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Check the bottom of the page for several updates!

This morning I received the following email from Zirtual, where I have been a customer for about six months using their “Zirtual Assistants” or ZAs to help me manage my business without hiring a full-time assistant.

Dear Zirtual Clients,

It is with an incredibly heavy heart that I have to send this message. As of today, August 10th 2015, Zirtual is pausing all operations.

Due to a combination of market circumstances and financial constraints we must re-organize our current structure if we are to successfully serve you in the future.

I realize this news comes incredibly fast and I am truly sorry for the Z-shaped hole this will leave in your lives and business.

We know that many of you care deeply about your Zirtual Assistants. If you would like to connect with your assistant independently, please reach out to:questions@zirtual.com.

Thank you from the very bottom of my heart for the support you’ve shown Zirtual and my deepest apologies for the speed and inconvenience of this announcement. We will communicate any further updates as soon as we have them.

Best,

Maren, Erik, Collin + the Zirtual Team

I was pretty shocked when I read the email this morning, primarily because I was just charged the monthly renewal of $750 over the weekend for the next 30 days of service. Since ZAs don’t work weekends, I haven’t received any services for the $750 they charged me.I replied to the email to questions@zirtual.com asking about the charge, but didn’t want to wait as I’m sure there were a lot of people wanting a refund, and they are probably pretty strapped on cash or they wouldn’t have shut down.

You have to wonder about people who paid for an annual plan. Several people have reported on Twitter and in comments that Zirtual was still signing up new customers as recently as last week. How many people signed up for an paid thousands of dollars up-front for an annual plan? Losing $750 is pretty bad, but I can’t imagine losing $7500!

I went ahead and called my credit card company and filed a dispute. The representative from my credit card company was very understanding and even tried to call the Zirtual offices, but was told by a receptionist that no one was in the office. She was literally the only person working. Zirtual has completely shut down.

I also emailed my Zirtual assistant to see if she knew more about what was going on. Her @zirtual.com email address bounced, but I happen to know her personal email address too, fortunately. I emailed her and she was just as shocked as I am. ZA’s also received an email this morning, but supposedly much different than what clients received. I asked for any information on Twitter and received a few replies, including the one below.

After asking on Twitter I was sent this email that was sent to all Zirtual employees:

Dear Zeople,

In 2011, Zirtual was created with a vision to impact the future of work. We imagined a world where good help was not hard to find—and we have been trying to create that world for the last four years, in the process building a community and culture that connected us all in ways beyond the founders’ dreams. This has been more than that: a family, a team, and we came together to accomplish some amazing things.

Unfortunately, we have some truly heart breaking news today, news I never, ever thought I’d have to say. This is the hardest thing we’ve ever had to do, and we’ve been fighting and crying, trying to make it not so. However, due to a myriad of reasons, Zirtual can no longer afford to operate.

Effective immediately, Zirtual will cease all operations. This also means that our last day of employment was Friday, August 7th, 2015.

I wish this wasn’t true. We’ve been doing everything in our power, day and night, to produce a different outcome. Sadly, with tears in our eyes, we have to say that we’ve exhausted our last efforts to save the company from this harsh reality.

We have had so many incredibly talented and amazing people who believed in what we were doing, and were willing to put their whole selves behind this mission. We’ve made friends and connections that will last a lifetime, and so did so many of you. For that, we are forever grateful and thankful—I have so much love for you all.

We know that there are going to be a lot of emotions and many questions. We have prepared a FAQ with as much information as we have at this time. There is still information that we are figuring out and will know more over the next week.
FAQ
Q: What is happening?
A: Zirtual is shutting down all operations.

Q: When is this happening?
A: Effective immediately.

Q: Why is this happening?
A: Due to financial reasons, we have to cease operations immediately.

Q: I really like my job and want to explore working independently with my clients. How can I go about doing that?
A: We encourage you to do so! Clients have also been notified of Zirtual’s closure and we encourage you and/or them to connect independently to discuss future working opportunities.

Q: What will happen to my Zirtual account? When will I no longer have access to it?
A: You will no longer have access to your Zirtual account effective immediately.

Q: What is going to happen to sensitive information that was stored?
A: We will be purging this information from our systems entirely within the coming days.

