Don't let attachment blind you to reality.
Published September 17, 2025 • Based on Founder Reality Episode 18
Also available on: Apple Podcasts • Spotify • YouTube
After five years of building SimpleDirect financing - from my university days at Waterloo to today - I'm making the difficult decision to sunset the product. This isn't a story of failure, but one of hard-earned wisdom that I hope can help other founders avoid the same pitfalls.
But before I dive into the lessons, let me give you the full context of what actually happened - because the real story is more nuanced than 'startup shuts down.'
The Real Story: Portfolio Strategy, Not Single Bet
Here's something most people don't know: SimpleDirect Financing was never my only business.
Since 2019, our parent company ANC has been running a profitable consulting business. While I was experimenting with SimpleDirect Financing, ANC was serving clients, generating steady revenue, and building expertise across multiple domains.
SimpleDirect was a portfolio strategy - an R&D project funded by consulting cash flow. This meant we could experiment, learn, and pivot without the pressure of "make this work or die."
And that's exactly what happened. We learned deeply about:
- Embedded finance infrastructure (13 lender integrations)
- Compliance and regulatory requirements
- B2B2C business model complexity
- Blue-collar market dynamics
- The brutal truth about unit economics
When it became clear the model wasn't sustainable, we had the freedom to make a clean decision: sunset the product and move on.
This is why we didn't fail. We had profitable consulting keeping us alive. We were never betting the farm on one product.
Most founders don't have this luxury. They raise VC, burn through capital, and are forced to keep pushing a broken model because they have no other revenue stream. They can't pivot because investors demand they "stick to the vision."
We stayed independent, maintained profitability, and kept control. When SimpleDirect's unit economics didn't work, we could sunset it without catastrophe.
That's not failure. That's smart business.
The Real Cost of Founder Attachment
But even with a portfolio approach, I still struggled with letting go.
Building a startup is deeply personal. You pour your heart, soul, and years of your life into an idea. I've been attached to SimpleDirect since my sophomore year at Waterloo, watching it evolve through different teams, pivots, and iterations. But I've learned that founder attachment, while natural, can become your greatest liability.
The Opportunity Cost Is Enormous
I've watched brilliant founders—people with exceptional technical skills and business acumen—spend four to five years on products that never gained traction, simply because they couldn't let go of their "baby."
The tragedy isn't that they tried and it didn't work. The tragedy is that they could have been building something transformative during those years.
Think about it: five years is long enough to:
- Build a company from zero to $10M ARR
- Launch three different products and find product-market fit
- Master a new technology stack or industry
- Build a network that opens entirely new opportunities
Instead, many founders spend those years iterating on the same broken model, hoping that one more pivot, one more feature, one more sales push will make it work.
I almost fell into this trap. By year four, I knew something was wrong. But I kept thinking: "We're so close. Just need to fix the support model. Just need better lender partnerships. Just need to raise prices."
The truth? The model was fundamentally broken. No amount of iteration would fix it.
Team Confusion Follows Founder Confusion
When you're attached to a product without clear principles, your roadmap becomes reactive.
Our sprints turned into customer feature requests. We had no vision for where we'd be in three, six, or twelve months. We were building, but we weren't leading.
My co-founder Prajwol would ask: "What's our north star? Where are we going with this?"
I didn't have a good answer. I was reacting to customer feedback, competitor moves, and market trends instead of building from a clear set of principles.
The team could sense it. When the founder doesn't know where the ship is going, the crew gets anxious.
The Three Fatal Flaws That Killed SimpleDirect
Let me be specific about what went wrong. These aren't vague "we didn't have product-market fit" lessons. These are concrete mistakes that you can learn from.
1. We Didn't Control the End-to-End Experience
This was our biggest mistake, and it's one I see repeated constantly in the startup world.
SimpleDirect integrated with 13 different lending partners - SoFi, Upstart, LightStream, Upgrade, and others. Each had their own APIs, policies, approval processes, and customer communication styles. Once we handed customers off to these partners, we lost all control.
The result? 99% of our support tickets came from issues on the partner side—problems we couldn't fix, experiences we couldn't control, and frustrated customers we couldn't help.
Real example: A homeowner applies for financing through a contractor using SimpleDirect.
