fairly rudimentary feature set.

Unlike email, calendars are basically double opt-in.
The biggest difference between email and calendar is that email is an open channel. Anyone who knows my email address can email me. Systems that want to know context about email have to start by separating signal from noise. A well-managed calendar doesn’t have this problem as most events (other than Facebook events) that show up on my calendar are on there because both parties agreed to meet. That’s a powerful bi-directional signal.

The one big elephant in the room when it comes to calendars is what Google is doing with Google Now. If you use Gmail, Google Calendar, and search with Google, Google Now is the early window into what a smart digital assistant that augments and improves a calendar will look like. But I don’t expect the entire world to tip toward using all Google services for personal and work purposes, so I think there will be a continued opportunity for 3rd party tools to augment basic calendars. For more on my thoughts on Google Now, you can read this post.

As always, feel free to leave comments below or chat with me on Twitter @chudson.

Wearing Wearables – Thoughts on the Current State of Wearable Tech

2013-08-22 15.27.20 HDR I’ve been playing with a bunch of wearable tech lately. I find it all fascinating and really fun as a window into the future. The picture in this post shows the four wearable devices that I play with the most – Google Glass, FitBit (I am an investor), Jawbone Up, and the Pebble smartwatch. Wearable technology is one area where I feel like you really need to literally wear and use the products to get an informed picture on where things stand. Having played with a bunch of wearable tech lately, I wanted to write down some of my thoughts on the current state of affairs in wearables.

Can Be Worn vs. Want to Wear

I think we are very much in the first inning of designing wearable technology that is literally wearable (as in you can wear it) as opposed to wearable technology that you want to wear. It still feels to me like we are very much in the phase of the market where proving that things can be done is outpacing the fashion and design sensibility around building and shipping wearables that look and feel like fashion pieces.

Wearable Need Not Mean Visible

A lot of the early wearable technology that I’ve played with is very visible. You wear it on your face or on your wrist and others are aware that you’re wearing it. But I don’t think that every interesting application of wearable technology requires that the technology be visible. One other way to solve the first generation design challenges is to focus on making wearables less visible as opposed to more visible and obvious.

Too Many Things to Charge Too Often

As is the case with almost all of the electronic devices I own, one of the thing that plagues a lot of wearable devices is power consumption. Between my smartphone, tablet, and laptop, I already have plenty of things to charge. Adding in a few additional wearable technology items means that I have yet another set of devices to charge. What would really be a leap forward would be a generation of wearables where I could go weeks (as opposed to days) in between charges.

Smartphones Continue to Do the Heavy Lifting for Wearables

As much as I like the fact that I can wear a lot of wearable technology, many of the devices are limited in terms of what they can do. They don’t have native network connections. They rely on Bluetooth or something else to communicate with another device that has more processing power, memory, or storage. The current generation of devices is designed to work in concert with smartphones – many of them are not nearly as useful without a smartphone in the mix for data connection or processing as they would be without one. So it’s hard to think of most of today’s wearables as standalone devices as many function more as complements or extensions of the mobile phone.

There is Tremendous Work to Be done in Developing UI and UX Conventions for Wearables

We are in the very early days of exploring what it’s like to have a computer on your face or on your wrist. It has taken us awhile to learn what it’s like to have a computer with a data connection, GPS, and sensors in your pocket and I’d argue we still have a pretty primitive understanding of what that combination of features will unlock. We are way earlier in the game in terms of learning the same about life with wearables.

If you own, like, develop, or use wearable technology, I’m curious to hear about your perspectives. Feel free to leave a comment below or send me a message on Twitter @chudson.

The Frustrating Opaque Nature of iPhone 5 Battery Life

This is a really short post expressing a personal frustration of mine. I regularly carry two phones, an iPhone 5 and a Samsung Galaxy S3. One of the things I really like about my Galaxy S3 is that it gives me some insight into which applications I’m running are having the most impact on my battery life. I appreciate that the Android OS gives me that level of insight. I find the experience on my iPhone 5 to be maddening. I have no real insight into which applications on my phone are taxing my battery the most. The simple answer is that I know that things that are GPS or network heavy (Google Maps, Waze, Spotify, Pandora) can be heavy consumers of my battery, I have no idea how much my usage of a given application is contributing to my mediocre battery experience on my iPhone 5.

As a counterpoint, one of the things I really like about Onavo is that it gives me some sense for which apps on my phone are consuming the most data. Why can’t I get the same level of insight on my iPhone 5 when it comes to battery life?

And yes, I have spent countless amounts of dollars on Mophie, Maxboost, and other supplementary batteries for my phone. Rather than deal with the symptoms, I’d like to know more about the root cause of the apps that are draining my battery so I can do something about it.

