Twitter was alive yesterday with drama, after 1Password raised a whopping $200 million in funding, breaking an independence streak of 14 years. Usually, funding announcements are met with a resounding meh, but the internet was divided on a single point: why is 1Password taking all this money, and isn't that bad in the long run for its users?
The disdain resonated with me for a single reason: tech companies, particularly those focused on consumers, that take a metric ton of cash from venture capitalists usually hunker down on growth at all costs, pivoting into new features and markets... when those customers were perfectly happy before.
It always seems that when a startup raises too much cash, or a company gets too big, it just can't resist adding random bloat. The infamous @DHH put it well on Twitter:
Whenever I read about a software service I like hopping on the venture capital train to unicorn-ville, I fully expect them to go to shit. 1PW now need to beome a many billion dollar company OR DIE TRYING. That usually lead to desperate/shitty decisions.
It's easy to find evidence of this in companies that have previously had incredibly focused products, like 1Password, but ultimately pivoted away from their core competencies to justify their valuations. Dropbox is a prime example of this: the company recently pivoted to be more than a file sync service, instead offering a "work management utility" to help busy knowledge workers organize all of their digital things.
The overwhelming sentiment? The new Dropbox sucks, and the company has been railed for forcing users into using a bloated, feature-laden app they didn't actually ask for. Another example of this can be found in Google's rumored plan to offer banking in 2020, which prompted me to wonder: does every tech company need to do every damn thing?
1Password is good because it's focused, simple, and does the job very well, so taking on venture capital money does seem dubious. That's what makes the reaction to 1Password's fundraising so visceral: a worry that a huge blob of cash will lead the company to add new features, pursuing growth at all costs in markets that nobody really wanted them to be in anyway.Will millions in funding ruin 1Password?