If you can’t beat ’em – well, sometimes you just have to fold.

“The market was just getting to0 competitive,” says Adam Covati, CEO and co-founder of Argyle Social.

And so the Durham social media startup is closing its doors.

The company, which has employed more than 30 people since inception in 2010, announced last week that it would shut down operations at the end of May.

Covati co-founded the company in 2010 with Eric Boggs. Both had worked stints at Bronto Software, and both wanted to explore the emerging market within social media analytics.

The pair quickly raised angel funding from notable entrepreneurs Taylor Mingos (Shoeboxed), Jed Carlson (ReverbNation) and Aaron Houghton (iContact, Boostsuite), as well as local angel investor Bruce Boehm to build their company.

So, what happened?

The company grew to nearly 25 employees by the middle of 2012 and boasted clients like Gander Mountain, Yammer and UserVoice.

“There were a few times when we saw that the company needed to streamline,” said Covati, “In some cases that was because a sales model wasn’t performing or just because expenses were too high.”

The company never quite grew to the proportions the co-founders anticipated. It would never have more than 25 employees.

Some employees left, said Covati, to pursue new startups. Many founded their own.

“Folks from Argyle are now founders at StatusPage, SparkCentral, and Armor Payments,” said Covati.

Eric Boggs, the co-founder, left in November 2012 and later launched RevBoss.

“It’s a very competitive space,” said Covati, and there was a lot of volatility and change in the market between 2010 and 2014. The industry, which in 2010 seemed wide open, quickly changed as new competitors popped up and as larger companies adjusted to build software offerings to capitalize on a growing market.

It’s not just a matter of the company failing to meet sales and revenue targets, said Covati. Nor is the shutdown solely due to the rise of competitors or the growth of divisions inside of larger organizations.

“It’s pretty much all of that,” said Covati, and working in conjunction, could help explain the decline of the company’s ability to acquire new customers. “It made the price to play pretty steep,” said Covati.

“It’s not that a small team without a lot of money couldn’t make it,” said Covati, quick to credit the employees that helped him build the company and who have been running client support and communications as the company winds down services.

“We bounced around a bit as the market changed, it left us without a strong enough niche,” said Covati, “we had a hard time converting enough customers at a pricepoint that made the economics work out.”

Winding down

The writing was on the walls, so to speak, and Covati began having two types of conversations. The first conversation was with potential partners, in order to strike a deal.

“After talking to the likely targets, it looked like that wasn’t going to happen,” said Covati, which led to the second type of conversation, one with the company’s investors and board of advisors.

“I’m lucky to have a great board and a number of good friends who have been through some of this before,” said Covati, who had previously asked the question “is it time to start thinking about winding it down?” of his network.

“You have to be honest with yourself and ask the tough question often,” said Covati.

After these conversations, said Covati, “we decided that it was in the best interest of the customers to close up before the service started to suffer.”

The Arglye team

Covati informed his team – down to four employees – of the news early last week. He’s made it a personal mission to ensure that they land on their feet, and is working with a number of startups in downtown Durham “to see where there is a fit for our people.”

Brad Ward is one of Argyle’s last remaining employees. He started in April of 2013, and just celebrated his one-year anniversary with the company. His last day will be May 31, and he’ll help roll down clients from the Argyle software product.

Ward joined Argyle a few months after Covati took the reigns as CEO, and loved the energy of the company and its people from day one.

Since Ward started, the company decreased in size. “I knew that it wasn’t great that we weren’t expanding,” said Ward, who said that a lot of the moves were reorganizational or because employees decided to build their own startups.

“The connection you have with your coworkers, your clients, and the product is very strong within a startup,” said Ward, “it hurts when things don’t end up like you expected, and it hurts more to see the people around you experience that same feeling.”

The startup community in Durham and the Triangle is full of “versatile, resilient people,” said Ward, who plans to pursue opportunities within other area startups. He’s already started reaching out to his network to find the next great startup opportunity.

When hearing the news, said Ward, “I felt a sense of dread that there would be a lot of backlash or disappointment from the community our clients.”

He’s heard a different response from the clients that he works with every day and his fellow members of the startup community.

“The overwhelming response has been support and congratulations on what we were able to accomplish,” said Ward, “that certainly means a lot.”

He’s certain he’ll find a place in the community. Covati plans to help.

As far as Covati’s next move?

“I haven’t put a lot of thought into what’s next,” said Covati, “I’ve been very focused on providing as smooth of a transition as possible.”

“I’m a huge fan of digital marketing, social, and marketing automation – it’s definitely the future of marketing,” said Covati, “so I don’t see myself straying too far from that space.”