Pretty much the worst nightmare of any startup CEO and cofounder just came true for Brett O'Brien, according to PandoDaily's Michael Carney.
O'Brien is the CEO, chairman, and co-founder of a startup called Viddy, which makes a video-sharing app.
At least, he was all those things until this week.
Last spring, Viddy was a startup sensation.
Photo-sharing app Instagram had just been acquired by Facebook for $1 billion, and Viddy – often called the Instagram-for-Video – had about 30 million monthly users.
The company was so hot that O'Brien was reportedly approached by Twitter, which wanted to buy the company for ~$100 million.
O'Brien turned down the money.
Instead, he raised more funds from outside investors who agreed to a huge valuation: $370 million.
This was Viddy's peak.
Since then: disaster.
Facebook curbed distribution to Viddy and user numbers plummeted.
From that high of 30 million per month, Viddy now sees about 5 million.
Finally, Viddy's board had enough and this week, O'Brien got canned.
PandoDaily reports that O'Brien will keep a seat on the board, but that's about it.
It's the worst nightmare of so many tech startup CEOs faced with tough M&A choices.
- You build a product that gets overnight success from users.
- A big incumbent sees your success and shoves money your way.
- It's a lot of money, but not Instagram-level money, so you walk away ... even though its plenty to make you rich for the rest of your life.
- Your product's overnight success goes away.
- You get canned.
It'll make your stomach turn just thinking about it.