About a year after my spectacular Xsight Media experience, I decided it was time to get back in the entrepreneurial ring. With some serious lessons learned, I was quite certain I wouldn’t make the same mistakes again. I made a bunch of new ones.
Calin, my then CTO, came to me one day with a little tool he developed to add his blog’s RSS feed directly to his Yahoo Messenger status message (if you don’t know what Yahoo Messenger is, don’t worry, it doesn’t matter anymore). He figured the same technology could be used add paid content and link it in those status messages. I was hooked.
This is how Status Pimp, the first advertising network on status messages, was born. Our business model was based on revenue-sharing, so users would essentially get a few cents every time one of their friends clicked on a link they promoted.
So, with Xsight still fresh in my mind, the first thing I did was reach out to potential investors. And I couldn’t believe my luck: on the first day I had two meetings, both of which were a yes in the room. The first meeting was with the IT seed financer of the moment, that was in the process of putting together a great portfolio of companies. The second was with Alin Zainescu, a guy I briefly knew through my then design agency, X3 Studios.
I approached Alin because of his incredible network and the influence he had built over the years, thanks to his success in media and PR (he had 2 exits to his name at that point). I hoped that he could help us with the business development side of things. When, after seeing the presentation, he said he wanted in, I was ecstatic. After the meeting, I remember calling Calin, Status Pimp’s co-founder and CTO, with the news and us discussing how many servers we would need to handle the millions and millions of users and clients who were surely about to follow.
And so Alin became our third co-founder. And he didn’t disappoint. We launched on the 13th of May 2009, with campaigns starting a month later. Within that month, Alin had scheduled meetings for us with pretty much all the ad agencies that mattered, lending us his credibility along the process. Status Pimp got to be known as Zainescu’s new thing, which we were more than happy with.
The following months things kept growing and growing. We had momentum. We signed up more users, more advertisers. Within our first year, we ran campaigns for Vodafone, Coca Cola, Winterfresh, Skittles, Raiffeisen Bank, to name a few. We were an actual profitable company. (I know… I couldn’t believe it either!)
The team was working hard to keep up. Adelina, our community manager, handled our user base with poise and the light touch it required; Alen, our CMO (and guy pretty much in charge of running the day to day operations), did an incredible job managing our clients; Calin and his team were always improving the tech behind it all.
Then, in the summer of 2010, we started talking to a new media agency startup about an investment. They were looking to expand their online reach and Status Pimp was well positioned for that. By December 2010 we had a deal, at 9x EBITDA valuation.
At this point, I bet you’re wondering why this is a story about failure. Are you expecting a big, dramatic moment, where all went belly-up? There really wasn’t one. Sure, we ended up not receiving all the funding (their financing ran out), but it’s not like we had any time or plans to spend it.
And that is the failure of Status Pimp.
What we started doing in our first month didn’t really change one year later. Sure, we added more users and more campaigns, but we were still basically a niche player, on a small market. We didn’t expand in other markets, didn’t go international, even on the smallest scale. Whenever this conversation came up, I always had a reason to push back: not enough money, product not ready, still plenty of room to grow locally. When we got our financing, I was still finding reasons to avoid stepping outside my comfort zone. I was lying to myself and making others believe it too.
And by that time, Status Pimp had lost all its shine. We were still signing up users, but our retention rates plummeted. We still had campaigns on the platform, but the quality of advertisers decreased substantially. So, shortly after our two year anniversary, we suspended the service.
This specific type of failure to act is something I struggled with for most of my entrepreneurial life, and I still struggle with it sometimes. I chose to write about Status Pimp, but I could have easily written about 5 other projects that failed because of my inability to push myself outside my comfort zone.
Status Pimp is the perfect example because it illustrates how a company can have all the right ingredients (the right co-founders, the perfect team, product-market fit, brand value, even investors), but still come up short if leadership is incompetent. It might sound harsh, but that doesn’t make it less true.