My dad, after a 20 year career as a New York City firefighter, went back to school and became an accountant. He was an early adopter of technology in his practice, buying a computer in 1987 and getting some of the earliest versions of tax prep software. To do the bookkeeping for some of his business clients, he used a DOS-based program called One Write Plus.
The program went over to Windows, but he never liked that version, so he stuck with DOS. He wasn't alone. Lots of people liked the old version better and stuck with it. Eventually, support for the OWP DOS version was discontinued, but he kept on truckin'. I'd bet anything he was one of the last active users of the program.
In the desktop software world, you could do that. You bought a version that you liked and you could use it for as long as you liked regardless of what happened to the underlying company. In a cloud world, software has a continuous cost of upkeep. When the company dies, the software dies. That frustrates a lot of users.
Today, one of my portfolio companies, Editorially, announced that it was shutting down. I can't say enough about the terrific job that Mandy, David, Jason and their team did to create a product that many people loved. Twitter is full of some really great things people had to say about it.
Oh no! @editorially is closing down. I wrote my entire book in that. It was such a good app. What a shame :(— Paul Boag (@boagworld) February 13, 2014
Unfortunately, the market turned out to be smaller than we had hoped for the potential paid features of the product, so it has to go away. It would be cost prohibitive for anyone to stay on to run it, and it would eventually brake. You're left with no cottage industry of users--a SaaS Cuba, where you can seemingly keep a 1950's car running forever.
Is there an opportunity here, perhaps? A holding company that could be the Land of Misfit toys for webapps? You run out of cash and then you apply to turn your code over to some caretakers--and if they think enough people love the business, they run the apps on a donation basis. Maybe you retain some small portion of the equity.
It's unfortunate to see all that work go to waste, but at least in Editorially's case, it wasn't all for naught. Lots of great writing was produced on the service--writing that will far outlive the service. Personally, I got to meet a great team that I hope to work with again in the future. Seed investing is a risk, and while things are playing out really well at Brooklyn Bridge Ventures, the portfolio is simply not going to have 100% success rate. Editorially was a risk well worth taking and I'd do it all over again given the caliber of the team I got to back.