Poll: Did you shutter a startup in 2011?
21 comments
We were well funded, but lacked focus... lesson learned: it's hard to realize when you're lacking focus, it comes in many different forms. Don't start a business or hire anyone until you have a focused idea, that has traction in the market... Software is easy, ideas are easy. Having traction in your software, having something that multiple people desire because it makes their life easier, saves them money is not easy. Don't get caught up in the details of what life might be like under successful conditions. Know that you need to cover the basics and to that end you need to probably cut most of your ideas. Yes, you can crank out software, but it's how you reduce your software down, how you make it simpler that is really hard. Writing lots of code is easy, but making it simple is hard. Making it simple will give you a better shot at making it understood and possibly a success... Oh, make sure you recognize the barriers to entry also. We created widget software at one point and it's hard to get people to install your code, even when it's a simple copy/paste - not impossible, but it's a barrier. Also, consider the costs when you start pricing... You must make money above all else, always ask yourself if you would pay to gain the value that is your software... /endrant
The appearance of value is not the same thing as value, both products and cofounders and their contributions.
I had a cofounder who was great at generating buzz but didn't produce anything concrete. The problem was, that same ability to give off the appearance of value is what brought us together in the first place. It wasn't until 6 months later when we were out of runway and had half a product (my half) that I fully realized what had happened.
I had a cofounder who was great at generating buzz but didn't produce anything concrete. The problem was, that same ability to give off the appearance of value is what brought us together in the first place. It wasn't until 6 months later when we were out of runway and had half a product (my half) that I fully realized what had happened.
Sadly yes, two of them. The main lesson is never build a business based on advertising revenue.
We shut down http://www.publisha.com and http://www.viewshound.com after running out of funding.
We shut down http://www.publisha.com and http://www.viewshound.com after running out of funding.
Don't learn the wrong lesson. You might as well be saying "never try" or "never be unlucky."
That would be the main lesson only if you somehow could assert that the failure of your business is due largely to the fact that it was based on advertising revenue.
That would be the main lesson only if you somehow could assert that the failure of your business is due largely to the fact that it was based on advertising revenue.
Why not? I think advertising is a valid business model for sites that are focused on a specific niche.
I think he meant to say "never build a business based on adsense revenue".
Adsense is the reason i don't need a "real" job... so, either way; he is wrong.
I have no doubt that many people make a decent living off Adsense. As the basis of a business' main revenue model, it didn't work for us.
Would love to know what you are doing. I don't see anything in your profile. If you aren't comfortable posting publicly but are willing to divulge privately, my email address is in my profile. Thanks/sorry to bother you if it's an issue. :-)
Thanks for not asking if we pivoted.
Yes, the lesson learned is that I am better at the tech side than I am the business side and it's bloody difficult to do both at the same time.
Or at least it's too difficult to do both while being a full-time student as well.
At least for me at that point in my life.
Or at least it's too difficult to do both while being a full-time student as well.
At least for me at that point in my life.
I did not shutter a startup during 2011.
My biggest lesson is that the word "no" does not mean "no", it just means "not right now." Sometimes you have to stick with it before you see profound growth.
My biggest lesson is that the word "no" does not mean "no", it just means "not right now." Sometimes you have to stick with it before you see profound growth.
[deleted]
I voted "no" in the other poll. I am not voting in this poll. I did let at least two domain names go, in part because I actually could not afford to pay for them and in part because they were not going anywhere. We kept the content and that may wind up going into other projects elsewhere in the future. In fact, after "giving up" on one of them, I later thought this might be a good chance to come up with a better name and all that should I ever get around to pursuing it again.
I have been kind of recycling (with updates/additional commentary) some old content from a short-lived, now-defunct blog I used to have, so I think my intent to re-use the content for the two sites is not just wishful thinking or whatever. For now, I have cut down the number of things I am working on and have been focusing the majority of effort on one site. I'm encouraged as it's the most concentrated, productive, consistent effort I have ever managed for any of my websites. Maybe I will actually monetize it at some point and everything! :-P
I have been kind of recycling (with updates/additional commentary) some old content from a short-lived, now-defunct blog I used to have, so I think my intent to re-use the content for the two sites is not just wishful thinking or whatever. For now, I have cut down the number of things I am working on and have been focusing the majority of effort on one site. I'm encouraged as it's the most concentrated, productive, consistent effort I have ever managed for any of my websites. Maybe I will actually monetize it at some point and everything! :-P
Don't let investors make business decisions. Keep them informed, but stand your ground when it comes to informed decisions.
