Lessons learned from my failed startup after 2 years, 300 users and 0 revenue(sergioschuler.com)
sergioschuler.com
Lessons learned from my failed startup after 2 years, 300 users and 0 revenue
http://www.sergioschuler.com/startup-lessons-learned-from-my-failed-startup/
160 comments
You are absolutely right on both comments! And additional comments:
1) I am not a developer, but I believe having an idea -> finding a developer is the wrong flow. It should be like this: 1. Have the idea. 2. Get customers who give you real money to build this idea. 3. Get a developer by telling "I already have paying customers".
2) Absolutely agree. When I say "I should build that", in fact what I wanted to say was something like "I should have looked for more X prospects that would pay for what they wanted, get their money and then build that".
1) I am not a developer, but I believe having an idea -> finding a developer is the wrong flow. It should be like this: 1. Have the idea. 2. Get customers who give you real money to build this idea. 3. Get a developer by telling "I already have paying customers".
2) Absolutely agree. When I say "I should build that", in fact what I wanted to say was something like "I should have looked for more X prospects that would pay for what they wanted, get their money and then build that".
>>I am not a developer, but I believe having an idea -> finding a developer is the wrong flow. It should be like this: 1. Have the idea. 2. Get customers who give you real money to build this idea. 3. Get a developer by telling "I already have paying customers".
Actually, I disagree. Even if you're not a developer, you should still strive to learn enough development such that you can push out the first version of the product yourself, even if it's imperfect. Doing so will have several advantages:
1. It will make it easier to find a developer (they will respect you a lot more)
2. It will make it easier to get customers
3. It will make you appreciate the technical aspects of the business
Number 1 is the most important. The reason non-technical people have difficulty convincing developers to work on their ideas is that developers tend to look down upon non-technical people, especially "sales types." In addition, most developers have a thousand ideas of their own - you need to give them a reason to work on your idea instead. And that's a lot easier to do if you already have a version 1.0 out there that you have developed and have customers paying for it.
Actually, I disagree. Even if you're not a developer, you should still strive to learn enough development such that you can push out the first version of the product yourself, even if it's imperfect. Doing so will have several advantages:
1. It will make it easier to find a developer (they will respect you a lot more)
2. It will make it easier to get customers
3. It will make you appreciate the technical aspects of the business
Number 1 is the most important. The reason non-technical people have difficulty convincing developers to work on their ideas is that developers tend to look down upon non-technical people, especially "sales types." In addition, most developers have a thousand ideas of their own - you need to give them a reason to work on your idea instead. And that's a lot easier to do if you already have a version 1.0 out there that you have developed and have customers paying for it.
I agree with enraged_camel, but not for the straightforward reasons. First, as a non-technical founder who recently learned (basic) coding skills, I can confirm his first and third claims - learning to program does make it easier to find developer support and it will greatly improve your appreciation for the technical aspects of the business.
However, most important should be the second claim since learning to code will help you build a crude MVP, allowing you to reach customers and validate your idea. In this sense, enraged_camel and OP are both correct because they both point back to the same concept of reaching customers.
IMHO though, it comes down to what value a company is providing. If it is a tech start-up where the software product is the main value-add, then a core competency must include programming. If it is a real estate start-up with a website, then learning to code can probably be pushed off in favor of customer development. So in the OP's case, the question would be, are we in business to build a SaaS tool to help teams or are we satisfied helping team management improve in any way possible?
However, most important should be the second claim since learning to code will help you build a crude MVP, allowing you to reach customers and validate your idea. In this sense, enraged_camel and OP are both correct because they both point back to the same concept of reaching customers.
IMHO though, it comes down to what value a company is providing. If it is a tech start-up where the software product is the main value-add, then a core competency must include programming. If it is a real estate start-up with a website, then learning to code can probably be pushed off in favor of customer development. So in the OP's case, the question would be, are we in business to build a SaaS tool to help teams or are we satisfied helping team management improve in any way possible?
In fact I am learning how to program, so I agree with your points - but I don't think it is for every one. There is plenty of space for non tech founders.
BUT I do believe it is easier if you do know how to code.
BUT I do believe it is easier if you do know how to code.
"There is plenty of space for non tech founders."
In the tech startup ecosystem, I don't think there is that much space for founders that don't want to code.
Saying "I want to start a tech startup but I don't want to code" is as ridiculous as saying "I want to sell horses but I don't know anything about them and I certainly don't want to have to learn anything about them".
It's possible, but you're gonna have a hard time doing it...
Agreed. You need founders who can turn their hand to anything, not just their primary skill.
I ran a startup back in 2005 with another founder who was primarily focussed on marketing. It was a SaaS that was heavily dependent on data which had to be manually maintained. When he said "I'm not going to sit there wasting hours of my time entering data when I could be selling" it was the beginning of the end. From then on, I couldn't trust him to help out when needed.
We folded in 2008.
Silly analogy is silly. How about "I want to run a nuclear factory but I don't have a PhD in nuclear physics", is it also as ridiculous?
Brilliant analogy.
Saying "I want to start a tech startup but I don't want to code" is as ridiculous as saying "I want to sell horses but I don't know anything about them and I certainly don't want to have to learn anything about them"
I disagree. Not wanting to code is not the same as not knowing anything about the product, or wanting to. There's so much more that goes into a successful product or company than time spent coding (marketing, design, testing, sales, industry/market immersion, etc.). As a developer and co-founder, ideally I want complimentary skill sets. Being able to write code may be an overlapping skill, but it's not required.
I disagree. Not wanting to code is not the same as not knowing anything about the product, or wanting to. There's so much more that goes into a successful product or company than time spent coding (marketing, design, testing, sales, industry/market immersion, etc.). As a developer and co-founder, ideally I want complimentary skill sets. Being able to write code may be an overlapping skill, but it's not required.
I disagree because most "tech business" are empowered by tech, they are not ABOUT tech. My business was about team management/leadership, we just used tech as a means to an end. We could have done the same thing with consulting, but decided to get scale using the web.
It is like saying a given business which sells through the phone is about phones. Phones are just a way of doing it.
It is like saying a given business which sells through the phone is about phones. Phones are just a way of doing it.
The thing is, non-tech founders rarely have ideas for tech startups. They usually wanna do real estate startup, social network startup etc. which just uses tech as a tool.
Definitely a good analogy, but I think your conclusion is wrong (although I do still think having a non tech founder is not ideal). If you only want to sell horses then not knowing about horses is going to be a tough time. Same with trying to sell some kind of programming tool or something. However, as soon as you start to do something involving horses and not just selling them, it opens up a bit more.
Instead of just selling horses, you can make a startup that makes it easier for for people who want to ride horses but can't to ride them. You could have a stable with restaurant to let people watch others ride them, etc. Simply because you don't know about horses is not the problem, because the problem is finding ways to bring people to horses based on the public's opinion of horses. Your horses don't need to be looked after by the world's most knowlegable horse lover, just someone who sort of knows horses and is willing to learn will hopefully keep your horses in good enough condition until you can hire more horse caretakers.
This analogy works very well for tech startups too. You don't necessarily have to know how to make the website, it can be enough to know how to create something around the website (physical deliveries, or whatever) and just get some bare-bones barely functional web presence that you improve when you get traction and funding.
Instead of just selling horses, you can make a startup that makes it easier for for people who want to ride horses but can't to ride them. You could have a stable with restaurant to let people watch others ride them, etc. Simply because you don't know about horses is not the problem, because the problem is finding ways to bring people to horses based on the public's opinion of horses. Your horses don't need to be looked after by the world's most knowlegable horse lover, just someone who sort of knows horses and is willing to learn will hopefully keep your horses in good enough condition until you can hire more horse caretakers.
This analogy works very well for tech startups too. You don't necessarily have to know how to make the website, it can be enough to know how to create something around the website (physical deliveries, or whatever) and just get some bare-bones barely functional web presence that you improve when you get traction and funding.
And I would disagree. I think you're underestimating the time and effort required for a complete beginner to produce version 1 of any non-trivial product.
As a developer what I'd be looking for before coming onboard is a) a clear idea of what is being built b) that there is the money in place to pay me.
As a developer what I'd be looking for before coming onboard is a) a clear idea of what is being built b) that there is the money in place to pay me.
I would also disagree. I've almost finished v1 (literally, a bare bones MVP) of my SaaS idea, and my God, it took so much more time than I expected. And I'm a veteran developer who's shipped tens of projects.
The thing is, there's a lot more that goes into a viable product than just the core features.
The thing is, there's a lot more that goes into a viable product than just the core features.
Completely agree! For my start-up, beyond the core features, there's been a versioning system, front-end framework, database set-up, server maintenance, keeping up with patches to your coding language, fine-tuning CSS, analytics packages, user feedback tools, and that's just the list that I came up with in 10 seconds. In reality, there's actually much more.
>> The thing is, there's a lot more that goes into a viable product than just the core features.
This! I agree wholeheartedly, a useful tool/hack must travel a long road before it can become a product. Even if it's essentially solving the same problem.
This! I agree wholeheartedly, a useful tool/hack must travel a long road before it can become a product. Even if it's essentially solving the same problem.
> The thing is, there's a lot more that goes into a viable product than just the core features.
Yes, yes, YES! I'm doing this now, and just figuring out the "business" side of the product code is so much more work than the core idea (which is simple to code).
And getting the actual sales/marketing/accounting/admin/etc stuff is going to be 10x worse, I am sure.
Yes, yes, YES! I'm doing this now, and just figuring out the "business" side of the product code is so much more work than the core idea (which is simple to code).
And getting the actual sales/marketing/accounting/admin/etc stuff is going to be 10x worse, I am sure.
I agree with some of what you say (e.g. a non-technical founder that learns some technical aspects of the business will be more respected).
Though in practice I've experienced too many cases where I couldn't imagine non-technical founders I've worked with learning enough, and fast enough, to launch a v1 on their own. It's possible, but between OP's suggested flow vs. yours, I'll side w/the OP's. As a developer and co-founder, I'd much rather a non-technical founder concentrate on finding paying customers (or other cash flow), marketing, becoming immersed in the target market, etc. than learning how to code.
