

The creators of no-longer-with-us products explain what went wrong  - browngeek
http://37signals.com/svn/posts/2682-the-creators-of-no-longer-with-us-products-explain-what-went-wrong

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ABrandt
I always find post-mortems like these a bit strange. These founders are all
able to develop some pretty convincing reasons why they failed (albeit in
hindsight), yet show no signs of acting on it. I understand the feeling of
burnout, I have a handful of abandoned projects myself. I've never been able
to look back and say _that_ is precisely why I didn't succeed though. Lessons
learned is one thing, identifying the one factor that held you back is a bit
of a stretch IMO.

Interesting side note: The first failed company, Verifiable, links to the
sixth failed company, swivel, as an alternative. Apparently charting is a
tough space.

~~~
mixmax
While I agree with you I find the same to be true of successful companies.
When you ask a successful founder why (s)he succeeded you'l most often get an
answer aided by hindsight.

It appears to me that nobody truly knows what makes or breaks a company. There
are some prerequistes (hard work, focus on customers, etc.) that you _have_ to
have, but these aren't enough.

My guess is that it's like the weather and financial markets: Chaos (as in
chaos theory) reigns, and it's just not possible to know who the winnere or
losers are.

~~~
enjo
Not exactly. I can't find the citation just this second, but there was an
article floating about showing that successful founders tend to be much more
successful on subsequent projects than the baseline.

I don't think it's chaos or luck. I've argued it before, but there are traits
that make successful founders successful. The one that always stands out to me
is an absolute laser focus on analytics. These founders are 'obsessively
analytical' which allows them to make decisions much faster than others.

Starting a company is a race. Your trying to reach profitability (or at least
viability) before your current funding dries up. For boot-strapped companies
that can be a matter of weeks. For VC companies that can be years. In each of
the cases in the article they lost that race.

So starting a company is largely about managing that runway. Some people get
lucky and just get it right. For the rest of us tracking _everything_ and
truly being obsessed with that data allows you to see patterns, opportunities,
and problems much faster. I suppose that you could say that data-obsession
allows you to achieve hindsight much faster.

I have one failed startup (out of three goes). In that one I failed to keep an
eye on my data. In particular, I didn't realize just how slowly our
development was progressing relative to the amount of runway we had. In the
end we released a product that never found a market fit and simply didn't have
an opportunity to pivot. We ran out of money, and with it the business went
belly-up.

My most recent venture is about 3.5 years old. In that time we've had one
_massive_ pivot (think entirely new business that utilized about 20% of the
code we developed). We managed that by keeping close tabs on our development
schedule and releasing as early as possible. It became clear that our initial
idea would work, but the cost of acquiring customers was far too high. We felt
like we couldn't optimize that cost down to something reasonable in the time-
frame that we had left. We did, however, find a new business model along the
way and we've aggressively pursued that all the way to profitability.

Now we're looking at different data. Conversion rates, traffic, and ad-spend
rule my world now. We track everything we can think of. We've found patterns
for our business that have allowed us to optimize our spend while increasing
traffic. We've moved our conversion rates significantly. We still have a long
ways to go, but at this point we have a nice war-chest in the bank and are at
the point that we can aggressively scale. Along the way we've pivoted, just
less drastically. The product has changed significantly as we've come to
understand our market. We're pursuing a couple of opportunities that we never
even thought about during initial development.

I feel really good about our business. I think we're going to make it. We've
done that not through chaos or luck, but measurement and optimization.

~~~
mixmax
You make an excellent point, and to some degree I agree with you. Particularly
it's obvious that there are some traits that are needed, or at least up your
chances significantly. You point out focus as a vital ingredient.

But there's a flaw to the argument. You can spend all of your time measuring
success factors and acting on the data. But there are limits both to how much
you data you can make sense of, how much effort you can allow yourself to
spend gathering that data, and how you interpret that data.

finding a cofounder, for example, is a critical component of success, but how
will you pick a good cofounder based on data? Can you even do that?
Notwithstanding that the hardest part about finding a cofounder is actually
locating potential candidates to pick from.

In chaos theory you _can_ actually predict the weather if you have data that's
exact enough. But you don't. There's just noway you can measure everything
exact enough. I think the same applies here.

------
zandorg
The good thing about desktop software is if the vendor goes away, the software
still works.

Not too keen (as a customer) on putting my time and effort into a SAAS hobby
project that doesn't scale.

~~~
pinko
Given the rate of change in OS and GUI environments, support libraries, and
other APIs, most desktop apps don't work very well for long these days either.

Of course unlike SaS you can always continue to use an old version
indefinitely in a VM if it really matters.

But I find the longevity of the vendor is still critical for supporting new
environments and API requirements, and in practice I don't end up discounting
the going-out-of-business risk much for desktop apps vs. SaS apps.

~~~
zandorg
I should say here that I too have the 'old version' problem: The software to
send samples to my Akai hardware sampler only runs on Windows 98. I have a
Windows 98 PC just for this!

~~~
wvenable
But you _can_ still run it, ultimately proving zandorg's point.

------
steilpass
"Vitamin not a pain-killer" is a great metaphor.

~~~
emmett
No, it's a terrible metaphor. The vitamin business is hugely successful! I did
the research once and vitamins and supplements actually _outsell_ pain
relievers.

[ Edit: supporting research I did, which I've now cited twice in comments on
Hacker News. I should probably write a blog post.
<http://news.ycombinator.com/item?id=499929> ]

~~~
roel_v
I think the point wasn't so much in how successful both industries are, then
he could've taken any two industries. The point was that one is very much
needed, and the other is nice to have. It's hard to get people to pay for
'nice to have'.

~~~
run4yourlives
Huh? The guy you responded to shows exactly the opposite, to the tune of
vitamins being a larger industry.

------
silverlake
The linked interview with Swivel was interesting. I'm attempting a data
visualization startup. But I've found a niche where customers have a burning
need and __money __but lack the IT resources to implement their own solution.
It's not enough to draw charts; Excel can already do that. You have to provide
everything customers need, from fetching the data to analyzing the data. And
it's still a tough sale because SaaS is newish and people are uncomfortable
handing off critical business data. I can think of a dozen other niches where
paying customers need data analysis and visualization.

~~~
revorad
I'm also doing a data visualization startup (link in profile). What's yours?
Email me if you care to chat.

~~~
pstuart
You have some solid competition in this space:
<http://www.tableausoftware.com/>

~~~
guelo
If prettygraph.com is based in India his main advantage would be that there's
less chance of him immediately caving to U.S. government censorship like
tableau just did.

~~~
revorad
Based in the UK.

------
cyen
An even larger list of more in-depth post-mortems:
[http://foundersblock.com/featured/25-best-startup-failure-
po...](http://foundersblock.com/featured/25-best-startup-failure-post-
mortems/)

------
run4yourlives
Did Storytlr even bother asking people to pay for the service? Seems kind of
strange that with 10,000 users you can't at least cover $500 in hosting.

At $5 a month, that's only .1% signup required.

~~~
krschultz
I've seen the if only we get (tiny percentage) of (huge number) to pay
(seemingly small amount), we'll be rich! arguement framed about a thousand
different ways. I actually cautioned an entrepreneur I was talking to last
night about this.

Sales start from 0, and they continue from there. Until you have sold it a few
times, who knows if .1% is incredibly easy or impossible. Sometimes any number
>0 just isn't going to happen.

~~~
run4yourlives
I didn't say rich, I said pay the $500 hosting fees.

The fact is that you guaranteeing sales are $0 if you never ask for money.