As always, comments are open – feel free to leave one below or send me a message on Twitter @chudson

The Evergreen Nature of the Photo App Category

Photo sharing is one of those evergreen categories of app innovation that I continue to find fascinating. Every time photo capture, photo sharing, or photo editing feels “solved” something else comes along and changes the way I think about photos.

Photo sharing is also one of those categories that has become something of a punch line in startup and VC jokes – there is a lot of fun poked at people working on photo sharing. Many suggest it’s a category that isn’t worthy of the time and financial investment that entrepreneurs and investors put into it. I think it’s unfair to malign the category because there are interesting things that are driving photo growth and make it one of the few evergreen areas in consumer Internet:

Photos (and user-captured videos) are the most important things on my phone that I can’t easily replace if I lose my phone in between backups. Almost everything else I care about, particularly in terms of media or content, lives in the cloud. If I lose my phone, I can easily recover my music (Spotify, 8tracks, Pandora), news (NY Times, Pocket), and videos (iTunes, YouTube). If I lose my phone and haven’t backed up the photos on it, they’re gone forever.

New devices will continue to change the way we capture and share photos. Getting a smartphone many years ago changed the way I and many others take pictures. I’ve been using Google Glass for the past few months and that has changed the way and frequency with which I take photos. I take a lot more photos and videos wearing Glass and I take more in-the-moment and spontaneous photos because I don’t have to take my phone out of my pocket to snap a picture.

I want to do different things with different photos – there is no universal use case for every photo. Some photos are designed for social media sharing. Some are really more for temporal communication. Others are just taken to record something and are not for sharing. And some are meant to be organized into albums. That’s just a handful of the use cases I can imagine. And that’s why I think there continues to be room for new photo companies and ideas and we’ll continue to see them evolve.

Comments are open and welcome as always – you can also send feedback on Twitter @chudson.

Google Glass and B2B Applications

2013-08-22 14.26.57 HDR

I’ve been using my Google Glass for awhile now and it has been a really interesting experience. I think enough other smart people have written great articles talking about the future of Google Glass, what the experience is like, and whether it’s a mainstream product. A quick Google search will give you lots of good examples there.

Rather than write another post along those lines, I’d rather talk more about what stands out to me about where Google Glass makes a ton of sense and where I do think there is a near-term market opportunity. I do think that Google Glass has a lot of near-term potential use cases for apps focused on B2B applications. Specifically, I can think of medical, industrial, and law enforcement use cases for Glass where specialty applications and services that leverage the technical capabilities of Glass could be built and distributed. Three quick reasons why I think the B2B case is far more compelling in the near term:

For high-value B2B use cases, the cost of the hardware may not be a barrier to adoption or use. Google Glass is currently pretty expensive – it cost me more than the last iPad I bought and only slightly less than what I paid for my last Macbook. Because computer hardware tends to get cheaper over time, Glass and its successors will get cheaper. But that takes time. However, in the meantime, there are probably specialty use cases where having a face-mounted heads up display provides enough value that the cost of the hardware is not an impediment. In those contexts, the utility of Google Glass and vertical-specific applications as a bundle might be sufficiently compelling that those B2B customers will overlook the entry price of Glass. One analogy I think of is the ruggedized computers and tablets that some field technicians carry – they are more expensive than regular laptops, but they are optimized for specific tasks and presumably the ROI of using them makes sense.

Glass’ “social asymmetry” is an issue in social situations but need not be in B2B use cases. I think there is a weird social asymmetry that happens whenever I’m wearing Glass and the person with whom I’m interacting is not. It feels awkward to wear a heads up display on your face when the other person, who is often a peer or colleague, does not have them on as well. In a B2B context, I don’t know that this social asymmetry exists – it would be less jarring for me to encounter someone like a doctor, cable technician, technical salesperson, or someone else who is not a peer using Google Glass in a client service context. Those folks already have access to tools and technology that I can’t access and I for one am accustomed to interacting with them while they are using such tools. Or, if I were on a construction site and everyone there was wearing Google Glass and had access to the blueprints, schedule, and other pertinent information, there’s no asymmetry as everyone has them.

B2B developers don’t need massive consumer adoption to explore and develop vertical B2B applications. For consumer applications to flourish on Google Glass, Glass needs to have much more consumer adoption and usage. I say this because I assume that Google Glass will follow the arc of tablets and smartphones in terms of consumer adoption – as prices come down and the audience grows, free, device-specific apps will pop up and compete for attention. If Glass becomes popular with consumers, someone will try to be the “Instagram for Glass” or the “YouTube for Glass” or the X for Glass, including some apps that are uniquely enabled by Glass. However, for B2B adoption, a developer could build something specific and optimized for a specific vertical and market an app + Glass solution to that vertical and have a more traditional SaaS or licensed software business model. And, given the price of Glass, there is no reason that the specialty vertical app need be free or cheap if it’s producing real value for B2B customers. For sufficiently compelling applications, there might be interesting, early businesses to be built on the back of thousands or tens of thousands of paying B2B consumers while Glass and the wearables market waits for consumer adoption to pan out (if it does).

