😭 I can't believe this

Buildspace, a $100M startup, was shut down overnight (even though it's growing fast)

Author

Admond Lee
September 01, 2024

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Hey Founders,

Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.

Let’s get to it! 🚀

Today at a Glance:

  • ☠️ 1 Failed Startup → Buildspace

  • ⚠️ 2 Mistakes → Lack of monetisation options

  • 🧠 3 Lessons Learned → Trust your gut, follow your heart

  • 🔗 The Runway Insights → Derisking 101: How to identify and reduce risk in your daily work

  • 💰 Southeast Asia Funding Radar → MoneySmart rejects MoneyHero’s $8M acquisition offer

☠️ 1 Failed Startup: Buildspace

🚀 The Rise of Buildspace

Founded by Farza Majeed, Buildspace is a platform where people build cool shits (yes, cool stuff). Before talking about Buildspace, I want to share with you about the founder.

Farza Majeed

Farza is not your ordinary founder. He’s a builder who loves creating things for others.

His entrepreneurial journey started at 13 when he sold blank DVDs and T-shirts and got it to $100k by 15.

Then, he shipped multiple products in gaming to 1M+ users, trained open-source deep learning models for games, and founded ZipSchool (live science classes for 100k+ elementary school kids) before pivoting to Buildspace.

❝

I started Buildspace because I wanted to build the school that I wish I had.

— Farza (Founder of Buildspace)

  • The Problem — 💔 Many creators and builders struggle to find a supportive environment and don’t know how to pursue their passion and dreams, leading to an unfulfilled path.

  • The Solution — 💟 Buildspace is a school that aims to help people learn how to build businesses in domains they love.

    • You can figure out what you’re passionate about, create something you love working on, and then learn how to turn that creation into a financially sustainable path you can pursue full-time.

    • While most people follow the traditional path (i.e. rat race), Buildspace provides an alternate path.

💭 In short, Buildspace is a school for people who don’t want to just “get a job”. It’s like the Hogwarts for builders and dreamers.

⚡️ Here’s how it works:

  • You apply to join its flagship 6-week, free, online Nights and Weekends program.

  • Pick an idea you love, build it, get feedback, and iterate with guidance and support from mentors and peers.

  • After week 3, you’re invited to join a 3-day IRL event in SF at its campus.

  • By the end of week 6, there’s a demo day when you present your project (progress + struggles) to compete for a cash prize. You’ll walk away with lifelong friendship and a cool product that you’ve built — potentially a new startup that you’ll continue building.

🔥 Needless to say, Buildspace was on fire:

  • 12M+ people saw its content across Instagram and Twitter.

  • 30,000+ people joined Nights & Weekends to work on their own ideas.

  • 3,000+ ended up actually building their ideas, shipping them, and getting their first fans/revenue.

  • 1,000 people flew to meet IRL for 3 days across 5 events and 2 cities – SF & Dubai.

  • Some have started multi-million $ agencies, found co-founders, and even gotten funded for their own startups.

🤑 The best part? Buildspace is profitable off of its sponsorship and partnership model with companies that want more awareness around their tools like OpenAI.

💰 At its peak, Buildspace raised $10M at a $100M valuation from a16z, Y Combinator and many others.

📉 The Fall of Buildspace

However, something didn’t feel right to Fazar. Eventually, he decided to shut down Buildspace due to “personal” reasons.

📌 Here’s what happened to Buildspace:

  • Dec 2019 - Aug 2021 — Farza initially started ZipSchool to conduct live science classes for elementary kids K-15 before pivoting to Buildspace in late August 2021.

    • 💰 Got into Y Combinator and raised $125K.

  • Dec 2021 — Buildspace was launched.

    • Made $1.5M a year by 2022 on a product called “projects” where developers built alongside Buildspace.

    • Some users turned their “projects” into revenue-generating businesses or put them on their portfolios to apply for jobs.

