In an almost-unprecedented move, a silicon valley founder is exiting a company before it's burned all its money: anonymous chat app Secret is looking for a graceful exit.
David Byttow says Secret's “significant amount of invested capital” (remaining from US$35 million of funding) will be returned to the investors, rather than attempting a pivot.
It turns out that fifteen million users were on the one hand too hard to police (VC Mark Suster called out Secret last year for misogynistic, homophobic, or fat-shaming posts), but not enough to generate growing revenue.
It's quite likely that endemic trolling was getting in the way of making the service something enough people would pay for.
“Secret does not represent the vision I had when starting the company,” Byttow wrote making the announcement on Medium
He adds that anonymity is the “ultimate double-edged sword”, suggesting that policing his vision of respectful anonymity – “In an anonymous community, responsibility is critical, both for the platform and its users,” as articulated last August – turned out to be impossible.
The company “still has a significant amount of invested capital, but our investors funded the team and the product, and I believe the right thing to do is to return the money rather than attempt to pivot”.
Secret will also be trying to take care of its staff on the way out. Instead of the all-too-frequent spectacle of workers being escorted to the door with pink slips in hand, Byttow says he “will dedicate most of my time to helping the core team find their next roles” during a graceful wind-down. ®