To get the full effect, press play on the track above and start reading.

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This post is a more in-depth commentary following our announcement yesterday that Referly will discontinue paying users cash rewards for generating purchases at the end of this month. Referly has pivoted and you can read more about our new direction here.

My greatest fear as a startup founder isn’t to fail, it is to become a zombie startup. Kind of like in the 6th Sense when Bruce Willis doesn’t realize he is dead and tries to have a nice dinner with his wife, there are startups out there who are still “operating” but might as well not be.

It can take a long time to die. I’m not going to name any names, but you could simply cross reference yclist.com with alexa.com, and any company that shows little to no growth in web traffic in the past year that claims to still be operating is probably a zombie. Yes, even companies that focus on mobile or enterprise sales should see healthy growth in web traffic at the early stage.

With just the $150,000 each of my Y Combinator batchmates received last summer, many can continue to work on their company or change direction several times. It has been 6 months since Demo Day and I don’t think anyone has officially died. So I’ll say it. Referly died. It’s not the kind of dead where the website goes dark and everyone gets jobs somewhere else. But the idea that we started with turned out to be the wrong one, so we killed it and yesterday I acknowledged publicly to ourselves and everyone else that we have to change our course.

Helpful Things Investors Say

Over the summer when the seed market was hot and we were raising money pre Demo Day like gangbusters I seriously considered raising our Series A, or some kind of Series Seed style equity round. To feel out the situation, I spoke to some investors who had already put money into Referly and asked them what they needed to see from us in order to raise the equity round we were contemplating. I’ll never forget this feedback, which I will paraphrase since I didn’t write it down:

“The biggest problem we see with early stage companies coming out of YC, or really any program, is that they’ll approach a year or two after they’ve graduated to raise a seed round. It’s exciting to see they’re still alive and pursuing their vision, but then we ask about the growth of the team and the ways they’ve been capturing the opportunity of the business in the time they’ve had… and discover everything is the same. The same 2 or 3 people, the exact same idea, very little growth around key metrics like engagement or revenue. So why should try raise a series A? What have they proved?”

Ride or Die

Sometimes I feel caught between two mindsets, one that encourages me to be a cockroach and survive no matter what and another that inspires me to overcome my fear of flying and take it to the next level circumstances be damned.

The biggest reason to charge ahead is that I don’t want to waste a single moment of my life in denial, in deadlock, in zombie mode waiting for something I can’t control change or expecting magic to happen. It goes beyond not wanting to. I simply can’t, won’t, would never give up precious days, weeks, months, years. And it’s not that I don’t have endurance for the schlep, but I can only summon that super-human power to fight for the right thing.

Referly Monthly Active Users

I bet if you showed this graph to investors many would tell you your startup is doing GRRRRRRREAT! For a blogging platform (where we’red headed next) this is awesome – for an affiliate referrals site this doesn’t matter. It’s all about revenue, and it wasn’t climbing at a commensurate pace.

Is Your Startup a Zombie

How do you know if you startup is falling into this trap? Here are some hints:

• You don’t want to get out of bed in the morning
• You don’t want to go out in public for fear you’ll have to explain what you do
• You haven’t hit 10% week-over-week growth on any meaningful metric (revenue, active users, etc)
• You’re working on the same idea after 12+ months and still haven’t launched
• You’ve launched a consumer service and have less than 2% week-over-week growth in signups
• You’ve launched an enterprise service and have less than 2% week-over-week growth in revenue pipeline
• You are the CEO and hole yourself up in the offices so you don’t have to talk to employees and can read TechCrunch
• You’ve hired consultants to figure out revenue, culture, or product in a company of less than 10 people
• You’re at SXSW right now reading this post and trying not to cry

Update: I’m not saying you need to hit 10% growth every week, but you should have hit it at some point like launch or some other PR event.

Turning Things Around

Does any of this sound familiar? If so, don’t panic – you can fix this. The first thing you need to do is acknowledge the reality of your situation. From there, figuring out what to do next is a lot harder and a very personal and contextual decision, but you should embrace it with vigor. Don’t waste single moment of your life, or the time of those on your team, to begin plotting the next step. Paralyzed? Yeah, I know that feeling. Just plow through it, there really is no other solution. Along the way you may consume dozen of beers/shots with good friends over long circular discussions they tolerate because they love you. Do that, and then get back to work.

I’m not an expert at figuring out what to do next, I mean I just changed course on an idea that took me 3 years to start and another year to prove didn’t work. But whatever… the point is that no one is going to tell you that your company is a zombie. Except me. Don’t waste your 20s, or 30s, or 40s being a zombie.

Worst Case Scenario

Flame out hard. That’s my only backup plan, because doing the silent fail is for boring. Failing is failing – do it up right!

Zombie — Photo Credit: jamesrdoe on Flickr

WTF is getting old, our generation wonders. I think ageism runs deep, especially among the tech set who assume older people must be Luddites and by extension lower life forms. I’m not joking, I know people who feel this way – and when was the last time you had a conversation with tech with someone over 50?

When I was recently graduated from High School and working as a barista I did a lot of odd jobs to make extra money, and one of my favorites was helping people set up their computers and Internet and learn to use them. This is in 2004, and all my clients were in their late 40s and older. I was setting up Earthlink and AOL dial-up in 2004!

This is a photo of my parents, but I can totally imagine it being a photo of any 20-something couple I know. Are they really so different from us? What can we learn from them? What problems would they pay to solve?

