A successful entrepreneur shares her thoughts on business success and failure.

Dear Investors, My Company Failed and We Lost All Your Money. Here’s What Happened.


Something wasn’t right, and I couldn’t put my finger on exactly what it was. On the surface, it seemed like I had the best life. A popular blog with millions of readers. The perfect relationship with Brian, the most adoring fiance in the universe. A great set of supportive friends and a nice social standing in Austin, TX. And, last but not least, an awesome company, making marketing software, with a great team, that was making money and (finally!) shipping products.

Yet something lurked just beneath the surface. It would come out at awkward times, like 3AM, when I would wake up and feel an edge, a discomfort. Something felt broken. But when I looked at my life, I couldn’t spot it. What was going on?

Then, one day, a few weeks ago, an event happened (I’ll save the details of that for some other time.) Suddenly a torrent of emotions poured in. I was overwhelmed. I stayed home from work one day–my best friend Erica sent me some poetry, and I just cried. I wept. It felt like my soul was pouring out of me, one tear at a time.

I reeled from the onslaught of emotions for days, and soon thereafter, I broke off my relationship with Brian. Whatever wasn’t right in my life wasn’t easy to find. It went deep into myself.

Brian was shocked, and as well he should be. I loved Brian. I still love him. But something wasn’t there. It wasn’t right. It was why we weren’t getting married. He was the perfect guy on the surface, but for some reason he wasn’t perfect for me.

I Had to Leave…

That was Friday, April 25. Saturday morning, I woke up and bought a plane ticket to Boulder, CO for six days. It was there that I would kill my company. But at that point, I didn’t know that. All I knew was that I had to leave. I had to get away. Something was so profoundly broken in my life–something I knew I couldn’t see without the perspective that leaving my home in Austin, TX would show me.

Sunday morning, April 27, I arrived in Boulder. I felt a strange sense of unity, peace, and relief. All of the noise in my brain was quiet for the first time in years. I had told Brian this trip was to create my preferences, to help me understand what I wanted in this life. But it was also to fix the pain and the brokenness that I could no longer ignore.

Today is my fourth day in Boulder, and I have not stopped crying. Yesterday, our largest customer, representing 22% of our revenue for Whoosh Traffic, cancelled. Because of their cancellation, we could no longer make payroll next week.

I pinged my friend Andy on Facebook, and I did something that until now has been incredibly difficult for me: I asked for help.

“What Do You Really Want?”

Andy asked me, “What do you really want?” I felt strongly this was the crux of the question that had led me to Boulder, that had led me to drop everything in search of myself. At first, I didn’t know how to answer. But he helped me work through it.

After my conversation with Andy, I got on our company chat room and told Paul (our CTO) and Amanda (my assistant) that there was no more money left, and that we wouldn’t be able to make payroll. I thought they’d be upset, but they were stoic.

Isn’t it interesting how when things are broken in your life, people sense it somehow? I believe that’s why we haven’t raised investment capital in the past 7 months since we got out of Techstars. I knew, somehow, deep inside, that so many things were broken in my life, and that that extended into our business. So how could I ask investors to sink more money in? It would be disingenuous. I couldn’t do it.

The truth was, I didn’t really want to build a huge SEO software company. We knew that coming into Techstars. My cofounder and I split during Techstars, and I decided I really wanted to build a marketing automation platform. That platform would become MarketVibe.

But something still wasn’t right. If MarketVibe was what I really wanted to do, why wasn’t I launching it on my blog? Why wasn’t I doing whatever it took to get paying customers and make it successful?

The Brokenness…

The brokenness pervaded my dreams, leaving me exhausted when I woke up in the morning. I developed a sugar addiction and a video game addiction. I gained so much weight that many of my clothes stopped fitting. It’s hard to explain the contrast between the abject depression that ate at me in the middle of the night when I was alone and vulnerable, and the “everything is OK” smile I’d put on as my “public face.” It was why I stopped blogging.

Today I write this, still in Boulder, still reeling emotionally from the large volume of changes in my life in the past week. I write this humbly, with a complete lack of ego. My business failed and it took my savings, and $640,000 of investor capital on top of that, with it. I let my blog income sources dry up while I focused on the business, and now I must figure out what’s next, from an awkward place I haven’t been in in many years: no money, no salary, and some credit card debt on top of that.

