[Editor’s Note: This essay is an update from Kirill Zubovsky, a startup founder with ties to the Seattle region, who spoke on the GeekWire Podcast in January 2023 about his experience starting AI domain venture Smartynames.]
When your startup hits rough waters, it’s tempting to abandon ship. However, in my journey, I discovered that what seems like the end could be an opportunity in disguise.
If your startup isn’t gaining the traction you hoped for, it might be time to pivot or even sell. Believe me, there’s light at the end of the tunnel. You can profit, learn, and emerge stronger. Let me share my experience so you can sidestep some pitfalls I encountered.
This is also the story of how I sold Smartynames to Truic and got a great profit share deal out of it. But first, to fully understand it, we need to rewind.
The year was 2014 and Scoutzie, the venture-funded startup I’d poured my heart and soul into, was failing. Imagine sacrificing time and money, and putting everything into a dream, only to see it crumble. That was us. As funds dried up, the weight of fatigue and disillusionment made us believe there was only one way out: to shut down. A decision we’d forever regret.
Looking back, other doors were wide open: additional fundraising, pivoting, getting acquired, or selling off assets. In fact, the team at SV Angel, one of our investors, quite literally told us that all those options were on the table. But the fog of despair obscured those routes. Why? Because we stopped believing in ourselves.
Consider this: thinking of an “acquihire”? From an outsider’s lens, they’d see a resourceful Y Combinator founder with a stellar engineering background, a multi-tasking maestro. You can code, design, and engage in business. An asset to any organization!
But from a founder’s point of view, what I saw in the mirror was not that pretty: a worthless person who couldn’t make his company work, with no useful skills, and no more energy left to keep going. The chasm between external perception and internal self-evaluation can be vast, devastating, and not just unhelpful, but actively debilitating.
“Disassociate emotions from your venture for a moment. Shift focus from past endeavors and aspirations to charting a feasible way forward.”
This disparity isn’t just unfortunate; it’s misleading. The solution? Self-belief and a proactive stance. Disassociate emotions from your venture for a moment. Shift focus from past endeavors and aspirations to charting a feasible way forward.
OK, now back to the story of Smartynames. When I launched Smartynames, I didn’t have much of a plan, other than to learn about the industry and see what I could create. I wasn’t focused on money at first, but there was always a plan to get there sometimes, and hopefully soon. I got some affiliate deals in place, and came up with a set of features that I thought would be popular.
Fast forward nine months, and I was making a little bit of money every month, but it was definitely nothing to write home about. I was now faced with two options: to continue working, trying to figure out where the money was; or to find someone else who could help me do that faster.
At 25 years old, I would’ve stuck with option one, maybe even tried to raise money to go big. But in my 30s, I decided that sometimes moving fast and breaking things also means finding help. After all, domains weren’t a business I was planning to be doing for the next 25 years. It was a fun experiment, but I wanted out, and this time around, I knew that would require a deliberate effort.
I reached out to a few friends for advice (thank you Dave Schappell, and Anthony Eden!) and talked through my options. At first, I wanted to pivot and keep making progress, but then reason set it. I made a list of a dozen people who’d be interested in acquiring Smartynames and emailed them all. Each one got a personal email with an example of how Smartynames.com could enable their companies to get bigger.
Selling to a potential buyer is no different than selling to a venture capitalist or a prospective customer. If you want to learn more about sales, read The Qualified Sales Leader and Never Split the Difference.
The basics are as follows, though: make a plan, figure out what matters to the buyer, inject yourself in the right place in their purchasing process, and pitch your thing in such a way that they cannot resist wanting to buy it. Not every buyer is going to be right for your product, and you have to recognize that and focus on the ones that are. Then go through your list, and do the work.
So what happened when I sent out all the emails? Some people ignored me, some jerked me around, some politely declined, but a few companies expressed legitimate interest. We started talking about ways to integrate the technology, and what the future together would look like.
The most enthusiastic and honest buyer though was Nagabhushanam Peddi (better known as Bobby), the CEO of Truic, and we had such an upbeat discussion that after the first phone call with him I was pretty much convinced that short of something going terribly wrong, Truic was not just a better choice, but the best choice by a magnitude.
Here’s what really set Bobby apart: he was straightforward, honest, high-energy, action-oriented, and a great salesman. He immediately understood that I was more interested in learning than in money, and he was selling me the future of what we could accomplish together, rather than an immediate payout. I didn’t care who would pay me, but I wanted to work with Bobby.
It also helped that Truic was a great fit. They have been in the business of converting customers into domain buyers for years now, and have their own name generator, as well as a slew of resources on how to start a company. There’s a YouTube channel, a podcast, and a deep knowledge base. It’s a one-stop shop to get inspired, motivated, educated, and started. Not only did they already have everything I was hoping to accomplish with Smartynames, they also had the expertise on how to convert inbound users into sales, as well as lucrative contracts to turn those customers into dollars.
Like I said earlier, sometimes you need to ask for help, and that help can come in various forms. Sometimes it’s advice, sometimes it’s money, and in my case it was leverage. I could have spent months learning how to make money in this space, which would have required raising funds, or I could partner up with the people who already held all the cards. The choice seemed obvious.
It only took us a few days to iron out the details, and to sign the contact. Truic moved fast, really fast, and it was delightful. And now, if Smartynames makes money, we both get paid, and with their resources it is almost guaranteed to be true. It’s a win for them, a win for me, and a huge win for our customers who will be able to find the right domain, learn, and start a company. What’s not to love?
If you are a founder who is stuck in a grind, not sure of the way forward, perhaps selling is the right move for you. In the best-case scenario you will find a path to making more money, and in the worst, it will free your soul.
If you have any questions, or just need someone to talk to, please feel free to sign up for my newsletter Novice.Media or reach out to me directly.
Listen to Kirill Zubovsky on the GeekWire Podcast in January 2023:
