Fourteen months ago, Justin convened the final team meeting at his legal software and law firm startup, Atrium. With a heavy heart, he announced the closure of the company after having raised $75M in venture capital.
The full story of Atrium is admittedly long overdue.
“One thing I should caveat is, all of the failures with Atrium are really reflective of my own shortcomings, and they're not on all my co-founders, they're not on the investors.”
Atrium marks a sinister period in Justin’s life containing failure and pain, but also one of learning and reflection. The lessons learned haven’t made it necessarily easier for him to walk away from the experience, nor have they lessened the hardships of his failure. Just over a year removed, it is time to be honest and tell the full story behind the fall of Atrium.
So, where to begin?
With the $970M Twitch exit and YC Partner experience under his belt, Justin was itching to build the next big thing.
“Sure, I’d done well, but I had friends who had done even better. My ego was hungry and wanted to be fed. The desire for more nagged constantly at me.
I decided to leave YC and start another new company. This time, I settled on the concept in the most mercenary way I could think of: all I wanted was to create the biggest possible company. Once, again, my dreams were full of insanely large numbers. A ten-billion-dollar company. A hundred-billion-dollar company!”
Atrium was built as a legal services company, which would utilize a specific regulatory ‘hack’ that Justin invented in order to innovate and streamline the way legal services are provided. In response to the expensive, confusing, and opaque nature of existing processes, Atrium built software for startups to navigate fundraising, hiring, acquisition deals and collaboration with their legal team.
After quickly assembling a team of five co-founders, Atrium experienced no shortage of eager investors willing to fund the startup, especially with Justin at the helm. They received a term sheet for $10M right out of the gate from General Catalyst. Capitalizing on the rapid initial burst of momentum, Justin and his team started hiring hurriedly, prioritizing getting customers before figuring out their product.
These were the first two catalysts in the eventual downfall of Atrium. As a technology startup, product is paramount. Justin and his team did not focus enough on differentiating their product as an effective, efficient enough solution to the current problem.
Hiring too fast was particularly problematic because it didn’t allow adequate time to set a cohesive culture. It wasn’t clear who Atrium served; the lawyers or the clients who were buying their legal services. Without making the distinction, they fell into the pit of trying to serve everyone.
Despite these problems, the Atrium team trudged on, growing in size and raising an additional $65M led by Andreessen and other investors. Slowly but surely, the issues compounded and festered. Without clearly defined goals between the co-founders, huge frictional costs arose. One by one, the co-founders left until Justin was the last man standing. There are some things that more capital just can’t fix.
“I don't put that on them. I think I did not have a lot of maturity. I would say I didn't have a lot of empathy as a manager in the beginning. It was kind of like either you succeed as an employee, as a team member, either you're crushing it or you're betraying me, it was very much like win or die and there's nothing more important than winning.
And the problem was that people didn't feel supported. Like co-founders did not feel particularly supported. And I think in a lot of ways, I didn't set them up for success. And so the ones who were very close friends of mine and like Nick and Chris, when it didn't work out, you know, our friendships took a hit or they went to basically zero, which is pretty tragic.”
Justin could see where the trajectory of Atrium was headed. As he lost co-founders, friends, and customers, he realized that the company was turning into a leaky bucket. Justin himself was barely interested in legal service and legal tech, and the company could not identify who they were building for. Having spent over six months trying everything under the sun to churn growth, the vision was becoming less and less clear.
A decision had to be made.
In front of the company that he loved so dearly and had put so much of himself into, Justin announced that Atrium would be shutting down. Sadness, anger, and disappointment gripped the room. It was an unbearably difficult decision, but a necessary one for sure. Returning the remaining capital to investors and having laid off over 100 employees, Justin felt a tremendous amount of internalized guilt.
“That was, that was super tough. And still though, even with how difficult it was, I feel like I got a lot out of the experience.”
In the aftermath of Atrium’s fallout, Justin discovered some key learning moments from the experience. The first was that he didn’t want to be the founder or CEO of a company anymore. He was more interested and passionate about telling stories, creating content, and investing in new and interesting ideas. Having ventured into the world of content creation, he has never been happier.
“My friends see me and they're like, ‘wow, you are so much happier than you were going through the startup experience.’ But there was no way I ever want to go back. I gained so much personal growth and learning from startups and also obviously success, but they're not for everyone. And they're not for everyone at every time in their lives. I spent my whole career thinking that I just want to be a great founder, because all my examples, all the people I looked up to were founders.”
That’s the nature of being brave enough to build something. Sometimes things are tough and you will fail spectacularly. But failure itself does not define you. How you deal with the pain and move on to discover what’s important to you is what really matters when it’s all said and done. No matter what ordeal you’re going through, trust that you will emerge a better and stronger person for it. You will discover things about yourself that will exceed your wildest expectations.
Justin’s full video on the story behind Atrium is available here:
Quest Minutes: Dan Harris
Ten Percent Happier:
Could you imagine what it would be like to suffer from a panic attack in front of five million people on live television? Journalist, author, and co-founder of 10% Happier, Dan Harris, was subjected to this terrifying experience as a news anchor on Good Morning America. Since this ordeal, he has embarked on a mission to encourage us to ask an important question: what is happiness, and how can we work towards it?
Despite a world of growing excess, we often still feel like we are missing something. Dan’s mission of encouraging more people to seriously consider happiness is something we need now more than ever.
Here’s some of the key takeaways and lessons from the episode:
The Hedonic Treadmill keeps you perpetually dissatisfied.
This is one of the most consistent sources of unhappiness in our lives. We think that accomplishments and external achievements will satisfy us, but there’s always something more or bigger outside our reach. This was something both Dan and Justin struggled with throughout their lives. For Dan, it was his career as a journalist and reporter, and the anxiety and internalized pressure of this resulted in a panic attack on live television. For Justin, it was realizing that he wasn’t any happier, even after his successes as a founder and selling Twitch. Learn to find internal sources of motivation and meaning – there’s nothing out there that will make you happy.
The truth will set you free, but first it pisses you off.
Meditation and self-reflection can be a confronting process, but finding peace rarely comes easy. Try to approach meditation without attaching expectations of outcomes. As you continue with your practice, you’ll see subtler levels of yourself peeling away and you’ll become more familiar with the chaos of your mind. Taking control of this can be a painful process, but it can also be incredibly self-liberating.
Love, no matter what.
Expressions of love are omni-directional. When you genuinely care about other people, it also demonstrates that you have the capacity to love yourself too. Extending compassion both ways, and treating yourself like a friend or loved one you care about is important because it creates a feedback loop that affects the people around you.
I was curious to what happened with Atrium. Thanks for posting this.
Thank you so much for sharing such a great insight, Justin!
As I'm a founder who failed once before, I really resonated with this article!
Here's a list of my highlights that I really resonated with from this article and my notes:
>> As a technology startup, product is paramount. Justin and his team did not focus enough on differentiating their product as an effective, efficient enough solution to the current problem.
>> Without clearly defined goals between the co-founders, huge frictional costs arose.
✍️ Note: this was a part of the reasons why I failed at my first startup...
>> Justin himself was barely interested in legal service and legal tech, and the company could not identify who they were building for.
✍️ Note: I think this is a red flag...
>> Sometimes things are tough and you will fail spectacularly. But failure itself does not define you. How you deal with the pain and move on to discover what’s important to you is what really matters when it’s all said and done. No matter what ordeal you’re going through, trust that you will emerge a better and stronger person for it. You will discover things about yourself that will exceed your wildest expectations.
✍️ Note: I really like here! Yes, failure itself does not define us! I got a strong conviction after the first time failure. I summarized my journey in my Medium post: https://medium.com/@kazuki_sf_/why-im-building-glasp-20884bb507e1
>> Learn to find internal sources of motivation and meaning – there’s nothing out there that will make you happy.
✍️ Note: 100% agree and resonated with this!
Thank you again!