
Runscope acquisition falls through - bentlegen
https://www.facebook.com/johnsheehan/posts/10156769607460078
======
johns
This post is getting more attention then intended but I'll be back later
tonight after my hockey game to answer any questions.

I do just want to state unequivocally that we do not intend to shut down,
we're still growing and are as sustainable as ever. Customers don't need to
worry about us disappearing.

~~~
jsnell
"As sustainable as ever" might not be the best way to phrase things, given
that the previous state was in your own words "a long way from self-
sustaining".

~~~
johns
Fair point. In retrospect it _felt_ sustainable fresh off our last round given
the market at the time and the amount of runway it gave us. Not saying that it
was, just that it felt that way.

------
zaroth
How am I just learning about Runscope? This service is fantastic. I just
signed up for free, they have a really smooth onboarding process, I now have a
free API monitor pinging my API from multiple geographic locations and
verifying correctness of the return value, they are generating some neat
reports, and it looks like they even have a control I can publish/iframe with
a nice graphical history.

I mean, this is almost better than StatusPage.io type solution just because
it's so simple. The pricing is serious, and I think reasonable but it will be
un-affordable for some. For now I'll play with the free option and will
upgrade as soon as there's funding.

I really wish you luck with this product, it provides real value and is easy
to use, that should be enough.

Edit: So I read that you raised $6m. I'm sure that helped create this
software. What's great is the company can now take its time earn back that
money, and if you can focus on the features that matter you can grow the
feature-set in a controlled simple manor. The only problem I forsee is the
investors may never see a return on the $6m, or rather, selling shares will
never surpass the liquidation preference, so the challenge is paying yourself
enough. If you have Board control you will be able to issue dividends, but
otherwise getting cash out of the company will be hard.

~~~
hobbyjogger
> If you have Board control you will be able to issue dividends

Most VCs insist on a protective provision that requires their approval to
issue dividends to the founders/employees (i.e., common stock). So yeah--focus
on either building a company that will sell for more than the liquidation
preference or at least push for a comfortable salary.

------
simonw
John: really sorry to hear what a tough time you've been having. I hope you're
through the worst of it.

I recently started using Runscope as part of an R&D project and it's been a
revelation: it makes debugging API-related issues SO MUCH easier than any
other approach I've used. It's saved me many hours of work. I'm a very happy
paying customer.

One example: are you using Elasticsearch? Proxy your requests through Runscope
and you can see exactly what happened with every query - both the full request
and the response. And... you can share individual requests with other
developers to help with debugging complex issues.

------
aresant
I appreciate the absolute heart-on-sleeve but you're not in "post mortem"
mode, you're in transition mode!

Your message - from the first sentence to choosing "default dead" in telling
the story reads negative.

Same message, different delivery:

"First the good news - Runscope is now cash flow positive and in it for the
long-haul!

In other words we're "Default Alive"* and even though the road getting there
has been bumpy, we're more committed than ever.

We're even moving our core team back to sunny Minnesota to continue managing
costs and expand our team more sustainably."

\- - - -

I have huge respect for what you are going through and wordsmithing at this
critical stage when customers are thinking "What the fuck is going on at
RunScape" will have an impact on your business.

Stay positive and upbeat publicly, especially when you have a positive message
to deliver!

~~~
ludamad
I found the tone refreshing, personally

------
jefflinwood
The good news from this announcement is that they aren't shutting the service
down, as their costs have now fallen enough that they are cash flow positive.

Prior discussion on HN about a $6 million Series A, raised two years ago:

[https://news.ycombinator.com/item?id=7568598](https://news.ycombinator.com/item?id=7568598)

------
baus
It is interesting that the founder has decided to leave SF. It is getting to
the point in the Bay Area that PG's concept of "ramen" profitability is
becoming just a dream as costs continue to skyrocket. I think we are going to
see the industry start to fan out geographically in the next couple years.

~~~
johns
I wouldn't read too much into it. I love the Bay Area. Rent is crazy, but
there's no better place to run a startup.

------
gkoberger
I met John a few years ago, and he's one of my favorite founders. He's smart,
on top of things, personable, and effective. He's been a huge inspiration to
me, and I find myself constantly thinking "what would John do?" when in a
tough spot.

I'm sad he won't be in SF (and sadder I didn't take advantage of it more when
he was), but excited to see what happens. John doesn't give up... this is just
another step in a long journey.

Like the adage goes, "This too shall pass".

------
20years
"Without a team—soon to be without an office—our ongoing expenditures are now
minimal. This makes the company cash-flow positive."

Congrats on becoming cash-flow positive! Sounds like you are making a lot of
good decisions which will hopefully put you and your family in a much better
place.

------
jkarneges
Fortunately, unlike many other startups that we read about on here that bite
the dust, you can actually _pay_ for Runscope. Which I do. I think they have a
bright future as a sustainable company.

------
bb88
When I saw you guys at Pycon last year in Montreal, I thought you had a great
product, and a catchy slogan that I kept repeating to myself, especially after
I was laid off.

Everying is going to be 200 Ok.

And it will be.

------
jayonsoftware
You guys have an amazing product that has saved me so much time in the past
few years. Good luck.

------
fujipadam
Good luck to you and hope you get another offer that will resurrect your
company to full staff

------
shaqbert
@johns: who is gonna take care of your awesome community projects? If you need
help, let us know. We are using them all the time...

~~~
johns
We definitely want to keep them going. They're a great source of leads. If
you're using them all the time though, sign up for a Runscope subscription!
That's the best way to support those sites.

------
icedchai
So if you had to do this again, would you have taken VC?

~~~
johns
For this company, absolutely. It's not perfect for every kind of business, but
for what we wanted to accomplish I think it was the best path to do so. I'd
just ask them better questions about failure scenarios :)

------
stephenitis
Was there a better way to line up a acquisition process that didn't endanger
all the employees jobs?

~~~
johns
This was a really tricky balance. We could have let some people go earlier to
extend runway and maybe give us more time to optimize an exit, but at the cost
of morale and perhaps a subsequent talent drain. We also knew the people were
going to be a focal point for an acquisition so the more good people we could
keep around, the better our value to an acquirer. All things considered we
ultimately choose to hold on to as many of them as we could for as long as we
could while trying to be transparent about our status so they could decide if
it was worth it for them to hang around.

~~~
stephenitis
Thanks for sharing this perspective.

It's a testament to the the tools and infrastructure that your team built that
a two man team can keep Runscope in a cash positive holding pattern. If this
is rock bottom then Runscope is far more resilient than the sea of other non
revenue generating companies in this environment. again. props for being open.
hope you get to share more lessons as time heals.