They get pre-qualified for $15,000 with SoFi at 6.99% APR. Great! Then one of the lending partners' underwriting team requests additional documentation.
The homeowner doesn't understand why. They call the contractor. The contractor calls us. We call the lending partner. The lending partner takes 48 hours to respond. Meanwhile, the homeowner gets frustrated and calls lending partner directly, who tells them something different than what we told the contractor.
We looked incompetent, but we had zero control over the experience.
Compare this to companies like Basecamp, who built their own calendar, messaging system, and project management tools instead of integrating with Google Calendar, Gmail, and Slack.
It sounds counterintuitive - why rebuild what already exists? - but controlling the entire experience protects your business and keeps customers in your ecosystem.
Or look at Stripe. They could have just integrated with existing payment processors. Instead, they built their own infrastructure and became a $95 billion company.
Key lesson: Never base your business's core value proposition on external APIs you don't control. Build in-house for essential functions, use open-source for non-critical features, but minimize external dependencies at all costs.
If your product breaks when a partner changes their policy, you don't have a product—you have a dependency.
2. Wrong Product-Market Fit (Despite Having Customers)
Here's something that confused me for years: we had 254 active contractors using SimpleDirect. We processed tens of thousands of loan applications. Customers were paying us.
Doesn't that mean we had product-market fit?
No. It means we had customers tolerating our product.
The reality I eventually discovered: 70-80% of our target market didn't want sophisticated web apps or beautiful mobile interfaces. They wanted simple phone calls and text messages. They wanted to be notified when customers got funded, not to learn a new system.
We built SimpleDirect with a gorgeous mobile app (available on iOS and Android), a comprehensive web dashboard, automated workflows, and real-time analytics. Our design team spent months perfecting the UX. We were proud of what we built.
But contractors barely used it.
They preferred calling our support team (Jim Moore) and having him handle everything manually. They'd text us saying "Can you just call this customer for me?" instead of using the app we spent years building.
I confused sophistication with value.
I thought: "If we just make it more intuitive, they'll use it." But the problem wasn't usability. The problem was that they didn't want software. They wanted a service.
This is a critical distinction:
- Problem-solution fit: Yes, contractors need financing options for customers
- Product-market fit: No, they don't want a software platform to manage it themselves
We had the first. We never had the second.
Key lesson: Having customers doesn't mean you have the right product if those customers aren't actually using what you've built. Watch behavior, not feedback. Contractors told us they loved SimpleDirect, but their usage data told a different story.
3. Revenue Model Vulnerability (The Final Nail)
Our business model relied on two revenue streams:
- Subscription fees from contractors ($1,500/year)
- Commission payouts from lenders (1-2% per funded loan)
The subscription revenue was predictable but barely covered costs:
Annual revenue per contractor: $1,500
Annual cost to serve:
- Customer support (high-touch): $600-1,200
- Platform maintenance/hosting: $200
- Sales and marketing: $300
- General overhead: $200
Total cost: $1,300-1,900
Net margin: $0-200 (or negative)
So we relied heavily on lender commission payouts to make the economics work.
Then in early 2024, one of our biggest lending partners cut commissions by 40-50% overnight with minimal notice.
Our unit economics collapsed immediately. We had no leverage, no negotiating power, and no alternative. Our revenue depended entirely on external partners' policies.
This is when I realized: we weren't building a business. We were running on hope.
Key lesson: If your revenue depends on external partners who can change terms overnight, you're building on quicksand. Always control your primary revenue stream. Secondary revenue can come from partners, but never let your business survive or die based on someone else's decisions.
The Unit Economics That Never Worked
Let me be brutally honest about the math, because this is where most founders fool themselves.
At $1,500/year with the support expectations contractors had (largely set by our former customer success rep who gave everyone his phone number), we were structurally unprofitable.
The Support Death Spiral:
Our customer success person was well-meaning. Contractors loved him. He was responsive, helpful, and genuinely cared. But he created a culture of high-touch, phone-based support that we could never scale.
Every contractor expected:
- Phone calls for every homeowner application
- Real-time SMS updates
- Personal check-ins on loan status
- Hand-holding through the entire process
This worked when we had 50 customers. At 254 customers, it was unsustainable.
