Having your startup fail is in some ways similar to losing your job, but in some ways its much more personal. At startups you’re typically much more involved in growing the company and spend more time imagining how the future would be if (and dreaming of when) it will succeed. How the failure feels depends on many factors: your role; the commitments you made to customers, clients, and your employees; how long you were there; the paper money value of the stock you lost; how promising the idea was; how it failed; etc.
My story: Pay By Touch (PBT), a SF based start-up that aimed to revolutionize the way the world pays.
PBT developed a biometric authentication system that allowed customers to pay and get loyalty rewards with their fingerprint. PBT raised over $300M dollars, with investors including Gordon Getty, NFL players, Ron Burkle, and top-tier Hedge Funds like Farallon Capital.
My role was customer facing. As the Account Manager for our largest client, SuperValu (a grocery leader), I spent years on the road at Albertson’s stores in Portland, Cub Foods in Minneapolis, and Jewel-Osco in Chicago. Other members of my team led projects including Citbank Singapore, Whole Foods, Shell, Piggly Wiggly, Blockbuster, and the Co-Op in the UK.
My team and I spent our time in the stores talking to all types of customers: ranging from grocery shoppers, store workers, our corporate sponsors, new potential clients, to hedge fund and individual investors. We heard everything from “is PBT the Mark of the Beast?” to “What happens if they cut off my finger.” To the first: no. To the second: go to the hospital. Incidentally, the sensors were heat and pulse sensitive and wouldn’t work if your finger dropped below a certain temperature or loses its pulse, something we learned the hard way in the frigid Chicago winters.
We lived in corporate apartments, drove rental cars, bought lots of candy and junk food with our fingers at the stores, got to know the community, and wore an attractive array of corporate swag. My closet was filled with PBT gear. I bought and wore hideous neon green pants and tank tops. They were such stables of my wardrobe, I didn’t even think to expense them.
This job, like many at start-ups, was personal. I “dressed the part,” became close with our clients, many of whom I still talk to today. I hired, trained, and managed hundreds of full-time and temporary employees, and signed up thousands of customers, clients, and investors.
My team of “road warriors” were my closest (only?) friends, and we were all glued to our Blackberry’s and to each other. I couldn’t even go on a date, without sneaking to the bathroom to check my messages.
I believed in the product — when I was mugged in Minneapolis (yes, you read that correctly), I was able to get groceries and “cash-back” at the Cub store.
We were installed in 3,000 locations and enrolled 3.6 million customers!
Yet, there were huge problems, both in the stores and at PBT HQ. Installing, maintaining, and training on biometric systems was expensive, and our value proposition only really came into play when we were installed everywhere. Otherwise, you did need your wallet.
The company made many acquisitions, and had close to 1,000 employees and a burn rate we could not manage, especially when the credit crunch hit. The company missed payroll, and it became a guessing game of when and IF we would be paid each pay period. We were insolvent, and credit had run dry.
It is difficult to determine the actual point that I knew PBT had “failed.”
In the lead-up I felt many of the same symptoms of a major break-up:
- Desperately missed feeling connected and needed. What was I supposed to do now? My Blackberry was gone, my team was gone. The isolation and feeling of loss was unbearable at times.
- Obsessed over all the time and money I “lost.” Clearly the large “investment” in my crush’s long term future was not going to pay off.
- Threw away anything that reminded me of my old flame. For years, I would not wear anything green.
- Couldn’t talk or think about anything else. What else was interesting?
- Gained 10 lbs (maybe more), mostly due to lethargy.
- Couldn’t imagine being with anyone else ever again.
- Missed speaking the language that we had developed. Would all this shared knowledge ever be useful or valuable again?
Years later, I still think about PBT, but largely in a positive way:
- Many of the employees held a “wake” and wrote and read poems about the “hot sensors that burned us.” Going through such an extreme situation with a group of people really bonds you.
- I often ask people casually what they think of biometrics; at a brunch last weekend I offhandedly asked if fear of a cut off finger would prohibit them from signing up for a biometric fingerprint system.
- I ask cashiers what they think of Square, RFID, or any other new point-of-sale system.
- I can finally wear green again. At an ex-PBTer party, I took home some PBT finger puppets, and smile when I see my cat playing with them.
- I feel an affinity and am proud and honored to have been a part of the experience.