If you’re working on B2b Glass or Glass-like applications, I’m curious to hear what your experiences have been. Feel free to leave a comment below or chat with me on Twitter @chudson.

Why Refresh.io Nails and Pre and Post Meeting Intel for Busy Networkers

When I first heard about Refresh, I kind of rolled my eyes. I love CRM and contact management applications, and many of them sound better in practice than they deliver in practice. I figured that Refresh would fall short as many other well-intentioned products in the space had in the past. But Refresh is now part of my daily routine and I wanted to write a short blog post as to why. I have to disclose that I am not an investor in Refresh, but I am an avid user of the product.

For those of you who are not familiar with the product, it’s fairly straightforward. You give Refresh access to your calendar and a few other data stores and it provides you with insights about the people you are about to meet and encourages you to write notes about the outcome of those meetings. That’s the product in a nutshell.

For background, I’ve long wanted a lightweight product that would deliver intelligence about the people I am about to meet. To be a more complete CRM system, the product would also have to deliver a meaningful and easy-to-act-upon post meeting nudge to augment the record about that person based on what we discussed. In the web-only world, it was hard to make that process feel low friction. But with mobile and push notifications, there is a new opportunity to rethink products in this category. Refresh is by no means the first product to tackle this problem, but it’s one of the few I’ve seen that justifies its existence by solving a few of the core problems I’ve seen with other products. I’ll list the challenges below:

1. If I can get all of the relevant information about a pending meeting from a single source, there’s no need for an aggregator. Simply put, if all your product does is show me the last 5 tweets that a given person has sent, I can get that from Twitter. To be truly useful and informative, a product in this space has to show me information that is somewhat costly for me to acquire as a lazy person and relevant to a first or follow-up meeting. Refresh has a broad reach and consistently delivers interesting and useful information to me.

2. If the aggregator shows me useless or extraneous information, it’s just noise. As someone who meets a lot of people, I’m looking for a service that delivers useful information. Showing me Facebook photos of a new contact and his or her kids is not actionable – you sound like a stalker bringing that stuff up in a first meeting. However, showing shared interests, past employers, and other elements of common ground is useful – and the product presents it in such a way that I can pick and choose which elements to discuss and which are better left unsaid.

3. In order to get me to contribute and augment records, I need to see both public and private benefits to doing so. The hardest thing of all for any system like Refresh is to get the user to contribute net new data – important notes or reminders from a meeting that will live with that contact record. I think Refresh does this well – they ping you after the meeting with a simple reminder / ask to augment a record with anything you want to remember for a next meeting. They do it in a very low pressure way – the product encourages you to augment records but doesn’t make you feel like a loser or bad person if you choose not to do so. I haven’t yet gotten comfortable with posting public notes (feedback or info that’s visible to others), but maybe I will once I figure out the social contract around that.

I have, though, been using Refresh to make private notes about people. Mostly I’m using Refresh to keep track of people who are considering job changes, looking to hire, or considering hiring people. A few seconds of notes gives me a good gist of what we discussed and Refresh is great for that.

I’ve spent a lot of time thinking about what kind of product could disrupt LinkedIn given their massive data advantage over any upstart. I’m not saying that Refresh will topple LinkedIn, but if there is a company or product that could ultimately chip away at LinkedIn’s dominant data advantage on professional information, I believe it will be something that intelligently reads your calendar and understands who you meet and gets you, as a user, to give the system some information on the quality of that interaction.

If you use products like Refresh and have thoughts, I welcome you to leave a comment below or send me your thoughts on Twitter @chudson.

Where Are the Big Consumer-Facing Email Startups?

Email is one of those things that everyone complains about and wishes worked better. Some people want to kill email, some people want to make it work better, and others want to automate away the drudgery of managing email. In spite of all of the complaining about email and all of the entrepreneurial energy spent around making email work better for end users, it has been really hard to build venture scale business in and around consumer-facing email services. Yahoo recently acquired Xobni, which had made some good products in the space and had been at it for several years. There are tons of new companies including Contactually, Sanebox, Boomerang (Baydin) and others who are still in their early days but making good traction. I hope one of the current crop of players can grow into a really big company some day (disclosure – I use lots of those products but am not an investor in any of them).

