It is with some sadness that I announce we are going to shut down the CrankyAds service.
For our existing CrankyAds users you have until the start of next year, 2014, to sort out an alternative ad management system and transfer any existing advertisers over.
Any active subscription payments advertisers have with CrankyAds will be cancelled at the end of November 2013. A final payment of all ad revenues still owing to publishers will be made in December 2013.
Finally the service will be switched off January 1st, 2014.
CrankyAds does not currently cover costs and we no longer wish to focus our energy on the project to help it grow. For much of this year the founding team have gone in different directions as we each focus on projects we are more excited about.
While I am disappointed we reached this point, I have no sense of hesitation that it is the right thing to do. My own motivation for CrankyAds has been on a steady decline for more than a year and I’m happy to have closure on this project.
Further explanation for the decision is below, including plenty of startup lessons learned thanks to the power of hindsight.
The Time To Make A Choice
If you have been reading this blog for the last three years you know I have been a partner in a startup called CrankyAds.
I first had the idea for CrankyAds way back in 2007, but was knee deep in blogging and teaching at the time, so put off starting it.
In 2010 I finally began the process of creating CrankyAds, and in 2011 I brought on two partners, Walter Haas and Mick Real to act as developer and designer respectively.
We then went into full-on startup mode, attending events, doing pitches, applying for incubators, joining co-working spaces and even turning down some investment money.
You can read more about these experiences in my previous articles about CrankyAds here -
- How I Created Our Pitch Deck For Investors And Tales From Our First Startup Presentations
- My Tech Startup Journey: Learning How To Fund A New Software Company
- What To Do When You Run Out Of Money And Time?
- Launching A Software Startup, Looking For Investors And More – Updates To My Business Timeline
At the end of last year we reached a point where we had a to make a choice.
We could pivot and change direction with CrankyAds, we could go hard and take on investment so we could realise the features we wanted to create, or we could slow down development and let CrankyAds continue but without working on any major new developments.
We chose the third option.
We agreed to create three more features as our goals for early 2013, and then stop ongoing development and let CrankyAds continue organically.
Realistically at this point we had all decided to move on to other things, but we didn’t want to completely give up on CrankyAds just yet. It was still serving a need and generating a little bit of money.
I had hope that it would slowly grow organically, at least enough to cover costs, but that has not been the case to this point.
Why We Made This Decision
There is a simple answer to why we eventually reached this point and have decided to shut down CrankyAds -
We just don’t want to be in the advertising industry anymore.
I know CrankyAds could grow into something profitable. However, that requires people who are motivated to create new features and market the service competing in an industry that in some ways is dying, but in other ways is being reborn as something completely new.
With mobile advertising, in-content advertising, video ads, re-targeting, real-time buying networks along with competing options constantly popping up like new pay per click networks (Facebook ads – look out for a Facebook version of Google’s AdSense soon too) and traditional options like affiliate networks. It’s a crowded space to operate in.
We made plenty of mistakes along the way with CrankyAds. Perhaps my first big mistake was seeing CrankyAds as a technology company when it was always going to start as an advertising company.
As crazy as this sounds, I never wanted to be in the advertising industry. I wanted to use technology and some cool ideas around making advertising transactions more social, to help bloggers generate an income stream.
Yes it was still advertising that bloggers were selling, but I saw us as a technology service that helped bloggers and advertisers connect organically, in a very social transaction. Our focus as a company would have been building social tools to help facilitate these transactions.
You might say I wanted CrankyAds to be the Facebook of online advertising.
Unfortunately we never reached the point where I could test the social features I had come up with.
Development Killed Us
We made mistakes early on with development and underestimated how difficult it would be to build just the basic platform.
To compound this problem, as things dragged out and months of work turned into a year and beyond, we faced pressures to make money.
We became aware of lean methodology and our focus changed to what we would do quickly to test things that would lead to profitability.
This is when CrankyAds to me became more of an advertising company than a tech company.
We began to follow a very old model. We needed to find advertisers so the bloggers who signed up with us could earn an income, and we needed to find bloggers so we had quality sites for advertisers to buy ads on.
With little to distinguish us between all the other advertising management platforms that do the same thing (CrankyAds lacked the social tools I wanted, which would be our point of differentiation), it was always going to be a difficult proposition to compete, and not the area I wanted to focus on either.
In a perfect world we could have built the basic platform and started to offer the social tools, which we could test under a lean methodology, within a few months, but it turned out to be 18 months before we reached this point.
There was always the option to get investment money and pour it all into development. We could hire more programmers, but that presented a whole bunch of new problems to do with hiring good people and integrating them into a team, something we tried along the way and struggled to manage.
Taking investment funds would also mean we would be held accountable to investors, very much changing the pressure we faced as founders.
It could have ended up as a nightmare situation, held hostage to long days as a startup founder, working a business model that we never signed up to focus on just to show increasing revenue.
This is why we ultimately said no to investors and stopped looking for them. There was no point raising funds to chase something we didn’t want to chase.
If I personally had a few million spare lying around to throw into a project, I would definitely consider hiring three or four developers for a year and build out all the cool social features I wanted CrankyAds to have.
That would certainly NOT be a lean methodology process, but it would be fun, and it could have led to what I wanted CrankyAds to become – a social advertising platform.
Unfortunately because of how things went I’m not sure if I will ever get to see if my social ideas would work on an advertising platform.
