Ask HN: Why did your startup fail and what did you learn? - lsr_ssri
======
mmsimanga
I come from a coal mining region. For over a 100 years there has only been one
mine in the area, a big mine. There is plenty of coal in the surrounding
areas. This is Africa. An uncle of mine had the idea that we start a mine. He
invited about 20 of us, all related. We started putting aside money to
register a company, pay a geologist to prospect for the coal and get mining
permit to mine the coal. We all contributed money on a monthly basis. All
paper work is done in the capital city so we used to send the oldest uncle in
the group to go process the paperwork. He had worked in government before and
he was older. In my culture you respect old(er) people.

To cut a long story short we successfully registered the company, got a
geologist to confirm there was indeed coal and got a mining license from the
government. We then signed a contract with a sub contractor to come and mine.
When the share certificates came instead of owing 5% I ownwed 0.00086% of the
mine. Yes there were 3 zeros before the 86. Our elder the uncle we had sent to
do the paperwork basically screwed all of us, including the uncle who
originally came up with the idea.

Lessions 1\. Never use your cultural beliefs in business. Stick to contracts.
2\. Don't just trust family.

~~~
everybodyknows
People inside our tight social circles are held accountable by social
pressure. This is why, for instance, Mormons seldom defraud other Mormons --
it would make Sunday mornings unpleasant for a long time to come.

That your uncle would choose very deliberately to alienate his entire family
is the astonishing thing. Would be curious to know what his social life is
like, now ...

~~~
josh_frome
Actually, "According to the FBI, affinity fraud crimes are especially
prevalent in Utah." [https://fox13now.com/2017/12/20/fbi-warns-lds-church-
members...](https://fox13now.com/2017/12/20/fbi-warns-lds-church-members-of-
affinity-fraud/)

~~~
everybodyknows
Interesting, but the article doesn't give us much sense of how close the
victim and perp were in the church hierarchy, My reading is that they probably
did not have the same Mormon bishop, who would have felt some pressure to take
action.

So, yes, the farther away in the social network, the weaker the social
pressure. If the link is mere nominal membership in the same faith, that may
be worse than no link at all. Most of Madoff's victims were Jews -- because
they were inclined to give him the benefit of any doubts.

~~~
EpicEng
>This is why, for instance, Mormons seldom defraud other Mormons

>If the link is mere nominal membership in the same faith, that may be worse
than no link at all

So which is it?

~~~
everybodyknows
Not enough info in the article to form a judgement.

~~~
EpicEng
...You're the one who made the initial claim.

------
god_bless_texas
I chased and successfully won a huge customer for my small and fledgling
startup. I chased and successfully won a sole service contract for a key part
of their business process. I allowed a credit situation with them to grow over
the course of 3 months while I allowed them to have 60 day terms. And then,
they went out of business and left me holding the bag with $150,000 in unpaid
AR after I spent $90,000 generating that AR with them.

The lesson is never trust the size of a company as sufficient reasoning that
they can and will pay their bills.

~~~
MisterOctober
^ this is real talk. Big companies love to be behind on AP for a variety of
reasons, among them:

\- Their own 'highly matrixed' organizational structure makes it near
impossible to find 'the correct person' to talk to about accounting issues,
let alone get a straight answer out of them - so chasing these issues down
becomes a huge drag on your time and energy and you may very well just give up
after a while

\- Past-due invoices are typically penalized with tiny interest percentages
[in the <2% range], so even if they do intend to pay eventually, they can
gleefully treat you as a bank with really low interest on short-term loans.

\- They know full well that you, the small company, probably aren't willing to
put up the massive time and dollar resources in order to sue them, the big
company, for what is to them small potatoes. They have a bench full of
experienced attorneys, you might have a single one, and they know exactly how
to extend and complicate a legal process such that the litigation itself costs
you far more than the outstanding AR.

~~~
tptacek
A lot of this is probably true, but it's _really_ to your benefit to
understand, as a businessperson, that this is generally how large clients
expect to conduct business. You can fight it and even establish better payment
terms, but it isn't always worth it. It's usually cheaper just to build a
business that is resilient to late payments.

Over the last 15 years or so, a lot of my best customers have been super-late
payers. You take the good with the bad.

~~~
subhobroto
I used to think that offering a 10% discount on invoice to clients for
payments within NET30 would motivate them to pay early, but very few clients,
specially those complaining about expenses ever made good use of that.

Has this been your experience as well?

... and do you "outsource" your AR for a % of your invoices?

~~~
mrhappyunhappy
As a consultant I state that I will charge a 10% late fee for every week a
payment is late. I’ve never had a late payment. I’d say offering a discount
does the exact opposite.

~~~
subhobroto
Clients past a certain size just "forget" about the late payment penalties in
my experience, which is why I offer a "on time" payment discount.

I tried both methods and clients would rarely pay the premium compared to
those who would avail of the "on time" payment discount.

I have less happier clients when I make them pay a fee than when I take away a
discount although mathematically they are the same number.

~~~
jjeaff
That just gave me a flashback to my college accounting courses. So many
examples where a discount was offered for on time payment. Must be a reason
that technique has been around long enough to be a fixture in accounting
textbooks.

------
gfarah
On my first startup right after university, we were doing an IoT device
(hardware + software), our MVP was good enough to make a couple of sales
amounting to 550 consumers. At that point the board decided the best way to
grow was to bring in “adult supervision” aka a seasoned CEO to run the
company.

Even though I did all the software, I had only around an 8% stake in the
company at the time.

The person in question decided we needed to “perfect” our product before
taking it to market. She had us working 12 additional months and since we did
not have “enough tests over the new features yet” she cancelled the 550 orders
and gave the contracts to one of our competitors. At that moment I and the 2
electrical engineers in the team left the company and they ran out of money
and close 6 month later.

Lesson learned: Big-corp CEOs don’t make for good startup CEOs 99% of the
time.

~~~
phonebucket
"Lesson learned: Big-corp CEOs don’t make for good startup CEOs 99% of the
time."

While this may be true, I don't believe it is fair to reach this conclusion on
the basis of a single experience.

~~~
SkyPuncher
Anecdotal, but I tend to agree with it.

Large companies are optimized for a different set of outcomes - usually
including extreme concern about quality and public image. That doesn't fly in
a startup.

------
iandanforth
I started a consumer robotics company with no more than a software and
hobbyist robotics background. The grand plan was to sell furry robot pets and
we got as far as the prototype stage and a demo at Maker Faire. After that we
hit a huge wall. There is essentially no path from hobbyist, off the shelf
components to a real product.

After that company died I joined a real robotics startup with some seriously
talented founders. They had already built out several robots and had the core
skills (mechanical engineering, software engineering, electrical eng, and
controls) to design and build a working robot. More importantly though they
knew the process to make a robot real which involves personal contacts at
custom component suppliers, the right outfit to do engineering review, how to
raise enough money to get the kind of runway hardware needs. And on and on.

Moral of the story, you can't fake hardware. Get experienced people on board
from day one or your going to flounder and most likely die.

~~~
ragebol
I worked at a small robotics company in the Netherlands, technical university
spinoff. We did tests in care homes for elderly and disabled people and we
actually had clients that wanted to use our robots and were very positive
about them.

But we were just too early. The robot didn't even need to be very autonomous,
shared autonomy was part of the plan (fake it till you make it and honest
about it :-) ). I controlled the robot from the other side of the (small)
country to give people their teddy bears and TV remotes etc.

Problem was that we tried to do our hardware completely by ourselves, whereas
nowadays there are several options for mobile manipulator robots that look
good enough to put in a home. We spent more time getting the robot to work
than on useful applications (we had dozens of activities of daily live a robot
could support). And even the getting our robot to work could be done more
efficiency (in hindsight). We should have used e.g. an EtherCAT motor
controller instead of writing of doing it all ourselves on a micro-controller.

We didn't progress enough quickly enough for our investors and subsidizers and
ran out of money.

A another great lesson was this though: when you hear talk about robots in
care, the complaint I get a lot is that that is sad for the clients, because
they don't get someone to talk to (but a robot) and they will get lonely. That
turns out not entirely the case. A lot of disabled clients told me they don't
want to talk to the care-givers all that much, they just want their
drink/toilet break/pen they dropped etc. They have friends and family and
don't feel lonely. The complaint about loneliness is coming from the care-
givers. For elderly people, it may be different though, but I found that very
interesting.

