Reflecting on Failure: Why Rapport, the sustainability SaaS startup that received Rise of the Relaxation, shut down

Reflecting on Failure: Why Rapport, the sustainability SaaS startup that won Rise of the Rest, shut down

John Rooks and Justin Jaffe after successful the Rise of Relaxation and a $100,000 funding from Steve Case.

Rapport, the Portland-based startup that developed software program to assist companies monitor their sustainability efforts, has shut down operations. John Rooks, the corporate’s co-founder and CEO, stated the product wasn’t in a position to acquire the mandatory traction within the market.

The corporate gained prominence within the Portland startup neighborhood in October 2015 when it received a $100,000 funding throughout a pitch competitors judged by Steve Case, the AOL co-founder turned enterprise capitalist who had introduced his Rise of the Relaxation tour by means of Portland. Rise of the Relaxation is Case’s effort to spotlight startup communities across the nation outdoors the most important hubs of San Francisco, New York Metropolis, and Boston. Rapport additionally received the High Gun showcase occasion that yr.

Rapport was an enterprise software program firm that supplied a cloud-based software program platform to assist firms and organizations higher monitor a wide range of sustainability metrics, from the quantity of water and electrical energy used to the overall variety of miles their workers commuted to work. The corporate grew out of Rooks’ profession as a sustainability advisor. He noticed the chance for a software program instrument to productize among the work he was having to do as a person advisor, resembling serving to firms arrange techniques to measure after which scale back their greenhouse fuel emissions. He and Justin Jaffe co-founded the corporate in 2014.

Following its win at Rise of the Relaxation, the corporate raised a roughly $250,000 seed spherical, together with the $100,000 from Case’s Rise of the Relaxation Fund, which matched a improvement mortgage from the Maine Expertise Institute. At its peak, it had 4 workers and prospects from California to Maine, together with the Metropolis of Portland. Jaffe informed Maine Startups Inside in Might 2017 that the software program was deployed at roughly 200 websites.

Rooks spoke to Maine Startups Insider about what occurred, why shutting down the corporate was the appropriate transfer, and what he discovered from the expertise.

perceive the product-development cycle

The underside line, Rooks stated, is that the corporate’s software program platform by no means gained sufficient traction within the market.

When reflecting on why that was, Rooks cited two causes:

  • They didn’t do sufficient market analysis to make sure product-market match
  • Software program didn’t sustain with buyer wants

“We didn’t do sufficient product discovery to ensure the product match the market,” Rooks stated. “We have been counting on my expertise as a advisor and what I used to be seeing as gaps within the market and what my prospects have been telling me.”

That’s to not say the corporate didn’t do any market analysis. Rooks stated they most likely did greater than 100 interviews with potential prospects. The issues started once they requested these potential prospects in the event that they’d purchase the product in the event that they constructed it. The solutions have been encouraging. However that didn’t translate into precise gross sales after they constructed the product.

“Till you ask them to jot down a verify, they’ll say they’ll purchase it,” Rooks stated, exposing an issue with asking that kind of query throughout market analysis.

If he needed to do it over once more, he’d attempt to flip the normal gross sales and product improvement cycle on its head and promote the product earlier than truly constructing it. That’s onerous to do, however it may be finished. Rooks cites one other native entrepreneur, Jason Cianchette, who was in a position to try this along with his startup Liquid Wi-fi.

“That’s the appropriate order of operations,” Rooks stated.

The ‘Cool’ issue

The corporate additionally needed to cope with the “cool” issue, Rooks stated.

“Individuals obtained excited once they might see their footprint, however it was simply cool. It wasn’t something past cool,” Rooks stated. “So the second yr, when the time got here for them to resume, they didn’t need to pay for cool.”

The issue was, whereas the software program did a superb job of measuring these sustainability metrics and giving a enterprise a snapshot of its carbon footprint, it didn’t present the subsequent actionable steps that prospects have been on the lookout for.

“They wished options,” Rooks stated.

The product improvement timeline included future variations that might analyze the information it had collected and supply strategies for tactics the client might scale back its carbon footprint, however the money circulate wasn’t there to get that future model constructed quick sufficient.

“We had this entire IOT play six years down the street the place we have been simply sucking up information from all of the machines, however we simply by no means obtained there,” Rooks stated.

For some time, to make up for the product’s lack of steered actions, Rapport started layering consulting on prime of the platform, which was ironic since that’s what Rooks had been attempting to keep away from when he created the corporate. However it will definitely turned clear that it was not a sustainable plan.

Bored with elevating capital

Usually, if a startup is constructing a software program product, however the preliminary income isn’t sufficient to fund the event wanted to repeatedly enhance the product to seize and retain market share and meet prospects’ wants, then that startup is taken into account an excellent candidate to boost enterprise capital.

Within the case of Rapport, Rooks and Jaffe have been good at pitching the enterprise, however they made the matter-of-fact determination they didn’t need to do any extra fundraising.

“I simply wished to do the work and I obtained bored with promoting the concept to individuals who’s job it was to discover a motive to say no,” Rooks stated. “The facility dynamic of begging for cash sucks. After three years of working the corporate, you begin to ask, ‘The place do I need to spend my time?’”

In Rooks case, he wished to spend his time serving to companies scale back their carbon footprint.

“I might get the fun of getting folks to scale back their carbon footprint with out the software program, so it took the headache away,” he stated.

Discover a naysayer

Requested what recommendation he’d give to startup founders, Rooks stated discover somebody who’s prepared to inform you what you don’t need to hear.

“I believe you want a naysayer,” Rooks stated. “I believe you at all times want somebody intestine checking you as a result of on the early stage once you’re spending most of your time telling the identical story again and again to buyers, you’re making it look as profitable and bulletproof as doable—and it’s most likely not but. You’re promoting the likelihood.  So you need to be very cautious to not imagine that story you inform outsiders.

“The hockey stick is a fable. You’re telling a narrative that in yr three the curve goes straight up—and also you begin to imagine that and there’s an actual hazard to that. You may’t lie and so that you do it with enthusiasm and sound projections, however there are actual assumptions in there,” Rooks stated. “If we had an advisor at all times intestine checking our personal bullshit that may have been useful for us.”

Ultimately, you would say Rapport was a sufferer of its personal success. It was profitable sufficient that they saved going, however not profitable sufficient that they ever noticed that hockey-stick-type of development.

“We have been simply profitable sufficient to provide us hope that the subsequent piece would fall into line, by sheer grit and sticking it out and never desirous to fail,” Rooks stated. “I assume that’s an actual drawback—folks grasp on longer than they want. We didn’t need to personal a barely profitable firm. That was work we weren’t prepared to place in.”

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