To supplement, the article's Where it went wrong and Where it went REALLY wrong sections cite non-technical reasons for failure. So while you raise great points, it's not clear that the OP's situation would have been better if he had learned to code first.
Though in practice I've experienced too many cases where I couldn't imagine non-technical founders I've worked with learning enough, and fast enough, to launch a v1 on their own. It's possible, but between OP's suggested flow vs. yours, I'll side w/the OP's. As a developer and co-founder, I'd much rather a non-technical founder concentrate on finding paying customers (or other cash flow), marketing, becoming immersed in the target market, etc. than learning how to code.
To supplement, the article's Where it went wrong and Where it went REALLY wrong sections cite non-technical reasons for failure. So while you raise great points, it's not clear that the OP's situation would have been better if he had learned to code first.
If the founder is a developer, yes, I totally agree. But for business person, no, I don't. Just like OOP programming, I think a team needs to be comprised of unique committed talented professionals that can do their own job very good: marketing, sales, social networking, programming, designing, business managing, legal, etc. (skills might overlap).
Even if you are Jack of all trades, you won't have the time to execute all the tasks well on your own. If the developer looks down on you because you don't know how to code, then that is not your ideal candidate or your business or talent is not convincing enough.
Even if you are Jack of all trades, you won't have the time to execute all the tasks well on your own. If the developer looks down on you because you don't know how to code, then that is not your ideal candidate or your business or talent is not convincing enough.
It is true a team ideally is made up of experts in different areas.
It is true having technical skills can make it easier to hire developers, get customers (only one way to make this easier), and appreciate the technical side.
If a 'developer looks down on you' why does this not make them an 'ideal candidate'?
And what is the value of an ideal candidate? Is finding one even possible? Isn't 'the ideal' hard to reach in anything? My ideal life is to make millions while making the word a better place, have a six pack, lots of interesting friends, write rap, write a novel, have an uberman sleep cycle and not go crazy, and have many beautiful and intelligent woman.
Isn't 'ideal' more of a standard then an actual possibility? If so, isn't not the end of the world if this developer is not ideal? Don't you only need a talented developer who will do the work that is asked of him?
And what is 'business or talent ' not 'convincing enough' for? (hiring the developer, creating a business etc..)
It'd be great to fully understand your point of view.
It is true having technical skills can make it easier to hire developers, get customers (only one way to make this easier), and appreciate the technical side.
If a 'developer looks down on you' why does this not make them an 'ideal candidate'?
And what is the value of an ideal candidate? Is finding one even possible? Isn't 'the ideal' hard to reach in anything? My ideal life is to make millions while making the word a better place, have a six pack, lots of interesting friends, write rap, write a novel, have an uberman sleep cycle and not go crazy, and have many beautiful and intelligent woman.
Isn't 'ideal' more of a standard then an actual possibility? If so, isn't not the end of the world if this developer is not ideal? Don't you only need a talented developer who will do the work that is asked of him?
And what is 'business or talent ' not 'convincing enough' for? (hiring the developer, creating a business etc..)
It'd be great to fully understand your point of view.
In my experience of being a developer and building my own idea I actually found there were occasions when my inbuilt technical idealism caused me to make some wrong decisions on my product. I found it quite difficult to make product decisions independently of technical ones.
I've had some really good bosses who couldn't code, though there is certainly a skill in winning over devs when you're not a programmer yourself.
There are advantages to being a non-technical founder, if you're able to bring the right techies on board.
I've had some really good bosses who couldn't code, though there is certainly a skill in winning over devs when you're not a programmer yourself.
There are advantages to being a non-technical founder, if you're able to bring the right techies on board.
As a developer and solo founder, I just can not finish a serious project in one year.
For example, it took me two years to get version 1 of torapp guilloche designer
(www.torapp.info). We did not get consistent/significant customers and we need a new product to survive.
To evaluate more ideas and to be familiar with respective areas took me another year easily (without deep knowledge in the area, how can you beat your competitors?).
So how can you guys roll out a product in 3 months? How can you quickly pivot?
To evaluate more ideas and to be familiar with respective areas took me another year easily (without deep knowledge in the area, how can you beat your competitors?).
So how can you guys roll out a product in 3 months? How can you quickly pivot?
>So how can you guys roll out a product in 3 months? How can you quickly pivot?
Tooling. To elaborate, if you're hand writing code to call an API, then you're doing to much. This is a 15 minute task at most, and that includes production level validation, security, etc. on both the client and server.
Also, basic code quality checks should be running non-stop in a separate terminal and automated tests should also be running. Plus the core automated tests should themselves be automated.
Developing an API is again a 15 minute task.
To be totally clear, proper tooling will take you from prototype to (early) production. Obviously, tooling does not write your application for you, but standing up a basic app where you can use the UI and move data to/from the backend needs to happen with a minimum of effort. Once the core design/structure is done, you can spend your time on value add activities such as UI customization, custom business logic, and so on.
Tooling. To elaborate, if you're hand writing code to call an API, then you're doing to much. This is a 15 minute task at most, and that includes production level validation, security, etc. on both the client and server.
Also, basic code quality checks should be running non-stop in a separate terminal and automated tests should also be running. Plus the core automated tests should themselves be automated.
Developing an API is again a 15 minute task.
To be totally clear, proper tooling will take you from prototype to (early) production. Obviously, tooling does not write your application for you, but standing up a basic app where you can use the UI and move data to/from the backend needs to happen with a minimum of effort. Once the core design/structure is done, you can spend your time on value add activities such as UI customization, custom business logic, and so on.
Its relatively easy, but far more than 15 minutes. Think about authentication, design and testing.
Maybe your MVP could have less features?
I suspect the reason non-technical people have difficulty convincing developers isn't so much about respect but more to do with the idea itself and the person presenting it.
Its come to a point that hiring development staff for web based applications isn't that expensive if you focus on hiring people that aren't in North America and don't need to use the whiz bang language or framework (I would put even Ruby on Rails and Django in this) but instead use PHP.
What I do think is important for non-technical founders is to have an understanding of what software development actually involves, so that they can judge and critique the work. It's worth knowing why a company might quote you, $10K for some work versus another $50K. Is one company using PHP or ASP.NET? Does one company's quote include all tasks such as requirement's gathering, mock-ups, development and production deployment. Where does system testing and end user testing fit into all of it? What's the hosting costs after the fact. Are they using Rackspace, AWS or their own provider and charging $300 a month for it.
I think a smart person can take a good 30-50 hours and read up on all this and get a good grounding as there is no lack of materials to get this knowledge from. I don't need to know the intricate details of how to build a car to appreciate the manufacturing process for a car. We all know there are many makes and models of cars but the design and manufacturing, distribution and sales of cars follow similar patterns (not taking into account the new entrants such as Tesla).
As an added check, a non-technical founder should find a trusted technical person that can help guide the development of the product even if the technical person themselves won't build it.
I think doing this would go a long way to get something built and off the ground. It's easy for a lot of us who have grown up with technology and understand computers, the internet, programming languages, algorithms, software development etc. but for the non-technical person who grew up as a user of the tech not but not a tinkerer its hard to catch up and go beyond and build a product (even an MVP).
Its come to a point that hiring development staff for web based applications isn't that expensive if you focus on hiring people that aren't in North America and don't need to use the whiz bang language or framework (I would put even Ruby on Rails and Django in this) but instead use PHP.
What I do think is important for non-technical founders is to have an understanding of what software development actually involves, so that they can judge and critique the work. It's worth knowing why a company might quote you, $10K for some work versus another $50K. Is one company using PHP or ASP.NET? Does one company's quote include all tasks such as requirement's gathering, mock-ups, development and production deployment. Where does system testing and end user testing fit into all of it? What's the hosting costs after the fact. Are they using Rackspace, AWS or their own provider and charging $300 a month for it.
I think a smart person can take a good 30-50 hours and read up on all this and get a good grounding as there is no lack of materials to get this knowledge from. I don't need to know the intricate details of how to build a car to appreciate the manufacturing process for a car. We all know there are many makes and models of cars but the design and manufacturing, distribution and sales of cars follow similar patterns (not taking into account the new entrants such as Tesla).
As an added check, a non-technical founder should find a trusted technical person that can help guide the development of the product even if the technical person themselves won't build it.
I think doing this would go a long way to get something built and off the ground. It's easy for a lot of us who have grown up with technology and understand computers, the internet, programming languages, algorithms, software development etc. but for the non-technical person who grew up as a user of the tech not but not a tinkerer its hard to catch up and go beyond and build a product (even an MVP).
Interesting! Indeed if you work with freelance developers, or you work as freelancer, getting "quotes" is quite some work, and understanding if it is a good price or not, also.
As I am working on a side-project trying to help others with making quotes, would you have some time to chat more?
To me it seems like recruiting of a developer worth anything, from scratch and without an existing team to help you to recruit or lure, must be much more difficult than getting an amazing idea or selling said amazing idea. Is that just because I never tried selling anything?
Does anybody have examples of successful startups that proceeded in the way Sergio describes and became successful -- starting out with a business person/team, selling the goods first, then manage to find developer(s) to build it? (It's not rhetorical, I'd love to hear such examples -- the usual stories seem to be revolving around a gang of programmers, or at least a programmer co-founder.)
Does anybody have examples of successful startups that proceeded in the way Sergio describes and became successful -- starting out with a business person/team, selling the goods first, then manage to find developer(s) to build it? (It's not rhetorical, I'd love to hear such examples -- the usual stories seem to be revolving around a gang of programmers, or at least a programmer co-founder.)
For the company I currently work for, and at a previous company I worked for, v1 was built by an outsourced development firm long before the first fulltime engineer was hired. Yes it sucked and has since been completly rewitten. But it was a working product that started bringing in revenue and helped raise more money.
Look at http://thefoundation.com/ , they have some cases about this kind of approach.
Stephanie from https://www.refficient.com/ did just that.
