The Unconventional Exit: How Justin Kan Sold His First Startup on eBay
The story of a struggling startup, a last-ditch effort, and a surprising success.
In the world of startups, exits usually come in the form of acquisitions, IPOs, or unfortunate failures. But for Justin Kan, co-founder of Justin.tv (which later became Twitch), his first startup exit was anything but conventional. In a bold move, he sold his first company, Kiko, on eBay.
The Struggle of Kiko
In 2003, Justin Kan and Emmett Shear, two fresh graduates from Yale, embarked on a journey to create a web-based calendar application. They named it Kiko, and it was their first venture into the world of tech startups. Their goal was to create a calendar that was easy to use and accessible from anywhere. They believed in their product and were excited about the potential it held.
Nevertheless, the road to success was far from smooth. Despite their enthusiasm and hard work, Kiko struggled to gain traction. The launch of Google Calendar was a significant blow, as it quickly attracted many of Kiko’s users.
The founders found themselves in a challenging situation. They had raised money from investors, but with little user growth, no revenue, and no clear path to acquisition, they were rapidly running out of cash.
The struggle was not just financial. The founders were under immense pressure and were dealing with feelings of guilt and failure. They had raised money from investors, and the thought of letting them down was daunting.
The Hail Mary: Selling on eBay
In a moment of desperation and creativity, Justin came up with an unconventional idea: selling the company on eBay. The idea was inspired by another site, Jux2, which had successfully sold itself on eBay for $105,000. Justin figured that if they could recover even a fraction of that amount, they could return the money to their investors and walk away with a clean conscience.
The Auction
They set up a 10-day auction on eBay, listing the domain name, source code, and user base as part of the package. To drum up interest, they posted the auction on Reddit and managed to get it to the front page. The story was picked up by TechCrunch and other blogs, and soon, the auction became a much bigger story than they had anticipated.
Despite a hiccup with eBay’s terms of service that led to the auction being temporarily canceled, they managed to get it back up and running. And then, to their amazement, the bids started coming in.
The Unexpected Success
The final price for Kiko was a whopping $258,100. The buyer was Elliot Noss, CEO of Tucows, a Canadian internet company. He bought Kiko using his personal eBay account. In the following weeks, they finalized the paperwork and payment.
Lessons Learned
This unconventional exit offers several valuable lessons for entrepreneurs:
- Think Outside the Box: When faced with a challenging situation, don’t be afraid to get creative and try unconventional solutions.
- Don’t Underestimate the Power of Publicity: By getting their story on Reddit and TechCrunch, Kan and Shear were able to attract a lot of attention to their auction. This publicity likely played a significant role in the success of their auction.
- Failure Can Lead to New Opportunities: Despite the struggles they faced with Kiko, Kan and Shear went on to found Justin.tv, which later became Twitch and was sold to Amazon for almost a billion dollars.
In the end, the story of Kiko is a testament to the power of creativity, resilience, and the willingness to try unconventional solutions in the face of adversity.
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This article was inspired by a YouTube video by Justin Kan, co-founder of Twitch, who shared his personal experience and insights about the early days of Kiko. You can watch the full video here.
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