Philip Westfall, August 13, 2019
It was October 8th, 2014.
The Grid had just launched a crowdfunding campaign for their highly anticipated website builder, claiming to use artificial intelligence to design and build websites.
A few months later, after closing a $4.6M series A, everything looked promising for the expected Spring 2015 launch.
Although the tool had incredible promise, things seemed to take a turn for the worse.
In late 2016, the Grid started to show signs of a failing company:
To make things worse, in early 2019 The Grid took down all customer websites and showed this message on their updated, one-page website:
“Dear people of the Grid, we have placed V2 sites in an archived state and current users will be emailed a tool to acquire & backup their content. User registration will reopen with V3. To keep expectations clear, we will not be uber-regular with life-is-swell emails. We will not be shipping *minimally* viable shells of a product to satisfy suits.
We won't talk talk talk about how close we are (though we are) and how game-changing yada yada. You won't be hearing from us in full dose till the new engine hums.”
So what happened? Does the company still exist? Will there ever be a v3? What will happen to the $6M dollars that were invested by founding members?
That’s what we’re here to try and figure out.
According to our research, here is a detailed overview of everything that happened to the Grid.
The Grid was founded in San Francisco by a leading team of web developers and designers including Dan Tocchini (CEO and Co-Founder), Brian Axe (Chairman and Co-Founder who was Director of Products at Google AdSense), Leigh Taylor (Lead Designer and the first Medium designer), and Henri Bergius (VP of Engineering).
“After the first year & half of R&D at the Grid, with a rough prototype and only 3 engineers, which included me, Facebook courted us for acquisition.” - Dan Tocchini, Founder of the Grid.
When the initial offer of $30-50M became an offer of $10-15M, the team decided to turn it down and pursue a public launch.
The Grid launches their crowdfunding campaign.
The Grid closes their Series A for $4.6 million USD, led by AME Cloud Ventures.
The Grid founder Dan Tocchini explains how their main website was built using the product. The presentation starts at 1:20. At this point in the campaign, there are 22,763 founding members.
The Grid shares a sneak peek of their upcoming iOS app.
The Grid showcases the first in-app demos of the product.
The Beta Product begun to rollout to the first 100 backers. The Grid claims to have close to 50,000 founding members. They created a video giving customers additional details about their journey and what can be expected during the Beta program.
The Grid mentions on Twitter that all customers should be online before January 2016.
The Grid holds their first online hangout and discusses improvements in their design systems. At this point, they claim it takes 6-10 seconds to create a website.
The Grid holds their second online hangout and discusses improvements in the user interface. Although they mention there will be several additional hangouts in the series, this was the final hangout publicly shared online.
The Next Web is one of the first major tech websites to review the Grid. The article showcases several screenshots of the product and goes into detail about some of the confusion surrounding the company, such as the ongoing crowdfunding campaign and the fact there is still no date for a public launch.
At this point, the crowdfunding campaign has been live for 10 months and there are over 54,000 founding members.
The Grid releases a new video showcasing how to build a website using their iOS App.
The Grid’s founder Dan Tocchini is interviewed by HuffPost. The Grid has 35 employees, over 61,000 founding members and the product is still in private beta.
The Grid announces that it’s started to roll out auto activations in beta.
Close to 2,000 founding members have access to the Grid’s beta platform.
Over 7,000 founding members have access to the Grid’s beta platform.
Over 15,000 founding members have access to the Grid’s beta platform.
All 61,000+ founding members have access to the Grid’s beta platform.
The Grid turns off beta and launches their public version.
The Grid launches a “lifetime membership” of $96 to the top 10% of users. Here is a copy of the landing page that explained all the perks of the membership. The website also contained a message explaining why there had been no marketing over the past year:
“10 years of R&D & more than a dozen patents went into making the first AI web designer. 2 years ago we let the world know and shattered the record for consumer software crowdfunding. We didn't sell out, we walked from offers from the biggest website in the world. How could we? This is just the beginning. For the last year no marketing, no ads, we took your feedback and invested everything into making v3 what we've all been waiting for…”
You can still demo their v3 product here.
During a webinar, Dan Tocchini mentions that v3 of the Grid will be released on November 17th, 2017.
Note: Unfortunately the webinar is no longer available as the domain has been taken down.
However, there are still tweets about it.
Dan Tocchini replies to angry customers that are frustrated with the Grid missing their release date.
The Grid sends their last public tweet.
Still no update on V3 release. Frustrated customers start voicing criticism all over the internet.
All customer websites are taken down; thegrid.ai where customers sites were hosted is no longer functional. The main website confirms this information.
The Grid continues to sell pre-paid subscriptions. Their new “Pro Membership” gives you access to 10 sites for $144. They are also offering a demo of the v3 product while letting people join the v3 wait list.
First things first: we don’t know what happened. We can only speculate.
The only people who know for sure are the numerous employees whose LinkedIn profiles still show them working at the Grid despite having new roles at other companies.
However, because our company (PageCloud) went through similar challenges as The Grid, we feel like we may be able to comment on what went wrong.
Here’s a little bit of context for those of you who missed it in 2014-2015 when The Grid and PageCloud were both attempting to shake up the website builder market.