It's also useful to remember that until you have an actual product, the company really does not need a sales person, because there is nothing to sell. A startup does need a lot of things besides a developer, like customer development. But customer development is not the same as straight sales! I have seen some teams flame out because there's a sales person there with nothing to sell feeling useless, and the rest of the team feeling like they are dead weight, and meanwhile real priorities aren't getting dealt with.
> But customer development is not the same as straight sales!
The point of the article, what caused my last failure, what almost everyone that bootstraps a business, and most of the ones that received investiment will tell you is that this phrase is wrong. At least in the context of growing companies (not mature companies in mature markets), if you separate the two concepts, you are dead.
And that means your sales force should never do just straight sales, and you must hire accordingly.
The worst part, I knew (at least in theory) it from the beginning. Not talking to customers is very attractive to developers. But don't mind, it didn't hurt much.
The point of the article, what caused my last failure, what almost everyone that bootstraps a business, and most of the ones that received investiment will tell you is that this phrase is wrong. At least in the context of growing companies (not mature companies in mature markets), if you separate the two concepts, you are dead.
And that means your sales force should never do just straight sales, and you must hire accordingly.
The worst part, I knew (at least in theory) it from the beginning. Not talking to customers is very attractive to developers. But don't mind, it didn't hurt much.
> 1) General advice to non-technical founders, not specific to this post: If sales is one of your primary skill sets, and you cannot sell one developer on working for you, you may want to have a brief heart-to-heart with yourself on whether you are sufficiently skilled at selling to build a company which will live or die based on your sales ability.
But I think "selling" the product to a developer is a difficult sell: harder than selling a product which exists and solves a pain point to a company who has money and is looking to solve their pain point.
If "selling" means getting the developer to work for no cash (only e.g. equity). A good developer has a job, and has lots of job offers, all offering them real money now. I'm not sure it'd be possible to persuade most of them to work for no cash.
But I think "selling" the product to a developer is a difficult sell: harder than selling a product which exists and solves a pain point to a company who has money and is looking to solve their pain point.
If "selling" means getting the developer to work for no cash (only e.g. equity). A good developer has a job, and has lots of job offers, all offering them real money now. I'm not sure it'd be possible to persuade most of them to work for no cash.
I read that as selling the venture to the developer, i.e. convincing a developer that the company has all of the pieces it needs to be successful already except for a developer. Note that good freelancers usually have paying customers already, so even they will need some convincing to take on a new client.
As far as offering equity to a developer, this may be as weak a move as building a product before proper validation, since it essentially means bringing on an investor before proving that there's something worth investing in.
As far as offering equity to a developer, this may be as weak a move as building a product before proper validation, since it essentially means bringing on an investor before proving that there's something worth investing in.
Cash or no cash, I believe the key for a developer is working on an interesting problem + having impact. If you have real companies offering real money for a product that don't even exist, at least the developer can be convinced that his/her work will have impact.
But I think a strong trend will be that less experienced and less skilled (and over-confident) developers will be more easily lured. How do you counter this trend when recruiting, and filter for the one that is skilled enough but still can be lured? You can't just take any developer to be solo developer for a startup (much harder than team development), especially to work on somebody else's idea.
I'm in a hurry and didn't read the article - but on 1, developers are far from normal consumers or businesses, consider far different things reasonable and interesting and are a totally different "sell" - much as founders themselves are far different from normal employees and simply can't be judged on the same basis. I don't think your point 1 is valid at all. (Likewise, just because you can convince a developer, doesn't make you an actual salesperson, doesn't mean you can convince a customer!)
Great sales people can sell anything to anyone. Selling the things you believe in to people that really need it is easy. Selling people mediocre products they don't need and probably can't afford, that is actually difficult.
If anything convincing a developer to take your money (assuming you have any) to write code should be orders of magnitude easier than convincing a client to give you money for something that doesn't yet exist.
If anything convincing a developer to take your money (assuming you have any) to write code should be orders of magnitude easier than convincing a client to give you money for something that doesn't yet exist.
Almost anyone can sell anything to anyone, if the bargaining space is unrestrained.
"Would you work for me for a billion dollars a year and six months holiday?" Lots of people are going to say yes.
But are they the people you want? Do you have those sorts of resources to throw around? What about other perks of working with you to fill in the intermediate space?
Extreme example, granted. But the point is that there are things you can't solve, at least not in an immediately relevant sense, just by throwing money at them. Getting a developer's probably relatively easy. Getting one you'd want; at a price you can afford... knowing next to nothing about the technical area of the business yourself?
That may still be easier than selling something that doesn't exist, but it's not clear that it's orders of magnitude easier.
"Would you work for me for a billion dollars a year and six months holiday?" Lots of people are going to say yes.
But are they the people you want? Do you have those sorts of resources to throw around? What about other perks of working with you to fill in the intermediate space?
Extreme example, granted. But the point is that there are things you can't solve, at least not in an immediately relevant sense, just by throwing money at them. Getting a developer's probably relatively easy. Getting one you'd want; at a price you can afford... knowing next to nothing about the technical area of the business yourself?
That may still be easier than selling something that doesn't exist, but it's not clear that it's orders of magnitude easier.
The problem is that most non-technical people with "ideas" don't have money, don't have connections, are not amazing at sales (otherwise they would have both money and connections) and don't even know now they are going to acquire customers.
They might think they are good at sales, but if that was really the case then getting enough money to hire someone to build your prototype is not that hard. Freelancers are everywhere, you can judge them by their portfolio, and getting someone to build you a greenfield project at market rates is not really difficult.
They might think they are good at sales, but if that was really the case then getting enough money to hire someone to build your prototype is not that hard. Freelancers are everywhere, you can judge them by their portfolio, and getting someone to build you a greenfield project at market rates is not really difficult.
>Great sales people can sell anything to anyone.
If that were true then an inventor could have asked a great sales person to sell an engineer on the idea, and build it.
In fact, this isn't true at all, and most innovative ideas are forced to be built by the same person in whose head they are, precisely because it is not true that "great sales people can sell anything to anyone", and some of the best ideas can't be sold, but must be built instead.
If that were true then an inventor could have asked a great sales person to sell an engineer on the idea, and build it.
In fact, this isn't true at all, and most innovative ideas are forced to be built by the same person in whose head they are, precisely because it is not true that "great sales people can sell anything to anyone", and some of the best ideas can't be sold, but must be built instead.
This was not brought up but is relevant when a lot of discussion on this article is revolving around the business-developer relationship.
>Selling people mediocre products they don't need and probably can't afford, that is actually difficult.
This is exactly why developers (at least this one) have a pending distaste for business people. This should never, ever, be done. The difficulty of selling 'mediocre products' that are not in 'need' and to people who cannot 'afford' is awful and disgusting. It implies tricking the buyer for your own gain.
If you have a mediocre product do not misrepresent when you sell it. If you are trying to fck people out of their money, fck you.
The difficult case is what if you invest your livelihood in a product that turns out to be shitty. You are left with either tricking people in to buying it or facing the alternative -- debt, foreclosure etc.. This could include putting a family (wife or husband or partner and children out on the street). This sucks for all involved. Customers wish you had a good product, you wish you did too.
This decision comes down to responsibility. You built that product. You were in charge or you bought in to the company. Take the loss, be honest about the product (note sales is still involved just not sales that misrepresents).
To be clear, sales is great. If sales is the method of opening people's mind enough to see what you genuinely believe are the best parts of your product. If its to lie and convince them to lie and buy a product that is 'medicore' and they cannot 'afford' (implicitly that this purchase will hurt them in other ways) then fck sales. This 'lying sales' is what the statement indicated and what I, and I think other developers, do not like.
>Selling people mediocre products they don't need and probably can't afford, that is actually difficult.
This is exactly why developers (at least this one) have a pending distaste for business people. This should never, ever, be done. The difficulty of selling 'mediocre products' that are not in 'need' and to people who cannot 'afford' is awful and disgusting. It implies tricking the buyer for your own gain.
If you have a mediocre product do not misrepresent when you sell it. If you are trying to fck people out of their money, fck you.
The difficult case is what if you invest your livelihood in a product that turns out to be shitty. You are left with either tricking people in to buying it or facing the alternative -- debt, foreclosure etc.. This could include putting a family (wife or husband or partner and children out on the street). This sucks for all involved. Customers wish you had a good product, you wish you did too.
This decision comes down to responsibility. You built that product. You were in charge or you bought in to the company. Take the loss, be honest about the product (note sales is still involved just not sales that misrepresents).
To be clear, sales is great. If sales is the method of opening people's mind enough to see what you genuinely believe are the best parts of your product. If its to lie and convince them to lie and buy a product that is 'medicore' and they cannot 'afford' (implicitly that this purchase will hurt them in other ways) then fck sales. This 'lying sales' is what the statement indicated and what I, and I think other developers, do not like.
That's because most inventors are not great salespeople and great salespeople are busy printing money to be peddling ideas to developers.
I'm a non-technical founder (I have an engineering degree on paper, but have never been a practicing developer) who's starting out on his own. I disagree (or maybe, have an alternate viewpoint) with your first observation.
I don't think sales skills are completely fungible across domains. A great business seller may not actually be a great motivational/aspirational seller, and vice versa. So it's wrong, IMHO, to assume that just because you may be incapable of convincing a developer to join you, you will also be incapable of convincing a customer to buy your product.
That said, I'm facing somewhat the same issue myself - so they way I'm solving it is by (a) rolling up my sleeves and trying to build a bare-bones MVP/mockups using relatively accessible tech like Bootstrap, HTML, JS etc. (b) overcompensating for my tech shortfall by giving 2x of what I can in areas like marketing, customer interviews, alpha partnerships, fundraising etc., and (c) using (precious) capital to outsource the first version of my app instead of waiting for tech co-founders.
As I see it, it's Carpe Diem. There's no way I can earn serious developer cred in weeks or even months, so I might as well look for alternative approaches instead of moping around, wishing I'd followed the software developer road 15 years ago instead of the MBA one :)
I don't think sales skills are completely fungible across domains. A great business seller may not actually be a great motivational/aspirational seller, and vice versa. So it's wrong, IMHO, to assume that just because you may be incapable of convincing a developer to join you, you will also be incapable of convincing a customer to buy your product.
