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20 Feb Why we shut down Newsberry Part 2: Why we didn’t sell ← Go back

Posted by Natalie Nagele on February 20, 2012 — 12 Comments

Why we didn’t sell Newsberry

When I first sat down to write the story about shutting down Newsberry, it was very therapeutic. I wanted to get it out there, all the real, honest thoughts behind it. What I didn’t expect was the amount of interest in our decision process, the amount of support and also the criticism, questioning and pondering it caused.

A common theme among some skeptics was why didn’t we just sell it. So, here’s why.

We wanted to

When we first started noticing that Newsberry wasn’t going to work out, we thought the best “way out” was to find someone to take it over. It couldn’t be that hard, people and companies were buying apps that were making no money all, and here we had a product that was actually profitable.

That said, we had no idea where to look. It’s not like we were going to put a For Sale sign up. We had active clients who we didn’t want to scare off. We were still actively supporting the product and we also wanted to sell a profitable service, and for that you needed customers. So we quietly put some feelers out to friends and family and came up with a figure we were comfortable with (sorry, that number isn’t public).

The first fish to bite

We started to get offers and interest from people/companies completely unfamiliar with email marketing, or the software business altogether. That just made us feel uncomfortable, and we turned them away. We had no interest in selling to someone who would kill it quickly.

Call us idealists, but we weren’t going to sell to just anyone. And we most definitely weren’t going to let someone with no software experience take our brand and run (or trip and fall) with it.

The closest thing we got to selling

We met with two really large hosting companies that showed an interest (independently). With one we had a lengthy, detailed meeting we thought went pretty well. In the end it didn’t pan out. They wanted a team to go with it, a decision we really respect. They understood that email marketing wasn’t easy and that it’s not just something you figure out. Obviously, we didn’t have a team to offer.

That was the closest we got to finding someone we liked for the product. A company with resources we didn’t have, a reputation they wouldn’t want to destroy by neglecting our customers, and financially could (probably) meet our price to sell. After that failed through, we really stopped looking. We just figured we’d try to make Newsberry work (again).

No to open source

Email marketing is a complex business, mostly because you spend all day preventing spammers from sending on your IPs so the spam doesn’t get to the ISPs, who then in return will block your legitimate mail. It’s shitty. It’s not just about building a beautiful product, it’s about dealing with external forces that control you. It’s something many companies are extremely good at (and we’re doing it now at Postmark). The code we built to run Newsberry does a lot of this. There are throttling settings, spam handling rules, behavior tracking, etc. If we open sourced it, it would absolutely get in the wrong hands. It’s just irresponsible.

We also don’t believe this code is open sourcable. There is a lot of legacy code; it’s not in the best shape and we don’t have the resources to maintain it. An open source project needs to be maintained, which is opposite of what we want. Getting distractions away from our team was a big driving force for shutting Newsberry down in the first place.

Speaking of distractions, selling is a HUGE undertaking. Maybe if we weren’t so worried about the quality of the purchaser it may have been simpler. But really, getting your code together, fixing issues, meetings, more meetings, lawyers, PR, etc. All of that can turn into a full time job. We were completely not interested in that. We weren’t going to get retirement money for it. And don’t forget, we still have two amazing products we need to concentrate on. In the bigger context, selling would be a bigger hassle than it was worth.

Takeaway

We don’t regret, for one second, not selling Newsberry. Looking back we had a relatively smooth transition of getting customers setup with Campaign Monitor, and moving our full concentration to Postmark and Beanstalk. Newsberry will remain our brand that nobody can tarnish.

We built a product, ran it for 7 years, and then shut it down in a way that just feels right. The end.

12 Comments

Having read all this, your decision not to sell makes makes more sense. However, it leaves me wondering if you couldn’t have hired an outside firm to do all the heavy lifting involved in a sale, in return for a percentage of the final sale price? Do services like that even exist, or is there really no way to avoid all the tedium involved in selling a business?

Jeremy — February 20, 2012, 9:02 pm

Fascinating post. Not sure I would have made the same call, but I really appreciate your honesty here.

Also: I love the color changing logo on this blog.

Rich Jones — February 20, 2012, 9:34 pm

Grow the team, specialize them for Newsberry, and then sell :-)

Ivo — February 21, 2012, 4:40 am

I’ve seen this a few times with brick and morters.

One of my best mates fathers ran an aluminum business for more than 30 years and last year he decided that he would close up shop.

I was surprised he didn’t cash in on his 30 years of brand awareness and strong position in the industry, and also I thought it must suck to lose your job in such a way.

At the end of the day though, if it’s your business then it’s your name that goes along with it. Former customers know YOU not the new owners and it’s your name that will get brought up if there are any issues.

For the existing staff, well there’s the same amount of business so someone else just got a lot busier.

I think if you’ve got the most out of your business it’s sometimes better to square it up and walk away and give someone a chance to take you place rather than sell for a bit of extra money.

Having said that, I’m not sure if it scales well (Google, twitter, facebook etc)

Justin — February 22, 2012, 10:20 pm

Wow. A simply fascinating, and refreshingly insightful post on the heavy lifting taking place with the decision making in entrepreneurship, which is not covered frequently enough.

It’s nice to see some idealist in a marketplace which rarely focuses on other than glitz and glamour.

John Riley — March 1, 2012, 10:31 pm

Damn, I can definitly feel what you feel ! It’s strange to close down your baby, especially when you do it in some kind of free decision. Most people don’t know when it’s time to stop. It might look stupid to other people, I mean all the work, all the shit you have gone throught, all the nightly actions, all the 48hrs-sessions, all the moments when you kicked your computer off the table, all the money you invested – and now it’s over forever. But i really believe that there’s a point in the lifetime of every project when it’s better to stop or restart than going on; this is just a very healthy economic decision. Guys, you will definitly have a great future !

Christian Lavie — April 26, 2012, 2:42 pm

I had a consulting company with products that we sold as well. Ultimately I just had to discontinue certain products – particularly ones we were known for, but were not getting much engineering love, and became a hassle to support, even for sales. The code was finished long ago, every sale was just pure profit, but it was consuming so much time and focus. Selling it would have been even more of a hassle, and to prep it for open source (e.g.: removing certain proprietary code, cleaning it up) was also asking for more effort, and we were emotionally spent. Ultimately we killed our darling(s), got free from the noose, and went upward from there.

BeenThereDoneThat — July 31, 2012, 10:38 pm

Preventing spammer is hard work to do, there are many spammer out there.

jcfdcw — November 23, 2012, 11:50 pm

It must have been a hard decision. You certainly took the higher ground not selling it to just anybody.

I was part owner in a health food store, I put in most of the long hours, 6 days a week. In the end we closed it. It was very difficult, but was for the best, as we did not have a buyer that would take over either.

JeanC — March 10, 2013, 1:01 am

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