When did “talk to customers” get substituted for “talk to people who are really similar to you”? Most of the people I know who claim to be talking to customers aren’t getting very far outside of their own demographic circles. Whenever I go home to visit my parents, which is every 2-3 months, I’m reminded that there is an entire world of people out there with problems vastly different from my own. My “first world problems” feel more like “person under 30 problems” when looked at through this lens.

Your Parents Have Money

Even parents of small means accumulate some amount of wealth (or debt) over time, so money management could be a real challenge, hassle, and source of stress for your parents. Combine this with the fact that they didn’t grow up using the computer, and you’ll find that even though there has been a lot of innovation in online banking, investment management, etc. it is very possible that they’re not using those tools.

If your parents have accumulated some wealth, or if like mine they run a family business or consulting practice, then their taxes and estate planning are also complicated. You, 20-something engineer, probably haven’t written a will. But your parents have, and they worry about that alongside things like a mortgage that might be underwater since 2008, mounting repair costs for their home (leaky roof, sagging wall, etc). Your parents probably worry about so many things you aren’t even aware of – sometime you should ask them to write down a list of everything they worry about. You’ll be amazed.

Your Mom is Going Back to Work After 18+ Years

I was very fortunate to be raised by a Mom who choose full-time parenting as her profession, but now that my sister and I are out of the house she’s figuring out what to do next. In her case she’s taken an active role in the family business and gotten more serious about her equestrian hobby. But for many families the full-time Mom either gets bored or wants/needs to contribute financially. How is someone who hasn’t been in the workforce for 20 years going to find a job, build skills, and gain the confidence to put herself out there? What job should they even apply for? There is probably a huge opportunity to 1) employee these people in your company and tap into deep life and professional knowledge 2) create a content/jobs site devoted to the over-50 professional lifestyle, jobs, etc.

Your Parents Have Kids (You)

Most of the people I know don’t live near their parents, so communication is a challenge. My parents have tried using Facetime and Skype with me, but neither of those services really stuck and we reverted to mostly phone calls and occaisonally email (in the past couple years). To be clear, they’re not Luddites, its just not a satisfying way of staying connected. Often I wonder if services for couples like Pair and Avocado would be even cooler for me and my Mom and Dad.

A Lot of Your Parents are Divorced or Widowed

An unfortunate statistic, but many of you have parents who will enter their later years alone. One thing I think is missing in the world are tools to help people over 50 continue to date. I don’t think sites like Match.com or OkCupid are really catering to that demographic.

Another thing I think is missing, or just starting to get addressed, is the need for skilled at-home care for the elderly who wish to avoid retirement homes. TenderTree, a company I mentored in a recent 500 Startups batch, is the beginning of this… and there is a land grab to come in lifestyle management and healthcare. Another great on is Eligible Web Services.

Your Parents Are Approaching Retirement

WTF is retirement, our generation usually asks. But it is very likely your parents have built their lives around the idea that in their mid-60s they’ll trade their full time jobs for a monthly social security check, and begin drawing on whatever retirement funds they’ve been setting aside. Most people grossly underestimate how much they will need to save in order to maintain their quality of living, so at this point there are two options: reduce spending or go back to work. The 60+ DIY community is incredible. Can you imagine what Etsy is going to be like when all the sellers using it right now are in their 60s?!

Your Parents Have Health Conditions

One unfortunate aspect of aging is that health conditions develop, or are exacerbated. From mild allergies to chronic conditions to memory loss, bone density loss, and on and on and on. Young people, with our invincible bodies and racing minds, struggle to grasp the frustration of losing aspects of youth. I think our parents feel old just talking about these things, but it bothers them and secretly worries their kids.

Its not that I want to manage my parents’ lives, but I do wish they could live forever, so it would be great to see technology that changes the parent/child conversation around regular physicals, diet, exercise, etc. For parents with severe or terminal conditions (broken bone, major surgery, cancer) I think there is huge opportunity to improve the experience of treatment, advocacy, ongoing care, and ultimately hospice when the time comes.

Your Parents Are Going to Die Someday

I hate writing that subheader, but it is true. Beyond the logistics of health, travel, care, money, and everything else that goes into operating the day-to-day of life there is the emotional side of living and loving each other. Where do the memories go? How will technology change how we capture and store photographs for grandchildren who never see your parents. All those things they’ve saved over the years have so much meaning, but how will you deal with that when they’re gone. They worry about this long before they should, and Facebook has barely scratched the surface of dealing with death.

I sometimes wonder that there aren’t more family legacy website (they do exist) storing all these keepsakes for future generations, providing private logins and access. I also wonder about the physical storage of keepsakes like an ancient wedding dress, photo of my great great grandfather shaking Henry Ford’s hand as he received the 9th Model T off the line, a gold watch (also a gift from Henry Ford) with a sweet engraving, my Grandfather’s partially written World War 2 memoir found on his Mac after his death, everything that smells like my Mom… and on and on and on.

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Someday You Will Be Like Your Parents

Selfishly, I hope we can start solving these problems now so that by the time I’m in my 60s I’ll benefit not only from a ton of technology geared towards an older generation (which will probably happen anyway since all the people who are in their 20s building tech will age right along with me). But what I really want is for my own parents and their friends to benefit even more from the web and other tech in their own lifetimes. I might get more years with them and their years spent on Earth will be more enjoyable. That’s just good business.

Being the “tech support guy/gal” in your family is actually a huge opportunity to observe all things that are broken, confusing, poorly marketed, and generally hinder adoption among our parents’ generation.