The Post Mortem on Short-Lived Tech Startup: Grapevine

Founder of Silicon Hills News

Photo licensed from Getty Images.

Photo licensed from Getty Images.

More than 90 percent of technology startups fail, according to a 2012 report from the Startup Genome Project.
The researchers found that most fail “due primarily to self destruction rather than competition.”
“For the less than 10 percent of startups that do succeed, most encounter near death experiences along the way.”
Some tech companies fail in a spectacular way like Webvan, a grocery delivery service during the dot com era that raised and spent more than $1 billion and closed down after just two years.
And others are just here today and gone tomorrow.
That’s the case of Grapevine in San Antonio. It was one of the first recipients of a $25,000 investment from the Geekdom Fund. Eric Larson and Richard Ortega founded the company, and a third co-founder Josh Seltzer joined Grapevine in 2012. The company lasted one year from inception to shut down.
On Tuesday night, the founders talked about their entrepreneurial journey and what led to their closing up shop at a post-mortem talk during SA NewTech, a monthly gathering of entrepreneurs at Geekdom.
Ortega recounted some advice Jason Seats, co-founder of Slicehost and now head of TechStars Austin, told Grapevine early on: “You want to be a must have and not a nice to have.”
Grapevine alerted businesses, primarily restaurants, to reviews left at Yelp, OpenTable and other review sites, about their establishments so that they could respond to them in a timely manner. They sprang to life out of a 3 Day Startup San Antonio weekend in the summer of 2012.
“We were all in,” Larson said. “Grapevine was what we did on a daily basis.”
By winter, Grapevine got some paying customers. At first, Larson did everything manually but by January, Ortega had a fully functioning software program.
They also joined the San Antonio Restaurant Association to find more customers.
The company applied to Dell to pitch at its first entrepreneur pitch day in January. Dell chose Grapevine as one of the lucky 13 to present in front of Dell executives. After that event, the company had two other meetings with Dell executives but a deal never materialized.
And then in the summer of 2013, Grapevine’s money ran out and it couldn’t raise additional funds. Larson, Seltzer and Ortega decided to shut down operations.
They shared a few of the lessons they learned from their startup journey:

  • You cannot have too much customer validation.
  • We were not solving the complete problem. We were only alerting companies about reviews. We weren’t solving them.
  • Design can’t solve core business model issues. “I kept trying to design a package that wasn’t neatly packaged to begin with,” Seltzer said.
  • Don’t outsource, do it yourself. Don’t build on top of other people’s services.
  • Be objective and look at your numbers.

And with a humorous bent, the founders shared some signs they knew they were trouble when:
1. Your developer has more tutorial bookmarks than actual lines of codes.
2. The person in charge of sales is still selling for their old company.
3. Your designer hasn’t opened Photoshop in two years and panics when opening PowerPoint.
4. You use the latest and greatest team collaborative app and you get nothing done.
5. You have more conversations in HipChat than you do with your own customers.
6. You are having a hard time getting customers to sign up for your free account.
7. You’re doing a presentation about the rise and fall of your startup and you’re working on your presentation 30 minutes before it’s due.

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