  • 2022 — 💰 Raised $10M at a $100M valuation led by a16z

  • 2023 — 🚀 Pivoted from “projects” to 6-week Nights & Weekends program.

    • Incubators like Y Combinator are a fantastic home for founders looking to build a unicorn.

    • Universities are an okay home for people who want to join the workforce.

    • Nights & Weekends program is meant to serve people in the middle (pursue their passions to build their own things).

      • S1 batch — 500 people joined

      • S2 batch — 3,000 people joined

      • S3 batch — 7,500 people joined

      • S4 batch — 18,000 people joined

  • 24 Aug 2024 — 😭 Farza wrote a letter and announced on Twitter that Buildspace will be shut down.

    • Why? The reasons are personal.

    • Farza shared that he couldn’t find the next path to grow Buildspace. Buildspace feels “done” to him. The fire to push isn’t there.

    • Despite all the momentum, he couldn’t find the spark that made Buildspace feel alive to him.

❝

At this point I’m out of ideas to try that I can really put my all behind to take us further. All the paths I wanted to explore, I did. And I don't have a clear idea on the next path to go down. The desire to push like hell isn't burning as it once did.

❝

I'm so sorry I couldn't make it work.
I'm so sorry i couldn't be better.
And I just hope you can respect the call.

— Farza’s farewell message

Want to learn more about Buildspace’s downfall?

⚠️ 2 Mistakes

💟 My Thought:

- Honestly, I don’t think these mistakes are what killed Buildspace.
- Buildspace was shut down because Farza no longer thinks Buildspace is an idea worth pursuing with meaningful outcome.
- The mistakes below are simply some “fkups” that could easily be solved if Farza continued working on Buildspace.

Mistake 1: No control over the quality of the experience

This was actually shared by Farza in this 2023 recap.

🧵 The entirety of Buildspace is duct-taped together via email, Discord, Youtube Live, Framer pages, WhatsApp, Instagram, and Twitter. It was driven by social media.

It didn't have tight control over the quality of the experience and just hoped that its users would be checking these various platforms and staying connected.

In the S4 batch, they saw the duct tape starting to tear:

  • Amazing builders got zero traffic on their posts because the Twitter algorithm was changing constantly

  • People could no longer keep track of interesting projects because there were just so many.

  • Participants no longer had an efficient way to find others like them, even Buildspace team constantly missed incredible demos that were posted on Twitter.

Mistake 2: Lack of monetisation options

🙏🏻 As a community-driven startup, Buildspace’s primary goal has been to never charge end users with the core beliefs to build an education system that’s free and open to all.

💸 However, as shared by Farza, monetisation was one concern. After exploring several options for monetisation, Buildspace couldn’t find a sustainable and scalable monetisation model that was aligned with Buildspace’s mission:

  • Sponsorships — They could hit $2-3M a year max with affiliate deals and product placements from Adobe or OpenAI. However, they could only sell limited placements and it capped out easily.

  • Venture — While this option makes sense, it’d deviate Buildspace to begin optimising for larger outcomes, removing indie hackers or creators from the picture and becoming “budget YC” or “Walmart a16z”.

  • Government Partnerships — The government in every country wanted something different from what Buildspace was selling. Because of that, Buildspace said NO to a $2M deal from the government of a country in Asia.

Since Buildspace has raised money from investors, Fazar believed that the monetisation opportunities will grow as the user base grows. So he went back to focus on growing the community instead.

🧠 3 Lessons Learned

Lesson 1: Trust your gut, follow your heart

❝

Instead of forcing something that doesn't feel right — I think sometimes you gotta have the strength to let go. Because what lies ahead may be more beautiful than what lies behind.

— Farza

Honestly, I really admire Farza for the fact that he had the courage to follow his heart and made the hard decision to shut down Buildspace — even though things seemed to be moving in the right direction from the traction’s perspective. He knows when it’s time to walk away.

