What I Learned during my first Windup

1. Market Conditions: The e-commerce sector (brands, retailers, merchants) face extreme challenges from 2021 to 2023: CFO(s) mandate 90% of SaaS / software expenses for all teams, average of 25% workforce reductions (layoffs), Apple’s app tracking and browser changes make it difficult for advertisers to do their job in helping brands find new customers, etc. In short, our customers had less and less money to spend and use for experimentation.
2. Monetization: We over-estimated the amount of GMV we could process as a point-of-sale by competing with Shopify for social, mobile & SMS checkouts. Our transactional volume was not enough to help us reach our ARR goals. By releasing TMTI, we had hoped to prove our value to merchants by acquiring top-of-funnel customer data and monetize this value through a monthly SaaS plan ranging from $30 - $300 / month.
3. Scaling our sales motion: we were not able to find an organic growth lever to bring more qualified merchants into our pipeline, making the SDR and sales process cold & inefficient. We were not able to scale paid marketing efforts by finding a reasonable CAC to LTV ratio on any advertising platform for B2B leads. While we had many strong long-lead sales relationships in the pipeline, our up-market sales team was not able to close major retail or brand partners at $10k+ ARPA in time to impact our ARR under current market conditions.
4. Shopify: The proliferation of Shopify apps and the intensified competition made it challenging to position our product effectively. Shopify posed barriers, making it challenging to get our solutions approved and integrated seamlessly.
5. Merchant-Funded Approach: Our initial strategy was to build a top-of-the-funnel solution funded by merchants to acquire shoppers. However, we found that extracting funds from merchants proved difficult due to various decision-making layers (data, legal, marketing, customer experience) and reluctance to invest in smaller dollar amounts.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows the great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

It's from Theodore Roosevelt during his journey around Europe 2 weeks before accepting the Nobel Prize. I always find it comforting to reward effort, over outcome. A life well lived is the life that's lived, I suppose.

Cheers and congrats on being the brace people in the startup arena :)

Sorry to hear this news but we all know that the path to PMF and scalable success is not an easy one. Thank you for all of your hard work and effort.

Congratulations to all! You worked so hard and I'm grateful to have gotten to know you + be a witness to such perseverance.

I am SO SORRY to see this ending for Whym, but I know you all put your heart and soul into this effort, and, while the outcome is a disappointment (for you three more than anyone else, I am sure), you should feel proud of all the hard work you did here! I know you left "no stone unturned," looking for a way to make this effort successful, and no one else could have brought this as far as you all did.

I wish all three of you nothing but the best, and hope to hear about what's next for each of you!

Kelly I am so sorry to hear the news:(:(. You’re a phenomenal team and entrepreneurs, and am grateful for how hard you worked on behalf of your shareholders.

Please stay in touch.

Thank you all for allowing me to be a part of this journey. And I really appreciate the full write up as it’s valuable for me to learn from this experience too. I’m sure the past few months have been grueling as you faced this decision and overturned every rock. Hope everyone is supportive and respectful through the process. You built something great! I’d love to keep in touch with all of you and look forward to seeing what you do next.

Hope you get a great night of sleep and some time to relax soon!!

Thank you for all your hard work and dedication. This is not easy.

Sorry to hear of this :( Its definitely a tough go right now for many startups.

Many thanks to you and everyone on Team Whym for all of the work you put into the company over the past years. If there’s anything I can do to help going forward, let me know.

Thank you for the thoughtful update and reflections. We appreciate you really giving it your best shot and leaving no stone unturned. We enjoyed getting to know you and following along so thank you for letting us be a part of the journey.

If there’s anything we can do to help as you wind down and explore what’s next, please do let us know.

I've been through this before. It's not easy. But this too shall pass. I can imagine what you're going through. Just know that in a short while, this will all be behind you and you will be onto something bigger and better.

Investors knew the risk. You put everything you had into this. That's all we can ask for. You are much better having gone through this experience. Not many people get to even have the experience you did! You are very lucky.