We tried to fix it:
- Built better self-service tools (contractors didn't use them)
- Created comprehensive documentation (contractors didn't read it)
- Implemented automated notifications (contractors still called)
- Eventually fired Jim and went email-only (contractors revolted)
The problem wasn't him. The problem was the price.
If we charged $15,000/year (enterprise pricing), we could afford dedicated account managers and white-glove service. If we charged $149/month for self-service with email-only support, we might have worked.
But at $1,500/year expecting high-touch? Impossible.
Why Blue-Collar Markets Are Uniquely Brutal
I want to share something I've been reflecting on: we picked one of the hardest possible markets for a bootstrapped SaaS startup.
Blue-collar industries (contractors, HVAC, roofing, plumbing) have unique characteristics that make software adoption incredibly difficult:
1. Low Tech Adoption
Most contractors are 45-65 years old. They didn't grow up with smartphones. They prefer phone calls to apps, text messages to email, and personal relationships to automated systems.
We built a beautiful mobile app that won design awards. They wanted phone support.
2. High Support Needs
When things go wrong (and in financing, things always go wrong), they want immediate human help. They don't want to read documentation, watch tutorial videos, or troubleshoot themselves.
3. Extreme Price Sensitivity
Contractors operate on thin margins. A $1,500/year subscription is a significant expense for a small business doing $500k-$1M in annual revenue.
They'd constantly ask: "Can I get a discount? Can we do monthly payments? Can you waive the fee for this one customer?"
4. Relationship-Driven Sales
You can't sell to contractors with slick landing pages and free trials. They want to meet you, know you, trust you. Sales cycles are 3-6 months minimum.
5. Seasonal and Unpredictable
Home improvement is seasonal (spring/summer busy, winter slow). Contractors' needs fluctuate wildly. They don't use your product consistently, which kills retention and makes unit economics unpredictable.
The Only Winners in Blue-Collar SaaS:
Looking at the market, only two models work:
A) High-fee transaction models (like GreenSky)
- Charge 9-15% dealer fees per project
- Contractors pass cost to homeowners
- Support costs justified by high fees
B) Enterprise software for large contractors (like ServiceTitan)
- Charge $10k-$50k/year
- Target contractors doing $10M+ revenue
- White-glove onboarding and support included
The middle market—where we were—is a death trap. You're too expensive for DIY self-service, but too cheap to afford white-glove support.
And I suspect we're not the only ones who will realize this.
Companies like Hearth raised $50M+ to build similar contractor financing platforms. On paper, they look more successful than us—more customers, more funding, more press.
But I'd bet they're facing the same unit economics problem. They're just masking it with venture capital.
When that money runs out, they'll face the same choice we did: raise prices 10x (and lose customers), cut support (and lose customers), or shut down.
Starting with Principles, Not Products
After studying companies like Basecamp—profitable for 25 years with $280M revenue and just 60-70 employees—I realize I built everything backwards.
I started with an idea (contractor financing), validated it with customers, built the product, and figured out principles later.
This created an inevitable conflict between what I was building and what I believed in:
- I value simplicity, but built increasing complexity
- I value control, but depended on external APIs
- I value profitability, but accepted razor-thin margins
- I value focused products, but kept adding features
Basecamp's approach is the opposite: They start with principles, then build products that align with those principles.
They've said no to thousands of customer requests because those features didn't align with their core values:
- No enterprise features (they value small teams)
- No integrations (they value controlling the experience)
- No mobile app for years (they value focus)
- No VC funding (they value independence)
They actively fight feature bloat because complexity violates their principles.
Meanwhile, I was saying yes to everything:
- "Can you integrate with this lender?" Yes.
- "Can you add this feature?" Yes.
- "Can you support phone calls?" Yes.
I had no filter because I had no principles.
My New Framework for Building
Moving forward, I'm adopting a principle-first approach. Before building anything, I ask:
1. Do I control the end-to-end experience?
Can a third party's failure destroy my product experience? If yes, don't build it.
2. Does this align with our values?
Am I adding complexity just to look sophisticated? Am I saying yes because competitors have this feature?
3. Are we building for customers or for ego?
Do customers actually want this, or do I think it makes us look more legitimate?