~~~
tixocloud
Reading your story from an outsiders’ perspective, did you guys have a
commercial person figure who was going to pay for the robots?

From my experience, healthcare usually comes down to figuring out who is
willing to pay for it (insurer, user, govt, etc.) and less so about the tech.
You are right that the tech doesn’t need to be fancy but funding model is
usually the bit needed to be fixed.

A buddy of mine is successfully taking took a smart baby mat to market (so far
anyway)

~~~
ragebol
We did have a business case worked out, even had a Dutch care insurance
company as investor. Those insurers would pay for the largest bit.

------
karlkatzke
The basic gist is that I was arrogant and negligent.

I started a company to leverage an order taking and customer management system
I’d built for a friend’s b2b outside sales company. Before, they were managing
everything with excel spreadsheets on a shared drive and it was a mess. After,
everything was in a php application that could set up a recurring credit card
transaction within a few clicks. It used AJAX (in 2004, before responsive
forms took off) to take different form inputs.

I rode that one client pony for too long. Managed to get a second client, but
I hadn’t worked out a good pricing strategy. I needed to offer the program
publicly, but we were too busy doing feature development for our two clients
to develop features for multi tenant. I was bad at the administrative aspects
of running the company, so I inadvertently ran up a bunch of bills. I wasn’t
keeping my sales funnel full or dedicating much time to finding new clients
and calling on them. The whole thing went crashing down when my clients
decided that they didn’t want to have 100% dependence on my company anymore
and per our contract paid a one time lump sum for a copy of the software.
Still wasn’t enough to fill the holes the bills had left.

I could have been SalesForce if I hadn’t been an arrogant 24 year old who
couldn’t learn from other people, but instead I ended up in about $50k of
personal debt.

~~~
Nydhal
> I could have been SalesForce if I hadn't been arrogant.

Did you overcome that and learn from the mistakes? No offence, but to be
honest you saying "I could have been SalesForce" makes it seem like you're
still working on the arrogance part.

~~~
karlkatzke
My point in saying that was not to express arrogance, but was to point out
that ideas are worth nothing and execution is everything. I executed poorly.
If I had executed well and a bunch of other variables had aligned, I might
have grown that company successfully.

I’m still a bit arrogant and aggressive in my approach to solving problems,
but it’s tempered somewhat by experience.

------
rb808
I wrote a great software library for specific web development problems back in
the dotcom boom.

I learned a few things, much of you hear already but is worth repeating :

* The MVP thing is real. I had a competitor that regularly released simple things that barely worked - while I continued to polished my project. By the time I'd finished the competitors stuff was all over the internet few a year or two and no one was really interested in my product. Plus by then the dotcom boom was pretty much starting to bust - I was way too late.

* Developing software is the easy part. I figured when I was done people would be lining up which is of course naive. Selling and support is harder and takes more time and effort than writing code.

* Writing software for developers sucks. No one wants to pay for anything as there is usually a cheaper way of doing it. The exceptions being big firms that really don't like small independents. Its better to write software to solve real problems - not software problems.

~~~
shawn
_It’s better to write software to solve real problems - not software
problems._

Quoteworthy.

~~~
Sophistifunk
It's true, but it's also why all our software is so terrible.

------
liquidise
I was an early engineer at a startup that failed for a somewhat unique reason
with an important overarching learning.

We built a software platform that intended to automate the job of market
researchers. Those researchers we hoped to replace ended up finding the tool
itself useful. Since the platform didn't replace the employees, our pricing
model fell short. In the end, we found success by hiring our own market
researchers and effectively pivoting into a software-driven consultancy.
Profitability came slow and steady.

After months of profitable growth, things changed on a dime. Our lead investor
effectively unseated the CEO one day, and made the statement that we were
doubling down on the original SaaS vision. Within a month our 100 person
company had been reduced to around 60. The now-unneeded consulting staff were
recipients of strategic layoffs. Revenue dropped overnight.

The morale of the company also fell off a cliff. The C's lost their ability to
cheer up the team and the senior staff saw the holes in the boat and promptly
abandoned ship. The company folded about 1.5 years later for a fraction of the
initial investment.

My learning in all of this: the tales you hear about the "bad VC"s are
occasionally very real. Make sure when bringing on investors that they align
philosophically with your founders' vision. Make sure that philosophy is
deeper than "we want to make that cash". Great investors i've worked with
since can be an immeasurable resource in so many ways. It is absolutely
critical that founders be excellent in their courting of valued investors.
Similarly, they must be ruthless in their rejection of the bad ones, however
sweet the check may appear.

~~~
AznHisoka
What was the name of the product/service if you don't mind me asking?

~~~
liquidise
Originally Qualvu, they rebranded sometime after i left to 24tru, i believe.

------
thanatos_dem
CEO would disappear for months at a time, with the promise of returning with
capital. We never really knew where he went, and he wouldn’t let anyone else
talk to investors (including me, who was CTO). Eventually he stopped paying
us, but promised that the money was just tied up in the parent company set up
in the caymans.

After 2 months of not paying myself or any other employees, the COO and I
drainked the remainder of the US account and paid out as much of what was owed
as we could to the employees before helping them find jobs elsewhere. I didn’t
get any of the money I was owed and was facing pretty bad debt, but the
experience was enough of a resume boost that I didn’t have a problem making it
up in my signing bonus.

What I learned is that a title doesn’t grant you any control, and that if
someone can’t be transparent with their inner circle of friends and colleagues
(in this case cofounders), then they have no business leading a company.

Also leaned to not fuck with the cartels.

~~~
JamesCoyne
Why shouldn't a startup fuck with the cartels?

~~~
koolba
Because if you don’t move fast enough they’ll break your things.

~~~
maephisto
That's not just a simple comment, it's art, kind sir! LOL

------
tomasien
I've had two startups "fail" for unusually clear reasons:

Startup #1: too hard to believe it could be big. Widely loved consumer website
we tried to fund with angel/VC money, and it was too implausible it could ever
be a $1b+ company. We needed a non-VC strategy to fund that business but
didn't realize that - ran out of gas.

Startup #2: found PMF, business-model fit, high-growth, and had an amazing
team. Blown up by a nightmare original founder (I was part of re-founding an
existing business) and poor corporate governance. The original founder blew up
a Series A and re-cap after the team new team made the company actually work.

What I learned from both is how finicky startups are and why conventional
wisdom exists. The more you try to re-invent things that aren't core to the
business or fit a square peg into a round hole, the more chances to fail you
create.

Don't try to get 1000 things right. Try to get 1 thing right and rely on the
wisdom of others to get the other things "close enough" to right to attract
talent, capital, time, and attention to the 1 thing you did get right.

~~~
ellius
Could you elaborate on this in some detail?

I'm in the position of believing I have "1 thing right." I worked in an
industry (banking) with a serious software problem and one particular vertical
that I'm confident I could build a good product for. I was in a position to
evaluate all of the major vendors that would be my competitors, and I'm
confident that I could get one particular thing very right. Ths problem is
that I have pretty much no idea where to go from there. I've never started a
company, I didn't even study business in school. In my career so far I've
pretty much done two things: I got very good at that particular aspect of
banking, and I taught myself to code and now do it professionally. But I'm so
aware of the gap between my own knowledge and the skills required to run a
business that I wouldn't really feel confident trying to go get investment
money (and wouldn't know how to begin even if I thought I could use it
responsibly). I guess what I'm trying to get at is: once you have the one
thing, where do you go for help with the thousand?

~~~
sahil-kang
Have you considered an accelerator:
[https://www.ycombinator.com](https://www.ycombinator.com)

~~~
BadDebug
What is YCombinator's take for their 100k investment? Also, it seems like
YCombinator sells businesses as a product, not product as a business. Like
their marketing on the website is all geared to investing in a business, not
investing in a product that leads to a business. That seems to be the 21st
century trend. Can you explain this dichotomy in today's market? It seems
kinda fake.

~~~
tomasien
They get 7%.

I don't know what you're asking with the rest of your question.

------
aarongray
I built an app for kids that created a family currency where kids would pick
the chores they wanted to do each day, earn points based upon the difficulty
of the chores, and then those points could be redeemed for real-life rewards
that they also chose - hosting friends for a sleep-over, a fishing trip with
Dad, learn a new card game with Mom, screen time, etc.

