Toronto-based Sprouter announced this morning that it will be closing up shop on Aug. 2, taking an engaged community of both entrepreneurial greenhorns and experts offline.
“We’re devastated to have to shut down the service but unfortunately, due to capital constraints, we’ve simply run out of options,” site founder and CEO Sarah Prevette wrote in a blog post.
Originally launched under the name RedWire, Sprouter first introduced itself to the global startup community as a Twitter-style messaging service for entrepreneurs. In March, Sprouter reworked its service to provide a question and answer-style service giving access to many business experts.
“You were able to get people who you were not able to reach otherwise,” says Dev Basu, president at Powered By Search, a Toronto-based search engine optimization firm. Basu was one of Sprouter’s experts, and also counted the site among his clients. “They had plans in the works for somehow monetizing this model and connecting entrepreneurs for people that would help them succeed. They would be a brokerage of sorts.”
It also hosted Sprout Up events in Toronto, giving start-ups a stage to demo their technology products and services, and attendees a networking opportunity in a casual atmosphere.
It’s an experience that community manager Erin Bury says she’ll remember fondly. About 600 entrepreneurs attended the most recent Sprout Up event, creating a line down the street to get in.
“It’s been an incredible learning experience for me, and I’ve loved every minute of it,” Bury said in an e-mail.
For Sprouter user Philip Powell, founder and CEO of Toronto-based startup My 8 Dots, the site provided a community of like-minded entrepreneurs and some key expert advice from Prevette.
“I found that everyone else participating in it was in the same boat I was in,” Powell says. “When you’re a startup and trying to build something with very little equity and a lot of passion, seeing other people with the same struggles and the same drive is very motivating.”
A relative newcomer to Sprouter, signing up just three months ago, Powell didn’t care too much for the question and answer features of the site. But he did appreciate the business wisdom imparted by Prevette, who earlier this month presented at a startup event in Montreal about taking an idea scrawled on a napkin and making it a real business. But now Sprouter finds itself going belly up.
“The thing I can’t wrap my head is the bitter irony of it. It’s kind of crazy,” Powell says. “I was also surprised that some of the people who have made it weren’t able to come in and help keep this boat alive.”
Sprouter expert Mitch Joel, founder and president of Twist Image and author of Six Pixels of Separation, wonders why Sprouter wasn’t bought by some larger entity – whether it be Google or Facebook, or a better fit closer to home. Monetization for the site either had to come from advertising revenue or fees paid by members, he says.
“There are certainly platforms that work in the market, and those that struggle along,” Joel says. “I think those that struggle along hope to find a home either through acquisition or to pull enough revenue from the actual members.”
When Sprouter’s servers are switched off, there may be no clear alternative to take up the torch for its community of entrepreneurs. Sprouter hand-picked a lineup of experts that were always at the ready to answer business questions in a personal manner.
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“There’s a couple of companies that aim to do the same thing, but they don’t really have the same feature sets or community,” Basu says.
Despite the apparent financial failure of Sprouter, many users expressed their disappointment the service would no longer continue on Twitter and in blog comments. Support was particularly strongly expressed for Prevette and Bury, the two most-recognizable faces behind the startup for startups.
“You have a young female entrepreneur, which is not always the norm,” Joel says. “That’s the sad part for me, is I hope it doesn’t deter others from trying. I have a lot of admiration for Sarah and Erin.”
Next steps for Sprouter’s founder aren’t yet known. But community manager Bury plans to take time off and travel Europe before looking for other work.
“I’ll share career news as it comes up, but trust me when I say I’ll be at another startup,” she writes in a blog post. “Agency and corporate life might be for some people, but I’m a startup girl through and through.”
