Spenser Skates and Curtis Liu, both MIT graduates, once led Sonalight, a voice recognition startup that could be considered an early precursor to Siri. Founded in 2011, the startup landed a coveted spot in the Y Combinator accelerator and amassed 500,000 downloads. However, Skates and Liu made a critical observation: while their product was “pretty good,” it was not sufficiently engaging to users for repeated use. As Skates put it, “Sonalight was a 95th percentile idea, but we wanted to find a 99th percentile idea.”

Pivoting to Analytics: The Journey Begins

The duo spent a considerable amount of time working on in-house analytics tools for Sonalight, gathering insights into user engagement. These tools, although initially built out of “engineer’s hubris,” became highly effective, surpassing the capabilities of other tools their peers at Y Combinator were using. Recognizing an opportunity, Skates and Liu began working on Amplitude in 2012, officially launching the platform in 2014, along with a new co-founder, Jeffrey Wang.

The Decision to Move On

The decision to abandon Sonalight came with an inherent risk, but Skates and Liu were not significantly daunted. For them, the focus was on creating something groundbreaking, not just another technology that people might use but would not find “sticky” enough for long-term engagement. Skates stressed that while they could have continued to improve Sonalight, it was becoming clear that the technology was not destined to be a “breakout, massive success.”

Zeroing In on the ‘Best’ Idea

The process of switching gears involved brainstorming and dialogue for over a month. The founders wanted to identify a problem that would play to their strengths as algorithm experts. The choice became increasingly clear: building a robust analytics platform that could offer valuable insights into customer journeys—a need they confirmed after conversations with about 30 companies.

The Psychology of Engineers and Entrepreneurs

Skates also provided insights into why many engineers hesitate to leap into entrepreneurship. According to him, engineers are generally risk-averse and look for clear paths and validations, which are often lacking in the entrepreneurial journey. This risk-aversion contrasts with the mindset necessary for startup success, which requires embracing uncertainty.

A Leap of Faith Pays Off

Amplitude has proven that the calculated risk was worth it. By 2021, the company had raised $336 million from investors and achieved a market capitalization of $1.35 billion, with over 2,300 corporate clients. The company went public, fulfilling Skates’ vision of a “breakout, massive success.”

Spenser Skates’ journey offers valuable insights into the psyche of entrepreneurs and the difficult choices they must make. For Skates and Liu, the willingness to abandon a “pretty good” startup for a potentially great one has proved to be a pivotal decision that has reaped rich rewards. They successfully transitioned from a voice recognition startup to a billion-dollar analytics company, demonstrating that sometimes good just isn’t good enough.