The problem came with the marketing. When I did my due diligence before
building the app, it seemed cost per click for ads was around 20 cents per
click. 20 cents * 2% conversion rate = $10 cost to acquire customer. My
lowball avg. lifetime value of a customer was $18 if customers stayed for 3
months on average. $10 / $18 seemed like a decent ratio, and if I could get
the conversion rate up or the churn rate down, it could be a good ratio.

So I set out to build the app, which took about a year and half. But, when I
finished the app and went to launch my marketing campaign, I was shocked when
I saw the cost per click had skyrocketed to $2 per click, meaning my cost to
acquire a customer was $100 with an average lifetime value of $18. My backup
marketing plans were content marketing based, with a networking campaign with
Mommy bloggers, but this takes a lot more time to scale your customer base
than blasting out an ad campaign. This caused me run out of runway with my
cash timeline, and so the startup failed.

I learned that its important to not get too heads-down coding your product -
its important to review your growth strategy every few months while you build
your product, because things can come up that can dramatically affect the
speed at which you can grow, and that can jeopardize the whole operation. In
my case, if I had noticed the ad costs climbing, I could have started
networking with more people earlier, doing more content marketing pre-launch,
and slowly increasing the size of my waiting list, or evaluating alternative
marketing plans before my runway got so small at the end.

~~~
Drdrdrq
I don't think you can guess in advance which marketing channel is going to
work for you, you need to experiment and see what brings results. There's a
book Traction that goes deeper into this, if you haven't given up yet. Good
luck, both in business and marriage! :)

~~~
jith
I see a few startup related books titled "Traction" on Amazon. Can you link /
clarify which author? Thanks!

~~~
Drdrdrq
Sure - Traction, a startup guide, by Weinberg. Excellent book.

------
tonyoconnell
10 years ago I built an almost amazing business that schools, universities,
teachers and students could use to build elearning and web apps. Think Square
Space + Moodle + Udemy.

Heres a demo if you're interested
[https://vimeo.com/2221065](https://vimeo.com/2221065) The demo doesn't show
much of the learning management features but they were also complete.

But the app had memory leaks and I didn't have the cash to pay expensive
engineers to fix them. For months and months I tried to fix the problems
myself until finally I was given the choice of giving up my business or my
wife.

I don't regret choosing my family because we had another daughter before the
marriage ended and she wouldn't be alive if I chose to continue with my
business instead.

I learned ...

1\. I should never have given up. If you don't give up you can't fail. 2\. I
shouldn't have believed my mentor who said there wasn't a market for my
product. A company entered the same market and now they are worth over $1bn.
Listen to other people but have faith in yourself. 3\. Be careful to choose
the right technology. I chose Plone/Zope/Python the same stack that was used
by CIA. I thought I was very smart about that but I didn't realise that
specialists in this tech would be so difficult and expensive to hire. 4\.
Don't blame anybody. In the end it was my choice to give up. 5\. Everything is
as it is meant to be.

~~~
tempuser24
When you say the CIA do you mean the Central Intelligence Agency ?

~~~
kirubakaran
They probably mean:
[https://en.wikipedia.org/wiki/The_Culinary_Institute_of_Amer...](https://en.wikipedia.org/wiki/The_Culinary_Institute_of_America)

I fell for that once. I'm embarrassed to admit that I thought she was a spy
for a couple of minutes until I picked up more context. I'm sure I looked
super disappointed for the rest of that conversation.

------
biztos
I worked on two that failed, one because of Napster-Induced Hysteria ("nobody
will ever make money with online music!") and the other because we were myopic
enough to think Orkut might bury us. Those were days, right?

From the first one I learned two things that are probably still applicable
today, and from the second I learned one big thing. In order:

1\. If people from outside the tech world end up controlling your software
startup, that indicates you are doomed. Pretending otherwise will just make it
worse.

2\. Great teams are incredibly rare, and if you have the good fortune to be
part of one you should really try to keep it together for the next challenge.
(We dissipated so hard it was ridiculous... one went into motorcycles, one got
a PhD, two floated back to Europe, one became a bartender...)

3\. If the founders can not convincingly dogfood their own product, you are
doubly doomed. I remember sitting at a table with founders while they tried to
think of things they could maybe do with The Product we'd just spent months
building, and feeling the rats of doom nibbling at my toes. It had not
occurred to me that this was a possibility. Engineers: vet your founders!

------
haolez
We wanted to create a routing app for bikes, which would take in consideration
cliffs, dangerous streets and the likes.

With our internal team, we’ve managed to create a killer backend that would do
all the hard routing stuff without issues. It was better than Google Maps in
most cases!

Now, we just needed the app. We used all our money to pay a third party
contractor to make the app, and they failed miserably. We never received a
working prototype. We ran out of gas.

The backend still exists, in case anyone wants to give the app a shot. I might
release the backend as open source. Ping me if this interests you.

~~~
ckastner
> We used all our money to pay a third party contractor to make the app, and
> they failed miserably

Where did you hire/find the third party contractor?

Friends of mine, in two separate startups, got burnt badly by those outfits
that offer the "native apps for iOS and Android" package for $10K or so.

I talked to some of those "developers" once, when I helped my friend
troubleshoot an issue. It was _horrible_. They were so inept, they couldn't
solve a problem if you provided a solution to them ( _literally_ \-- they
failed at copy-pasting).

~~~
skunkworker
And then they want you to sign a document or email saying that they did all
they would _say_ and just rip people off when they think, "oh an iOS app with
backend for $5000".

------
woogiewonka
My first startup failed because I had no idea what I was doing. I started an
online vacation rental site, similar to vacationrentals.com vrbo, homeaway
etc... I was getting traction and had people list their rentals on my site but
I failed to collect any revenue. The thought was, build it, offer it for free
to grow it and then charge. Well, I built it (wasting way too much money on an
original solution when existing solutions could have done just fine), people
came (after I bent over backwards trying to onboard them), but time sucked me
dry and I was not able to sustain the "business" any longer. Looking back, I
did just about everything wrong.

~~~
pandapower2
>The thought was, build it, offer it for free to grow it and then charge.

I feel like this is an incredibly common software developer turned
entrepreneur mistake. Lack of confidence in asking for money leads to a
reluctance to put a price tag on the thing you have built.

~~~
woogiewonka
With vacation rentals, you have to have people who actually rent stuff and
that's the part of the chicken/egg problem I haven't solved yet. While I was
able to bootstrap the site, the traffic to it was non-existent thus I felt
guilty if I charged people to list. The premise was that they would list for
free first, their listings would attract traffic, then I would charge people
to list. Meanwhile people are booking and more are listing - that was the
idea.

~~~
webmaven
The simple way out of that conundrum is to make it free to list (perhaps with
an option to upgrade to a "premium" listing for a recurring fee), and charge
for the actual bookings made through your site (you'd need to experiment to
figure out whether flat fees or a percentage worked better for you).

------
WheelsAtLarge
Lack of leadership, we had a general idea of what we wanted but it was never
defined. We wanted Shopify, years before they came along, 2001. But we never
defined the product because no one took leadership of the product and
business.

Bad programming, (me) had just finished college and thought I could lead a
team of programmers because I had done an ok prototype that was actually
working at a small scale. Given that specs were being defined on the fly then
the programming was a mess. To scale it, we brought in programmers hoping it
would help but they mostly sat around because we didn't know what we were
building. Also, we got subpar programmers because they were cheap. One guy
managed to BS his way into a paycheck for 5 months without ever programming a
line of code. After he was fired, I found out that that was his specialty,
getting hired and getting fired a few months later.

We could not meet deadlines, we could not meet self-defined deadlines so the
investor's money stopped.

A lot of useless infighting due to egos, we could not figure out the business
but we sure found ways to fight and argue.

I wish we would have been more willing to learn as opposed to being so
arrogant by thinking we knew everything. I use it as a warning every time I
think I know everything and it brings me back to reality. We lasted 2.5 years.
We should have closed shop at 3 months.

------
stretchwithme
Well, it didn't completely fail yet. It's still going 13 years after I left,
actually. But part of the struggles were brought on by my mistake with a
military customer that probably cost us the contract.

This was back at the beginning of the Iraq war. Our main contact told me the
US should attack France, as they weren't supporting the invasion. I made the
mistake of saying I was glad he was executing policy, not making it.

