From Raising $75M to Shutting Down 3 Years After

Hey — It's Nico.

New month, new 4-email series - this time about the Stories of 4 Big Failed Startups. This week, the story of Atrium.

A well-funded startup, with an experienced founding team, shuts down in just a few years... I've published this story dozens of times on Failory.

Justin Kan was one of the pioneers of the streaming platforms industry, building Justin.TV in 2006, which later morphed into Twitch. In 2014, Justin exited the company after selling it to Amazon for nearly $1B.

3 years later, he was back in the game, building a legal-tech startup called Atrium. Thanks to Kan's charisma and previous success, the startup quickly raised $75M from several investors, including Y Combinator and Andreessen Horowitz.

Yet, the know-how of the funding team and the $75M in funding wasn’t enough to make Atrium a success. Lack of PMF was the main reason for its failure.

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We didn't have the chance to interview Justin. However, he published a tweet 1 year after Atrium's closure reflecting on their biggest mistakes. Here are the 4 main points:

• No PMF: Atrium didn’t manage to shape its tech offering into something the market needed - in other words, they didn't achieve PMF. And as Justin says, “adding more money to a situation of lack of product-market fit rarely works.”
• Too Big to Pivot: In less than 3 years, Atrium's team grew to 200 people. This limits flexibility, which is needed when searching for PMF. Justin says: “The more people you have, the harder it is to bubble up feedback or turn the ship.”
• Business Model: Atrium offered A-Z legal services, with all the necessary tools created in-house, which was super costly. Besides that, they worked under a subscription model, which was uncommon in the industry. Justin thinks they “didn't do enough turns of business model iteration quickly enough.”
• No Motivation: “Only work on things where you have intrinsic motivation. If you don’t, you’ll lose motivation when times are hard, or your own goals change.”

In our article, we dive deeper into each of these causes of failure so that you know how to avoid them.

​Here are the 4 reasons why Atrium failed.​

That was all for this 1st issue. I'd love to hear your thoughts about this email series. Also, let me know if you'd like us to write about any specific failed startup.

If you're a new subscriber, you should check February's 4-email series about Unconventional Customer Acquisition Channels:

• 1st issue: Programmatic SEO Guide​
• 2nd issue: Side-Project Marketing Guide​
• 3rd issue: Building in Public​
• 4th issue: Data-Centric Content​

Lastly, here are my top 3 readings of the week:

• ​SEO Content Writing: In this video, the founders of Grow&Convert go over how to select the right topics and keywords to write about and how to write content that ranks and sells.
• ​My SaaS Got Stuck at $1,500/Mo: In this Twitter thread, Nathan Barry, founder of ConvertKit, shares how he used direct sales to scale the company to $100k in 12 months, after being stuck at $1.5k/mo for a long time.
• ​Data-Backed Research Reports: This Twitter thread analyzes how Zapier is getting thousands of backlinks by publishing "bite-sized reports." Recommended read if you enjoyed last week's post on Data-Centric Content.

That was all for this week. I hope you enjoyed today’s article and curated resources.

Cheers,

Nico