Scope is What Kills Founders

If you’re working with just two engineers to develop a video streaming app, you’re likely setting yourself up for failure. A photo app might be more feasible, but even then—it’s likely to be flawed.

Some ideas require more resources to be successful.

I made this mistake with my previous startup. We tackled real estate using AI in a few promising but distinct areas. We divided our product into modules, each based on some traction we’ve seen—but attempting to execute all of them at once led to a product that was perfectly mediocre in every aspect that mattered.

Now, years later, I understand that our approach was similar to that of other startups like Rippling. Rippling innovates in HR, IT, and finance. On their website, they showcase 9 products in their HR Cloud, 2 in their IT Cloud, and 5 in their Finance Cloud, totaling 16 products—so the strategy isn’t inherently flawed.

However, Rippling's situation is different; they’ve raised $1.2 billion over seven rounds and have, according to some public sources, around 2,500 employees. We had a million in seed funding and a team of about 10 people. And that was probably too high a number—as we had to compromise on experience to fill so many roles with the money we raised.

Rippling’s founder, Parker Conrad, had previously co-founded Zenefits, another successful startup valued at $4.5 billion, whereas we had limited entrepreneurial experience. While it’s not impossible for first-timers to achieve success, we didn’t. Even if we had found more success, we would likely have needed to raise much more funding to realize our vision in the first place, creating a sort of catch-22 situation, as we wouldn’t get it without more credentials.

If I had the chance to start over, I would still keep the long-term vision in mind but concentrate on the most promising single product, dedicating years to refine it. I believe this focus is crucial, as even with more resources, our lack of experience would have been a hurdle. We struggled with making swift decisions, managing technical debt, and made some poor hiring choices. With more experience—or perhaps a bit of luck—we might have managed to stick the landing based on our original plan. However, under our actual circumstances, perfecting one product first and learning from our mistakes would have likely been a better strategy. This would have taken more time—but it would also have reduced our overall expenses, allowing us to invest more as time went on and we achieved new milestones.

I sometimes wonder why we didn’t do it that way. Part of the reason might have been our observation of other companies, similar to Rippling, achieving success with similarly broad strategies. We believed we could replicate their success—but lacked the insight to recognize that these startups were at a different stage compared to us. A more realistic comparison would have been with their earlier, less impressive versions when they were just starting out.

Another factor was our impatience. We lacked the confidence that a single product, initially underperforming with just a few customers, could improve and attract thousands. We observed that introducing a new product brought in 20 new customers, and another addition brought 10 more. This immediate growth encouraged us to continue expanding our product suite. But this approach had its limits. It became inefficient as our expanded offering wasn’t compelling enough for a broader audience beyond early adopters. The size of our product suite also made it difficult to move swiftly or make significant changes, as we were reluctant to sacrifice any part of it.

A slow death, possibly preventable, that we unwittingly brought upon ourselves.

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