

Ask HN: What did you do when your startup failed? - mmq


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shawnmon
My first startup failed because I invested in the wrong developer company who
took my $10K and left me with nothing.

Yes, I hired local and I even checked references. This company operates 2
miles from where I live. It couldn't get any safer.

They slowly quit working on it and then quit and started ignoring me until I
sued them. I won in court and got a judgement to collect my money.

Apparently this doesnt matter, and the owner of this company simply continues
to operate, just without paying bills, such as my $10K judgement against
him/company.

This was 2008 and my full time job just laid everyone off, about one month
after committing my money to this startup.

I later foreclosed and went through quite a storm of financial loss, and life
changes.

All while developing my next startup ideas!

Wooohoooo, I'm still alive and I know my persistence will pay.

So, my answer? Evaluate your loss if you can truly evaluate it, grab the
obvious mistakes and make sure you dont do them again.

Millions of people every day don't attempt their own startups due to what
happened to me. Fear. Fear of loss. Fear of exactly what happened to me. It's
incredibly discouraging that people/companies can get away with this, and it
effects more people than just me. See... when i tell my story about failure, 9
out of 10 people get further away from ever overcoming their typical fears
about starting up. I'm the only one who "should" fear the future... yet, Im
the only one taking more risks.

(sounds like i might need a new set of frands, huh?)

------
ChuckMcM
Well, if you are the analytical type, you start by going back from start to
finish and looking at all the decisions you made. At each decision point, you
write down three things:

1) What did we know?

2) What did we not know, but could have known?

3) What things could we have been doing that would have maximized our 'view'
of the state of the company?

Don't bother questioning your decisions or feeling guilty, just look at what
you knew and didn't know and figure out a way to work that maximizes your
knowledge at a given time.

Now once you've gone through and chewed every bit of operational knowledge you
could off that bone, take one step back. And ask three more questions;

1) What was our mission when we started?

2) What did it become?

3) Was the mission wrong or did we execute it poorly?

Again, its not to heap guilt on yourself for failing it is to develop a way of
tackling problems that you know are reasonable ventures to begin with (they
solve other peoples issues as well). Sometimes things fail because they are
before their time (other things need to be true that aren't yet true), some
things fail because they solve a problem which is really just an annoyance and
so nobody is willing to spend real money to have it solved, and thirdly you
sometimes find that the cost of the solution is higher than the value of the
solution.

Of those three, the last one is worth looking at again. If you can re-evaluate
_how_ you solved the problem and get the costs down, sometimes a 'failed'
startup can become a 'successful' next product, even when it is essentially
the same idea.

Once you have that analysis, if you find that _you_ could be better (which is
to say "I don't now enough about marketing" or "I don't know enough about
accounting" or "advertising" or "managing customer expectations") or some
other basic skill that running a business require. Your next step might be to
either get training or take a job that can fill that gap.

If you found that you just couldn't take the uncertainty, the high highs and
low lows, and futility of pushing a wet noodle up hill. You might want to
consider working at a larger company.

If you found it was exciting and exhilarating and you can't wait to do it
again, then use your hard won experience to pick a problem to solve and head
out back into the forest.

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sctechie
I got a 'real' job. =)

My first startup was back in 2002 or so. We were doing a sort-of ebay for
contractors. Today, you have similar services like Angie's List but we were
creating a marketplace for contractors and sub-contractors to bid on jobs.

We had meetings with a large (back-then) communications company, had a
functioning and viable product with revenues, and were weeks away from
securing a large investment. I'm not mentioning names but you can pretty
easily figure it out if you know your early 21st century phone tech combined
with the fact we were targeting contractors.

In my honest opinion, it was a great idea. The company didn't fail because of
a technical issue or bad idea. We failed because of personal issues between
myself and the other founder. He decided to pursue other opportunities in his
personal life and took most of the equity and product with him.

That being said, I would not trade the experience for anything.

Lessons learned:

1) Having multiple founders is not a boon. It's much better (for you
personally) to be a sole founder and then bring on employees or 'co-founders'
after you have the company started.

2) Leave yourself options. I put 110% of myself for over a year into this
startup. My total compensation for all of my effort was under 10k. I literally
put all of my eggs in that one basket of 'this is going to be a success'. Not
having a plan for failure was a huge mistake on my part. This could be as
simple as maintaining your contacts while working on your startup or even as
complicated as looking for other jobs while working on your startup.

3) Get back to work! Failing does not make you weak, unintelligent,
incompetent or anything like that. It simply means your idea and / or
execution was not good enough. There's only one way to fix that, get back to
work.

------
will_brown
Forge ahead. I myself was a practicing attorney who left my job to pursue a
start-up of my own. Days ago I learned about YC and HN, and as soon as I
learned about YC, I found myself filling out a YCW2013 late application. I
know as a non-technical, single founder, that applied late I am at a
disadvantage.

Just last night I scrolled the HN jobs page and found one YC alumni who posted
a non-technical job, I immediately emailed them my back story: attorney quit
job to pursue start-up but I also explained that if I failed to get into
YCW2013 that I have familiarized myself with their start-up/product and think
I would be a great addition to their start-up team. What is important,
especially with start-ups is that you are open, honest and sincere with your
commitment to the position and start-up, for example the start-up I contacted
would require me to relocate from Miami to Chicago.

Hopefully your start-up succeeds and you do not need it but my advice boils
down to being genuine and going after what you want, in my case that is
working for a cool start-up tackling an interesting problem. Never give up on
your vision, best regards.

~~~
seiji
_Days ago I learned about YC and HN_

May I ask how and/or where you found about these things?

~~~
will_brown
Multiple times a day I read the Google News technology articles. In the past 6
month alone I can not tell you how many times I read "______ a YC company got
funding/purchased." A couple days ago it must have clicked that YC was not the
parent company behind all these successful start-ups. That same day I
submitted a late application to YCW2013 and embraced the entire HN community
by reading submissions that caught my eye and contributing where appropriate.

~~~
seiji
Welcome and congratulations on finding your way here!

There are only three rules:

    
    
      - never give up, never surrender
      - get back to work
      - no, really, stop reading this and go make something people want.

------
debacle
We were trying an idea, and thankfully we failed early.

I talked to a recruiter, had a job within a week or so. There are other start-
ups that started about the time we did that are still slowly failing, so I
think an early exit (even if it was a parachute) was a good one.

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sinisakomlenic
\- remember the cause of failure

\- remind yourself about it

\- go back to work

\- do not repeat the thing from the first point

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hardik988
This may not be a popular decision, but I chose to attend grad school. I now
think that was the best decision I ever made.

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jkkorn
Fail as in, "I've pivoted in every way possible and im losing money all over"?

~~~
mmq
As you made all you can do, pivoted and especially burnt all the money you
had.

------
wtvanhest
Just curious, what was your startup and what happened?

~~~
mmq
Actually, I was just curious about other people's experience, especially in
the worst case scenario (start up fails). Since I quit my day job to free my
mind totally for entrepreneurial experience.

As for me I had a side project, geo-social planning tool, that had 5000 users,
but not actively using the app. I shut it down, because it was unlikely to
succeed, it was strange to the way people meet and go out. And also, because I
noticed that other similar projects were also stuck in the chicken and egg
problem.