Think of me on the next one!

No stone left unturned indeed. Thank you for the message. More importantly, thank you for giving it your all. If you ever need anyone to chat or commiserate with about all the strange feelings and emotions that come along with a decision like this, just let me know.

Sorry to hear this news. You all gave it everything you had and then some. Let me know how I can help.

I've had the privilege of being a Whym and Kelly fan since almost inception. There is no team more innovative or dedicated than the mighty three! Obviously not the outcome anyone wanted and I imagine words can't capture the last 24 months. In the end, you were bold, ambitious, relentless, an innovator. The results don't dictate the person or the accomplishment. You should be proud of everything you've done.

I am around to catch up whenever and/or help in any capacity. I hope you take a little time for yourself.

Thank you for the update Kelly. I'm sad to see the final days of Whym, but was glad to be part of the journey. Thank you for always keeping us updated, through the ups and downs -- I appreciate the transparency and it's rare from what I've seen. You gave it a thorough shot in trying to find a buyer.

Excited to see what you do next!

I know how hard and passionately you’ve worked to realize your vision for the company. I was rooting for you all the way! I’ve rarely worked with such driven, committed, incredibly talented, smart people who were humble, kind, curious and open to learning. Not to mention fun!!

I am so grateful to have met each of you and to have had the opportunity to work with you. I only wish I could have done more to help. You’re all brilliant. I know you’ll be successful in whatever your next adventure may be.

I hope you take some time to rest, because you deserve it. And, I hope you’ll all keep in touch. If there’s anything I can ever do for any of you, please reach out.

Thank you for the email Kelly - I know it was so tough to write. I have so much respect and faith in each of you as leaders and founders, and I can't wait to see what's next for this team. Certainly, don't be a stranger, and let me know if there is anything I can do to help.

I hope you're proud of what you accomplished creating a viable product out of thin air. Ideas are everywhere but it's the .001 percent of the population who have the guts to bring it to life. It was such a pleasure working with you and I'm grateful to be a part of the journey. I promise you that when the dust settles, and you're on to your next accomplishment, they'll be a revealing moment where you'll realize that this decision got you to the next phase of your life. In my experience, the hardships in my life that I've walked through have gotten me to a better place.

You lived the hero's journey, gutting through insurmountable challenges that most wouldn't have the courage to endure. That's quite admirable. Anxious to see what comes next and looking forward to staying in touch.

I know this was a very challenging decision for the team, but I really respect the efforts you took and the thoughtfulness you showed.

I'm excited to see whatever you do next!

Just want to give you three a shout and say you should be very proud of everything you did and accomplished on this journey and not get too bogged down by the final outcome.

Whatever each of you do next, be it start something new, join something early, or jump back into a big company - you're going to be better at what's next because of Whym.  Because of how much you each expanded your skillset.  Because of how you learned what works and doesn't work in hiring, building culture, making decisions.

I know I always prefer to invest in founders who previously had to shut something down vs. those who are doing it for the first time. I know I always prefer to hire folks who have had experience building something from the ground up.

So many people just plug into the big corporate world and go on auto-pilot for their careers, or spend more time fighting political battles instead of building products. And in today's world, where companies have ZERO loyalty even to their best employees (especially in tech), the rug can be pulled out from under you so much faster than winding down a startup.  And you are left there with a generic resume that looks like everyone else.

***Not you three.  You will now forever stand out amongst your peers.

To me there is nothing more impressive than people who try hard things. Who don't settle. Who don't just plug into the Matrix and work 9-5 until they die.  That's fine for some folks, but thank god there are people like the three of you who are willing to try to build, to taking risks, to create.  Cause we'd all be living in an Orson Wells novel if it wasn't for people like you.

So don't hang your heads.  You are going to be infinitely better at whatever is next because of this experience.  Be proud of it. I'd hire or invest in all three of you if I have the chance again.  And it's because of what you did with Whym, not in spite of it.