[deleted]
Lost funding on my project Shadow Physics which basically killed the game and killed the company started to make it, Enemy Airship.
I'm planning on writing up a kind of postmortem on the project after the new year. A lot of things went wrong, and it was a text book example of failure to pivot when we had no other choice.
I'm planning on writing up a kind of postmortem on the project after the new year. A lot of things went wrong, and it was a text book example of failure to pivot when we had no other choice.
What seriously? I thought you had received funding from the World of Goo guys right? What a shame, seemed like a great game.
shut down the product i started in 2007 because the product i started in 2010 started taking off.
I closed mine so I could finish college and learn to program better. I was 6 months from graduating and we had a choice of either raising money and dropping off college or closing the startup so we could graduate. As we didn't have a MVP completed, the feedback from our beta team wasn't entirely positive and my cofounder needed more help in the technical side than I could assist (I coded very very slow), we decided to close.
Next year I am joining a large startup as an employee and have been teaching myself how to program for the past couple months, following Joel Spolsky's tip, reading Code, K&R and SICP. So far it has been amazing, learning alot. I am almost through the first half of K&R.
Next year I am joining a large startup as an employee and have been teaching myself how to program for the past couple months, following Joel Spolsky's tip, reading Code, K&R and SICP. So far it has been amazing, learning alot. I am almost through the first half of K&R.
Throwaway account b/c my startup has not quite failed but is likely mortally wounded. I will use past tense about failing throughout this post even though it hasn't technically happened quite yet.
My startup failed for two main reasons: 1. One of my cofounders (of our team of three) was not full time, but was ostensibly the CEO of the company. 2. Our investors have precisely 0 experience with SAAS startups and we were constantly fighting them about really stupid stuff.
Part time cofounders: Don't do it! Our part time cofounder has a health issue that prevented/prevents him from going full time. My other cofounder and I were willing to give it a shot in the hopes that he'd eventually be able to come on full time, but we never established what that would look like when it happened. When it finally came to him being "ready" to make the leap, he revealed to us that he needed nearly a 6-figure salary, a 1-year severance in case of his dismissal, and he wanted enough equity to control the company. My other cofounder and I had quit our jobs and gone without any pay for 7 months until our seed round, and we were making way below market salaries (we have houses, mortgages, kids, etc. so we couldn't bootstrap forever) after we closed our seed round. Obviously our expectations of our third cofounder's involvement were incompatible with his. This nearly tore the company apart and the ensuing arguments probably permanently damaged our relationships. I would strongly suggest that the founding team needs to take the leap at the same time and be totally on the same page about compensation, equity, responsibilities, etc. I will never do a startup with a part time cofounder again, regardless of any extenuating circumstances.
Dumb, meddlesome money: There's a lot of discussion about smart money vs. dumb money, but you also have to be careful about dumb money that thinks it's smart. Our investors have very little software experience and have certainly never heard of a lean startup, but they certianly think they know everything about running our business. We developed a very poor relationship with them over the past several months, since we were resisting producing things like 3-year plans and lots of documentation. We chose them because we were told that they had connections that we needed to grow, but that didn't end up working out. They recently told us we needed to fire all of our staff and take huge pay cuts until we can convince them that we're spending money wisely. Now, I will readily admit that we didn't always spend money in the 100% most optimal way. We were learning and we made mistakes, but firing everybody is not the way to make the company successful. Either lets go for it or lets go home. Next time I take smart money from somebody I want on my team, or I take nothing and bootstrap.
Avoid tranches: This is somewhat related to point 2, but you should really try to avoid having a tranche. We thought we'd have no trouble getting ours because the milestones weren't hard to meet. Unfortunately when the time came, our investors weren't happy and weren't going to give us the money, milestones be damned. We had the opportunity to take the tranche a few months ago when we had a better relationship with our investors, but we didn't. Another mistake. If you can take the money, then for God's sake take it. One dollar in the bank is worth two in the tranche escrow and whatnot.