4. Is the revenue model sustainable?
Can I earn revenue directly from customers without depending on third parties? Are unit economics profitable at scale?
5. What would it take to kill this product?
If external factors outside my control could destroy this business, it's too risky.
SimpleDirect failed every single one of these tests. I just didn't realize it until year five.
What I Got Wrong (And What You Can Learn)
Let me summarize the mistakes so you can avoid them:
❌ I built first, found principles later
→ Start with clear principles and values. Write them down. Make decisions through that filter.
❌ I added complexity to appear sophisticated
→ Simple solutions often win. Especially in markets that don't value complexity.
❌ I chased market opportunities and hype
→ Build from your strengths and values. Don't build something just because the market is big.
❌ I made decisions based on competition
→ Focus on customer value instead. Competitors are often wrong too.
❌ I ignored what customers actually wanted
→ Match product sophistication to customer preferences. Sometimes they want less, not more.
❌ I let attachment cloud judgment
→ Set clear shutdown criteria before you start. If X happens, we pivot. If Y happens by Z date, we shut down.
❌ I underpriced to win customers
→ Price for the value you need to deliver. If customers need high-touch, charge enterprise prices.
❌ I hired for customer success without defining processes
→ Design scalable processes first. Then hire people to execute them, not figure them out.
The Portfolio Approach That Saved Us
Here's why we're actually okay despite shutting down SimpleDirect:
ANC's portfolio (2019-2025):
- ✅ ANC Consulting: Profitable, steady cash flow, funded experiments
- ✅ SimpleDirect Financing: R&D project, valuable learning experience
- ✅ ANC Startup School: New vertical, growing with international students
- ✅ SimpleDirect WorkOS: Next bet, better market (AI productivity for knowledge workers)
We survived six years, never raised VC, maintained profitability, and kept total control.
This is the portfolio approach VCs preach but founders rarely execute:
- Multiple revenue streams
- Profitable core business funds experiments
- Freedom to pivot when products don't work
- No external pressure to force broken models
Most founders make a single bet and die when it fails. We made multiple bets and survived.
That's not failure. That's strategy.
"But George, Shouldn't You Have Focused?"
I can already hear some readers thinking: "This is exactly the problem. You were spread too thin. If you'd focused 100% on SimpleDirect, it would have worked."
Let me address this directly, because I used to believe this too.
The "focus" advice is right for growth-stage companies, wrong for early-stage founders.
When you've found product-market fit and unit economics work, YES—focus obsessively and scale. Steve Jobs was right to kill product lines at Apple in 1997 because he needed to save a dying company by focusing on what worked.
But when you're in the discovery phase—testing markets, learning what customers want, figuring out if the model works—focus is a liability.
Here's why the portfolio approach saved us:
1. Cash Flow Buys You Time to Learn
Without ANC consulting providing steady revenue, I would have been forced to:
- Raise VC (give up control, get pressure to force growth)
- OR make SimpleDirect work immediately (ignore warning signs, keep pushing broken model)
- OR shut down in 2021 when we first saw the unit economics problems
Instead, consulting bought us time to learn deeply:
- How embedded finance really works
- What contractors actually want (vs what we thought they wanted)
- Why blue-collar SaaS is uniquely hard
- What unit economics look like at scale
That knowledge is worth more than forcing a broken model to work.
2. Different Bets Teach Different Lessons
Running ANC consulting while building SimpleDirect wasn't distraction—it was cross-pollination.
From consulting, we learned:
- How to charge premium prices (which we failed to do with SimpleDirect)
- How to qualify customers properly
- How to set boundaries on support
- How enterprise sales actually work
From SimpleDirect, we learned:
- Product development at scale
- API integrations and technical complexity
- What doesn't work (equally valuable)
These lessons compound across the portfolio.
3. The Real Risk Isn't Dilution—It's Single Point of Failure
The founders who died weren't "unfocused." They were over-focused on one bet that didn't work, with no backup plan.
I've seen too many brilliant founders spend 4-5 years on a single product, burn out, run out of money, and quit entrepreneurship entirely.
They weren't less talented than me. They just didn't have a portfolio to fall back on.
