All Things Must Come to an End—PatternBuilders is Shutting Down

By Terence Craig and Mary Ludloff

There’s a sad, but true, statistic that every entrepreneur knows by heart: 9 out of 10 startups fail. Unfortunately, PatternBuilders is adding its number to this pile. We have been procrastinating writing this post because shutting down a company is hard. When you put your heart and soul into something, you need time to process, reflect, and eventually get to the point where you can move on.

But moving on does not mean that we are disappearing; after all, shutting down the company does not end our passion for big data, privacy, and all things tech-related (especially IoT). To that end, we will be maintaining this blog, as our main place to write and comment about those issues.  We are also consulting around all areas involving big data and/or privacy (via our existing consulting organization, Ludloff-Craig Associates) and are working on some other things that we are keeping under wraps for now. But if you follow our blog, @terencecraig, or @mludloff, you will be the first to know.  And if you have interesting opportunities, consulting projects, or for the right company – a full-time job ­– please get in touch.

There are a number of reasons why we are shutting our doors, but suffice to say, we made some decisions we knew might have an adverse effect on the company. And we stand by those decisions.

During the past two years, we found ourselves dealing with a number of unanticipated health issues. Terence’s mother was paralyzed and in the ICU for almost 18 months which led to him taking a leave of absence.  Happily, his mom is fully recovered and it’s our hope that she will be around for many years to come.

The extended leave of absence of a co-founder and CTO for any startup would be bad. But the impact on PatternBuilders was compounded by our second decision point: not spending a lot of time pursuing venture money. We had good technology, better prospects, and a partnership with Microsoft.  Why not continue to bootstrap the company? As we began to work with our betas, the technical advantages of our solution being built for streaming analytics on the cloud had us hoping for a big win.  But with Terence out and another executive falling ill, there was simply not enough money to hire quality folks quickly. Even with that, we considered restarting the company: Our customer and partners were being amazingly patient so why not push forward?

This leads us to our final decision point, the rise of Spark, “a fast, general engine for large-scale data processing.” We believe that this is a game-changer as Spark has addressed most of the problems that prevented the Hadoop ecosystem from being broadly adopted. And as a well-supported open source project, our prediction is that Spark is going to make it incredibly difficult for closed source software like ours to compete in the big data space.  When combined with an over-saturated, hyped market and the dramatic rise in OSS quality driven by Apache and (gasp) Microsoft, it’s not clear to us how any pure play big data vendor creates the next Oracle.

The winners of the big data race will be enterprise SaaS vendors, like Workday and Salesforce, as they have structural advantages over any big data vendor:

• No ETL issues to deal with. SaaS vendors have already captured customers’ data.
• Hosted service offerings. SaaS customers do not have to deal with the “big data analytics” infrastructure burden.
• Existing infrastructures. SaaS vendors have the expertise and capital to build and deploy resilient scalable infrastructures.

Pure big data vendors are dealing with two barriers to mainstream adoption: No built-in access to existing customer data and, unlike SaaS vendors, no deep understanding of a particular vertical (CRM, Human Resources). We predict they will be reduced to selling services to support an open source stack that gets easier to implement and deploy every year. As one of our advisors said after Cloudera delayed its IPO: “Big data is a feature not a product.”

And there you have it. When we looked at our options, we knew that it was time to shut the company down.

During the course of our careers, we have been fortunate to work at startups that went on to be successful. We were also equally fortunate to work at startups that were unsuccessful. And no, the previous sentence was not a typo. We have learned a great deal while having to shut down a company or two:

• Humility—you can’t always “win” in the winner take all mentality of the valley but when you do win after “failing,” you realize that it has a lot to do with your team and with luck. We’ve met a lot of smart people, some even geniuses, but the smartest people are those that are humble about their successes. These are also the people we try to surround ourselves with.
• Compassion—there is nothing harder than having to “let good people go.” But we have always tried to ensure that our good people landed softly. This is much easier to accomplish in the boom times but we are happy to say that we did our best in the bust times as well.
• Introspection—entrepreneurs are always thinking about better ways to do things. That’s usually what forms the kernel of the next great company. We’re not bitter or disappointed because our next great idea may be born out of our last failure.

There are many people, partners, advisors, and customers that supported us along the way.  We want to publicly thank all of them for their ongoing support as we built PatternBuilders and then tried to work through keeping it going. They stayed with us during Terence’s leave of absence as well as the subsequent product delays and for that we are truly grateful. We also appreciate their counsel as we dealt with the tough decision to shut down PatternBuilders. As shut downs go (and we’ve been through a few), the process was much easier due to all of them. Thank you and we hope to pay it forward.

There are lots of lists about what makes great entrepreneurs or startups but there’s usually one thing those lists have in common: Not afraid to fail. If you are an entrepreneur, you are a risk taker. If you are afraid to takes risks, do not be an entrepreneur. Failures are a fact of entrepreneurial life but out of those failures, great things can happen.

As we said earlier, we are keeping the conversation going on our blog and twitter handles. Please keep in touch!