Vegas-based SHIFT carshare project shuts down, founder Zach Ware to become full time VC
Rumors have been swirling out of the desert about the fate of one of Downtown Vegas' most ambitious startups, SHIFT by Project 100. You know, the one that was going to buy 100 Teslas. (A move that I called "swatting a fly with a machine gun" at the time.)
Now Pando has confirmed from Shift's CEO Zach Ware that the company has completely shut down. All of the company's staff are being laid off -- more on that below -- and all assets are being sold off. Once that process is completed, Ware will become a full time partner at Vegas Tech Fund.
Ware has long been one of Tony Hsieh's more reliable lieutenants in the Downtown Project and a part-time partner at the firm. (Disclosure: Ware greenlit the VTF's minority investment in Pando.) Last night, Paul Carr and I had a several hour dinner with Ware, who told us the entire story of how a company went from an ambitious mix of ZipCar and Uber -- powered by all those Teslas -- to complete shut down in just two years. We'll be writing a much longer piece on his journey-- it's full of lessons for entrepreneurs, particularly those building ambitious companies outside of the Valley. It also is a microcosm of some of the things that have gone so wrong in Downtown Vegas, with clues on how to rectify them.
But the important thing now are the facts -- not least because, as with everything relating to Hsieh's Downtown Project -- there have been a lot of rumors. The decision to shut down Shift was entirely Ware's call, he says. The company had $2 million left, in both liquid cash and assets, but that wasn't nearly enough to pull off Shift's ambitious vision. Ware says he considered various ways the company might pivot, but ultimately, Ware says he had a moment of honesty with himself on a flight back from Miami and realized the best thing he could do for his employees, investors, and Vegas was to shut the whole thing down now, rather than Thelma and Louise it off a cliff. He gave all employees what he described as a "generous" severance package (he wouldn't give specifics) and transitionary benefits for their families. After liquidating the remaining assets, he'll return the capital to Vegas Tech Fund where, he says, it can be better put to use funding new ideas or those with more traction.
We like to glamorize the stories of entrepreneurs running their companies until ever dime is depleted, hoping for some miracle Hail Mary. But sometimes getting over your own ego, admitting defeat, and shutting a company down takes the most bravery.
Ware told the Vegas Tech Fund portfolio this news about an hour ago. The email is below:
Hi everyone,I wanted to share a brief update with you from VegasTechFund. Starting in May my role as a partner will become full-time. It’s our goal to be a formidable fund in Las Vegas and beyond for at least the next 15 years (hopefully more) and a big part of my focus will be building the framework to make that happen.Over the coming weeks and months we will have a lot more to share about our plans. We also will be asking for your help and I hope the growing VTF team and I will have the chance to pick all of your brains.So what about my work at SHIFT? Over the past few weeks the leadership team at SHIFT and I made the difficult decision to wind down the company. (for those of you that don’t know, SHIFT is the company I founded two years ago, almost to the day)A number of variables led us to this decision which we think is the right one for our team and our shareholders. Most importantly making this decision now allows us to wind down our large and complex operations responsibly and take care of our amazing team while we still had a healthy amount of capital. Additionally we all felt that our substantial remaining capital would be more productive redeployed into the broader ecosystem by our shareholders.I’m very proud of what we accomplished, what we didn’t and what we learned. And I will share many more details in the coming weeks about our experiences, successes, failures, and lessons.The SHIFT team and I are are still in the process of winding down the company and taking the time to celebrate our shared experiences over the past two years. My transition to a full-time partner will begin in May. In the meantime please don’t hesitate to reach out if you have questions or I can help in any way.Cheers,Zach