Sprouter announced this week that it will be turning off the lights on its question-and-answer Web site for entrepreneurs on Aug. 2.
The notice caught many of the site’s users off guard, as the Toronto-based company appeared to be picking up momentum in recent months, attracting more users to its online community as well as its Sprout Up events in downtown Toronto. ITBusiness.ca spoke with Sprouter founder and CEO Sarah Prevette about the news.
Below is an edited transcript of the interview.
ITB: Your site seemed to have an enthusiastic user base. What happened?
Sarah Prevette: Sprouter has an incredibly passionate and vocal community around the world. It was successful in the sense that it did provide for a successful exchange of business information between experts and people starting their business. Ultimately, we just ran out of runway before we could execute our business model.
What do you mean?
We had to experiment with a lot of things. Our goal with Sprouter was to fulfill the need we s aw with entrepreneurs needing advice. Sprouter fulfilled a need but had to experiment with different revenue models. We were competing with the notion of free for a long time and trying to make that work with a scalable set was really challenging. As we came to understand how we could create a proper freemium service and some of the ways we could monetize, it was too late and we’d run out of capital.
So you were looking at a premium-level subscription service?
Yeah, it’s disappointing to know some of the stuff we had behind the scenes will never see the light of day. But we were actively working on introducing live video Q&A to allow experts to do live, deep-dive sessions with users.
It’s always easy in hindsight to say “woulda, coulda, shoulda,” but we did fulfill our mission in terms of building a community and it’s disappointing to not be able to continue on.
How far out did you see this coming? Was the site’s shift to be less like Twitter and more like Quora a last-ditch attempt to stay alive?
No, the Q&A was not a last-ditch effort by any stretch. It was an evolution of the service. We recognized in the beginning it was people crowd-sourcing answers from each other. We realized that was inefficient way of doing it.
The Q&A was a way to have curated question from the community get proven experts with demonstrable experiments answering questions. It was wildly successful. For us, it was about trying to make due with limited resources and limited capital. We stretched ourselves for too long. We’ve made sacrifices in terms of salaries, we’ve cut back in how quickly we could expand further, and we’ve been relying on interim dollars coming in from advertising and sponsorships, and that’s just not sustainable. We’ve really faced challenges in raising capital and executing against our model as quickly as we needed to.
Tell me more about the sacrifices you were making while trying to bootstrap your business along.
I have not had a salary for well over a year. That’s a major sacrifice. That’s something you do to let your business carry on and buy it that extra runway. But at the end of the day you have to pay your bills. Sprouter needed to be able to pay for itself, and we just weren’t getting there fast enough.
Were you hoping for an eventual buy out?
No, we never built to sell. Sprouter has always been about building a community. We thought we had a great business model and we’d be able to grow organically, and that wasn’t the case.
Do you lament that you didn’t have some more help from VCs?
Well, I lament quite a few things. It’s always easier in hindsight to say what you could have done. Certainly we had trouble raising. There’s definitely a point where you can’t raise at those final moments, when you finally do need money, that’s when people don’t want to give it to you. It’s the old adage that you should look for money when you don’t need it. We didn’t do that. We should have raised earlier, we should have bought ourselves a longer runway to be able to execute and it’s unfortunate we weren’t able to in the end.
What would you do differently if you could do this over again?
I would have realized it was going to take twice as long and cost twice as much than I thought it would. It was a chicken and egg scenario. We need the community to get the dollars and we need the dollars to get the community. We built the community, but unfortunately we just did it too slowly evidently.
So how would you accelerate that?
Well, capital infusion. I would have raised a round earlier. We waited too long in reaching out people to fundraise.
You are often speak at events like Start Up Montreal about succeeding as an entrepreneur. Did you follow your own advice with Sprouter?
It’s so much easier to give advice than take it, isn’t it? The stuff I speak about are lessons that I’ve learned the hard way. Over the past several years, I’ve learned a lot about strengths, but also quite a lot about my shortcomings. That experience is where I speak from, the things I’ve learned from blood, sweat and tears. Hopefully people are able to extract lessons from that and not make the same mistakes.
Do you see any replacements for Sprouter?
We’ve been blown away in the number of people that have come forward and are interested in talking about continuing Sprouter and continuing to facilitate that community. We’re going to spend the next little while exploring those options and see what makes the most sense. Our desire is to continue serving that community.
What are your plans now?
It’s really too soon to tell. Sprouter has been my entire life for quite a long time now. It’s not really fully sunk in that I’m going to wake up next week and not be working on it. I think I’ll be taking some time off to recalibrate and see what options are out there. We’ve loved being part of this community and I hope we can continue to provide through whatever partnerships we create.