Rumors of our demise are under-exaggerated
On Sunday evening, Matt George, the CEO and founder of transportation company Bridj, published a Medium post, “Out of Aces,” announcing that the company would be abruptly shutting down. Starting, “Today, our incredible journey unexpectedly ends,” and closing with — I kid you not — a video of Kenny Rogers’ “The Gambler,” the note is, undoubtedly, one of the more surreal ways to tell the world that you are closing your business.
Bridj, a company looking to innovate the transportation industry, had raised at least $4 million — although BostInno once reported that it was raising $15 million (more on that in a bit). The news was delivered mid-evening on Sunday, affecting those who were planning to use the service on Monday. After the post went live on Medium and word began to spread on Twitter, George took to the social media platform to offer his thanks to those who were bemoaning the company’s demise and to fight back at some criticism.
According to reports, at least 50 people are out of a job because of this sudden closure.
A couple of things to note here. First, Bridj was a noble and ambitious effort from George and his team to improve the stale state of innovation in Boston’s transportation system. Some of the earliest established routes, especially those that connected Brookline and Cambridge with the city’s business centers, seemed to have been the lifeblood of quite a few people, judging from comments online and on social media. Also, in general, George has a good reputation among founders in Boston.
Putting aside the details that George mentions in his blog post that the closure has to do with a “major car company” deal** that fell through, a large part of the disappointment from within and without the company stems from a bigger issue not just for Bridj, but for many early-stage companies: Overexposure.
Bridj’s expansions outside of Boston, which took its focus off fine-tuning its product locally, didn’t work. Bridj tried to expand to three other cities, Washington D.C., Kansas City, and Austin. The D.C. experiment failed after one year; the Kansas City project seemed like it could be a success, but the contract between the city and the company expired in March, according to some folks I spoke with; and after making an announcement to launch in Austin last summer, the closest that project seemed to come to getting off the ground was the creation of a BridjAustin Twitter account.
In March, the Boston Globe’s Scott Kirsner wrote a piece about transportation companies that heavily featured Bridj and San Francisco-based Chariot, which was acquired by Ford (a previous Bridj partner). In the piece, Kirsner quotes George extensively. In reference to the D.C. failure, Kirsner writes, “Bridj’s George now calls that a test of the economics of serving neighborhoods with “a lower average income by far than the rest of the city.” Of Austin, George says, “We chose to focus on a different project.” The Kansas City effort is “a massive success,” according to George, although Kirsner questions the numbers a bit. At one point, Kirsner writes, “Without supplying numbers for 2015, George says Bridj ‘grew by 550 percent, in terms of rides and revenue, in 2016,’ and that the company plans to add more service to Cambridge and, ‘hopefully,’ Somerville this year.”
At the end of the story, Kirsner writes, “George says Bridj is ‘actively working with a number of auto manufacturers’ to explore self-driving electric vehicles. Testing could begin later this year or early next. ” Overall, George describes Bridj to Scott in glowing, positive terms, which fits the theme of the article about the evolution of the transportation space. Looking back at the piece, it’s easy to poke holes in some of George’s claims that make it seem as if, to use the parlance of the day, Bridj was crushing it.
This is something that is quite common for private companies: Overpromotion, and the working theory that if you can make the market and public perception believe that a company is doing well, eventually the reality will catch up to the narrative. But, in an overwhelming amount of cases, this is not at all the case. There are almost too many companies to list that have pushed a public storyline that differs greatly from what is actually happening inside the company.
Why does this happen? Because on rare occasions, it works — at least for a while.
(Now, all of the blame for this hype cycle should not fall squarely on the shoulders of Bridj and George. There are many others, the media especially, who cheerlead, with excessive vigor, for some of these unseasoned hopefuls. I’ve contributed to this too many times to count, but hope to have learned my lesson from past pronouncements of greatness. I mean, BostInno has a March Madness startup competition that real companies actually waste some of their marketing spend to try to “win.”)
Like many other early-stage founders before him, George pushed the myth of Bridj’s greatness. One sign that things might not have been as they seemed was an oversensitivity to having the messaging be exactly right. For instance, after the very positive article, George sent Kirsner an email that, as far as I can read from a Twitter exchange, complains about the company being described as a “commuter bus service.” The whole exchange is preserved in these tweets. Check out all the responses to get a full sense of the argument over Bridj’s economics that transpired after Kirsner’s initial tweets. At the end, George tweets “D.C. is high on the list for markets that will get BRIDJ v1 later this year. ” That’s George hinting that Bridj might try to go back to D.C…a nary two months ago.
Looking back, it’s evident that George wasn’t very forthright with Scott about the actual realities facing the company. This isn’t something new. Let’s go back to the BostInno story from 2015. In “Bridj is Raising Up To $15M in Series A Funding at a $60M Valuation,” Nick DeLuca writes about the company that it is “raising a Series A round of $10 million to $15 million, according to a source close to the matter, who also told BostInno that the round is expected to value Bridj at a cool $60 million.” The key, odd word combo in this headline I must point out is the progressive present participle “is raising,” connoting something that has started and is ongoing, which is quite unusual for a fundraising story. Later, DeLuca quotes George and then head of marketing Ryan Kelly for the piece. However, in reaction to his ask about the funding “rumor,” DeLuca writes: “Both George and Kelly declined to comment on the series A funding round.” Seems odd, right?
