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Shyp, a company that probably never should have been, ceased to be on Tuesday. It charged consumers $5 to pick up and deliver pretty much anything, a business proposition permanently tilted against itself.
In the modern history of Silicon Valley startups, Shyp’s demise isn’t all that unusual. There’s a fill-in-the-blank quality to its short (5-year) story. Half-baked idea. Check. Gobs of money ($60 million) from big-name investors (Kleiner Perkins, Sherpa). Check, check. Repeated “pivots.” Check. (Fast Company’s Harry McCracken has a thorough review of Shyp’s history.)
What makes Shyp’s swan song somewhat unique is that entrepreneur Kevin Gibbon put words to the music in a much-praised apologetic post about his experience. While Gibbon intended his essay as a way to cop to mistakes, I found it interesting as an almost perfectly distilled example of why the HBO show Silicon Valley (just back for a fifth season) has done such a good job mocking the real people of Silicon Valley.
Like many founders in this upside-down land, Gibbon is simultaneously sorry for his mistakes and oblivious to how little chance he ever had. He notes his company’s “initial explosive growth” without analyzing whether what looked to him like an impressive start ever made any financial sense. He identifies his mistakes as focusing on consumers, but there’s no evidence he could make a business from serving businesses either. He says even after a successful shift toward businesses—a time during which, cliché alert, Shyp “fought tooth and nail”—the company was left “with too little runway” to continue. That last comment is a meaningless euphemism best translated as: ‘We had run out of money and couldn’t persuade our investors to give us more.’
Stories like Shyp’s are valuable to those outside Silicon Valley who think this stuff is easy, that piles of money last forever, and that attracting famous VCs guarantees success. It also makes the tales of those who succeed that much more powerful.
(Update: this story was corrected to remove Google Ventures as an investor in Shyp.)