Oops. They started migrating to another product. Oh well.

Lesson is, if you're going to object to what a customer thinks, do it when its
your own company. It's not really fair to make such a choose for everybody at
your company. Kind of self indulgent, actually.

And people are entitled to their opinions and my mouthing off didn't change
anything. An exercise in futility that only cost us.

~~~
the_clarence
I mean. What could you have told that stupid guy

~~~
tim333
I find sarcastic positivity often is good eg. "that's a really great idea -
you should be president." Let's you take the piss and often they think you're
being serious.

~~~
beaconstudios
or just be professional and divert the topic to something else so you don't
have to give an opinion on craziness. The guy was probably just mouthing off
anyway and responding literally isn't going to do anyone any favours.

~~~
stretchwithme
Exactly.

------
torte
So far a few:

1) Don't spend money and time on things you don't need or will need earliest
in a few months from now.

2) Regardless if you have a brand-new idea for a product or try to improve an
existing product/process, you need to validate first that you follow the right
path. I think a light-weight solution like the idea behing the Design Sprint
([http://www.gv.com/sprint/](http://www.gv.com/sprint/)) is a good option.
Don't go off and try to build an MVP. You will waste time and money (again).
Even for a simple and functional MVP you will need spend lots of time to build
a frame around it.

3) If you intend to improve something existing in an industry, come up with
something unique about your product first (compared to your competitors). This
will help you to get initial traction. Again, you need to validate this
particular unique feature before you start building.

My previous startup endeavours failed all because we/I did not follow those
rules.

One time we were mostly building away because we thought we know the industry
(worked many years in the same space before) and had a lot of wrong
assumptions. This combined with wrong spending behavior made everything fail
very quickly in the end. From the outside we just copied our competitors and
even our product was superior and looked better and gave part of our business
customers a much better experience, we did not attract enough customers (as in
users), because there was no obvious reason for them to use us vs our
competition.

In another attempt I just got too deep into the tech and totally lost focus on
what I was actually trying to solve. Lots of wasted time (except for
experience).

~~~
ajones93200
Exactly! I did not follow these rules while I started. And to make things
worse, I kept the idea to myself and worked on it for years before releasing
the product. And no one wanted my product although it was supposed to be
better than the competitors.

------
throwythrow
For me:

\- I didn't work hard enough.

\- I didn't have any previous success or experience.

\- I was starting it in a second language I didn't speak well enough.

\- I was on my own and had no one to turn to for emotional support.

It's all too easy to read the startup blogs and think "Gee, I should be doing
that!" but when the rubber hits the road it's much more difficult than I ever
imagined. Lesson learned.

------
fybe
I was part of a start-up that still exists but it seems to be stagnating. i
left due to the founders having almost nothing in common except for making
money.

The site is like squarespace but for local shops and businesses. The founders
met on an airplane and thought they can make a business. So you had the
business CEO with no technical background living in X country and the ruthless
CTO with his team in Y country.

I left ship when the CTO cleaned out the bank account and disappeared. The Y
country never extradite their citizens or charges them for any international
crimes so he got off scott free while the CEO had to "use" his car insurance
to get money to keep the business afloat and pay the out-sourced developers.
(He set his car on fire to get a payout)

Edit: I guess the lesson is that the founders need a vision and co-operation
to make it work. These two basically had a common goal of making money of a
fad. Back then the latest craze was to become a market place for other
businesses ie. JustEat, SquareSpace etc.

Another would be that the core team better stick together. The founders were
separated by hundreds of miles. The business side was in EU while the CTO and
the devs where not. This caused communication issues, planning problems and of
course money.

I left because of money too I guess. After working 6 months on a "paid"
internship which was 50 eu a week I was offered a contract that would give me
0.5% equity, no raise and force me to work full time AND when doing my final
year college thesis to be based for something the company can use.

~~~
eps
I think the OP aimed his question at _founders_ of failed startups. There are
fewer of them than of us poor shmucks that got burned by a failed startup as a
collateral damage. So their accounts of failures are far more interesting.

~~~
fybe
That's fair, perspective from actual founders definitely is a more interesting
point of view.

Didn't want to give an off-topic anecdote but thought from my experience
seeing what can go wrong for founders of a start-up I would share my
experience.

------
interdigm
If your business's revenue is based on B2B service sales with an extensive
client educational sales process with regular renewals and varying client
contacts, assume you will need built-in re-education salesperson time costs of
renewals factored into the price set for your services. Don't assume clients
will recognize the purpose and value of your on going services and renew
automatically without proof and convincing all over again. Otherwise, your
client re-education sales overhead will kill your profit margins.

------
mrpoptart
After 4 years of excellent growth my partner and I had enough income to
support one person full-time. Both of us were programmers, the company was a
side gig for us. When his dad was laid off from his job, we hired him to
handle the day-to-day of the company, which was mostly turn-key at that point.

He did a bad job, drove the company into the ground, and we couldn't fire him
without major personal issues, so we let the company die. I divested myself
before things got really bad, but it was so sad to watch all that work and
potential go up in flames.

We should have fired him anyway, but that's how you learn.

~~~
sutterbomb
If it was mostly turn key, how’d he do such a bad job? I’m mostly at that
point with my business and am aiming to “fool-proof” operations so looking for
things I may be overlooking.

~~~
codeisawesome
I guess you can apply fool-retardant, but can’t really fool-proof processes -
that’s much the business value of an org once the basics are in place. “You
had ONE job” is a meme for a reason :-)

------
troydavis
The gist: I wouldn’t try to sell SaaS/software to individuals.

My business-oriented startups have been successful. My consumer-oriented one
wasn’t (at least as a business), because I thought that people would be
willing to pay some amount to save time or get more done. Turns out that even
if a user states that an app saves them hours per month, the vast, vast
majority won’t spend any amount of their own money for it.

The product got users - some who used it hundreds of times per month - but
even among those who said they loved it, they used it constantly, and it saved
them hours, very few would pay even ~$35/year.

People are fairly good at valuing other people’s time (as businesses do every
day). People are unbelievably awful at valuing their (our!) own time. That’s
not anyone’s fault, it’s human nature.

This only comes out as a revealed preference, that is, by asking a happy
active user to pay, not asking whether they would pay.

Almost every “consumer” company actually makes most of their revenue from
businesses. The exceptions that don’t have millions of free users - like
1Password when it was licensed software and FastMail in its early days - are
exactly that: exceptions. Most remain fairly small until or unless they start
serving businesses too.

Asking individuals to spend their own money on a software/Web product (rather
than a physical object or music/video content) is next to impossible and I
wouldn’t do that again. Sell to businesses or find another revenue stream.

~~~
timdavila
How do you feel about solo entrepreneur products that are solely for
individuals? e.g. Pinboard, Tarsnap

Idea being purposefully stay small - keep costs down, so you don't need as
many customers to succeed. My gut feeling is there is a sweet spot (likely
below $20/year) where it's more of an "impulse buy" rather than a purchase
that needs consideration.

------
adventured
I've learned a few recurring lessons from several start-ups failures. My
favorites -

Aggressively pursue the simplest version of your idea/product/service. As a
very general rule, once you begin building, try to remove more features than
you add from the draft concept, until you get to launch. Get rid of ballast,
be ruthless with yourself about whether you really need a given feature or
aspect of the product. If the dropped features make sense, you can add them
back in later, assuming customers actually want them.

Narrowly focus on knocking over that first bowling pin. Do not target too
large or wide of a market to begin with. I made variations of this mistake
with my first two start-ups. Focus narrow, narrow/small enough to capture a
market or substantial market share, then try to knock down more pins. Chris
Dixon has an eloquent explanation of this concept (which I borrowed the
bowling pin analogy from). [1] Peter Thiel also has various good elaborations
of the concept in his book and talks he has given.

Have a customer - ideally multiple - before you build the product. It's the
easiest and fastest way to validate that there is some kind of market there
before investing your time. Even better if you can get them to put money on
the line ahead of launch. It's repeated over and over again, and it's worthy
of the reptition, make sure you're really solving a problem that people have.

[1] [http://cdixon.org/2010/08/21/the-bowling-pin-
strategy/](http://cdixon.org/2010/08/21/the-bowling-pin-strategy/)

------
timoth3y
I wrote a detailed and (to me) heartbreaking account of this two years ago.
The article went viral and kind of freaked me out, but I think the advice is
as good as ever.