According to our research and experience, here are the key points that stopped the Grid from making it in the website builder market:
After running the most successful crowdfunding campaign in website builder history, the Grid faced tremendous pressure to deliver a game-changing product that built websites through AI.
Despite not having a public-facing product, the Grid’s marketing team continued to push out teaser videos that showcased amazing features, further increasing customer demand and expectations.
After missing several deadlines and stirring a wave of customer frustration, the Grid decided to release a product that wasn’t fully featured or ready for user consumption.
When the Grid released their product in the wild, their most important advantage quickly became their biggest weakness.
Let us explain.
To build a website, the Grid asked users to pick a color palette as well as a font and layout style. Then, after adding some content, the Grid created a website.
Sounds pretty cool on paper!
However, regardless of how the website was built, there were only two choices when it came to the end product: satisfaction or dissatisfaction.
If users were unhappy with the design, which most were, they went looking for a solution.
Unfortunately, because the Grid used AI for all aspects of the product, users had very limited options when it came to editing the design: they could change the original style choices or tell the Grid that they didn’t like the design and the app would spin up another website.
For a lot of people, this felt like a game of designer roulette. A user would never know if the output would be right for them.
Because of the lack of control and the small amount of time users invested in their sites, many of them felt like the easiest solution was to simply give up.
When the Grid launched, they immediately aimed for the stars.
They wanted users to build full-blown websites entirely through AI.
Instead, they could have aimed for something more achievable, like building a single page or holding back on certain AI elements, like layout, that are extremely difficult to perfect even for professional designers.
For example, they could have offered a few templated layouts and then built-in AI features allowing customers to redesign them over time.
Here’s a basic representation of what we mean:
If users had a sense of accomplishment working with the software, where they could build something simple, they would be more willing to come back over and over to iterate on their website as the product improved.
Users had very little input when it came to their website. Although we love the idea of giving people pre-styled options for things like colors and fonts, users need some freedom to set their own custom styles.
Individuals and businesses using the Grid struggled to respect their own style guides which caused high levels of frustration and churn.
We all know how poor reviews can collapse even the most hyped companies. Remember the legendary sandwich picture that poured gas on the failed Fyre Festival?
Although there were people on Twitter backing the Grid’s product, they were heavily outweighed by the numerous customers who were disappointed with the Grid’s product and communication after it went live in 2015 - 2016.
Here are just a few examples:
Furthermore, many people mentioned that the Grid had started to delete their negative comments and ban them from their social media accounts.
Here’s just one example from a user who created a one hour video review with the title: “The Grid Sucks”.
Needless to say, this turned into a PR nightmare.
As mentioned before, the Grid didn’t focus on a minimum viable product.
Essentially, the Grid was trying to add bells and whistles to a core product that wasn’t finished.
Although the Grid had raised $4.6M and had sold for over $6M in founding memberships, like most startups, the company had a high burn rate and had not reached profitability.
According to a 2015 interview with Dan Tocchini, the Grid had 35 employees spread across 8 time zones. Based on the average salaries of backend developers working with AI, let’s assume an average salary of $100K for all of these employees.
Simple napkin math would show annual costs of $3.5M (35 x $100K) without considering any additional costs for rent, travel, patents, hardware, software or other expenses.
Considering the Grid had been growing their employee base since 2010, it’s not hard to believe that by the end of 2016 the company was under serious financial pressure to raise more money or to renew and grow the existing subscription base.
With poor customer reviews and retention, this would have been no easy task.
Note: Just for the sake of comparison, and to illustrate how expensive software development can be, Wix launched an AI based template builder in 2016. The year before, their development team of close to 600 cost them $68M.
However, there are many signs that the Grid is slowly fading away, and we wouldn't bet on them making a historic return any time soon.
Here are just a few examples:
When you sign up for their v3 waiting list, their business address shows a winery just north of San Francisco.
And their contact email is firstname.lastname@example.org, which after a little bit of research, connects back to Carl Chouinard, their former CTO who left the company in December of 2017.
One person on Twitter had this to say:
“Not sure if you’ve been following the situation here on Twitter or not, but I talked to 8 of the original team, they either left due to ethical issues, contract ending, or declined to comment. NONE of them had anything positive to say, all negative, or no comment.”
A former employee, who gave a one star review on Glassdoor, mentioned:
“Out of money and didn't pay out the employees”
There have even been talks of a class action lawsuit against the company.
It’s always unfortunate when such promising tech doesn’t make it.
However, for PageCloud, the worst part is seeing 60k+ customers who lost their investment and were never properly informed about what was going to happen to their websites.
Because of this, we decided to create a unique offer to help the Grid backers get their websites online.
If you show proof of purchase (screenshot) of a payment made to the Grid, we will provide you with a free website for one year ($240 value).
No strings attached. If you don’t like the website after a year, you can simply walk away forever.
To benefit from this promotion, start your free trial and reach out to our in-app support team to let them know you had a Grid subscription. They will be happy to provide you with additional information.
If you know people who used the Grid, feel free to share this information with them!
Did you enjoy this article? We’d love to hear your thoughts below.
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