That said, I'm facing somewhat the same issue myself - so they way I'm solving it is by (a) rolling up my sleeves and trying to build a bare-bones MVP/mockups using relatively accessible tech like Bootstrap, HTML, JS etc. (b) overcompensating for my tech shortfall by giving 2x of what I can in areas like marketing, customer interviews, alpha partnerships, fundraising etc., and (c) using (precious) capital to outsource the first version of my app instead of waiting for tech co-founders.
As I see it, it's Carpe Diem. There's no way I can earn serious developer cred in weeks or even months, so I might as well look for alternative approaches instead of moping around, wishing I'd followed the software developer road 15 years ago instead of the MBA one :)
> I don't think sales skills are completely fungible across domains
My experience across a fifteen year business confirms this. Year one I had to sell. As an engineer I was a horrible sales guy. A couple of my dealers took me under their wing and over approximately a year a made notable changes.
Years later, as we grew, I had to hire sales people. That's when I learned the lesson. If someone is good about selling product A it doesn't necessarily mean they can sell product B. I hired around a dozen sales people over the years. Most were collosal failures. Some of the most memorable ones came with huge contact lists and years of selling other products in the industry. Based on the advise of other entrepreneurs I ended-up hiring someone with little sales experience and training them over a year. She was my best sales person, by far.
My experience across a fifteen year business confirms this. Year one I had to sell. As an engineer I was a horrible sales guy. A couple of my dealers took me under their wing and over approximately a year a made notable changes.
Years later, as we grew, I had to hire sales people. That's when I learned the lesson. If someone is good about selling product A it doesn't necessarily mean they can sell product B. I hired around a dozen sales people over the years. Most were collosal failures. Some of the most memorable ones came with huge contact lists and years of selling other products in the industry. Based on the advise of other entrepreneurs I ended-up hiring someone with little sales experience and training them over a year. She was my best sales person, by far.
I agree. Sales is often domain-specific, and this becomes truer the longer you spend in any given domain. And sometimes a long list of great contacts is more of a liability than a benefit. You need someone who can call up anybody you need them to -- not just someone who's going to hit up his list every time. The people on the list might not even be the customers you want or need. Hell, who you need may change in two months. In general, a static and inflexible asset in a variable environment is a bad thing.
[Side note: there are such things as general "salesmanship" skills, like being personable, charismatic, good at articulating value propositions, good at finding ways to get in front of people, and so forth. But these things need not be conflated with capital-S Sales.]
[Side note: there are such things as general "salesmanship" skills, like being personable, charismatic, good at articulating value propositions, good at finding ways to get in front of people, and so forth. But these things need not be conflated with capital-S Sales.]
Wait, so, not having ever done sales, I'm not sure what you mean. What is in the set of "capital-S-Sales" that's not "salesmanship?"
I think he is saying that a CEO can have salesmanship skills like the ones listed in order to "sell" people on the idea of working for the company, but it doesn't mean that he is also able to pick up the phone and do cold calls to sell widgets.
I suspect that there are a lot of stories of salesman candidates coming in the door, saying "I have a huge rolodex, I know a hundred people to whom I can sell this right now," that turned out to be duds. Oh, they spent their time on the phone talking with their old buddies, who occasionally bought one or two as a favor, but it never came through anything close to what you, the non-salesman-founder, were expecting.
Well, it's that and a lot more.
Some of the really established guys --20+ year career in the industry-- can come with this "I can walk on water" attitude as they drive their leased Jaguar into their parking slot. Then they cave when they realize this is a new market segment and a new product segment in the industry. They are used to people coming to them to buy the old stuff. Now they actually have to work, learn the new product, learn the new lingo and also identify customers who might be receptive to the message.
Then you have the guy who worked for a rather large company and is used to the fish jumping into the boat. No fishing rod or fish finder required. You don't even have to know how to bait a hook. These guys, amazingly enough, actually think they are selling. When faced with a situation where the phone only rings if they make it ring they don't do very well.
There's the guy who faked it in a good market, got lucky and built a reputation on circumstance rather than skill. When things change (i.e., the economy tanks) the reality of their capabilities comes to the surface.
Then there's the inability to adjust to a change of audience. You don't sell to an engineer the same way you might sell to a manager or the president of a company.
One of the most frustrating things for me has always been the sales person who attempts to take credit for a sale that came in because I spent tens of thousands of dollars in marketing. They think you are stupid. Or at least they act that way. Some of the most memorable moments in my experience have been after major trade-shows. Imagine having a sales person come to you like he just climbed Everest to close a sale after you just spent over $100K to exhibit at a trade-show for a week. You look further and you see the sale was due to a years-long relationship with the customer as well as a meeting at the trade-show where the sales guy didn't even interface with the customer. What did happen is that he got and printed the purchase order because he was in charge with monitoring [email protected]. In retrospect it is really funny and it also reveals interesting character flaws.
And, of course, there's the mercenary sales person who will hand out discounts like they are candy in order to book sales and look like a genius to anyone except for the person who actually looks at the numbers.
There's more, of course,
The advantage of the motivated newbie is that they can learn the product, the market and the approach. It takes six months to a year of real work to get someone up to speed, but it can really pay off. Most business owners I reached out for advice would roll their eyes when I asked for the secret to hiring good sales people. Everyone had horror stories galore.
One of the toughest skills to learn for in-person sales is to know when to close your mouth and let the process happen. When I started my business I would talk and talk and talk. I probably lost more sales to that than any other blunder. A year later, I'd show up to a call, "read" the room, meet some of the people I didn't know, setup the demo and mostly let the customers sell themselves on the product. Selling by saying less, not more, is a skill that takes time to develop. Most really good sales people are very relaxed and confident during a sales call.
One of my friends put it like this: It's like the hotel business. You can print beautiful brochures; exquisitely redecorate the rooms; have amazing food and all manner of services. You can't force people to take a vacation.
Some of the really established guys --20+ year career in the industry-- can come with this "I can walk on water" attitude as they drive their leased Jaguar into their parking slot. Then they cave when they realize this is a new market segment and a new product segment in the industry. They are used to people coming to them to buy the old stuff. Now they actually have to work, learn the new product, learn the new lingo and also identify customers who might be receptive to the message.
Then you have the guy who worked for a rather large company and is used to the fish jumping into the boat. No fishing rod or fish finder required. You don't even have to know how to bait a hook. These guys, amazingly enough, actually think they are selling. When faced with a situation where the phone only rings if they make it ring they don't do very well.
There's the guy who faked it in a good market, got lucky and built a reputation on circumstance rather than skill. When things change (i.e., the economy tanks) the reality of their capabilities comes to the surface.
Then there's the inability to adjust to a change of audience. You don't sell to an engineer the same way you might sell to a manager or the president of a company.
One of the most frustrating things for me has always been the sales person who attempts to take credit for a sale that came in because I spent tens of thousands of dollars in marketing. They think you are stupid. Or at least they act that way. Some of the most memorable moments in my experience have been after major trade-shows. Imagine having a sales person come to you like he just climbed Everest to close a sale after you just spent over $100K to exhibit at a trade-show for a week. You look further and you see the sale was due to a years-long relationship with the customer as well as a meeting at the trade-show where the sales guy didn't even interface with the customer. What did happen is that he got and printed the purchase order because he was in charge with monitoring [email protected]. In retrospect it is really funny and it also reveals interesting character flaws.
And, of course, there's the mercenary sales person who will hand out discounts like they are candy in order to book sales and look like a genius to anyone except for the person who actually looks at the numbers.
There's more, of course,
The advantage of the motivated newbie is that they can learn the product, the market and the approach. It takes six months to a year of real work to get someone up to speed, but it can really pay off. Most business owners I reached out for advice would roll their eyes when I asked for the secret to hiring good sales people. Everyone had horror stories galore.
One of the toughest skills to learn for in-person sales is to know when to close your mouth and let the process happen. When I started my business I would talk and talk and talk. I probably lost more sales to that than any other blunder. A year later, I'd show up to a call, "read" the room, meet some of the people I didn't know, setup the demo and mostly let the customers sell themselves on the product. Selling by saying less, not more, is a skill that takes time to develop. Most really good sales people are very relaxed and confident during a sales call.
One of my friends put it like this: It's like the hotel business. You can print beautiful brochures; exquisitely redecorate the rooms; have amazing food and all manner of services. You can't force people to take a vacation.
Would you look for anything in particular when choosing a newbie? Maybe expeirence in used cars or insurance?
Well, my approach was to hire a small group of people to help out at a trade show, give them a some training and watch how they worked during the show. At the end of the process I offered one of them a permanent job. It worked out very well.
I did this through an ad in Craigs List. I effectively asked for people comfortable with technology, able to learn quickly and with great people skills that could be applied in the context of sales presentations in a trade show environment. I did get quite a variation of responses. I selected a small group I thought would do well.
I did this through an ad in Craigs List. I effectively asked for people comfortable with technology, able to learn quickly and with great people skills that could be applied in the context of sales presentations in a trade show environment. I did get quite a variation of responses. I selected a small group I thought would do well.
I don't understand people's (not necessarily the OPs)utter obsession with philosophies. Especially in the startup world when being adaptive and surviving is key.
Lean Startup, great book, decent ideas, not the religion that it's become. I'm sick of hearing, hey do this the lean way and it'll "significantly improve" how well you do, after all it's the blueprint for success. Personally, I don't buy into that. Here's my view of success in reality: do whatever works (that's legal & up to your moral standards), be opportunistic and get lucky (yes, hard work and measuring metrics alone don't do crap).
MVP and idea validation are great concepts & helpful common language. In hindsight all "successful" startups seem to have a "pattern", but in all seriousness, there isn't a friggin algorithm for success in startups, otherwise algorithms would've replaced entrepreneurs a long time ago. (Although selling success patterns & software based on such to wantreprenuers is a great idea)
I'm sorry the Sergio's experience happened. It's easy force cause and effect onto a narrative. It very well could have been that the developer Sregio met was at a point in his life where he really just wanted to build something great and did end up building the awesomest thing. Instead of trying to dissect the reasons his startup failed, had luck been a little more favorable, we might be trying to analyze how it became a huge success.
