Finding the Lessons in Losing $75 million


You might not recognize the name Justin Kan, but you’d likely recognize his website. Kan was a co-founder of Twitch, which grew to become the number one gaming website in the world. Not only does Twitch have massive cultural reach – everyone from pro athletes to Snoop Dogg have hosted Twitch streams – it was also very profitable for Kan, selling to Amazon in 2015 for almost $1 billion.

Kan’s next project was Atrium, a startup that was part law firm and part software company. (The idea was to create software that would make life easier for Atrium’s in-house legal team, allowing them to work more efficiently and therefore offer their services at a lower rate.) And after Kan’s success with Twitch, investors were eager to get on board: Atrium secured $75.5 million in funding.

Thirty-six months later, Atrium was shutting its doors, and returning what was left of that money to investors. More than a year after making that decision, Kan posted a sort of video confessional that explains what went wrong. “People love talking about success,” he wrote on Twitter, “but today I’m going to talk about failure.”

Kan walks us through why Atrium failed, and it is a laundry list of reasons: the company hired too fast, they never really figured out who Atrium was for, and there were problems with the culture inside the company. Above all, says Kan, “My co-founders did not feel particularly supported. And I think in a lot of ways, I didn’t set them up for success.”

He goes on to detail the cost of what happened: not in terms of dollars but in terms of his relationships with the people around him. He talks about the lost friendships; about having to lay off his 100-or-so employees; and about “doing wrong” by his investors and customers.

Kan’s confessional offers so many reminders about the right way to do things. And although he made the video with other startup founders in mind, he says that the lessons he learned are universal. “No matter what it is — no matter how difficult — you can get through it if you just take it one step at a time, and really let yourself be present in the experience.”

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