Q: I don’t know what to do. Who can I talk to about this?

A: Feel free to contact your pod leader outside of Zirtual, or email me directly at maren@zirtual.com there is also an EAP line (hotline)

Magellan Employee Assistance:
PH: 1 (888) 231-7015
www.lifessolutionseap.com
You are allotted 3 visits with a counselor for up to 90 days

Q: I have a question that is not answered here, where should I send it?
A: Please direct all questions to questions@zirtual.com,

With heavy hearts, and more love than you can begin to possibly imagine, we goodbye for now, hopefully not forever. We love you.

– Maren, Erik, Collin, and Joe

Maren Kate Donovan

Office: 1.800.997.9714 #7000
Cell: 702.245.2423
www.Zirtual.com

What does this mean for outsourcing and convenience services?

One of the reasons Zirtual and services like it (eaHelp, Red Butler, Worldwide 101, etc) were increasingly popular is that they interviewed and vetted the virtual assistants. Busy business owners and professionals may have a lot of tasks that can be outsourced, but going to outsourcing sites like UpWork (formerly Odesk) directly is hit and miss. Having a vetted assistant ready to start, having a technology infrastructure in place to support them, and having a simple easy to understand billing system are all very attractive to an executive like me, who just wants to get work done and doesn’t want to have to interview a dozen assistants.

There are so many great new startups that make life and business so much easier, but what happens when they go out of business, get acquired, or pivot? What happens when you’ve invested dozens, or hundreds of hours into building these services into your business processes and then they go away? This post will be updated regularly as I receive more information.

Update: It seems Zirtual has deleted their twitter account but Google Cache shows they were still tweeting as of last night! zirtual-tweet One has to wonder what is going on behind the scenes. Investors don’t just put millions of dollars into a startup and not ask questions about runway and cash flow. What was going on that led to such an abrupt closure? Did Jason Calacanis honestly not know anything was wrong ONE DAY ago? There’s definitely more to this story than we’ve heard so far… Update 12:55pm – Zirtual.com is now redirecting to this blog entry stating that the company has suspended operations: Screen Shot 2015-08-10 at 12.54.55 PM Update 1:03 PM: Jason Calacanis just tweeted about the situation with Zirtual

Update 1:57 PM – eaHelp, another provider of virtual assistant services, has responded with a blog post about Zirtual closing.

Update 2:26 PM – It appears some former employees knew what was coming…

Screen Shot 2015-08-10 at 2.24.11 PM

This was posted to a Facebook group for former Zirtual employees earlier today.

Update 3:30 PM – Red Butler has also responded assuring customers “the proposition of highly reliable virtual assistant service is not a broken promise.”

Update 4:42 PM – Not really “news” but definitely a funny bit of irony. Zirtual CEO Maren Kate Donovan recently wrote a piece in Fortune Magazine about “How to manage chaos during a company shakeup.” Her thoughts?

Don’t make change a secret
My team is without a doubt my biggest asset, which is something I never take for granted. So it’s vital to keep them in the loop during periods of change and consistently show support. Because what my employees don’t know could ultimately hurt the entire business. The sooner your team knows about upcoming shifts in the company—the better.

Additionally, give your employees ample time to adjust, as change in a company can often lead to people feeling unstable in their positions. And be transparent. Employees who can trust in the company and its management aremuch more likely to stay committed to the mission. It’s easy to want to play the ‘mama bear’ role in protecting your team during a transition, but they will respect you more if they are fully aware of the struggles that lay ahead.

Guess it’s a matter of “do as I say, not as I do.”

Update Tuesday, 8/11 9:45pm

Several outlets are now reporting that Zirtual has been acquired by Startups.co. Startups.co also just put out a press release announcing the acquisition.

Zirtual CEO Maren Kate Donovan has posted an announcement as well, along with an explanation of the events leading up to the closure. I have also posted a reply my thoughts on how the situation was handled.

Zirtual Information

Zirtual has raised $5.5 million in funding over 4 rounds, from 9 different investors. Their most recent funding was just a few weeks ago, a $650,000 debt financing round.

Information according to the Zirtual profile on CrunchBase.