Well, the reason is that BostInno was tipped off by Bridj itself that it was raising money, and then, when asked to go on the record, the company reps said no. How do I know this happened? Because, they had tried to do the same thing with me when I was working at the Boston Globe. First, came the tip email, then when I asked for a quote, I got a serious response from George (who had also sent the initial tip-off of the fundraising in media res) that he couldn’t comment on any reports of new funding. Needless to say, neither the Globe nor I had any interest in running a gratuitously manipulative story that gave a company trying to raise money from investors (it now seems quite unsuccessfully) a fictional valuation of $60 million. (If you go to Angellist right now, you will see these $15M Series A/$60M valuation numbers under the company’s funding profile as if they actually did raise that money.)
And it’s in this cycle of overhype that Bridj seems to have fallen tragically. Now, don’t get me wrong, the product had some impressive qualities and piqued enough interest from local governments to get some serious consideration for a greater burden of responsibility within the machinery that is mass transit. But when you are basically running a minimum viable product and promoting it as if it is the second-coming of the London Metro, a correction is inevitable.
There’s a bit more weirdness, however, to the entirety of the Bridj story. According to a number of people I spoke with, many employees, it seems, were uncomfortable when George decided to install Nest cameras at the company’s office. From what I’ve heard, the belief was that the feeds, which went directly to George’s computer, could be misused by the CEO to keep tabs on employees.
I had multiple email exchanges with George and spoke with him on the phone about this claim, which he categorically denied, going so far as to say that it’s the first time he has ever heard anything of the sort. He then sent me an email, giving the details of the location and coverage of each of the five Nest cameras at Bridj’s office. He also stated in the email, “We installed the system when we moved in, and since have had no suggestions, formal or informal concerns raised that there was a security system in place to cover entrances and access points to the building,” and that, “There are zero workspaces covered by the NEST system, full stop. Any suggestion otherwise is demonstrably and factually false.”
That last part is interesting because it relates to something that George told me during our conversation about a former employee who raised concerns about the cameras possibly covering the work area and the unintended perceptions they could create. Once he told me that story, I asked if what he just told me undermines the point he was adamant about making that this was the first time he had ever heard of the cameras being an issue. Somehow, he didn’t think that telling me about a previous instance when an employee expressed the potentially problematic nature of the cameras counted as a suggestion or a formal or informal concern about the security system.
Nevertheless, the only thing I know for certain is that this issue, whatever the reality is, compelled enough people to share this odd aspect of Bridj’s operating culture. Not only that, but it buzzed so freely through the Boston tech community that multiple people felt the need to tell me, someone who writes about startups, about the weirdness weeks ago, which was well before the company’s deal with an unnamed car company fell through.
Many folks were surprised by Bridj’s “unexpected end,” including its unfortunate employees, customers, and, in his own words, the founder himself. The story of Bridj will be one about a company with both a great deal of potential and a large amount of bluster. Young founders who think that the best way to build a company is a never-ending stream of media clips should take heed from Bridj’s demise. I think George sums the entire Bridj story best with his Kenny Rogers’ kicker from the Medium post…”You got to know when to walk away, know when to run.”
**According to the Globe, that partner was supposedly Toyota.
Under-the-radar
Pillar VC gives us this week’s local company that should be getting more love. When I recently asked which company in its portfolio doesn’t get enough love, Jamie Goldstein pointed to PathAI.
As Pillar partner Sarah Hodges elaborated, “PathAI is transforming pathology by using machine learning to improve cancer diagnostics.”
Led by Andy Beck and Aditya Khosla, PathAI recently added as an advisor Pillar “Co-Founding CEO” Stan Lapidus, the founder of Cytyc, which had a $6 billion exit to Hologic in 2007. “Andy and Aditya are a powerhouse team,” Hodges said
“There is a multitude of applications for their technology, from lung cancer to breast cancer to cervical cytology,” she added. “The team already has active partnerships with Philips, Bristol-Myers Squibb, and the Gates Foundation, and is experiencing huge momentum securing new partnerships.”
What went down this week…
Lull? – Utterly Biased received quite a few response in regard to last week’s query about whether or not the idea of a downtick in startup activity in Boston is real or just the perception of a few. Here are a few of the best responses, and they all differ sharply:
- “If we’re going with the definition of “calm before the storm” for lull then I say, yes.” Tom Coburn, Jebbit.
- “Where have you been spending your time? What’s this based on? What I’m seeing is probably the most interesting time in Boston tech I’ve seen in the last 15 years. It’s very strong in a number of areas that are driving the next big waves of tech: robotics, voice/NLP [neuro-linguistic programming], industrial IoT, genomics and precision medicine, healthcare IT, cyber security, etc…Boston’s strength has always been R&D and this wave is R&D heavy.” – Drew Volpe, First Star Ventures.
- “One way to look at the current lull in the market is to look at “hot opportunities” being hawked by contingency recruiters and reputable staffing firms in the Boston area. We’ve noticed that the number of hot opportunities being offered started to deteriorate around October of 2015. That deterioration has continued to today. Hot opportunities being pitched have slowed to a trickle of problem-child companies, like American Well, who’ve been running the same job openings for 3 continuous years. During the first half of 2016, a couple of us had gotten calls from a reputable staffing firm in the area, not to offer a hot opportunity, but to see what we were seeing “in the market.” Boston is the worst of the major tech job markets, so the lull here may be longer and deeper in comparison to the other major tech job markets.” – Anonymous
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