Koala - DEAD. Warmly - DEAD. Common Room - DEAD. Pocus - DEAD. Unify - PIVOTED. Vector - PIVOTED. “Signal Orchestration” was supposed to be the future of outbound… But the space ended in an acqui-hire frenzy when nobody could raise their next round.
Here are my observations from this decidedly sad state of affairs:
1/ MARTECH SUCKS
If you aren’t a CRM, you are high churn. Martech gets tried and ripped out, most of the time it’s not mission-critical. RB2B is the worst of it - leads/intent data sold as a SaaS to a high-churn buyer persona. Couple that with people raising money before the churn kicks in, and you get a bunch of companies that couldn’t raise the next round and were forced to puke to make payroll.
This paradigm also applies to the zombies of the COVID era (6Sense, Salesloft, Clari), who thought they had large, sticky customers but ultimately did not. If I were in martech (which I am) and were dependent on a capital transaction to realize business value (which I am not), I would be… sad.
2/ VC RUINS GOOD BUSINESSES
A few of these businesses would have been nice bootstrapped, “lifestyle” businesses where the founders could have built cool stuff, had a happy team, and made millions of dollars per year on their own terms… had they set out to do that. Some combination of pre-churn euphoria and easy money, led to an entire space falling. Investors needed the companies to be bigger than they were meant to be, and the founders with either a little or a lot of convincing, agreed with them.
3/ LACK OF TRANSPARENCY IS A PROBLEM
Every “acquisition” gets framed as some positive thing, even though no price is mentioned, which is misleading to other Founders. An acqui-hire and earn-out is not what any of us are doing this for. Yet these are the headlines we see, and we send congratulatory text messages and DM’s. The problem is that this is a bad outcome, and most VC-backed companies either experience something like this or worse.
What I want to see is a table of who sold for what and what the Founders walked away with. Then compare it to a table of bootstrappers. But we will we never see it, so the show will go on.
4/ WHAT ARE YOU DOING THIS FOR???
It’s very easy to get incredibly ambitious with YC, SpaceX, Anthropic, OpenAI buzzing all around you. Investors all want those outcomes, so they all push you to believe it’s possible. For some people, it might be. But in most cases there is a huge amount of luck (along with skill) in becoming one of the 10% (or less) of people that succeeds after taking VC money.
I have friends who just couldn’t be happy unless their business became enormous. Yes, you need VC for that. But most people who took money did so because it looked like it made sense at the time, and they were selling a small stake in their business so they didn’t think it was a big deal. But it is. It always is.
/ CONCLUSION
I talk all the time about freedom. I truly believe that the pursuit of freedom is why most of us go down this road in the first place. And the path that starts with investor money and ends with acqui-hire is pretty close to the polar opposite of the freedom we all seek.
What’s crazy to me is that most of the people in our ecosystem wouldn’t be happy with an RB2B outcome. Simple product, simple business, stalls at $10m, but requires very little ongoing human effort. Can’t sell it, but generates millions of cash to fund our next experiment, and freedom to do whatever you want is the max it could be.
But somehow the news cycle, peer groups, and investors tap into our ambition, ego, and greed, and make most people think RB2B is silly, cute, or boring.
I wonder if at any point after enough acqui-hires (or worse) people in our ecosystem will step back and ask “WHY” …
Why do we need to grow forever?
Why do we need to tie our future to capital market transactions?
Why do we need to burn tons of money, hoping the next round materializes?
When none of that is in service of true freedom.
Maybe someday the boring path of slowly growing cash flow will be in style…
But I doubt it.
Adam
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