Bottom line, my heartfelt congratulations to Sergio on being successful at stepping up, despite the risks and having a crack at it. If you had never stepped up and we all gave in to our negative biases and overanalyzed the crap out of everything before we started we'd still be polishing stone wheels.
I know how shitty it feels. But remember, hindsight is 20-20 and cause and effect should really be cause+luck and effect. Hope you're a better entrepreneur and will be back in the game soon.
Lean Startup, great book, decent ideas, not the religion that it's become. I'm sick of hearing, hey do this the lean way and it'll "significantly improve" how well you do, after all it's the blueprint for success. Personally, I don't buy into that. Here's my view of success in reality: do whatever works (that's legal & up to your moral standards), be opportunistic and get lucky (yes, hard work and measuring metrics alone don't do crap).
MVP and idea validation are great concepts & helpful common language. In hindsight all "successful" startups seem to have a "pattern", but in all seriousness, there isn't a friggin algorithm for success in startups, otherwise algorithms would've replaced entrepreneurs a long time ago. (Although selling success patterns & software based on such to wantreprenuers is a great idea)
I'm sorry the Sergio's experience happened. It's easy force cause and effect onto a narrative. It very well could have been that the developer Sregio met was at a point in his life where he really just wanted to build something great and did end up building the awesomest thing. Instead of trying to dissect the reasons his startup failed, had luck been a little more favorable, we might be trying to analyze how it became a huge success.
Bottom line, my heartfelt congratulations to Sergio on being successful at stepping up, despite the risks and having a crack at it. If you had never stepped up and we all gave in to our negative biases and overanalyzed the crap out of everything before we started we'd still be polishing stone wheels.
I know how shitty it feels. But remember, hindsight is 20-20 and cause and effect should really be cause+luck and effect. Hope you're a better entrepreneur and will be back in the game soon.
"The developer had no intention of being the project’s developer (?) he was not really a developer, he was a computer science graduate who owned a webdev shop and was used to managing, not coding."
Heard this story so many times. Amazing how many people join a startup and don't want to do the actual work. Remember that scene in The Social Network where Mark Zuckerberg calls his outsource team about progress on that latest feature? No? Me either.
Heard this story so many times. Amazing how many people join a startup and don't want to do the actual work. Remember that scene in The Social Network where Mark Zuckerberg calls his outsource team about progress on that latest feature? No? Me either.
BAM!
"Since we were 3 business people, we spent all this time into idiot plans, budget forecasts, BUSINESS CARDS, fancy website… all useless things which in the end did not contribute to anything."
I've been apart of a lot of startups and this is far and away the best advice. It was a common theme with two startups I worked for during the boom years. One CEO's hubris was stunning. 10 million privately funded and he blew most of it on season tickets and suits at stadiums to "entertain" big prospects (nevermind we didn't have any "big" prospects at the time!), remodeled the office to the tune of a few hundred thousand dollars, it goes on, but you get the idea.
When you're in a startup, it really is about getting your product shipped, and making sure that's where the focus is.
Great writeup and glad you saw the errors of your ways. Lots of people never gain the wisdom you have until after two or three failed attempts.
I've been apart of a lot of startups and this is far and away the best advice. It was a common theme with two startups I worked for during the boom years. One CEO's hubris was stunning. 10 million privately funded and he blew most of it on season tickets and suits at stadiums to "entertain" big prospects (nevermind we didn't have any "big" prospects at the time!), remodeled the office to the tune of a few hundred thousand dollars, it goes on, but you get the idea.
When you're in a startup, it really is about getting your product shipped, and making sure that's where the focus is.
Great writeup and glad you saw the errors of your ways. Lots of people never gain the wisdom you have until after two or three failed attempts.
Did you work at Entertainment 720?
Nope.
One of the startups was a telecom company, the other an educational software company.
The telecom company was the one that burned through all the millions. They had an exclusive contract with one of the regional bells and were trying to make high speed internet accessible to the masses. They were banking on fiber instead of the existing DSL which ran over copper. Essentially using T1 fiber to give high speeds at the cost of copper DSL.
They thought they had a home run with a growing base of clients, and were trying to get acquired more than build the next Frontier Telecommunications.
They had a crazy story, maybe sometime I'll let the details go. That was a crazy time for sure.
One of the startups was a telecom company, the other an educational software company.
The telecom company was the one that burned through all the millions. They had an exclusive contract with one of the regional bells and were trying to make high speed internet accessible to the masses. They were banking on fiber instead of the existing DSL which ran over copper. Essentially using T1 fiber to give high speeds at the cost of copper DSL.
They thought they had a home run with a growing base of clients, and were trying to get acquired more than build the next Frontier Telecommunications.
They had a crazy story, maybe sometime I'll let the details go. That was a crazy time for sure.
I think you missed the reference. They were referring to a company from the TV show Parks & Recreation. See here https://www.youtube.com/watch?v=jX0ZF8f8G0A
"Instead of surfing the wave and adapting my idea to what a real prospect client was telling me they wanted"
FFS don't do this. There are far too many startups beached on the shores of "well, this one SRS BZNS client wanted us to change what we were doing so we did. Where'd all the rest of our clients go?"
I'm not saying "don't pivot", but "just making what they wanted" (where N(they) = 1) turns you into a poorly-paid contract developer who's also paying to host the result, not an entrepreneur.
FFS don't do this. There are far too many startups beached on the shores of "well, this one SRS BZNS client wanted us to change what we were doing so we did. Where'd all the rest of our clients go?"
I'm not saying "don't pivot", but "just making what they wanted" (where N(they) = 1) turns you into a poorly-paid contract developer who's also paying to host the result, not an entrepreneur.
I personally would view building something for X client a viable option if it was going to be a large sum of money. Then use that money to fund the company and the product you really want to build and sell.
It can be hard to get that one or two clients who can fund the company, but it is a viable strategy as long as you have the right mindset. We, Datalanche, had this opportunity but unfortunately (like most deals) it didn't work out. Had we successfully made the deal, it would have been a multi-million dollar contract which would have easily funded the entire company and the flagship product and we wouldn't have given away any control.
It can be hard to get that one or two clients who can fund the company, but it is a viable strategy as long as you have the right mindset. We, Datalanche, had this opportunity but unfortunately (like most deals) it didn't work out. Had we successfully made the deal, it would have been a multi-million dollar contract which would have easily funded the entire company and the flagship product and we wouldn't have given away any control.
I don't think you have to ask "Where'd all the rest of our clients go?" when you don't have any clients to begin with.
I want to shine some light on one side problem, scratched here:
The problem today is (out of the perspective of a developer): To many companies rely on just "hire any (cheap) developer" to ramp up the product. I see it all the time: Quality is not asked for, many companies (specially in the web business) just want the cheapest developers. They search for a student (at best), because he is cheap and will just make a small time estimation and an even smaller fixed price offer for the project. The student will happily work overtime that is not covered by the initial estimation.
Than the companies go mad, when either the programmer is running away or the whole project runs into a blind alley (or both at the same time), because the "totally expensive" programmer had not enough experience e.g. with database development and the database structure just lets you shiver. Then the shouting and anger is big: "Damn programmers -- all are liars and lazy!"
What went wrong, stated Uncle Bob correctly in his Blog: http://blog.8thlight.com/uncle-bob/2013/11/19/HoardsOfNovice...
But the "cheap, cheap!" culture seams to be unstoppable. If you tell people in advance about "quality" and "professionalism", they don't listen or just laugh at you. It seams, all the people just have to find out the hard way -- but I guess, even than most of them will not learn at all.
The problem today is (out of the perspective of a developer): To many companies rely on just "hire any (cheap) developer" to ramp up the product. I see it all the time: Quality is not asked for, many companies (specially in the web business) just want the cheapest developers. They search for a student (at best), because he is cheap and will just make a small time estimation and an even smaller fixed price offer for the project. The student will happily work overtime that is not covered by the initial estimation.
Than the companies go mad, when either the programmer is running away or the whole project runs into a blind alley (or both at the same time), because the "totally expensive" programmer had not enough experience e.g. with database development and the database structure just lets you shiver. Then the shouting and anger is big: "Damn programmers -- all are liars and lazy!"
What went wrong, stated Uncle Bob correctly in his Blog: http://blog.8thlight.com/uncle-bob/2013/11/19/HoardsOfNovice...
But the "cheap, cheap!" culture seams to be unstoppable. If you tell people in advance about "quality" and "professionalism", they don't listen or just laugh at you. It seams, all the people just have to find out the hard way -- but I guess, even than most of them will not learn at all.
I believe this is a marketing problem (from the developers). See, I am a non-tech founder, I don't understand why X is cheaper than Y. If I perceive the same benefit, I will get the cheapest one.
(This is hypothetical, but not so much: I understand a bit of tech and even so I don't have so much clue on how to judge a developer besides what he shows me he had done).
(This is hypothetical, but not so much: I understand a bit of tech and even so I don't have so much clue on how to judge a developer besides what he shows me he had done).
You are right, that developers are most of the time bad marketers. But I must disagree with the notion "... besides what he shows me had done" (I admit that might not have been your point, but I still want to loose a word or two about it).
That's a problem intrinsic with software: What you "see" is not what you get. You see a perfect polished UI, but you get a sack of bugs! So this criterion is not usable at all. The intrinsic values of a program are not visible to non-developers at all. Even software-companies have a hard time, deciding which criterion to choose as a base for decisions.
I think, when you look at cars or houses, people are more likely to ask a professional to decide about the condition of the car or house. Also everybody that loves his car (and life) will bring his car to some person that has read some books about motors and does repair the brakes "half-prize" in his back-yard. But in software practice, you just want to see some polished front lids of cars and decide that the brake repairs will be fine.
That's a problem intrinsic with software: What you "see" is not what you get. You see a perfect polished UI, but you get a sack of bugs! So this criterion is not usable at all. The intrinsic values of a program are not visible to non-developers at all. Even software-companies have a hard time, deciding which criterion to choose as a base for decisions.
