Vienna-based Refinder is ready to end its journey today, 6 December. Founded in 2009, the company has been developing a tool for collaborative information management. We caught upwith co-founder Leo Sauermann to find out about the story behind the cloud app startup and the ups and downs they encountered during their years on the market. In the following Q&A, Sauermann talks about what they learned from this experience and what they would recommend to other startups.
Tell us a little bit about how it all started.
Gnowsis and Refinder started as an invention I made, a personal semantic web. The original prototype in 2003 was quite unique and usable as a work diary or a personal information management tool. I started the company in 2009 with a scientific prototype and a handful of users who loved it and had been using it for years. We [he and his team] analysed this and did interviews and user-experience tests and thought “what could people use?” That led us to collaboration systems and later, to a personal search engine. We also evaluated the market for an information management tool for tax advisors, but encountered strong market entry gatekeepers.
What went wrong?
During all these mini-pivots, we lost some of our most dedicated first users, worked too much on the product and on adding features and not enough on marketing and sales. We had great people, but we did many things for the first time and made mistakes. The things that worked in marketing did attract sign-ups, but not dedicated users or buyers. Only at the end of 2012, experienced marketing people joined the team, and we were finally ready enough to quickly execute decisions.
Why did you decide to quit?
The traction was low and it was only slowly gaining momentum. When we saw slow uptake of our last product version – Refinder cloud search – we ran out of money. And it would have surely taken another year to get to cash flow-positive.
Looking back, is there anything you would have done differently?
Start selling on our first day. Not only to other motivated startup aficionados and tech-lovers, but also to buyers. I would have also stuck with my first idea, a personal semantic information management system, and tried selling that until it either worked or there was enough rejection to show that it was really wrong. Only then, I would have changed the product.
What did you learn from this experience?
Price-wise, if you don’t have any venture backing and investors in your personal network, charge serious money for your service. You can always go ‘freemium’ when you have the venture backing, but to get traction and prove the business is real, you need to charge from the beginning. This is common advice other SaaS founders share in their “why we failed” interviews.
Personally, I truly, deeply failed for the first time in my life, which surely built up my character. I have positive friends and family… and their ongoing ‘keep it up, you are a good guy’ motivation has helped a lot when things got gritty. This I am very thankful for. If someone fails around you, tell him or her that this is an experience to learn from and that ‘it’s not your fault’. It somehow helps.
If you could give a piece of advice to other startups…
You have your idea, fine. Now look first for customers and their needs, and go sell sell sell your idea, prototype, whatever you have and charge as much as you can. I had a great co-founder, but we missed a marketing person and I did not dig deep enough into it. If you realise you can’t make it to revenue yourself, find people to cover every skill you lack and only when you find them and you are all on the same boat, get going.
Don’t start a startup. Start a business.
What are your future plans?
Privately, getting everything together that I have neglected in the last years – doing a startup leaves some holes. Economically, I was lucky to find a great position in a company of a friend that is selling a traveling salesman algorithm – a personal sales-route planner. We have been in touch during all these years and the things I learned in the past are very useful now in this new job.