If any of you ever want to talk, just let me know.  Always here for you!

Thanks for the update, Kelly. Sad we didn't get a better end to the journey but appreciate your efforts.

What's in store for each of you? Curious what you'll be doing next.

Incredible effort guys. Admirable in so many ways. I didn’t get to see most of the run other than from afar but feel fortunate to have witnessed the early days in El Segundo. That was a fun and impactful experience for me so thanks for the opportunity to be part of the team. You guys are now better positioned than ever for whatever is ahead.

Good luck to all of you!

Thank you for all of your efforts trying to secure a future; you've always been proactive about sharing spreadsheets of who you're going after and convos you're having so i have no doubt you made a lot of calls. I'm sorry it didn't work out the way you wanted.

In early 2023, we sought to adapt to a rapidly changing landscape. We unlocked our SaaS monetization strategy by selling third-party data to merchants and began developing the Kookie Browser, hoping to position Whym as a leader in consumer-centric data solutions in response to the impending removal of cookies by major browsers.

Q3 2023: Critical Choices

During our September 2023 board meeting, we faced some tough decisions:

1. We decided to shutter our merchant business due to the inability to find a trajectory to $1M ARR.
2. Without a clear trajectory to meaningful ARR, raising Series A capital became unfeasible.
3. We proposed a bold pivot toward the Kookie Browser concept, supported by our patent-pending Doppel API. While the board recognized the potential, there were understandable concerns about the viability of the plan.
4. Determined to build conviction, our team initiated partnership conversations with key industry players, seeking to forge a new path forward.

Over the past ten months,

we’ve held over 100 calls with 44 FAANGs + other Ad Technology companies —

exploring every possible avenue to secure a future for Whym. Despite our best efforts, including detailed discussions with companies like Yahoo, Pinterest, Google, and Meta, the recurring feedback highlighted the challenges of integrating our solutions within their existing frameworks and timelines.

The feedback from these companies reinforced that while our vision was compelling, the market and timing were not aligned to bring that vision fully to life. Our innovative approach to consumer data and shopping experiences was recognized, but the hurdles of integration and scale within larger organizations proved too significant.

The right story-telling

We’ve definitely found the right ‘timely’ topic to engage in these conversations that focus on (1) removal of 3rd party cookies from browsers (2) creating a more consumer-centric way of collecting, sharing and providing users with the ability to see and collaborate with their data and (3) that our suite of shopping products creates a clear and compelling value proposition for a wide consumer base.

We have not proven out enough on the consumer side of the business

Our consumer-focused value proposition is the most compelling. It is strategically aligned with broader initiatives at these companies. We are selling the company on the idea of the consumer app’s evolution into a shopping browser.

We need a large consumer base of adoption in order to create a compelling marketplace for data partners / advertisers. The rough target is ~100 million users or more. The companies that have ~100 million consumers or more are browsers or social media platforms which is where we have focused our most recent efforts.

However, we have not built out enough of the product, traction or evidence on the consumer side of our business to be a compelling target. Teams are having to evaluate if acquiring us would accelerate their product timelines fast enough.

Let’s review some of the key conversations, insights and feedback from companies in data, social media, shopping, BNPL, payments, browsers, etc.

Series of 8 phone calls + diligence questions (redacted) with Finance & Legal, M&A, product, commerce

During May, the company entered the final stage of diligence with a large ($5b+ market cap) technology company. After multiple rounds of calls with Corp Dev, M&A, and various product & business leaders across the organization, the team decided that they were not ready to make an acquisition offer to Whym at this time.

—

A warm intro from a former Snap employee, now VP @ Yahoo!, to Ryan began and quickly engaged a strong executive sponsor - GM of key business unit (name & role redacted) at [recently PE restructured] Yahoo. After several 1:1 conversations, we began engaging with corp strategy and Deciens helped us connect directly with M&A.

