Five years ago I founded SabreCMS along with Esben Lunde and now I'm putting it in the grave. We're not bankrupt but see no future in our current configuration. I think this scenario was avoidable and so for the benefit of other entrepreneurs starting on this journey, I wanted to share my thoughts.
In 2015 I was approached by yet another customer who wanted an e-commerce site that was just a little out of the ordinary. There are already many good options for building such a site like Umbraco, Shopify, Woocommerce etc, but they all come with certain drawbacks. Customizing these platforms feel a lot like intellectual slavery to me - I know exactly what I need to do and its just a matter of punching in thousands of lines of very predictable code. I couldn't stomach doing that one more time, so I made the client an offer
"How about we build a code-less system from scratch, where you can do everything from building templates to complex e-commerce functionality inside an easy to use editor?"
The client agreed to the 10x more complex approach due the dream of a tailored experience and a sizable discount, which I offered in return for the IP rights.
Over the next 3 months I worked 16 - 18 hours/day on the prototype. At that point the editor was already looking so enticing that Esben quit his full-time job and came on board as a Co-founder/COO. Three months after that we launched our very first customer and signed a few others as well. It started to look like we had found a sweet-spot in the very red ocean of WebDevelopment.
In our first full release following the prototype, we had
Having decided to use Clojure/Clojurescript early on gave us a big speed boost which helped us target competitors effectively
I could go on and on about the technological marvel Sabre was but I fear it would be too subjective and boring. Suffice to say, we knew a lot about Webdevelopment when we started out, we more than doubled that knowledge in the years that followed. Sabre represents my vision of webdevelopment fairly well: Easy and quick. And by easy I mean it in the same way as I do with Clojure: It doesn't get in your way, allowing you to focus on the hard problems.
But being in a red ocean, we needed capital, lots of it. We approached several investors, both individuals and VCs. The vetting process was almost the same everywhere we went. Some thought the idea was great but too immature, others thought the idea of going into a red ocean was nuts. All of them had their own idea of valuation and their very scientific estimates ranged from 5M to 20M. Fair enough, we were almost pre-revenue at the time, but it did leave me feeling very disillusioned about valuations in general.
We arrived at our internal valuation by multiplying the hours put in with what a typical developer costs and an estimate of the next 2 years revenue. If I had to do it again, I'd probably just pick a number I liked and try to build some data around that - It seems this was how VCs arrived at their figures.
Ultimately we felt that we got the best deal with Borean, a Danish VC company that had 20 years experience and 20 managers that would support us and help take things to the next level. And they had money of course, lots of it. But unlike most VCs of that age, they hadn't earned that money making good investments. Instead they received millions from the Danish government every year with the stated purpose of spotting winners, investing in them and driving them towards a successful exit. Finding your first investor is a lengthy process and requires trust on both sides, I am grateful that Borean saw potential in us back then and entrusted us with their money.
The initial cooperation was as tricky as we feared it could be. The portfolio manager assigned to us had no knowledge of the tech/SaaS space and did not volunteer any new information on how to organize things. We decided to make the best of this initial disinterest and use the lack of input to get smart, read a few books on management and design things exactly how we wanted them.
After the first 2 years we had a setup that we were happy with. I was spending a bit too much time on development, but we had people working sales, client development and had some outsourced marketing. We also got a new government in Denmark which made it their top priority to shut down Borean (and 3 other VCs) so that 2 secretaries in the Ministry of Education and Research could handle the combined portfolios of 300 companies + new applicants instead. It would be cheaper and more effective they said. Borean reduced itself from 40 employees to 5 in the following weeks which meant our manager was now replaced by a new face who had 80 or so other start-ups to manage. It was clear we would be unable to complete the next round of financing which would be focused on sales and marketing.
So we had an investor sitting on 25% and therefor unable to take in new investments without diluting ourselves totally. We had competitors who were doing great and who were putting hundreds of millions into marketing. To get out of this stalemate would require spending an enormous amount of time on admin/paperwork/investors and almost no time on tech/ecommerce. Neither Esben nor I felt that we could die happy, knowing we had spent our lives managing investor relations for the better part of a decade - So we agreed that Esben would quit and seek greener pastures, while I would remain and off-board all of our existing customers, file for liquidation and close shop in an orderly manner. Those tasks concluded successfully just before the Christmas break, which means Sabre is officially dead.
I'll need to give this subject some more thought before I can crystalize some wisdom. Over the course of 5 very intense years, with many workweeks teetering on 100 hours, we learned a lot. Both must-do's and absolutely-dont-do's. The one thing I am certain that I would do different, was to work in smaller sprints taking in more customer feedback. After the first year we had quite a few customers, but we rarely consulted more than 1 at a time before adding to our road-map. I cant say how many hours were "wasted" on developing features that weren't in high demand, but I'm betting its 1000+.
Secondly, and perhaps most important. Stress gives you a great many warnings before going full tilt. We paid no attention to these warnings, working ever harder to achieve goals that were too ambitious to begin with. In what felt like a positive spirit of machismo, we encouraged each other when we should have been taking steps backwards, away from the problems, redesigning, rethinking. Sometimes in business you'll pick unwinnable fights - The sooner you recognize that, the sooner you can retreat.
One of my advisors (and potential investor) said "I work with 5 CEOs - 3 are in the hospital. Number 4 was just found hanging from a noose in his garage and then there's you. Are you stressed?". I'm ashamed to say that I answered in the negative. I didn't want to recognize that stress was actually gnawing at me quite a bit, so instead of focusing the discussion on stress I wanted to focus on how we could power through. This was counter-productive.
Letting stress become part of our daily lives was a huge mistake. I can't begin to estimate the number of bad decisions that were made under the influence of stress. But if I had to do it all again I would start and finish every day, making sure I wasn't digging myself into an ever deeper hole of stress.
I'll get back in to developing custom software and consulting. Its what I've always enjoyed the most and I've missed it frequently over these past 5 years. I've also been given the opportunity to join the visionary Invenio Homes as CTO, which is something I am looking forward to very much. I am of course dismayed that Sabre did not turn into the unicorn we had hoped but I don't feel like the time has been poorly spent. We've learned a lot, we've seen some customers achieve incredible e-commerce success and we've met many interesting people along the way. I do find it a bit shameful bowing out before the final bell (bankruptcy), but that was the only way we could safely off-board all those customers who put their trust in a young start-up which I think is more important than pride.
I will not go back to 18 - 20 hour workdays again, but I am supremely grateful to my family for bearing with me while I chased a dream.
I will not partner up with anyone where there is not 100% trust. It has been a privilege working with a good friend such as Esben through these past years.
I will probably keep working towards increased transparency in tech, removing the wall between IT and the business.
To those of you who are just starting out on this journey: The road is everything, the goal is nothing. Let the joy you feel every morning when you get out of bed be your compass.
About the author
Lau B. Jensen is a danish tech entrepreneur who has run been active in the start-up scene for over a decade. With a strong background in Webdevelopment/Functional Programming, he has taught Clojure all over Europe and worked with numerous startups and Fortune500s.