I burned through so much investor cash, the fire department showed up

Photo credit: Mohamed Nohassi.

This is satire.

As I write this, I’m looking at the charred remains of what used to be my startup. As a technology company, we’d taken all the steps we knew to run and scale a company. However, one thing they don’t teach you in “The Lean Startup” is what to do when you start burning cash so hard it ignites a fire.

Like any other founder, I launched my company with a dream in my heart and a glimmer in my eye. Or, at least I launched it with an MVP in the cloud and a sales deck on my laptop.

Investors were intrigued by my idea. I can’t confirm that’s because it was any good, though. After all, haven’t you heard about the vending machine company that just raised US$2.5 million? But after a few pitches and conversations, I got investors to buy into my vision.

If I’m being perfectly honest, I could have bootstrapped my company to greatness in 10 years, but I ain’t got time for that shit. I convinced these investors to give me more money than my parents earned in their entire lifetimes so I could build a tool like Facebook, but better.

Many people will tell you to take only as much money as you need because investor expectations increase based on the amount of money you spend. But I was like, “Daddy wants a new Cadillac and doesn’t want to wait until the company’s acquired, so open up your checkbooks, jerks!” And somehow, these investors still gave me money, even though those are the words I literally said out loud in our final meeting.

I figured that as a small company, we didn’t need a CFO. Numbers? Who gives a damn about numbers when you have US$4 million in cold hard cash to spend on vintage arcade machines and state-of-the-art Japanese toilets?

We were on fire. Almost literally, by that point.

Our product was doing great! We were attracting 10,000 users a month with our obscenely large marketing budget. I mean, some of them only ever logged in once just so they could get the free meal coupon we were offering them, but 10,000 users! And 10,000 meals, all on us. We were on fire. Almost literally, by that point.

Retention was difficult. But instead of testing and building the functions that might have made people use our product, I decided to instruct the team to build a feature that would allow my friend, DJ Coke Nose, to sync the colors of his iPhone notifications to the new Macklemore album. He loved the feature, at least until he had to give up his phone to pay off some of his gambling debts.

I was also tasked with hiring our team. So, I personally recruited a friend from college who demanded a US$500,000 salary and the title of “chief awesomeness officer” (CAO). And he was awesome…at everything except his job. In retrospect, I never really understood what I’d hired him to do in the first place.

Once we realized our product was tanking and that no one was willing to pay US$40 a month for color-syncing iPhone notifications, we were already feeling the heat. We asked our CAO to help, but he was away taking one of his ever-important weekly “strategy” meetings on a sailboat in the Bahamas. Little did we know that we were about to ignite. Our once-promising startup was going to go down in a blaze of glory. And by glory, I mean agonizing defeat and devastating failure.

By the end, we were quite literally pushing together stacks of money and lighting them on fire.