I think, when you look at cars or houses, people are more likely to ask a professional to decide about the condition of the car or house. Also everybody that loves his car (and life) will bring his car to some person that has read some books about motors and does repair the brakes "half-prize" in his back-yard. But in software practice, you just want to see some polished front lids of cars and decide that the brake repairs will be fine.
This is tied in closely to the issue of technical debt. Developers often have a hard time explaining clearly to non-tech product/business types why "faster, cheaper, now" in terms of code will not end up being cheaper in the long run; but conversely, just as most of us can't go out and just buy a house without taking on debt, new founders don't have the resources to start out with top-tier teams working full-time for them. When it comes to deciding on compromises to make so that your product can actually get built and within a realistic timeframe, I'd say it makes sense to find someone with dev experience who can at least help advise you on how and whom to hire, red flags, etc. - and _trust_ that person, if you don't have the requisite knowledge and experience yourself.
You could say it's a marketing problem and you might be right within reason. Unfortunately, I could also see a perception problem.
Do people find it really ok to have video and a website spelling "try it free" and then have only an email input form ? I know that testing if demand exists is important, but doesn't it have adverse effect on your reputation to somehow lie to your prospects ?
I think you're saying its a lie because there is no product yet? I can see how you think that. If he did build the product first though and one person signed up and he had to pivot to something fairly different, that'd be a lie too then effectively. Except, now he wasted a lot of time building.
My POV is if you're only taking email addresses for people to know when it's available anything on the site is just your plan. Plans always change.
I wonder how the returns work out for sticking 'Email me to when it's ready to be tried' or something. I can see you getting fewer numbers, potentially, but I wonder about the people who are actually interested in the product vs drive by triers.
At least seems more respectful of people's time than 'try it free' just for them to have to click through and find out what it's about.
At least seems more respectful of people's time than 'try it free' just for them to have to click through and find out what it's about.
To be frank, I think that is exactly what I used. I just didn't judge was important enough to mention.
Really great writeup, thanks for sharing.
I'm left wondering, though, what you actually did over the two years? You imply that you were working on it full time. Two years full time is a lot of time. You can do pretty much anything in that time (including, as others have mentioned, learn to code).
> idiot plans, budget forecasts, BUSINESS CARDS, fancy website [and writing articles]
I find it hard to believe you can work on those things for two years, day in and day out.
I'm left wondering, though, what you actually did over the two years? You imply that you were working on it full time. Two years full time is a lot of time. You can do pretty much anything in that time (including, as others have mentioned, learn to code).
> idiot plans, budget forecasts, BUSINESS CARDS, fancy website [and writing articles]
I find it hard to believe you can work on those things for two years, day in and day out.
Hardly, no, one mistake that I didn't mention (because I am still processing it) is how long we took to have v1 (more than a year). This was a mix of my incompetence, too many features and also an inexperienced developer (in fact we changed developers once too).
So, yeah, a looooot of the time was put into building the product, refining it, getting bugs out of the way, testing it again, finding the same bugs...
Then there was marketing. Finding more clients, because we believed finding more people meant someone would buy the product.
PS: I was not completely full time, the developer was. In those 2 years, I have been freelancing (one needs to eat).
So, yeah, a looooot of the time was put into building the product, refining it, getting bugs out of the way, testing it again, finding the same bugs...
Then there was marketing. Finding more clients, because we believed finding more people meant someone would buy the product.
PS: I was not completely full time, the developer was. In those 2 years, I have been freelancing (one needs to eat).
1 year? Just ship product regularly brother.
A business person trying to start a tech startup.... It's like a business person looking for musicians to start a band. This is beyond ridiculous. Either bring some skill to the table or go create a "business startup" and stop polluting the industry with yet another failed idea and even worse a "post mortem" of why it failed.
PS: This includes Marketing, Managers as well as the Business peanut gallery.
PS: This includes Marketing, Managers as well as the Business peanut gallery.
I'm not sure if that's a good analogy for your point. The success of a band often requires more than people that can play music well together
The Beatles had Brian Epstein for example (aka The Fifth Beatle)
The Beatles had Brian Epstein for example (aka The Fifth Beatle)
Yes, but the first members are driven with higher goals then just "Starting a business". A business person is driven with the intention of making money. If it were otherwise, they'd learn a trade/skill.
My vision was to get rid of lame managers. Certainly a useful vision.
A cube created to make money is different from a cube created for bettering cubes or advancing cube making. Do you get my point? Your motivations are not high enough. What you claim is your intention is not what your actions say.
I love the Monkees.
I love The Beatles.
I think the Monkees fit the bill of a "pop band manufactured by a business person" more than the Beatles do.
And they're better.
And they're better.
A subjective comment. "Better". Their music has done nothing to move our species' art forward. If you are just going to release the same stuff as another band then you are stagnating evolution, move to the side!
Don't compare the two. The Beatles have ushered in new song writing, band lineup, tone setup and lyrical prowess. Incomparable. Do you even use your ears, or are you just regurgitating?
Don't compare the two. The Beatles have ushered in new song writing, band lineup, tone setup and lyrical prowess. Incomparable. Do you even use your ears, or are you just regurgitating?
I replied the same thing above: tech business are usually not about tech, they are empowered by tech. A company that uses phones to sell their products is not about "phones", they are about the product and the phone is just a tool. For me, the web was just a tool.
A lot of non-tech co-founders exist and they succeed, so certainly not absurd.
A lot of non-tech co-founders exist and they succeed, so certainly not absurd.
Exhibit A. Everything wrong about this perspective. Disassociation and genericness down to a "T". How's that formula working for you?!
Nah, troll harder next time.
If you can't hear and handle the truth, then you will persistently and consistently fell. Even if you generate profits, that is not the end all, be all marker of success. After all, Microsoft is ever increasing its profits, yet it is polluting the world with products that are barely innovating.
But please, keep thanking the complacent comments that do nothing to better your case.
But please, keep thanking the complacent comments that do nothing to better your case.
Innovation without profit would be success, but building things people buy isn't success because it's not innovative? What?
Read and re-read. I never said "Innovation without profit would be success". Oh and in case you didn't understand the first part of this reply. Read and re-read again.
I have to disagree there is more to a business then a product.
Somebody has to find customers, make sure there is a way to accept their money, ...
Somebody has to find customers, make sure there is a way to accept their money, ...
Yes, but sellers, business and marketing need to be driven by higher purpose then just "making more cash". We all like to make money, but that should not be the priority. Quality will eventually bring in money.
Disagree.. tech startups needs a very good seller.. to hire employees, raise money, sell to customers. And developers are notoriously bad at selling!
Don't generalize. If anything sellers have drowned big tech companies with unwanted contracts, long term support of legacy products. You are driven by "making money" which is ultimate greed. Thanks but no thanks. I'm more than happy making one customer at a time happy then having you guys whore engineers out.
Sellers as the peanut gallery, should be kept in check.
Sellers as the peanut gallery, should be kept in check.
Good article but I would look at this "failure" from a glass half full perspective. You "won" because you've learned valuable lessons you can take to your next idea. I've had many products that have not gained many users in their respective marketplaces but I learned from each and everyone of them. All these experiences has brought me where I am today (CTO of a 45+ employee company). No failures in my past as far as i'm concerned; just lots of self teaching (that you can't get in school).
>> ""An Indian company expressed desire to buy something from me other than the thing I was building, so I should have built that instead.""
I may be the minority but I agree with him but on one condition. If this Indian company wanted to pay a small monthly subscription fee for your product I would never have agreed developing "their" ideas. I would have taken their feedback and put in the big pile with all the other feedback I gathered up. But I would have pitched this Indian company a different story, I would have pitched them a professional services contract instead of a product. I did something similar in the past and it worked out very well because in a business money is king. With no money you can't do the things you need to do, like attend conferences to sell your idea, buying adwords, hiring solid developers, paying yourself a salary so you can devote your time to the idea.
In my case the customer was willing to pay ~$10k a month to get what he wanted. We built it for him while building our own product. Once we got big enough and could sustain ourselves without our original customer, I gave the customer away. The developer who maintained the project was interest in taking on the project himself. We came up with a 6 month transition plan, including lots of product/project management help, office space, etc. It was a win/win situation at the end.
Doing this is not for everyone though. There are many days I cursed this customers for taking up the majority of our resources. We had to be very good at differentiating between their requirements and the markets requirements. We weren't perfect at it but it worked out in the end.
>> ""An Indian company expressed desire to buy something from me other than the thing I was building, so I should have built that instead.""
I may be the minority but I agree with him but on one condition. If this Indian company wanted to pay a small monthly subscription fee for your product I would never have agreed developing "their" ideas. I would have taken their feedback and put in the big pile with all the other feedback I gathered up. But I would have pitched this Indian company a different story, I would have pitched them a professional services contract instead of a product. I did something similar in the past and it worked out very well because in a business money is king. With no money you can't do the things you need to do, like attend conferences to sell your idea, buying adwords, hiring solid developers, paying yourself a salary so you can devote your time to the idea.
In my case the customer was willing to pay ~$10k a month to get what he wanted. We built it for him while building our own product. Once we got big enough and could sustain ourselves without our original customer, I gave the customer away. The developer who maintained the project was interest in taking on the project himself. We came up with a 6 month transition plan, including lots of product/project management help, office space, etc. It was a win/win situation at the end.
Doing this is not for everyone though. There are many days I cursed this customers for taking up the majority of our resources. We had to be very good at differentiating between their requirements and the markets requirements. We weren't perfect at it but it worked out in the end.
There are a lot of things I'm interested in but would not pay for online, but good failed startup stories like this is not one of them.
Seriously, if somebody could cull 2 or 3 of these a day and deliver in a weekly or monthly format? It'd be worth a subscription.
Thanks for the article!
Seriously, if somebody could cull 2 or 3 of these a day and deliver in a weekly or monthly format? It'd be worth a subscription.
Thanks for the article!
Why do you need so many failure stories?
One failure story per week should be sufficient to be constantly aware of typical problems.
One failure story per week should be sufficient to be constantly aware of typical problems.