After 4 conversations with commerce, data and the GM of Search, it was clear that what interested the Yahoo team the most was the potential opportunity to take a larger market position and grow consumer productization via the Whym Shopping Browser concept (Kookie) as an expanded version of the Whym app & extensions. The GM asked that we prepare the engineering plan to build out this product and discussions about how it would be monetized.

The M&A lead spoke w/ Investor Reference.

Following this initial scoping document which was shared with the GM of Search, we received the diligence questionnaire from Yahoo and were officially introduced to the person that would run the acquisition process. We composed a response and shared team composition, cap table, high level financials and traction metrics to all questions.

The Yahoo! Team took about 1 week to review. We noticed several app / extension signups / installations by the Yahoo product & engineering teams as part of their eval. The M&A lead got on a phone call to inform Kelly that they were not going to make an offer.

Yahoo: Thank you for getting the information over. I think that was super helpful for our teams to review. Overall, our team really loves the product you guys have built. The team, the vision for the future. Definitely think there's a lot of goodness between women and Yahoo in evaluating the materials you sent me.

One kind of red flag or issue that we kind of came across was that we realized there'd be a lot of rebuild necessary in the browser extension for us to make it work for our purposes. For our purposes and kind of the plans that we have for browser extension, it wouldn't necessarily work for the timelines that we are envisioning right now. Our plans are taking longer than expected, which is why we're excited to talk to you. And so just given the timeline it would take to complete that versus acquiring and then having to rebuild, the timeline just wouldn't make sense.

Kelly: Thank you. Let me see if I have heard you accurately? In a build vs. buy scenario, obviously the advantage that you guys would be looking for is to accelerate some type of timeline around your product development. Is it fair to say that in that evaluation there, there was not enough evidence that this would accelerate the timeline or key business objectives?

Yahoo: Yeah, I think that's an accurate summation of it. I think if it was more like plug and play, then it would be much more interesting for us at this moment of kind of where we are in evaluating ourselves. That being said, we could very easily turn around in a few weeks and say, hey, actually things have changed on our side.

If the team's looking for a soft landing, we would definitely be interested in talking about hiring the team in and putting incentives in place to build this future vision together.

Began with the head of partnerships on strategic / new innovation initiatives. Very interested, but not his domain.

Moved to head of partnerships for commerce & data. Had several conversations w/ customer experience, data and commerce teams. Ultimately the play would be to help build out their current extension experience. Pinterest is based on explicit signals and they particularly our ability to automatically save and index products.

There is definitely strategic alignment on sharing data with users. They are trying to figure out how to engage users directly with seeing, collaborating and modifying their data.

They haven’t purchased much in the past 5 years. They admit that they are ‘early in their monetization journey’. In December 2021, Pinterest announced the acquisition of the Vochi app and in June 2022, Pinterest announced their definitive agreement to acquire San Francisco based AI-driven fashion shopping platform, The Yes.

Started with partnerships, but not an obvious fit for partnerships > sent us to M&A. M&A connected us with YouTube Shopping.

Shopping lead like what we are doing on the creator / collections side of the business with social shopping. There isn’t enough built out here that Google doesn’t already have somewhat assembled to be compelling.

No additional opportunities here ATM.

Had several robust conversations w/ head of PL of personalization @ Instagram (names redacted).

Instagram: I agree with the need or use case of giving people the ability to opt in and giving people the control over what information gets shared and how it shared and for how long. You guys probably saw some of this in Snapchat. This is something we're trying to solve internally as well from a lot of different aspects. I think for this to make something to make sense for something like an Instagram scale becomes the main question.

Ultimately, we were not a fit for Instagram on several fronts:

Instagram has so much data that they need to address personalization at the ‘cohort’ level and really aren’t interested / can’t focus on 1:1 personalization by engaging individual users.