The Real Answer: Focus on Learning, Not Just Products
Here's my actual philosophy now:
Early stage (year 0-3): Run multiple experiments, but focus on ONE learning goal
- ANC consulting: Learn how to serve clients profitably
- SimpleDirect: Learn if contractor financing can scale
Growth stage (year 3-5): When you find what works, focus ruthlessly and scale
- We never got here with SimpleDirect (that's the signal to pivot)
Mature stage (year 5+): Diversify again, build new bets, compound knowledge
- Now: SimpleDirect WorkOS, ANC Startup School, etc.
The mistake isn't having multiple bets. The mistake is not knowing which stage you're in.
The Path Forward: SimpleDirect for Work
So what's next?
We're pivoting SimpleDirect into SimpleDirect for Work—an AI-powered productivity platform for modern teams.
Why are we excited about this?
1. Better Market
We're targeting tech-savvy knowledge workers, not tech-averse contractors. This market:
- ✅ Adopts new software enthusiastically
- ✅ Prefers self-service over phone support
- ✅ Values productivity and is willing to pay for it
- ✅ Makes fast decisions (trial and buy same day)
2. Better Timing
We're early in the AI productivity wave. It's 2025, not 2019. We're riding a massive trend, not entering a mature market.
3. Better Economics
Self-service actually works with knowledge workers. We can scale without hiring a support team.
4. Better Fit
We're builders and developers, not call center operators. This product plays to our strengths.
5. We Control the Experience
No external APIs for core functionality. We build everything ourselves or use open source.
We've already launched SimpleDirect Chat, and we're shipping new features every week. Our first customers are loving it.
This is what we should have built from the beginning.
The Bigger Picture: Don't Let Attachment Blind You
If you're a founder reading this and thinking "this sounds like my startup," here's my advice:
Set Clear Shutdown Criteria Now
Before you fall deeper in love with your product, write down:
- If we don't hit $X revenue by [date], we pivot
- If customer retention is below X% after 12 months, we pivot
- If unit economics aren't profitable by [milestone], we pivot
Make these decisions when you're still rational, before attachment takes over.
Build a Portfolio, Not a Single Bet
Don't put all your eggs in one basket. Have:
- A cash-generating business (consulting, services, agency work)
- Experimental bets (products you're testing)
- Long-term vision (where you're ultimately going)
This gives you freedom to make smart decisions instead of desperate ones.
Watch Behavior, Not Feedback
Customers will tell you they love your product. But do they actually use it?
We had contractors say "SimpleDirect is great!" and then call Jim instead of using the app.
Usage data > customer surveys
Match Product to Market Sophistication
Don't build complex solutions for customers who prefer simple ones.
Contractors didn't want beautiful mobile apps. They wanted phone calls.
If we'd accepted that reality earlier, we could have:
- Built a simple SMS-based system
- Charged less
- Scaled support with automation
- Actually made it work
But I was too attached to the vision of a "modern fintech platform."
Final Thoughts: Failure Fast, Learn Faster
Shutting down SimpleDirect isn't an ending—it's a beginning.
I spent five years learning lessons that will compound for the next 30. I now know:
- How to evaluate markets before committing
- How to structure unit economics from day one
- How to build with principles, not just ideas
- How to run a portfolio of businesses
- How to let go when something isn't working
That knowledge is worth more than the product itself.
To my fellow founders: Don't let attachment blind you to reality. Don't build complex solutions for customers who prefer simple ones. And never, ever let your business depend on someone else's success.
The goal isn't to avoid failure—it's to fail fast, learn faster, and build something that truly serves your customers and aligns with your values.
SimpleDirect Financing is shutting down. But ANC is thriving. SimpleDirect WorkOS is launching. And I'm more excited about the future than ever.
Sometimes the best business decision is knowing when to let go.
What lessons have you learned from shutting down or pivoting your startup? I'd love to hear your thoughts—reach out to me on Twitter or check out more founder stories at Founder Reality.
Want to follow the SimpleDirect WorkOS journey? We're building in public and shipping fast. Check out getsimpledirect.com to see what we're building next.
George Pu
CEO, SimpleDirect
Toronto, Ontario, Canada
This article is based on Episode 18 of the Founder Reality podcast. Listen to the full conversation below.
