The Day we turned down TechCrunch for DEMO

When Scot and I left our jobs to start MessageSling, we didn’t know we were going to start MessageSling.  We didn’t have the name.  We didn’t even have the idea.  We just knew we wanted to be in this sweet spot:

It’s pretty funny admitting it, but when we left our jobs, we had a better idea of how we were going to launch our company than what our company was actually going to do.

My cofounder, Scot, came from Jingle Networks, creators of 1-800-FREE411.  FREE411 launched at the DEMO conference in 2005, and Scot saw firsthand what kind of exposure came from the conference.  The way DEMO works is that first you get accepted, then you pay $18,500.  In return, you get 6 minutes on stage to pitch your product.  It’s 3 or 4 days long and launches 60+ companies every six months.  It’s a big media production.  Tons of press, investors, etc….

We were going to launch at DEMO.

Now when I say launch, I should probably say that we assumed our launch had to be a huge thing.  Not just a press release and a mention in a blog.  It had to be a big deal.  We had to have a major launch and get tons of traffic right away and get in front of investors and get user feedback and there was no route that was ‘just’ grow the business slowly over time.  That was my mindset anyway.  I won’t say that it was wrong, because that option can work for people who have all their ducks in a row.  But it was uneducated and narrow in the sense that, as far as I was concerned, that was the only way to do it (and we didn’t have our ducks in a row… but c’est la vie).

And then something neat happened, TechCrunch announced a new startup launch conference called TC50, and it cost about $18,500 less than DEMO.  TC50 was free.

TechCrunch is hip.  They have a huge readership.  TechCrunch’s founder, Mike Arrington, does not fuck around.  It was clear from the initial announcement that TC50 was going to be big; that it would rival DEMO in terms of the exposure it would give to the companies that launch at it.  And it was free!  Applying to TC50 was a no-brainer.

Then came a very interesting day.  We got past the first stage of the application process with TC50.  We had a call scheduled with some of the TC organizers to discuss MessageSling.  I’m not sure how many people got to this stage, but when you launch 50 companies at a conference, you can’t spend 30 minutes on the phone with too many so I’m thinking it was a big deal.

The call was scheduled for a Wednesday evening.  Wednesday afternoon, we found out we were accepted to DEMO.

We had a decision to make, and we had to make it quickly: a guaranteed launch for $18,500 or a (what we thought to be decent) chance at something comparable and free?

• Would TC bash us if we flat up turned them down? No idea.
• The world is small, and people talk.  If the DEMO people heard that we were interviewing for TC50 after we were accepted, would they yank our spot?  I dunno.
• If we just said no to DEMO, was it worth the risk of not getting our big launching?  Umm, can I have more than 2 hours to think about this?

I remember the conversation being quiet.  Scot’s house was quiet.  Jen (his then girlfriend, now wife) wasn’t there.  Dogs were quiet.  No music.  No rain.  Just the two of us standing in his kitchen.  The heater wasn’t on.  Laundry wasn’t going.  I was sitting at the breakfast nook.  Scot was leaning up against the sink countertop.  It wasn’t a debate.  It wasn’t an argument.  For an hour we sat there, talking, not knowing what to do.

It’s worth throwing some facts out there to put things in perspective:

• We started MessageSling in early January 2008
• We raised $50,000 in March
• We were accepted to DEMO on July 24th
• Our call with TechCrunch was scheduled for July 24th
• We had already hired CJ
  
• The initial payment for DEMO was $9,000
• We were going to run out of money in September if we went to DEMO
• We were going to run out of money about 10 weeks later if we did not go to DEMO
• When we ran out of money, we would still owe DEMO $9,500

We ended up calling TechCrunch, and told them we were going with DEMO.

I can’t speak for Scot, but I can tell you what I was thinking at the time: DEMO was a sure thing.  I was not confident we would make it into TC50.  I knew that the voicemail transcription space was already packed with competent competitors.  And given that, I was a tad surprised we got into DEMO.  I didn’t think we would get lucky twice.

If I could do it over again, I would do the exact same thing.  I would do the exact same thing because I like where I’m at in life.  I would never go back and change a thing because I don’t know how it would affect my development.

That being said, if I ever come face to face with that kind of decision again, I’ll have the full conversation with TechCrunch.

Why?  Because we had delusions of grandeur.  Those questions I posed up above? Stupid.  Would DEMO yank our spot?  Would TC bash us if we turned them down?  No. Neither.  Why would they?  We were nobody to them.  We were just a couple of kids that sent a couple emails.  We were in a bubble having a completely unreasonable and wasteful conversation.  TC and DEMO were only concerned with having a full conference of great companies.  We should have gone as far as possible with TechCrunch, possibly even told them we were accepted to DEMO:

Look guys, we just got accepted to DEMO, but we’re obviously interested in you because you’re the new hotness, a hell of a lot cheaper and we’re short on cash.  If we continue things, how soon would we have an answer from you?

That would have been the right play.  And it will be the right play next time :)

Moral: You can play the crazy insecure what-would-he-say-what-would-she-say game all day.  Don’t waste your time.  Assume the best in people.  Be honest and communicate and keep all options open as long as possible.