If someone came along who wanted to take over CrankyAds I would be more than happy to explain my ideas for the social tools I wanted CrankyAds to have, which leads me to this…
Are We Selling CrankyAds?
Earlier this year we did start looking for potential buyers of CrankyAds, knocking on the doors of some companies similar to us and also contacting a broker.
We didn’t find a buyer with the limited search so far.
The right kind of buyer is someone who is willing to put in more development work into CrankyAds. For most of the people we contacted they already have their own advertising platform, so they had no desire to start work on ours.
Nothing really seemed to fit well so we decided to continue running the service a little longer and see what happens. If CrankyAds couldn’t cover it’s own costs towards the end of this year, then we would have to shut it down.
That brings us up today.
We are still open to someone taking over of course, so if you are interested feel free to get in touch with us – email@example.com is the address.
Why Not Pivot?
You’re probably wondering why we don’t pivot CrankyAds towards a new direction.
We had so many discussions about this and so many great ideas — many that excited me — but as we learned over the last two years, any pivot would require an investment in development that we are just not prepared to make.
Even under a lean methodology, there is work to do to change direction, not to mention how that would impact our strategy, which would require changes to our website, marketing and every other part of the business.
To make a long story short, as founders we are more interested in moving on to other things than try and turn CrankyAds into something that is profitable.
Sometimes you just need closure and to move on. I think this is one of those cases.
The only major regret I have is we don’t currently have an option to keep CrankyAds running so the existing users can keep using it. I want to keep running it here on EJ to manage my advertising too.
There isn’t a service out there that does exactly what CrankyAds does. I’m struggling to find a good alternative to use myself and to recommend to our users.
There are plenty of plugins and services that are close or similar, but none that offer support for video, banners and text links as simply as CrankyAds does.
Perhaps this blog post will surface someone who can see value in taking it over so CrankyAds won’t have to shut down.
It’s been three years since I first contacted a programming company to start work on the first version of CrankyAds. Over that time I have learned a lot of lessons, here are some of them…
1. Partnerships Are Fun And Productive
Working with a development partner is a lot better than paying an external development firm, even if you have to give away equity.
I had a lot more fun and we achieved a whole lot more as a team with Walter and Mick than I did paying $30,000 to a development company, who built the very early version of CrankyAds (which I could not use).
2. Lean is critical at the start, so hold on to dream features for when you are cash-flow positive
Software development takes a lot of time and forces you to constantly shrink your dream idea into fewer and fewer features. I suspect all software entrepreneurs wish their tool did so much more than it does, which is why becoming clear about the key features you need in order to test the idea is so important.
3. A Startup Entrepreneur Is Very Different To A Lifestyle Entrepreneur
My role as a founder of a software startup is so different to all the other businesses I have built previously. Everything I did before CrankyAds was about generating cash-flow sources that did not require much time and fuelled a lifestyle based on freedom.
The mindset for CrankyAds was different. It was more “silicon valley” startup. We studied startup methodology, looked for investors and began down a path that would likely have ended up absorbing more time rather than creating more freedom.
I was well aware of the differences going into CrankyAds, and I thought I was prepared for them. What I didn’t factor in was how much I am used to having a day that is full of variety and the freedom to choose how I spend my time.
I was excited about creating something bigger, but I didn’t factor in that a startup is really an all or nothing endeavour if you are the founder/CEO. It’s like a job, which is something I have never been built for.
At this stage in my life I probably make a better advisor and investor than I do a founder in a startup. I didn’t realise how true this was until running CrankyAds.
4. I Still Want To Write, Blog And Teach
I never stopped writing to this blog while I was working on CrankyAds. Obviously there is synergy between the two businesses. EJ makes for a fantastic marketing tool to promote CrankyAds, and is largely responsible for the exposure and user-base we have now at CrankyAds.
Despite the positive synergy, I felt like I was running two businesses at the same time, which is counterproductive.
If I didn’t have EJ or my newsletter, podcast and video channel, I wouldn’t have had so many advantages for CrankyAds. Yet all those tools take time to manage, which in turn takes time and my focus away from CrankyAds.
Sometimes going in 100% with no initial advantages and no money is a good thing because it forces you to hustle. You have no distractions other than your startup and you have to make it work or you don’t eat. That was not the situation I was in, and it impacted how I worked on CrankyAds.
The thing is, I always wanted to run my blogging business just as much, and often more as time went by, compared to how much I wanted to work on CrankyAds.
Maybe this means I am meant to be a writer/blogger/teacher as opposed to a tech startup founder. It certainly feels that way each time I return to a cafe and sit down to blog. There’s a lovely simplicity about this kind of online business.
Onwards And Upwards
For most of this year I have returned my focus back on to Entrepreneurs-Journey and the development of new training products.
You have already seen the fruits of this in the release of the EJ Insider Interviews Club, my Master Your Mindset E-Guide Package, a redesign and refocus of the EJ Newsletter and the recent launch of a new EJ blog design, all in the last few months.
In the pipelines I have Blogology, an Apple Newsstand magazine that will help my content reach new people, a Mobile App version of EJ and two more new E-Guides. That will take us through to the end of this year.
This is the tip of the iceberg, as my focus now is to do what I never did in the past; build a real business behind what I am already having success in.
Thank you as always for your continued support and attention. I hope by sharing my entrepreneurs journey, including the stories from projects like CrankyAds that don’t quite go as planned, you learn from my experiences.