... one of the prospects was an HR person from a huge Indian manufacturer. They wanted the system NOW and wanted to speak to me. [...] I just needed to build what they wanted.
I know startups that charged down the other path, being hyper responsive to their big customers, and they suffered for it because their biggest customer steered the product vision straight to crazy town. Such startups essentially become the contract development shop of a few big customers, living and dying by the whims of those big customers. Yes, you can pay the bills, but you're essentially working full-time for a few customers rather than building your own enterprise.
I know startups that charged down the other path, being hyper responsive to their big customers, and they suffered for it because their biggest customer steered the product vision straight to crazy town. Such startups essentially become the contract development shop of a few big customers, living and dying by the whims of those big customers. Yes, you can pay the bills, but you're essentially working full-time for a few customers rather than building your own enterprise.
I wonder how much their conversion was impacted by internationalisation problems. It looks like they were attempting to target the US, but their pricing page wasn't localised for that market. Unless they really were charging one thousand nine hundred and ninety dollars per team. Price is shown as £19,90 instead of $19.90
Also due to what I perceived as a thousand separator, not a decimal mark, I initially read the price as nineteen thousand and nine hundred dollars!
Also due to what I perceived as a thousand separator, not a decimal mark, I initially read the price as nineteen thousand and nine hundred dollars!
I forgot that one! I have even a saying for this learning "be local before being global".
A mistake I made early on was trying to provide a product as cheap as possible. Constantly worried that no one would pay what we asked for.
Basically being afraid to ask for the value it was really worth.
I think there was a comma/period swap, but if I'm reading correctly it looked like the product was positioned at $30 / mo?
Assuming that's correct - it's really not a meaningful amount to any company that has enough employees and management to actually be a user of the product.
I think a $30 / mo with a free 30 day trial period (once product launches and they can actually try it ;) ) that requires a credit card for the trail could have worked.
Would still need a product to actually try, but that's not much different than saying get a free trial and just taking in email addresses.
If anyone remembers the Minimalytics / Small HQ folks - I thought they did a good job with their signups. The only thing for me was I disappointed by how minimal their product was in beta. It was so basic I didn't have any use for it, and running our own startup, didn't have time to wait. We ended up building it internally.
I probably would have converted to a paying user if it was more developed at beta. Not their fault though, they did a good job I thought(if you're reading Small HQ).
Basically being afraid to ask for the value it was really worth.
I think there was a comma/period swap, but if I'm reading correctly it looked like the product was positioned at $30 / mo?
Assuming that's correct - it's really not a meaningful amount to any company that has enough employees and management to actually be a user of the product.
I think a $30 / mo with a free 30 day trial period (once product launches and they can actually try it ;) ) that requires a credit card for the trail could have worked.
Would still need a product to actually try, but that's not much different than saying get a free trial and just taking in email addresses.
If anyone remembers the Minimalytics / Small HQ folks - I thought they did a good job with their signups. The only thing for me was I disappointed by how minimal their product was in beta. It was so basic I didn't have any use for it, and running our own startup, didn't have time to wait. We ended up building it internally.
I probably would have converted to a paying user if it was more developed at beta. Not their fault though, they did a good job I thought(if you're reading Small HQ).
Firstly, the Indian corporation which contacted him, apparently was asking for something totally different. If they were asking about 3 or 4 features that could be added, I don't think that it would be a problem. But the author didn't do anything wrong there. They were looking for a developer probably not a product or not his product whatsoever.
If you accept his argument as true, that he should switch and follow the tide, then you might as well start looking for freelancer developer job.
< J/K> Awesome quote:
> The result of this was that in the end we had to hire a full-time (and paid) developer. So we had zero revenue, 4 co-founders and a paid employee (which was effectively the only one doing real work).
I laughed really hard reading this line. My girlfriend came from next room to make sure I was okay!!! That's awesome, like 4 guys watching a movie, say the 'Social Network', and deciding to do a startup!!! </ J/K>
Jokes apart, I think the author has got it all wrong. There are ten million reasons why a small startup failed. Most of the time is hard to tell exactly why.
But seriously, only people who have proved time and again their ability to deliver a product to the market and are famous for turning ideas into money, are able to struck deals before having a product. And we probably all know them (Jobs, Musk, etc). For the rest of us that's not how things work, I'm sorry to say that he is still getting it all wrong.
In the real world, you can't sell something that doesn't exist, these things happen only on Wall Street.
If you accept his argument as true, that he should switch and follow the tide, then you might as well start looking for freelancer developer job.
< J/K> Awesome quote:
> The result of this was that in the end we had to hire a full-time (and paid) developer. So we had zero revenue, 4 co-founders and a paid employee (which was effectively the only one doing real work).
I laughed really hard reading this line. My girlfriend came from next room to make sure I was okay!!! That's awesome, like 4 guys watching a movie, say the 'Social Network', and deciding to do a startup!!! </ J/K>
Jokes apart, I think the author has got it all wrong. There are ten million reasons why a small startup failed. Most of the time is hard to tell exactly why.
But seriously, only people who have proved time and again their ability to deliver a product to the market and are famous for turning ideas into money, are able to struck deals before having a product. And we probably all know them (Jobs, Musk, etc). For the rest of us that's not how things work, I'm sorry to say that he is still getting it all wrong.
In the real world, you can't sell something that doesn't exist, these things happen only on Wall Street.
Thanks for the write up - It's always better to learn from other people mistakes. I think however you and the most of the other posters miss the most basic problem because they mostly seem not to have tried the site and that is that, to me at any rate, it seems the product is not very good. It seems to be basically a 40 question form with questions like "People in the team know the weaknesses and strengths of other team members." that you mark from 1-10 and is not customizable. Personally I hate that stuff - you spend ages filling the thing out and then when you find the average response is say 7 what do you do then? There's not obvious action. If you had a form with a question saying say "what do you thinks the biggest problem with your team?" and people were able to say anonymously that say "there were four founders without the right experience and only one dev really working" then that would at least be useful. I think before worrying about the market etc you should have tested your system on real teams to see if it actually helped them much. This could have been done with zero or little tech - say either a paper questionnaire or just write your questions in an email and have people email their answers back to you. The fact that 200 people tried the product and none bought does imply a product problem but it if you define your product as trying something to fix team management problems then I think the issue is not that there is no demand for that but that your product does not work in that regard. If it was me and I could code a bit, rather than scrap the thing I think I might try changing it to see if it could be made to work at the team improving level. You could say cut it to say five 0-10 type questions and five "what's the biggest problem?" type questions and then try that with a couple of real teams and see if they found it helpful.
Your evaluation certainly have merits and a lot of it we confirmed when speaking to clients later. Just one thing to make clear: I have 5+ years of team management/leadership development and I used a similar tool I created and evolved (in paper form) to improve a loooot of teams. So the tool works - BUT you are correct, it is a pain to apply and you probably need consultancy to get out of the team management hole if you are not a skilled manager.
I think for first time bootstrappers, investing some time in a quality blog on a particular field you would like to build products for is really really useful. Apart from having a good audience to launch your first product, it helps you interact with people before you have something to sell to them. You learn more about their problems, the existing market, competition and so on.
__If there is just one thing you should learn, it is: Just speak to prospects and extract their pain, then sell the painkiller (before building the product). If they are willing to buy, do take their money and invest that money into building the product.__
This advice always seemed like a stretch to me. Does anybody pay for a product that's not ready yet?
This advice always seemed like a stretch to me. Does anybody pay for a product that's not ready yet?
"Does anybody pay for a product that's not ready yet?"
Isn't kick starter build around that concept? If people think something is looking good and might help them considerably they might be open to pay for developmental costs.
Isn't kick starter build around that concept? If people think something is looking good and might help them considerably they might be open to pay for developmental costs.
Kickstarter isn't designed for business, but rather it is designed for art in the general sense (which sometimes has business applications), so I don't think Kickstarter is a good example.
Believe it or not, it happens, just look at the cases at the foundation
This is a great article full of truth. My respects to the author because it takes courage to accept one's mistakes, but it's critical for getting up and moving forward in a better direction. How many ideas are sitting in my brain, but all I can think of is how to exactly am I supposed to validate that any of them are worth my life?! I mean, really, a startup will mean I will have no life. With my loved one in a startup already, I don't know if I could really start something without the support. Looking back, were any of the big companies that started as a small STARTUP founded by poor people? I think not. I haven't heard a single story of an actually poor person, who founded a startup and is now rich.
You want to know how to validate your idea faster? Don't have a free plan. Will people give you their credit card... that's what you want to know. And those are the people you want feedback from.
exactly. that's what he says in the article, no? :)
Yes. He says that instead of having a "Try it for free" button he should have posted the price and seen how many are interested in the product then.
Do you want to ask for a credit card with no deliverable?
>> "SEO and social media bullshit"
This stuff does seem like bullshit when you're working on it, but it's unfortunately crucial these days. It takes so long to build up the brand and visibility that I don't believe you have the option to just do it once you've got the product right. Unless you've got the investment, firepower or notoriety to get chins wagging then you've got a long road ahead of you. Good SEO actually sounds like one of the things you got right to me. But maybe you spent too long on it
This stuff does seem like bullshit when you're working on it, but it's unfortunately crucial these days. It takes so long to build up the brand and visibility that I don't believe you have the option to just do it once you've got the product right. Unless you've got the investment, firepower or notoriety to get chins wagging then you've got a long road ahead of you. Good SEO actually sounds like one of the things you got right to me. But maybe you spent too long on it
I understand where you are coming from. I agree it is essential for any business that uses the web. But if you have the wrong product, no matter the amount of SEO, you will get nothing out of it.
What I want to say is that SEO is important, but not more important than finding the pain and the product.
What I want to say is that SEO is important, but not more important than finding the pain and the product.
Questions for peer founders:
As a developer and solo founder, I just can not finish a serious project in one year. For example, it took me two years to get version 1 of torapp guilloche designer (www.torapp.info). We did not get consistent/significant customers and need a new product to survive.
To evaluate more ideas and to be familiar with respective areas took me another year easily (without deep knowledge in the area, how can you beat your competitors?).
