Comment by GabrielBianconi
1 day ago
I'm the co-founder and CEO of TensorZero.
We started the company two and a half years ago, and raised $7.3m in 2024 (announced only almost a year later). We've spent less than half of this amount.
Earlier this week we came to the difficult decision to wind down the project. The open-source repository remains available on GitHub (Apache 2.0) but won't be actively maintained by the team moving forward.
Hi! First of all, congrats on getting much further than any of us will ever be able to dream. Having a well funded startup is no small feat.
Now one question that you probably get a lot and I must ask: why not pivot?
A distilled model for specific domains is both nearly free and commodity. There is no money in AI outsourcing businesses at scale. If anything you are just a cost center that companies want to squish because your value a negated by the amount of effort it takes to evaluate it’s effectiveness.
News like this is reinforcing the narrative that frontier models and AI outsourcing generally is on the way down.
i had the very strange experience last week of a recruiter listing your org as an example client, and when i looked stuff up i saw the current state.
What did you spend the money on?
The other half goes where?
Mostly salaries to support a small team.
We are returning the remaining capital to investors.
Kudos to you and your team for not burning through the rest. Hope you have better luck with your next project.
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I thought usually founders try to pivot till they run out of money. I wonder if that is good or bad for a serial entrepreneurs if they decide to shut it down instead of pivoting?
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I’ve never heard of this before. Anyone know if it’s uncommon?
Familiar with creditors getting divvied in bankruptcies, but not refunds to investors… oh it’s because there’s never any money left when things wind down. (We hear of retail stores where employees discover closures posted on shop doors when reporting to work.)
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Are there any lessons around the why which may be publicly shared ?
There are many factors at play here but if I had to pick one... an open-source company has to find product market fit twice: first for the OSS project and again for a commercial product. The AI market moves very quickly so it's easy to take a step in the wrong direction and fall behind.
I might publish a long-form reflection when the dust settles.
It might come off as trite, but I genuinely am sorry that things didn't pan out for you
Very early in my career I used to believe that I or anyone else could be a CEO.
It wasn't until working with tiny teams where the CEO/founders devoted everything in their life to the business -- often at the expense of hobbies, romantic relationships, and any shred of free time -- that I realized true CEOs are a rare breed.
When are you ask things like "what happens if the product fails?" the answer would always be "It won't."
They both relentlessly believe in, and put every ounce of energy toward, their vision because anything less would not suffice
Again as trite as it sounds, I empathize with these people in that to them losing their vision felt like losing something dearest to them
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> first for the OSS project and again for a commercial product.
Is there a way to reach out to you as I would like to hear what you have to say about what I am working on. You can update your HN profile to include contact information or you can reach out to me using my HN profile.
I'm basically working on a portable intelligence layer for AI that I will be open sourcing and the commerical product will be to make the intelligence layer even smarter. I can share the Show HN post that I am working on that better explains the value proposition and would love to learn any lessons you have gained while trying to sell AI tools commerically.
Edit: In case somebody calls me out it. I didn't want to use the `tensorzero` email domain incase the domain was going to become defunct soon.
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Are there other OSS LLMOps projects that have overtaken you? I couldn't think of one.
> an open-source company has to find product market fit twice: first for the OSS project and again for a commercial product.
The only way this could be a 'lesson learned' is if you homehow managed to not pay any attention to what has been going on in the last 25 years with open source software companies.
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I'm really sorry to hear that, and I wish you and the rest of the team luck. When you first came out, I thought the approach was really solid - particularly with regards to structured inputs and outputs.
Is there anything your willing to share on what went into the decision/ what you learned about trying to build this kind of product?
See my sibling comment
Well, that explain things. Good luck on your next thing.
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The story of literally 95% of tech startups
Turns out I was wrong :)
Most people “can’t” say this. If you’re quite serious then I am too saying: refreshingly mature!
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Things change, situation change. Life is not constant. In business, it is even more Tumultuous.
I would applaud that the fact that found took bold decision to think out of the box and take action towards it.
LinkedIn is the worst platform to get accurate news as everyone is only incentivized to hype themselves up. Lots of examples abound in r/LinkedInLunatics