[https://medium.com/startup-lesson-learned/why-i-turned-
down-...](https://medium.com/startup-lesson-learned/why-i-turned-
down-500k-pissed-off-my-investors-and-shut-down-my-startup-2645c4ca1354)

~~~
myth_buster
Thank you for sharing your story/learnings. I didn't come across your blog
initially. These specially resonated with me:

    
    
      I need a higher level of certainty than investors do because my time is more valuable to me than their money is to them. Investors place bets in a portfolio of companies, but I only have one life.
    
      Listen to what your users say, but believe what they do.
    
      From now on, immediate benefit: sell to the user. Long term benefit: sell to the boss.

~~~
timoth3y
Thank you. I'm glad you enjoyed the article. That was one of the big
revelations for me as well. One of the things that made me realize that
pulling the plug was not only acceptable but the right thing to do.

------
UzhasKakoi
Once I turned around a startup from about to go under to s profitable one. We
restructured every piece of the value chain, but not without resistance from
the founder/owner. Every suggestion I made was met with “I tried it and it did
not work.” In reality she did not try, she intended but backed off when the
other party pushed back.

In essence we took control over cash by: 1\. raising prices significantly 2\.
Introducing differentiated product and two tiered pricing 3\. Switched product
production from prepaid to 45 days AP. ..... N. Restructured relationship with
distributors

All these actions produced huge negative working capital. Instead of financing
operations at an insane % rate, which technically was killing the business the
company paid off all the debts and was spewing cash.

Cash Is King

------
arkades
Our uninsured CEO/cofounder developed a chronic illness and embezzled cash
from us to pay his massive medical bills.

Killed our runway, which we only found out after we hired an accountant to
look into our books and find wenhad an empty gas tank. Since this was still at
the f&f funding stage, none of us had the heart to go after him for it.

~~~
owyn
Wow. That's a great reason to advocate for universal health care in the US,
because it lets people work for a more risky startup without having to worry
about that particular risk!

~~~
hef19898
Partially I agree. On the other hand there are alot of cases of smaller
companies not paying social security and health insurz for there employees in
Germany despite having universal health care.

~~~
wink
That sounds... kind of weird, especially the "a lot of cases" part.

If you have an official company with official employees (and if either is not
true, then well, everything's illegal anyway and your employees are not really
employees) the health insurance will be on your toes quite quickly to pay your
stuff (as I've experienced firsthand).

The only thing I can think about is having all your staff as unpaid/underpaid
interns, but then they're not employees and your exploiting them anyway.

Would love to have some details on this.

~~~
hef19898
Just from the top of my head. A lot was, obviously an exaggeration, sorry for
any confusion. Still, there are more than one might think.

Skipping on social security seema to be easier and more common than health
care. Health care usually are insurance companies, so any missing payments are
likely to be flagged. But atill it is possible to skip for a couple of months.

Social security is wired by the company to the authorities, and they usually
take lknger to catch up. Ultimately these cases are found out amd prosecuted.

The main point being, even with universal health care cash stripped or just
companies still find ways to not pay up.

I would have to dig a little deeper for some concrete examples and details.
Just let me know if it is of any interest.

~~~
wink
Thanks for the clarification, no need to dig deeper. I don't usually feel the
need to defend anything going on this country, but this broad statement just
went contrary to my experience in a) being an employee b) running a business
c) talking to people doing both ;)

------
tluyben2
The most valuable lesson I had from the companies I ran/run is that both sales
and getting investment are both volume plays. If am a technical guy and I used
to be that even more than I am now; I thought people who could do sales were
deeply magical creatures. But every time we had a 'super sales' (usually co-
founder because of the 'super' part), the super wore off and turned into no
sales which killed or downsized companies eventually. I only fairly recently
found out that it is just a matter of meeting as many people as you can and
having as many sales pitches as you can. Investors the same thing, although
that depends a bit more on the phase and the business than the sales.

------
dandare
My story is rather typical. I have built something visionary that everybody
liked but nobody needed.

I hated the very idea of selling something that is not finished so I never
validated the product with customers. How could I explain to them how
revolutionary will the product be? The only way was to show them. Like the
first iPhone.

In fact, I didn't like the "talking to customers" part at all, so I focused on
coding visionary product that will sell itself. Everybody liked it but nobody
needed it.

~~~
andreivasiliev
Same here. I did not talk to my customers while I was first building my
product partly because I worry someone might steal the idea, partly because I
felt customers would not understand the benefit until I showed them a finished
product. And then when I finally showed people a finished product, just as you
said, everybody liked it but nobody needed it (or they just pretended to like
it :-( ).

~~~
andreivasiliev
Although I learned the lesson, I still think I have not spent enough time
talking to customers. I am a shy guy and would rather coding than talking to
people.

~~~
ajones93200
If you are an entrepreneur, you will have to overcome that psychological
barrier. Go to some local events and talk to everybody who is willing to
listen to you. Some of them might be your potential customers.

~~~
andreivasiliev
I recently moved to SF Bay Area. I live in Fremont (cannot afford to live in
SF). I don't know any good places to hang out with peer entrepreneurs. I guess
I should try harder.

~~~
ajones93200
I have lived in Fremont for 12 years. I can tell you it is not the best place
for entrepreneur networking. Most of the networking events are in south bay or
in San Francisco. A meetup group I recently came across that focuses on
entrepreneurs in Fremont area is Brown Bear Meetups
([https://www.meetup.com/Brown-Bear-Meetups/](https://www.meetup.com/Brown-
Bear-Meetups/)). It is a relatively new group and all their events are free.
Since you are in Fremont, it is worth checking out.

If you are serious about networking and do not mind driving to the south bay,
you will get a lot more options. Personally I would recommend the following
ones.

1\. Startup Matchup and Networking Event at Founders Floor
([https://www.meetup.com/Silicon-Valley-Startup-
Founders/](https://www.meetup.com/Silicon-Valley-Startup-Founders/)). It is a
monthly event and is always on Tuesday evenings at Founders Floor. Try to be
there at 6pm so that you can park on streets for free (or stay in your car
until 6pm if you arrive early). You should expect to see about 50 to 100
people. They charge $15 and provide dinner. When the event starts, the host
will ask everyone to do a self-intro (about 1 minute). This is the part I both
like and dislike. I like it because it kind of gives you a chance to know
everyone. I dislike it because it can easily take up to 2 hours so that there
is not much time left for networking.

2\. Monthly Mixer: Find Your Cofounder
([https://us.techcode.com/events/2017/2/8/meet-your-co-
founder](https://us.techcode.com/events/2017/2/8/meet-your-co-founder)). This
is also a monthly event and is always during lunch time on Wednesdays. The
good part is you don't need to worry about traffic and it is also free to
attend. The bad part is that no food is provided. So be sure to eat something
before you go. You should expect to see 30-40 people. The format is similar to
the Founders Floor event. Usually it will be around 1:30pm after the intro
session is over. You can stay there networking afterwards (that is why you
need to eat something before you go!). Parking at TechCode is free.

3\. Lifograph SV Networking : find cofounders, investors, developers, growth
hackers, freelancers, customers
([https://www.lifograph.com/events](https://www.lifograph.com/events)). This
event was once combined with the Founders Floor event. But recently it is
moved to Mindrome in Santa Clara. It is very similar to the Founders Floor
event and you need to pay to attend. The host, Dea Wilson, is a very charming
lady and always makes the event fun to attend. Parking is free.

4\. Entrepreneur Mixer and Happy Hour at Sports Page bar near Google
([https://www.meetup.com/sventrepreneurs/events/249922641/](https://www.meetup.com/sventrepreneurs/events/249922641/)).
This event is also monthly and happens on Tuesdays (5-8am). It could be
challenging if you live in Fremont as you need to get there during the rush
hour. You don't need to pay to attend the event. But you may feel obliged to
buy some drinks in the bar. There will be no host and you are on your own once
you step into the backyard of the bar. You just walk around and find people to
talk to. Because the bar is open to the public while the event is on, you need
to be sure that the person you are approaching is there to network (many
Google engineers come out for drink during that hour and may not want to be
disturbed by you). The parking lot in front of the bar is rather small. You
may want to arrive early.