It became clear that the current solutions that they have for allowing users to personalize their advertising interests are acceptable to them. They don’t believe that users want to engage directly with adjusting their advertising interests and that Instagram will continue to look for more predictive behavioral patterns to personalize the user journey. It makes sense from where they are coming from.

The idea of a browser that prioritizes ‘data on purpose’ is in direct conflict with the public perception that Meta / Facebook are trying to correct or influence. There is no way they feel they can take on a public, mass message other than that of data privacy and safety and have no appetite to re-educate the user on what it might mean to ‘own’ their own data.

The browser concept is not interesting to them. And they don’t need to collect more data outside of their current channels at this time.

Made it to Call 6 with Partnerships VP, M&A, product, commerce

Provided data room. Head of Product for Stripe Link is the best sponsor for our acquisition. This Product Lead was just dismissed from the company and they are in the process of re-hiring the role. Likely a dead-end.

Link PM priorities for consumer awareness and potential partnership opportunities with Whym in enhancing data quality during transactions and trust-building tools. Whym researched and created this proposal for PM:

• Major Link goal is to grow consumer awareness of Stripe via Link product
• Stripe wants to focus its value proposition on a product that helps consumers save money and time and feel protected when they make a purchase, especially when making a first-time purchase with a new merchant
• What other pre & post purchase experiences can Link offer (via Whym or based on Whym’s XP): examples: proactive price drop notifications and refunds, order tracking, aggregating merchant insights across different sites around social reviews and product reviews, and refund rate and dispute rate, leveraging the network to help build credibility on behalf of the merchant, or ‘no regrets mode’ = where for 24 hours after your purchase, you have the ability to change the payment method or apply a promo code retroactively
• How could Whym bolster a branded login / authentication (like Shop Pay but Login w/ Link)
• How could Whym help to mitigate ‘logouts’ after 90 days with identity solutions
• Link wants to broaden direct relationships w/ consumers via native app and communications like SMS and email

Head of B2B commerce initiatives (formerly @ Shopify) also met with us, but couldn’t see a fit under current initiatives.

Warm intro to the Chief Strategy officer. Followup calls with heads of product, commerce, data, customer experience and M&A leads.

(See below) The Klarna team is already building a version of consumer shopping profiles for their market. They have piloted an login solution and have strong brand recognition in Europe. We are completely strategically aligned but we don’t have enough new ideas or products to be a compelling acquisition for them at this time. It is unlikely that they would be interested in launching a specialized browser.

The company has a pending IPO. The company has only publicly announced one acquisition in the past 5 years. The BNPL business model is declining in public opinion within the past few years which is why the company is aiming more at shopping rewards than financing.

Warm intro to the data / advertising teams @ Epsilon. We had several strategic calls with team to discuss positioning Whym to ‘big data’ and advertiser networks like ‘Trade Desk’.

Warm into to strategic advisor to Epsilon network. Advisor admitted that ‘big data’ companies (which are all his clients and former employees) have been thinking about how to engineer a solution to the 3rd party cookie crisis for over 10 years. He pointed us to several youtube.com videos recorded by former CEO(s) of these companies that outline their intentions. The goal of Whym’s technology is aligned to these companies, it was unclear if our execution and proposed solution would find a fit.

We spoke with head of product, technology and business @ Epsilon via warm intros. Advisor attended these calls with us to help guide us.

Ultimately, these companies are interested in the potential of Whym’s API solution & monetization structure, but needed to see a compelling consumer user-base in order to be convinced that they can market our solution to their customers which are typically large retailers, enterprises and advertising networks.

Adjacent conversations: Fully Contact, Slickdeals

Spoke with M&A, absolutely no interest. We would need to find the right product / business leader to go back into the team here (similar to the Stripe approach).

Then read press announcement — 20% workforce reduction announced May 2024.

Advertising networks began to follow a similar line of Q&A as ‘big data’.

The VP of Data Partnerships @ Trade Desk is still interested in working with Whym, but needs to be convinced that there is a large enough consumer audience to sell to their network.