To be clear, there are some places where you can make money in email. The anti-spam companies in the 2000s made good money selling anti-spam services to consumers and businesses. There are lots of good businesses that exist in B2B and B2C marketing (ExactTarget, ConstantContact, MailChimp) and email infrastructure (Sendgrid, Amazon, etc.). I’m talking specifically, though, around products and services targeted at email end users, mostly consumers or business people who use email on a regular basis. I think of them in two broad categories:

Email clients – I have used (and will continue to use) email clients that make managing and dealing with email much easier. The latest incarnation of successful email clients includes Sparrow (acquired by Google), Mailbox (acquired by Dropbox), and Mailplane, and Boxer. Prior to that, we had lots of other ones including Oddpost (acquired by Yahoo) and many other 3rd party alternatives still exist.

Email services and extensions – The other big bucket of services includes a set of services that make working with and managing email easier. That’s everything from Xobni (acquired by Yahoo), Rapportive (acquired by LinkedIn), Sanebox, Unsubscribe (now part of TrustedID), Outbox and many many others that do everything from triaging your mail to keeping spam out of your inbox.

Despite all of the frustrations around email, it has been pretty hard to build big, venture scale businesses in and around email. I’ve been scratching my head as to why this is the case and there are a few hypotheses I have around why this is the case:

Email is not one market because everyone uses email differently – Even though everyone complains about email, everyone seems to use it differently. As such, it’s hard to build tools and technology that address a large enough chunk of the audience to allow companies to achieve scale. There isn’t one market for email technology – it’s a market of mini-markets based on how people use and manage their relationship with email.

Many consumers are unwilling to spend real money on a service (email) that they get for free – One other hypothesis is that because most people get their email for free, they think of email as free. As such, they are unwilling to spend much money to make that experience better. Rather than spending money to make email work better for them, they would rather just suffer with the status quo. This makes it hard for some services to remain independent.

The large email providers (Yahoo, Microsoft, Google, AOL) have big balance sheets and will quickly gobble up teams whose interfaces or services are getting traction. Given the size of their respective audiences, it’s hard for the larger companies to tinker with core email without risking alienating their audiences. So they allow smaller companies to experiment with new services and UI paradigms and quickly snatch them up when they start to get traction.

If you’ve been involved with building a consumer-facing email product or service and have something to contribute, I’d love to hear your perspective. Feel free to leave a comment below or send me a note @chudson as I’m looking to learn more.

What Not To Say When a Friend’s Company is Failing

Failure is part of the startup ecosystem and it’s not fun. I’ve never met someone who had a failed company who would have preferred failure to success. While failure is a necessary part of the startup ecosystem, it has human consequences. Lately I’ve had some personal experiences with failure and had the chance to have pretty honest conversations with friends and colleagues whose companies are on the verge of not working out barring a miracle or recently failed. One thing that has struck me is that a lot of well-meaning people can say the wrong things when a friend or colleagues’ startup isn’t working and is about to fail. I wanted to write a quick post about a few things I commonly hear people say that I think are well-meaning but not helpful when you’re on the horns of a failing company.

Entrepreneurs tend to be highly identified with and invested in their companies. It’s hard not to take failure personally. When your company is failing, there’s not much other people can tell you to make you feel better.
Tolerating and accepting failure is not the same as celebrating failure and most people don’t expect failure to happen to them. The value in failing is that it hopefully teaches your real-world (as opposed to textbook or blog post) lessons about what to do and not to do. Failure should also keep you humble and grounded and makes you realize how hard it is to build a sucessful company.

That being said, there are a few things I’ve heard people say and caught myself saying only to realize that they’re not really what you want to hear when things don’t work out.

“This failure will make you a stronger entrepreneur.” – This is undoubtedly true in many cases. But it’s not helpful when you’re in the midst of things not working out. The closer you get to the finality of failure, the more one tends to focus on the present and immediate circumstances and the less you tend to care about the future. There’s probably a time to have that conversation, but it’s not when the prospect of failure feels imminent or the finality of that company’s demise is still raw.

“Lots of startups fail / failure is part of the process / generic comment about how startups often don’t work out” – This too is a true statement of fact. Lots of startups fail. Reminding entrepreneurs that failure is part of the process and that entrepreneurship is inherently risky does not help much in the moment. Telling your friend that his or her startup is part of the statistical pool that fails doesn’t help that person deal with the very real fact that his or her company is not going to work out.

“Successful people often point to their failures as being important to their success.” – This is related to the point above. It’s not surprising that people who are ultimately successful have the perspective on why things that didn’t work out were instrumental or important elements of their eventual success. But that’s a backward looking statement and it doesn’t necessarily mean a lot when you are in the moment, trying to deal with failure.

I think one of the best things you can say to a friend whose company is about to fail or has failed is “I’m sorry it didn’t work out and I hope you’re doing okay. Let me know if there’s anything I can do to help you out.” Talking to a bunch of people has made me realize how important it is to be thoughtful about what you say to people who are going through tough times in business.

As always, I’m open to comments and feedback below or you can chat with my on Twitter @chudson.