Now we're at the point where they won't give us the tranche and so we're going to miss payroll for December come January 1. Then it'll be like rats off a sinking ship. So we're likely in the final couple weeks of our company and I'm writing this story on Christmas after I finished doing some work for a customer. I'm obviously not quite ready to totally throw in the towel, but barring a Christmas miracle I'll be looking for a new "revenue stream" for myself come 2012.
Merry Christmas, HN, and a Happy New Year!
My startup failed for two main reasons: 1. One of my cofounders (of our team of three) was not full time, but was ostensibly the CEO of the company. 2. Our investors have precisely 0 experience with SAAS startups and we were constantly fighting them about really stupid stuff.
Part time cofounders: Don't do it! Our part time cofounder has a health issue that prevented/prevents him from going full time. My other cofounder and I were willing to give it a shot in the hopes that he'd eventually be able to come on full time, but we never established what that would look like when it happened. When it finally came to him being "ready" to make the leap, he revealed to us that he needed nearly a 6-figure salary, a 1-year severance in case of his dismissal, and he wanted enough equity to control the company. My other cofounder and I had quit our jobs and gone without any pay for 7 months until our seed round, and we were making way below market salaries (we have houses, mortgages, kids, etc. so we couldn't bootstrap forever) after we closed our seed round. Obviously our expectations of our third cofounder's involvement were incompatible with his. This nearly tore the company apart and the ensuing arguments probably permanently damaged our relationships. I would strongly suggest that the founding team needs to take the leap at the same time and be totally on the same page about compensation, equity, responsibilities, etc. I will never do a startup with a part time cofounder again, regardless of any extenuating circumstances.
Dumb, meddlesome money: There's a lot of discussion about smart money vs. dumb money, but you also have to be careful about dumb money that thinks it's smart. Our investors have very little software experience and have certainly never heard of a lean startup, but they certianly think they know everything about running our business. We developed a very poor relationship with them over the past several months, since we were resisting producing things like 3-year plans and lots of documentation. We chose them because we were told that they had connections that we needed to grow, but that didn't end up working out. They recently told us we needed to fire all of our staff and take huge pay cuts until we can convince them that we're spending money wisely. Now, I will readily admit that we didn't always spend money in the 100% most optimal way. We were learning and we made mistakes, but firing everybody is not the way to make the company successful. Either lets go for it or lets go home. Next time I take smart money from somebody I want on my team, or I take nothing and bootstrap.
Avoid tranches: This is somewhat related to point 2, but you should really try to avoid having a tranche. We thought we'd have no trouble getting ours because the milestones weren't hard to meet. Unfortunately when the time came, our investors weren't happy and weren't going to give us the money, milestones be damned. We had the opportunity to take the tranche a few months ago when we had a better relationship with our investors, but we didn't. Another mistake. If you can take the money, then for God's sake take it. One dollar in the bank is worth two in the tranche escrow and whatnot.
Now we're at the point where they won't give us the tranche and so we're going to miss payroll for December come January 1. Then it'll be like rats off a sinking ship. So we're likely in the final couple weeks of our company and I'm writing this story on Christmas after I finished doing some work for a customer. I'm obviously not quite ready to totally throw in the towel, but barring a Christmas miracle I'll be looking for a new "revenue stream" for myself come 2012.
Merry Christmas, HN, and a Happy New Year!
Unfortunately, it's a recurring story. e.g.
> you also have to be careful about dumb money that thinks it's smart.
All dumb money thinks it is smart; If it thinks it is dumb, it's usually smart-by-association by being attached to smart money.
> you also have to be careful about dumb money that thinks it's smart.
All dumb money thinks it is smart; If it thinks it is dumb, it's usually smart-by-association by being attached to smart money.
Clickable for the other poll: https://news.ycombinator.com/item?id=3390727
Yes, shut down one and ended up with another I'm quite pleased with. Though, there's nothing like customer service emails on Christmas Eve.
Shuttered mine because I didn't have any time -- I was having to balance it with grad school and my co-founder was working full-time as biz dev for another startup.
we did well, made a bunch of money, but our team was not all there to carry the weight. we had a good run for a few years and learned a lot, but it was unexpected and was biting hard into the paths and ambitions that the founders were already deep into. we're all still the best of friends. no sadness or regrets, just the future.
yes, discover and share products you love. http://signup.peeqshare.com/
No
No..
Reasons why, lessons learned in the comments would be appreciated.