5\. Silicon Valley TGIF Business and Social Networking
([https://www.meetup.com/Silicon-Valley-Startup-Idea-to-
IPO/ev...](https://www.meetup.com/Silicon-Valley-Startup-Idea-to-
IPO/events/252822375/)). This event is also monthly and happens on Fridays
(8pm - 11pm). This event is one of my favorites partly because Bay Area
traffic usually clears out after 7:30pm (important for those who live in
Fremont). The event is free to attend and there is no fixed agenda or format.
You just get into the lobby of Hyatt Regency Santa Clara and look for people
with name tags on their chests. Talk to whoever you want to talk to. And there
is no hard stop. You can hang out there as long as you like although most
people would have left by 11pm. You can park your car for free in the parking
lot right in front of the hotel.

6\. Founder Hiking Monthly @ Stanford Dish
([https://www.meetup.com/sventrepreneurs/events/248758563/](https://www.meetup.com/sventrepreneurs/events/248758563/)).
This event used to be at Wunderlich Park. This year they moved it to Stanford
Dish. If you are an outdoor person, this event is a good fit for you. Due to
the nature of hiking, most likely you will stay with the same person(s)
throughout the morning. Although that leads to some in-depth discussion, it
does limit the number of people you can interact with.

Other than those mentioned above, there are also a few other networking groups
in south bay. I just did a quick search on meetup.com and here is the list
(disclaimer: I don't know much about events of those groups; the list is just
for your reference).

[https://www.meetup.com/106miles/](https://www.meetup.com/106miles/)

[https://www.meetup.com/Bay-Area-Entrepreneurial-
Network/](https://www.meetup.com/Bay-Area-Entrepreneurial-Network/)

[https://www.meetup.com/Network-After-Work-San-Jose-
Business-...](https://www.meetup.com/Network-After-Work-San-Jose-Business-
Networking-Events/) [https://www.meetup.com/Startup-Saturday-
SV/events/253766764/](https://www.meetup.com/Startup-Saturday-
SV/events/253766764/)

...

So far I only covered the south bay and did not mention a word about San
Francisco yet. There are many good networking events in SF and you can easily
find them by searching meetup.com. I used to go to SF a lot. But I quit going
after a robbery accident on BART as I came back from an event in SF (luckily I
was not targeted). Most SF networking events happen at night. It could present
challenges if you live in Fremont.

Hope this helps. Good luck!

~~~
andreivasiliev
Wow! This is awesome. Thank you so much!

------
t0mbstone
Our startup failed because my business partner wanted to just be the "idea
guy" who designed the screens, while having me code it and do all the heavy
work. Initially, this was going to be a 50/50 split, but after working on it
almost full time for about 6 months, I ran out of money.

He had a pretty big savings account and came from a well-off family, so he
agreed to front me basically just enough to cover my rent while I worked on
the app. We agreed that since he wasn't really contributing much as far as
manpower or hours logged, he could help justify his stake in the ownership by
contributing monetarily.

After a couple of more months, we had a working, functioning app that was
about 80% finished, but we started to butt heads on some ideas and he claimed
he was frustrated by the fact that the app wasn't completely finished (even
though we had changed scope and redesigned the entire app no less than three
times).

He used this as an excuse to renege on our initial 50/50 split idea. Instead
of honoring our deal, he opted to claim complete ownership and write me out of
the picture.

Another way someone could look at it: He saw the app was starting to come
along and was getting actual beta users, and he got $dollar$ signs in his eyes
and decided to be greedy.

Both he and I were young and naive at the time, and the whole project had
essentially been built on a handshake deal, because we didn't want to spend 10
grand on lawyers and paperwork before we even had a product worth anything.

I had spent a year working on an app, barely making ends meet and living off
of credit cards, but because I was trusting and naive, he was basically able
to screw me over and walk away with everything. His name was on more of the
paperwork and he was the primary signer on the bank account. I could have
fought it, but at that point I didn't have the energy or the desire to even
work with him any more.

The joke is on him, though. Without me around to actually write the code, he
never did manage to finish the last 20% of the app, and here we are almost 10
years later. After all that, he never managed to get the app out of beta, and
he never made a penny off it.

The end lesson I learned: Don't invest time and energy in an idea or a
partnership if you aren't willing to spend the money up front to lock down the
legal aspect, because by the time you have enough traction and money to lock
it down, it will be too late!

Money and greed corrupts people. Period. When someone has the possibility of
millions of dollars suddenly seem like a real possibility to them, you might
be surprised by just how quickly they turn on you!

~~~
woogiewonka
Couldn't you just use the code to do the rest yourself and launch it on your
own - write him out of the picture if nothing was solidified legally?

~~~
t0mbstone
Unfortunately, he had solidified parts of it legally, but not the parts that
benefited me.

And honestly, even if that wasn’t the case and I could somehow argue that he
didn’t own any of the intellectual property for any of the stuff he helped
design (which I seriously doubt I could do), we are talking about code that is
ten years old by now.

I could always re-design the basic idea and re-code it from scratch, but that
is both time consuming and risky (since it would be difficult to completely
separate all of the ideas that he might have owned from the ones I had).

I’m currently making good money as a full time salaried employee at a company
that I enjoy working at. I’m afraid that the cut-throat, high stakes appeal of
a startup is somewhat lost on me at this point.

------
jedberg
The startup failed because so much time was spent consulting to bring in
revenue to pay meager wages, and not enough time was spent on building
product.

If you're going to fund your company with consulting, make sure you have a
very strict rule about how much time you spend consulting. At the end of the
day, you need to build product.

~~~
boulos
Was this MinOps? If so, what are you up to now?

~~~
jedberg
No a different startup. I internalized the lesson from that startup and made
sure that after I did the one consulting job for MinOps that we didn't do any
more consulting, unless the job can be completed in less than a day.

------
demircancelebi
I built a SaaS company, offering marketplace infrastructure to people who
wanted to start online marketplace businesses.

Turns out, although tackling the technical side of building a marketplace is
not that easy, it is perfectly doable. The real challenge is getting people to
use such marketplaces. It takes a lot of non-technical effort to build a
marketplace. There's the obvious chicken-egg problem for most marketplaces. It
is solvable, but usually requires a lot of capital to attract a lot of people,
or the founder should have some sort of secret (being already established as
an offline commissioner in a market, having the right connections, having a
following and so on) so it is not easy to compete with them.

2 things I learned irrelevant to the business are these:

1) Looking back, I've made some serious mistakes, but I had no idea that these
were mistakes at the time. Therefore, I must be making all kinds of mistakes
today, which will only become apparent in the future, and that is actually a
bit worrisome.

2) Prior to this, I've not experienced 'being a failure' in any sort of
activity so strong, and it is not a good feeling.

~~~
EnFinlay
Re: your second point, I experienced that too. It's an interesting thing to
deal with.

------
manofmyword
Our founder raised $25 million on a prototype that showed zero product-market
fit after launch. You probably know what company I'm talking about :)

~~~
LargeWu
Color?

~~~
bhahn
Probably Clinkle

------
bsenftner
Too early with a ML product back in '08, people were not ready to believe such
a thing was possible: basically a working VFX pipeline for what are now called
"deep fakes", but I targeted inserting consumers into brand advertising TV
commercials and music videos. First people simply could not grasp the concept,
then they did not believe it was possible, and then because I wrote it alone
and had no team VCs and partners and other potential collaborators felt
working with "my company" was too risky. People want to see a team, not just
one guy and an automated media pipeline. You need a team and an organization
to be taken seriously, no matter how great one's technology happens to be. I
did have two freelancers helping with the web site, but the entire media
digital double creation and VFX pipeline was written by just me, and that is
perceived as too risky. Here we are 10 years later, and still no one has done
automated consumer inserting into still and video advertising. I still have my
working pipeline...

~~~
ttoinou
Sell it as an After Effects / OpenFX plugin to begin with

~~~
bsenftner
It is as big if not larger than After Effects - it's an entire VFX pipeline:
servers as render nodes, as compositor nodes, and so on... All extremely high
speed, to the tune of 150,000 30 second clips per minute. It is/was a globally
scaled on-demand VFX pipeline. Not even the VFX industry has such pipelines.

~~~
ttoinou
Oh but why couldn't you make a little plugin to begin with ? And then clients
who needs more can use your big pipeline.

You can still adapt your pipeline for new uses -- for example Style Transfer !
Or other stuff I have some ideas

~~~
bsenftner
Oh, I tried all kinds of things, each with some level of success but not
enough. I was offering a digital double API service to game studios, a web app
for digital artists to create characters. The full pipeline was never used,
just parts by various clients for customized needs.