So how can you guys roll out a product in 3 months? How can you quickly pivot? (pick up ideas and evaluate them quickly)
As a developer and solo founder, I just can not finish a serious project in one year. For example, it took me two years to get version 1 of torapp guilloche designer (www.torapp.info). We did not get consistent/significant customers and need a new product to survive.
To evaluate more ideas and to be familiar with respective areas took me another year easily (without deep knowledge in the area, how can you beat your competitors?).
So how can you guys roll out a product in 3 months? How can you quickly pivot? (pick up ideas and evaluate them quickly)
It certainly will depend on the actual product A LOT.
A vector editor is very complex compared to the typical CRUD-based with a little business logic that lots of SaaS products are in the end.
A vector editor is very complex compared to the typical CRUD-based with a little business logic that lots of SaaS products are in the end.
Lesson N+1: Hacker News can break your blog's webserver. That's one you only learn through experience.
[ETA: which is sad, because I want to read it!]
[ETA: which is sad, because I want to read it!]
Damn Bluehost, hehe. I wish I knew how to fix it, but a few refreshes seems to go through.
I wouldn't blame your host, actually. It's WordPress. It's a shame it's so often given a free pass on these issues when it really isn't good at handling peaks in traffic.
Any alternatives?
Using the popular caching plugins...W3 Total Cache (http://wordpress.org/plugins/w3-total-cache/) or Super Cache (http://wordpress.org/plugins/wp-super-cache/) seem to be well liked and I've used both of them without too many issues (I have some weirdness in my WP upgrade path). My blog has been on HN and reddit a few times and has never crashed, even though I'm on the cheapest Dreamhost hosting plan with what seems like 5 to 10 second response times for non-cached pages.
Will try, thanks!
If you install wp super cache[1], then you shouldn't have any problems
1. http://wordpress.org/plugins/wp-super-cache/
1. http://wordpress.org/plugins/wp-super-cache/
static html websites
The only solution is to throw money at it until it gets better, isn't it? Or to wait it out. I remember when the word "Slashdot" became a verb, back when "Reddit" was a joke about a frog and a library book and DOS was what Windows ran on. The problem hasn't improved, as far as I know. So no biggie; it's not your fault. Ride it out and you'll be fine. Meanwhile, I'm mostly commenting so I can find your article again later and get to actually read it!
Now the whole Bluehost is down.
I copied it to a pastebin: https://news.ycombinator.com/item?id=6992850
The last para - If there is just one thing you should learn, it is: Just speak to prospects and extract their pain, then sell the painkiller (before building the product). If they are willing to buy, do take their money and invest that money into building the product.
Is that really possible? Making someone pay for a product that doesn't yet exist? How can you do that?
Is that really possible? Making someone pay for a product that doesn't yet exist? How can you do that?
Look at http://thefoundation.com/three-students/, those guys do that over and over again.
This concept really is the holy grail of people who like to talk about startups.
I think there are some mis-perceptions about the idea. Here is how I how found the concept useful, in my company.
Startups who focus on revenue rather than growth can use this technique as a success metric (duh). Rather than using active users, etc., as proxy metrics for success, this method is a very direct one to measure how marketable your idea is. Get one success banked, then you can start to optimize -- pretty neat!
However, it's also incredibly difficult to do. So the second purpose becomes this: a proxy to evaluate the importance (in your customers' eyes) of the problem you solve. If you're solving a problem that everyone in the banking industry desperately needs solved, they will be more willing to try something that isn't feature-complete (or in existence).
So while few people will actually buy your product before it exists, using that as the goal can help you in your business development. You can figure out the problem's importance (and, believe me, it's better to solve a hair on fire problem than to solve a minor inconvenience). You can get feedback from people who are actually willing to pay -- this signals they are probably your customer! (So it helps you prioritize feedback, and sort people you talk to into actual / window-shopper type customers).
What the gurus don't tell you is this is very difficult to actually accomplish, at first. But after several iterations, you can get valuable feedback from people who are closer to having skin in the game.
And, of course, there is the chance that someone will have such a big problem that they want to pay you to solve it right now. If you can find that big fish, and their problem is similar enough (or uses core technology sufficiently similar to your "productized" version), then you can partially pay to make the product. (This comes with the caveats about how you don't want to be a slave to a single customer, etc. But we're having luck developing our core technology in the process for the big customer, and will re-use it for our product.)
I think there are some mis-perceptions about the idea. Here is how I how found the concept useful, in my company.
Startups who focus on revenue rather than growth can use this technique as a success metric (duh). Rather than using active users, etc., as proxy metrics for success, this method is a very direct one to measure how marketable your idea is. Get one success banked, then you can start to optimize -- pretty neat!
However, it's also incredibly difficult to do. So the second purpose becomes this: a proxy to evaluate the importance (in your customers' eyes) of the problem you solve. If you're solving a problem that everyone in the banking industry desperately needs solved, they will be more willing to try something that isn't feature-complete (or in existence).
So while few people will actually buy your product before it exists, using that as the goal can help you in your business development. You can figure out the problem's importance (and, believe me, it's better to solve a hair on fire problem than to solve a minor inconvenience). You can get feedback from people who are actually willing to pay -- this signals they are probably your customer! (So it helps you prioritize feedback, and sort people you talk to into actual / window-shopper type customers).
What the gurus don't tell you is this is very difficult to actually accomplish, at first. But after several iterations, you can get valuable feedback from people who are closer to having skin in the game.
And, of course, there is the chance that someone will have such a big problem that they want to pay you to solve it right now. If you can find that big fish, and their problem is similar enough (or uses core technology sufficiently similar to your "productized" version), then you can partially pay to make the product. (This comes with the caveats about how you don't want to be a slave to a single customer, etc. But we're having luck developing our core technology in the process for the big customer, and will re-use it for our product.)
I think a more important lesson to learn here is to have the uncomfortable conversations ASAP. The sooner you communicate clearly, the fewer opportunities there are for misunderstandings.
If I had to give founders one piece of advice it would be, "Just Ask"... Ask for the sale, ask what youll get in exchange for equity, ask, ask, ask...
If I had to give founders one piece of advice it would be, "Just Ask"... Ask for the sale, ask what youll get in exchange for equity, ask, ask, ask...
I would like to thank everyone who posts these failure stories. We get too many effortless success stories here and often forget that failure is the norm and not the exception. It's a bit like how those books on software anti-patterns are so helpful. Sometimes it's more helpful to focus on what not to do.
Great write up, I think this point is crucial: Founder roles and expectations.
Even if the goal/role is to be the non tech founder, it's important to learn the basis of html, CSS and Javascript. It will give you another perspective when you think about how to implement an idea.
Even if the goal/role is to be the non tech founder, it's important to learn the basis of html, CSS and Javascript. It will give you another perspective when you think about how to implement an idea.
I learned this one the hard way. Started as two founders, one techincal, one biz dev (I'm the biz dev).
We brought on a third (largely my doing), as more of the operations / finance side. Didn't set roles, and my biggest gaff of all was to not make him vest.
After a year, the third founder turned into a maniacal control freak and almost sank us. Finally departed, but took his equity with him.
My biggest lesson so far is be very careful who you partner with and ALWAYS vest. Or another way to put it, you don't need to worry about the good times, it's the bad times you need to consider and pre-negotiating the divorce is critical.
We brought on a third (largely my doing), as more of the operations / finance side. Didn't set roles, and my biggest gaff of all was to not make him vest.
After a year, the third founder turned into a maniacal control freak and almost sank us. Finally departed, but took his equity with him.
My biggest lesson so far is be very careful who you partner with and ALWAYS vest. Or another way to put it, you don't need to worry about the good times, it's the bad times you need to consider and pre-negotiating the divorce is critical.
Damn that's well written. Of course I can also show some business cards and some bull. But when push came to shove, my target market were not prepared to pay.
As always, I am always keen to connect with bright people and good ideas.
As always, I am always keen to connect with bright people and good ideas.
The website was down for me at first but after 27 refreshes I managed to get it. Here's a mirror: http://pastebin.com/avMpRwrU
I just love the brutal honesty expressed compactly. Full of useful information for all startup-founders. I'm sure many are currently making the exact same mistakes.
Thanks for sharing your experience and insights Sergio.
It takes balls to do that shrinking ego experience in public.
I'm sure something good will come out of it.
It takes balls to do that shrinking ego experience in public.
I'm sure something good will come out of it.
Great insights, thanks for sharing, Sergio.
This is such a great article, thanks
Four business guys? That's four too many. Just learn how to code and build your own stuff.
Priceless lessons from the real world for the people who want to build a product. Thank you.
Such a great write up, thank you for sharing.
Question: what are you going to do with the product now?
Question: what are you going to do with the product now?
Nothing. It is just sitting there.
I made all of those mistakes, and also learnt the hard way. Great post.
OP, your biggest mistake is not taking the time out to learn how to code yourself. You said it went on for 2 years, that was plenty of time.
INDEED! In fact I started. Did One Month Rails (a couple of months ago). My github (please don't laugh, but do give out advice): https://github.com/sergioschuler/
Thanks for sharing this man!
Very nice article Sergio.
good stuff man
Two elaborations:
1) General advice to non-technical founders, not specific to this post: If sales is one of your primary skill sets, and you cannot sell one developer on working for you, you may want to have a brief heart-to-heart with yourself on whether you are sufficiently skilled at selling to build a company which will live or die based on your sales ability.
2) His advice about starting with 1 anchor client for a SaaS, expanding to 10 via expenditure of shoe leather, and then starting to worry about scalable approaches to customer acquisition is very, very good. (I don't know if I definitely would endorse the "An Indian company expressed desire to buy something from me other than the thing I was building, so I should have built that instead." That would turn on a lot of things, including how serious that company was about actually buying the thing. There is a world of difference between "I would buy a Widget from you" and "I commit to accepting delivery of a Widget from you, where a Widget broadly does X, my timeframe is Y, and your payment will be $Z." I'd be looking for a letter of intent or a check as a filter for seriousness following that Skype call before making a bet-the-business decision on it, personally, but I obviously don't know the specifics of what was said.)