Everpix: when a great product hits the photo startup funding crunch
Eric Nakagawa stashed this in startups
Stashed in: 106 Miles
This is a sad story. They had a good product and raised a lot of money but did not manage it well.
Here's some more notes I took:
Andrew points out that a modern startup’s costs are all people costs:
The final thing that’s worth pointing out in the article is the cost structure of the company and where the money went:
- $565k consulting and legal fees
- $128k office space
- $360k operating costs
- $1.4 total personnel costs
In other words, 80% of the costs went towards the employees and contractor/consultants/legal. It’s basically all people costs. You could argue that the office space is really just a function of the people too. Really, only ~15% of the capital went towards actually running the service.
If anything, this trend will only continue. San Francisco housing costs continue the rise, while computing infrastructure only gets cheaper and more flexible.
I scratch my head when I see a seed stage company with 6, 8, even 10 FTEs.
Seed stage startups can't afford that in 2013! Stay under 5 or you're doing something wrong.
Also from Andrew: “It’s never an easy thing to shut down something you’ve worked on for years, but I was insanely happy to see such a high-quality post mortem from The Verge. Thanks for writing this up, guys!
I'm still unclear on why they had to shut down.
Is it safe to say they failed to manage their costs?