------
IloveHN84
We were too early regarding the technology (doing 3d real time reconstruction
of inner rooms using laser scanner - 2011), without even owning a laser
scanner (price tag: $30000). We got to rent one for some hours ($2000/4hours)
to get some samples but they were too few to draw a generic, working
algorithm. With the samples it worked well, but we didn't get the opportunity
to move further, then we ran out of money (funded by a University Program,
from the money we bought computers, office stuff and travels) pretty soon,
because none looked pretty interested in the product. 3 years later, other
technologies reached the market and it was 'successful', even though I don't
see any disruption until today.

Learned a lot in laser scanning and improved my programming skills
tremendously (was CTO and main IT guy after finishing university).

Unfortunately PCs were not so fast as today and there was no help like today
with all those APIs available, but only 2 major libraries that helped me to
achieve the MVP: OpenCV and PointcloudLibrary.

~~~
dnate
Is there a company out there today that does what your startup tried to
achieve back then?

------
andreivasiliev
My startup failed because I was too secretive. I though I had a great idea and
always worried that somebody would copy it. I spent 4 years working on my idea
only to find out that nobody was interested in what I was doing. Now my
mentality completely changed. I will be flattered if someone even bothers to
copy my idea. At least that means I am doing something right.

~~~
punnerud
4 years working on it.. Can we have one line of description?

~~~
andreivasiliev
I was working on a video conferencing product targeting enterprise users.
There were already many solutions on the market when I started: WebEx,
BuleJeans, Skype Business, AdobeConnect, etc. As a regular video conference
user, one thing bothering me most was I could not figure out who was talking
to whom when there was a heated discussion. So I designed a system that could
track people's attention so that everyone would know who was talking to whom.
It took me a long time to build a usable product since I had never worked in
the video conference industry. After I released a beta product, people told me
that they would just ask for clarification if they don't know who was talking
to whom. They would never learn to use a new system just because of that.

------
mikel11
Lack of clear leadership.

Two founders - friends. Thought we could work every decision out
democratically. Didn't turn out that way - used to fight about almost
everything until each of us tried to force our way. And we had enough - that
kind of stuff will drain the energy out of you.

------
tptacek
If it's not working, kill it. Your time is worth too much to waste.

~~~
rwmj
This is the most important lesson, and one I wish I had learned at my last
start up. It drifted along and eventually failed for a variety of
uninteresting reasons. But really we should have killed it much earlier when
it was obvious that it wasn't going anywhere. (Unfortunately at that time it
also was making just enough money to keep things turning over)

------
n_t
I am towards the end of wrapping my startup. There were 3 main failure reasons
-

a. could not build a good team,

b. co-founder was not 100% committed,

c. picked target market in the geography which I was new to. Although it was
my home country, the way to do business and lack of professional network
became hindrance.

~~~
ToJans
This post feels like looking in the mirror to me

------
bigiain
Because hardware is hard. Because product/artistic vision isn't the skillset
same as marketing/sales. Because angel investors and founders had
irreconcilable differences.

(Also because 95% of the functionality of the ~$60BOM hardware we spent 12-18
months getting into manufacture could be replicated with new components with a
BOM of around $10 by the time we had the product in our hands...)

------
tixocloud
Startup #1: I was trying to build a location analysis tool after seeing some
crappy software being used at work and charging us a crap ton of money for it.
Roped my friend but also found someone completely random based on skill set.
The dynamics of the team didn’t work out and we didn’t fully align on which
direction to go. We also didn’t have access to the data we needed and we might
have also gone after the wrong customer segment. We had ZERO experience in
commercial real estate and we quickly found out that whilst our tool is
useful, it’s not something the industry cares too much when it came to making
deals (read nice-to-have but not hair on fire problem)

Startup #2: Born out of my own frustration with startup #1, decided to try and
scratch my own itch with CRM software. At this point, it’s just me as my
partners all went back to their full time jobs. Money was good and they have
families. CRM is hell competitive and even more so with HubSpot in it.
Everyone I spoke with had so many needs and I wasn’t able to focus on
something pressing. Worked with a startup to build out a roadmap but they were
not 100% invested in the product and was just trying to help.

Startup #3: Off the back of a trip to Hong Kong, I came across a very useful
concept of having a mobile phone in your hotel. Tried to replicate it but met
many roadblocks in terms of getting contacts, scalability of the idea within
North America.

Going on startup #4 now, this looks to be a lot more promising after
incorporating everything I’ve learned from the previous failed items: \- Tech
is the least important issue. Usually, you can build the tech. It’s figuring
out whether people need it that’s key

\- Contacts, network and communication can be quite powerful. Having people
who know the domain space in helps to become a great sounding board.

\- Go deep with knowledge. Being a startup, you need to have some form of
credibility for people to trust you and your company. Previously I had high
level expertise but nothing deep enough that says I know the problems you’re
solving, mr. customer. Of course you can build up that knowledge but that will
take time

\- Time is the most precious component. Focus on what matters, validate and
think about the tech and optimisation after

------
rishabhd
For 2 startups -

For first one, got ditched by the other founders. Lesson learnt, make sure
everything is in black.

For Second one - Support, you may have the best product ever and the best
implementation team on this side of planet, but the customer support is
paramount. We gained too many customers too quickly and our support was
stretched thin, hiring new employees to train them on an exotic platform was
not easy. Also learnt that product simplification is the key to product design
and success. Also, a lot of other reasons, but these were the prime one.

It was well worth the time and would give it another shot someday.

Edit : added some more text

------
beh9540
Right out of school, another person and I had a startup building a managed
VoIP solution.

We didn't start selling early enough, and underestimated the amount of time
closing our first sale would take. That lead to my business partner taking
another job to make ends meet, and not able to meet obligations to our
company. Since he was managing the relationships and I was doing the tech, I
basically was left trying to manage the relationships from scratch, many of
whom weren't interested anymore. I very quickly ran out of money before we
could sign a contract.

Lessons (probably too many to list): 1\. B2B sales is a lot harder than the
tech. Make sure you have the runway to compensate for learning how to sell.
2\. Make sure your business partner(s) are as committed as you are. 3\. Don't
use your own money, or at least have multiple sources of income. 4\. Have a
good advisor. I feel like if I had someone I could have asked questions to, I
would have been more successful, or never would have taken the risk. 5\.
Probably most importantly, don't look at it as a failure, but a learning
experience. I was pretty depressed when everything came crashing down, but I
learned later that it was a valuable experience that put me ahead of a lot of
other people just due to the sheer amount of work it was.

~~~
gelstudios
I had a similar experience with managed VoIP. The first almost-accidental
customers seemed like a good sign that the most minimal viable product could
work as a business. But we did not start selling early enough, and it played
out almost exactly as you described.

Lessons: 1\. Sales is hard, especially if you have never done it 2\.
Commitment -- everyone involved should have skin in the game 3\. Hardware is
hard, even when you don't manufacture it -- refurbishing + firmware modifying
ip phones, poe equipment, etc ate into our runway

~~~
wiz21c
>>> 2\. Commitment -- everyone involved should have skin in the game

For those who don't get it, this means : \- don't expect anybody to help you
more than what he already helped (i.e. past help doesn't imply future help) \-
someone not as involved as you can become predatorial (for example, by
requesting, after years of super nice cooperation, a share of the profits, of
the intelectual property, etc.)

\- someone who helps your for nothing may hide some agenda

\- someone who helps you may realize that what you do together might hurt some
of his othe business (and thus starts to undermine your business, not just
leaving it)

------
mleonhard
I started RestBackup, a backup service for small business databases.

I coded 6 months before talking to customers. When I finally talked with them,
I learned that I built mostly the wrong thing. I spent half a year changing my
product to fit their needs. I could have saved about 6 months by talking with
people first.

Then I used the wrong sales strategy. I focused on cold emailing, snail mail,
and cold calling, which was demoralizing. The pressure of impending failure
was too much. I lost nearly all motivation and productivity. After another
half year, I ran out of money and gave up. I could have succeeded at sales by
consulting with an experienced salesperson in the industry. They would have
told me to find out how my target customers buy products like mine: they buy
whatever their local IT services company recommends. Then I would have focused
my sales effort on the local IT services companies and probably gotten enough
sales to take off.

Now it's 5 years later and I'm trying again, with a new business. Wish me
luck! :)

TLDR: 1\. Talk to potential customers before building anything. 2\. When
stuck, seek advice from experienced people.

