Why I Shut Down Irrive After Only 3 Months

In early 2011 I had an idea.  I was planning a trip and thought, wouldn’t it be great if there was an easy way to search all of my friend’s travel content (pictures, itineraries, social data, etc) when planning a trip.  A ton of travel content already existed.  I knew people would gladly share their travel content with friends.  And I knew that we could build a great Lead Gen business off of it once it had critical mass.  It was a simple concept in a fun industry.  So I took the plunge and started a new company.

In late 2011 we built a prototype and tested a basic product concept.  The limited set of testers seemed to like the concept, but the feedback was clear that our site had to be beautiful.  The container for the travel content had to enhance the viewing experience to be truly differentiated.  With that feedback, I made a decision, that turned out to be a big mistake.  The mistake was, that I took the prototype offline and started a 5 month long design and build process (I explain why this was a mistake below).  We were sure we had a winner on our hands, we just needed to make the site beautiful.

In May we launched our private beta, and spent the next few months working out the bugs while a limited number of users tested it out.  I wanted it to sparkle when we officially launched so I kept it behind a private gate while we added features and fixed bugs.  I wanted everyone to be wowed by their first experience with Irrive.

In September we launched to the public and got very good press reviews.  The early usage data was promising too.  Our sign-up rate for the first 3 months remained around 20%.  And the key viral event (the creation of a scrapbook) proved to have a very good viral coefficient, as we had hoped.  It was the first version, so we had a lot of plans on how to improve those already decent metrics.  But only 3 months in, I decided to shut the product down and sell the code to TripAdvisor for a fraction of what I invested to build it.  Why make such a quick decision with decent metrics?

A feature not a business

One of the key learnings in talking to our Promoters was that they viewed Irrive as a product that they would use only a few times a year.  And these were our biggest fans!

The simple point is, there are two type of consumer web business models – e-commerce and content.  Content businesses need huge pageview scale to build a reasonable advertising business.  Same thing with lead generation businesses which is what Irrive was.  The flaw with Irrive is that you can’t get scale fast enough when your Promoters (ie your most viral customers) only used your service a few times a year.  Irrive belonged as a feature within a larger business (eg TripAdvisor) rather than as a standalone business.

The Mistake

The big mistake I made with Irrive was taking the prototype offline, rather than leave it as the base and improve it incrementally.  I made this mistake for good reasons, but that’s irrelevant.  Leaving it up and iterating on it would have taught me a lot.  The outcome would have been the same, because the model was flawed.  But, critically, I would have figured this out 5 months sooner.  And that’s big.

“No Points for Second Place Maverick” – Iceman in Top Gun

When you are a start-up, you are under a constant ticking clock.  There are no moral victories.  When the clock runs out, you are done.  No one cares how close you were to building a business but your family.  It doesn’t matter how cool your product is.  Your goal is to build a business, not a cool product.

So, once it became clear that Irrive wasn’t going to obtain the necessary scale before we needed to raise capital, the decision was easy for me.

Why not pivot?

For those non-start-up types reading this, a Pivot is the business equivalent to what a basketball player does to get away from a defenseman. That is, he keeps one foot on the ground and turns the other foot.  A business pivot is the same thing.  You keep your roots, but adjust the model slightly.

One of my most trusted advisors suggested we do just that.  A guy I really, really respect.  So we spent some time thinking about how we can change our product to make people use it more frequently.  But that process quickly devolved into an exercise of a Product Looking for a Problem.  And that is a recipe for failure.  So I shut down that process too.

Capital & Talent Left

The good news is our team was able to identify a problem, and built a cool product that established a loyal (albeit small) customer base.  The bad news is we picked the wrong problem.  That’s on me.  However, we still had enough capital left and a talented team to make another run at it.  Returning $0.25 on the dollar just didn’t seem like an optimal option to me.  Plus, I am a fighter.  I never give up…ever!

So we started a brainstorming process and landed on a new problem that needed fixing.  And in January we started over.  I will expand on that process and the new product in a future post.

A Founder knows

Deep in their heart, a Founder always knows if they are sitting on a winner or not.  With my first start-up, I scraped and clawed for almost 3 years, and ended up with a great outcome.  But I knew pretty early that Irrive was different and didn’t deserve the same sacrifice.  Irrive’s model was flawed.  It was time to start over.

The sad truth is that not all Founders are willing to face the music, and so they ride it out.  Until the bitter end.  It is a terrible thing to watch. Danielle Morrill is a talented young entrepreneur who wrote a great post on this too.  So did Sam Shank. It is important for all entrepreneurs to self reflect.  To really ask themselves if they are self-aware enough and self-confident enough to face the facts.  That is a question that all entrepreneurs should ask themselves.

Published by v1again

I try very hard to be a great father, husband and entrepreneur. Founded and sold 3 companies. Winware.ai is my 4th startup.

11 thoughts on “Why I Shut Down Irrive After Only 3 Months

  1. Hi Steven,

    Have you read “The Lean Startup” by Eric Ries? Please do read if you have not.


  2. Heartbreaking but inspiring! My start up has been successful but we haven’t exited yet.

    Kudos to you for having the powers of self reflection and criticism. And for starting up again! Looking forward to seeing what you conquer next. Best wishes!

  3. Nice article. Often, we get carried away by good ideas and forget to think about its impact on people or its business value. While too much thoughts on business value would never let us move forward, periodical reality checks will certainly help us move in the right direction.

  4. Hi Steven, totally understand. We did a similar thing (if you recall from last ERA class, but didn’t have the discipline to shut the old thing down completely while teleporting ourselves into the new thing. My co-founders and I argue endlessly about killing our baby. Not an easy choice and good for you for having the discipline to do so. Would love to catch up some time and thanks for posting this. Look forward to seeing your new thing too.

    Sandy (makersalley.com)

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