🌟 Key Takeaways:

  • 💟 Trust your gut

    • Sometimes, despite external success, your internal compass might tell you it’s time to move on. Listen to that voice. If the passion that once fueled your project fades, it’s okay to step back and reevaluate your path.

  • 🤝🏻 It’s okay to pivot or exit

    • Not every journey needs to end in the way you originally envisioned. If you feel that your project has run its course or isn’t aligned with your goals anymore, consider pivoting or even exiting. It's better to make a conscious decision than to keep going without motivation.

  • 💪🏻 Be true to yourself & prioritise personal fulfillment

    • Your happiness and sense of fulfillment should be at the forefront of your entrepreneurial journey. If continuing down a certain path drains you instead of energizing you, it might be time to explore new opportunities that align better with your passions.

Lesson 2: Community is everything

While you don’t need to build a huge community like Buildspace did, you need to build a small community (i.e. loyal fans) that loves what you’re building and wants to be a part of the mission.

With the community, you no longer need to worry about getting sales or growing your business because your community will be the ambassadors to share your product or service with others.

🌟 Key Takeaways:

  • 🕺🏻 How to build a community

    • Identify the purpose of the community, your target audience, value propositions and platform (i.e. Slack, Discord, Telegram, WhatsApp, Newsletter) to host them.

    • Promote on social media and leverage your network to attract early joiners.

    • Engage with your community regularly.

    • Organise online or physical meetups for community members to connect, collaborate and share experiences.

    • Keep providing value (before selling), listen to feedback, and be transparent about your progress.

  • 🙋🏻‍♂️ Leverage community support during tough times

    • When you’re facing challenges or contemplating difficult decisions, lean on your community.

    • Their feedback, encouragement, and shared enthusiasm can help you navigate rough patches or give you the strength to pivot if needed.

Lesson 3: Focus is about saying NO to 99% distractions

❝

Once you have figured out what to do, be unstoppable about getting your small handful of priorities accomplished quickly. I have yet to meet a slow-moving person who is very successful.

— Sam Altman (CEO of OpenAI)

🙅🏻‍♂️ It’s crazy to think that Buildspace said NO to a $2M deal from the government of a country in Asia simply because it wasn’t aligned with Buildspace’s mission.

Looking back, it was probably one of the best decisions as it allowed Buildspace to focus on building what’s truly important to its community.

🌟 Key Takeaways:

  • 📍 Focus on what truly matters

    • Focus is a force multiplier on work.

    • To achieve meaningful progress, you need to focus on what aligns most with your core mission and goals.

    • Saying "no" to distractions, even if they seem like good opportunities, helps you concentrate your energy where it counts the most.

  • 🔋 Protect your time and energy

    • Not every idea or project deserves your attention.

    • Being selective allows you to maintain the intensity and passion needed to push your most important initiatives forward. This also prevents burnout and keeps you aligned with your long-term vision.

🔗 The Runway Insights

  • Derisking 101: How to identify and reduce risk in your daily work (Link)

  • How to get a VC from “Maybe” to “Yes” (Link)

  • The ultimate guide to term sheets for startup founders (Link)

  • The 10 rules of VC fundraising (that most founders just miss) (Link)

  • How to beat any competition (Link)

  • How to do things that don’t scale (Link)

  • 7 ways to kill trust as a leader (and how to avoid them) (Link)

💰 Southeast Asia Funding Radar

  • MoneySmart rejects MoneyHero’s $8M acquisition offer (Link)

  • Invesko raises $1.6M seed to be the go-to investment app for Gen Z in Southeast Asia (Link)

  • FinKnight, a Malaysia-based fintech, secures funding from First Move and Gobi Partners Affiliate to expand financial support for startups (Link)

  • DiMuto bags $5.9M in Series A from SEEDS Capital and SGInnovate (Link)

  • ESS, an eco-friendly rocket startup, secures SGD 25K investment from Protégé Ventures (student-led VC) (Link)

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That’s all for today

Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.

You can always write to me by simply replying to this newsletter and we can chat.

See you again next week.

- Admond

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