Sometimes you have to rip everything apart to find the core of yourself, the beauty inside you. And this is where I am today.

For so many years, I was the rock, the glue that held my friends together. I was the one who was always there, always ready to listen and give a hug. I was the nice one, the one who rarely judged, who smiled and wished everyone well.

When I tore my life apart, I found an inner core of myself–a twin core of vulnerability and strength, the masculine and the feminine, sitting together peacefully inside myself for the first time. My business failed, but I am not a failure. That’s the key difference that going into myself enabled me to acknowledge on a deep and personal level.

Am I Upset?

Am I upset that I lost my investors’ money? Only in the sense that many of our investors were my friends and I didn’t want to disappoint them. But the me coming out from this hurricane of chaos is a much stronger me, able to acknowledge the mistakes I’ve made, able to open up and be emotionally raw with my friends and my team–qualities that every great leader must possess.

This is what puts one on the path to success–true, authentic success with deep happiness and fulfillment. From where I stand today, I can see why so many leaders are unhappy. They are afraid to be themselves. They are afraid to be vulnerable, to let down their guard, to take the help that their friends and family offer. This is what breaks relationships, both personal and professional.

And now I can share with you what shifts for me this week: I know that this is what I have to offer the world. The twin cores of vulnerability and strength, standing together. As more women enter our workforce, and we as female leaders struggle to find our voices and our innate leadership qualities, we must not forget that the feminine side of ourselves is not a weakness. It is, in fact, our greatest strength as the leaders of this world. We are vulnerable, and we are beautiful, and that’s not just okay–it’s needed in our society.

And as it broke down with me, so it will with others, as we learn how as a society to be authentic, to be raw, to be emotional, to cry it out and hug our friends and tell them we love them. To deal with the pain as it comes instead of bottling it up, taking anti-depressants, and committing suicide (in the worst of cases.) To love without fearing the loss.

The people who embrace that vulnerable core of themselves are our true next generation of leaders, and today I get to stand up and say: That’s me. That’s not just who I want to be–it’s who I am now. I had to break my entire world to find it in myself, but now I stand before you, humbled, having failed in a way but having found something even better from that breakdown.

The world is quiet. The noise in my head is gone. For the first time in many years, I am at peace.

So What Comes Next?

There are a few things that are clear:

I want to keep our team together. Paul, Amanda, and I work together well. So we may form a new company, or rearrange the current one. I think I may do some consulting for a month or two, recovering my finances and helping other authentic leaders of larger companies find their voices and build better teams. (Email me at erica at erica dot biz if you’re interested in talking about this further–it won’t be cheap, but it will be worth it for you.)

And I would like to do MarketVibe, but I think it is time to explore some funding options that buy us some time, instead of feeling rushed to half-ass a product out to market. I no longer sense the perfectionism inside me that was causing us to not launch a product–but I do feel a need to give our product the time and attention it deserves to get the user experience to a state similar to the beauty I see inherent in this world.

Some of our current investors may come along for the ride. Some won’t, and that’s okay. As a person, I am worlds apart from the one who raised money back in 2012. I was not confident in myself back then. I had a gritty edge. I was scared.

Today I’m embracing myself as a leader not just in business, but in our world. I am “in flow” and I know the right people will show up to help me along and support my journey. It is time to show the world that the feminine and the masculine can work together; that neither is inferior, that both are needed. It is time to embrace my own vulnerability and lead by example.

And it’s time to redesign my blog. (Forthcoming!)

if this post compels you to reach out, by all means, do so. (Email, Facebook, Twitter) And if it’s not your cup of tea, feel free to unsubscribe. I am no longer concerned. This is who I am. This is why I’m here. And I’m excited to have you along on this journey with me, through my blog and social media, if you’d like to be a part. (Subscribe to my email list and/or follow me on Facebook.)

Thanks for reading. I’m sorry I lost your money.

With love,
Erica
#500strong #techstars and now… #failed. :)

Update (May 6): We were able to make payroll. My next blog post will have more details.



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I'm Erica Douglass.
After selling my online business at age 26 for over $1 million, I created this blog to help you grow your own business quickly.

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