~~~
eps
Looked at restbackup site - it's not clear what you do or offer. Is it some
sort of embeddable component for backing up host app's data to the cloud? But
billed through you?

------
rqmedes
As an engineer what I learnt was that commercialization is the most important
factor and that its difficult/near impossible to sell without strong branding,
marketing and networking. I now work for a multi-billion dollar company, the
product I developed is superior to theirs in almost every regard. What they
have is an amazing marketing team.

~~~
pandapower2
Its kind of demoralizing to see technically inferior products doing well but,
as you described, the technology is only a small part of the puzzle.

------
mooreds
I was part of a startup in the mid 2000s that wanted to make it easy to shop
for homes using your mobile phone. We used j2me and actually got the app
installed on a few phones. I wrote up a small white paper on j2me:
[http://www.mooreds.com/midp/midp.html](http://www.mooreds.com/midp/midp.html)

I believe the startup failed because it wasn't anyone's first priority. Every
one of the four founders had a day job, even though we all had double digit
ownership percentages. I don't recall if we even knew enough to have the stock
vest.

So the tech folks worked on the product on weekends and I don't know how much
the sales and marketing folks worked.

There were also issues with marketing, distribution and the fact the mobile
ecosystem wasn't quite there which made the app painful to use, but I think it
might have worked had we been all in (or even one of us had).

RIP homesonphones.com

------
keyle
I took a year doing something I had planned would take 6 months. I was
inexperienced, I shipped a product that had a very niche market. I got on the
PS4 appstore and the algorithm just took me down, way down. Pricing was also
screwed up in 60 odd countries for the first month with no control of mine.
RIP.

------
ravivyas
I think the most important one was people say one thing and do another. This
is true both from the sales perspective and a user experience/user testing
perspective. Here are a few examples

\- People wanted cheaper mobile app analytics, but they wanted a brand they
could trust \- People wanted a lot of insights, but they would never
understand most of the charts

On the whole, products which are used during firefighting are are hard
products to sell and differentiate on. Google/Fb/Amazon could build a product
with 10% of the feature coverage and yet own the market.

I recently wrote a bunch of things I learned here ->
[https://ravivyas.com/2018/09/03/mistakes-to-avoid-when-
scali...](https://ravivyas.com/2018/09/03/mistakes-to-avoid-when-scaling-your-
business/)

~~~
jaytagdamian
Link was broken. [https://ravivyas.com/2018/09/03/mistakes-to-avoid-when-
scali...](https://ravivyas.com/2018/09/03/mistakes-to-avoid-when-scaling-your-
business/)

~~~
ravivyas
Fixed it.

------
master_yoda_1
Hired a guy who do politics rather than coding. He destroyed the whole
culture. When I ask why we are not firing the guy, CTO know about it but can't
fire him.

------
contem
\- Two main clients did not pay bills on time, causing me to run out of
runway. Getting them to pay became the single most important issue, and after
they finally did, I was stuck with a 2.5 month backlog, two important clients
who couldn't be trusted to pay on time, and a broken spirit.

\- Created a b2b app, spend too much time on making it work great, not nearly
enough time/effort on marketing it. Found that the people who could understand
the technical superiority were not our target market, but just people who
estimate technical superiority from marketing. Couldn't and wouldn't compete
on that. Then we landed a big client who paid us handsomely to lose our focus
and turned us into a non-scalable consultancy business which we sold for an
almost symbolic value.

\- Used networking to get together a team of 5 researchers/engineers in a hot
field. Found funding prospects, but only on the condition that they pay us
(slightly below market average), but the equity would be in the single digits
(even for me). So this blew up, and a few months later the most promising
researchers got jobs at FAMG. I think most $$ potential was lost here (would
have been an easy acqui-hire).

Learned:

\- The cheaper the price, the cheaper the customers. I took pride in offering
great customer service, but spend hours looking into issues for 15$ accounts
(would have been cheaper to fire them).

\- The smaller the startup, the lower you are prioritized come pay-day. Would
be more aggressive in collections/SLA.

\- It is not how good your product is, it is how much people are willing to
spend for it (how good they perceive it to be). Non-technical people are
easier convinced by a sales call, than an impressive demo.

\- Learned how to deal with financial stress and to keep a good sleep/workout
schedule, else my output drops way too low.

\- 15% equity of 0$ is 0$, but you also can't expect the really good people to
work for your startup without any potential upside or throwing them a bone.
Strike while the iron is hot.

------
xutopia
The app was essentially what Slack does today. It was built to compete with
Campfire and Hipchat (the new kid on the block) and the mission of the product
was to be the most extensible group chat application.

Within a month we had paying customers. We didn't know how to grow the user
base as neither my co-founder nor myself knew how to do marketing. After a few
months of just adding features we tried finding investors and eventually had
to do consulting to pay our bills.

At that point we had an acquisition offer that was way lower than what could
have been. Because we were consulting and the product was going nowhere we
sold it. It was overall a great experience but the software ended up dying in
the hands of the acquirer as they could not find a way to market it either.

~~~
cetico
Marketing is hard. What did you try at the time? What would you try these
days, with the benefit of hindsight?

------
ben509
We launched our startup right at the end of the dotcom boom. We were trying to
do meta-searches against Alta Vista (mostly) and a few other, doing what was a
very primitive network search similar to what FB does, only specialized to
things like scientific papers. The first product was trying to help academics
and scientists find conferences to attend based on their common interests.

But before we got very far, the dotcom bust hit and investor cash dried up. My
partner went back to his day job, and I went back and finished my degree.

Lessons learned: market fluctuations can and will kill you. Have an exit
strategy. Don't rely on a single coder (me, in this case) especially one who
is young and immature. But definitely do it, you won't regret it.

------
limeyx
#26 on this ugly list

[https://www.complex.com/pop-culture/2012/10/the-50-worst-
int...](https://www.complex.com/pop-culture/2012/10/the-50-worst-internet-
startup-fails-of-all-time/caspian)

~~~
jeanlucas
Oh wow. I would like to learn more from this failure.

------
andersthue
I got stuck.

The more important a project is to me, the more stuck I get.

When I am stuck I do not do sales, I do not talk to mentors, I feel sorry for
myself, i procrastinate.

------
gdiocarez
Why it failed: Getting an office that can't be paid off with low income from
startup. Learning: Don't get an office.

~~~
jayalpha
Office, secretary, furniture, business card designs, etc. A VC buddy calls
this "start-up porn"

------
sbfeibish
My startup didn't fail. But my initial projects failed. Project 1. I started a
commercial version of Wikipedia back in 1990. Just the computer hardware and
software section. I hated starting there. But that's what I knew. And that's
the reason I started the project in the first place. It was harder to get info
about computers back then. You had magazines (and user groups I guess). I
wasn't sure of my computer programming skills. So I used an off the shelf
database management system. Long story short. The DBMS didn't scale. It had a
GUI front end. And as the project went along. Any change became exponentially
longer. Small insignificant changes started taking an hour, then two, and
finally 2 whole days to make a small change. (I was so mad I wrote my own
DBMS. And since it didn't have all the bells and whistles, it was lightning
quick. And changes were mere compiles that took 4-11 minutes.) I should have
stress tested the commercial DBMS I bought, at the start. I just assumed I was
paying a lot of money for it. It would work. There's much more that I don't
have time for. I should have sought funding, I shouldn't have worked on my end
of the project alone (I thought it would be in business's self-interest to
provide content and update the info. At the start about 15% did. Which in
retrospect was decent.), ... I should have started the startup earlier in
life. My aging parents became my primary concern.

------
prashantgaur
2 Years ago I started a product to provide a marketplace for
lawyers([http://www.legalisor.com](http://www.legalisor.com)). People can
search and hire best Lawyers & Advocates in India(mainly in NCR ). I started
this as a side project first and I did all the coding and market research
part.

Why it was failed :

1\. For sales and marketing, I hired my brother who was an MBA and things did
not go well at work. He was not giving enough attention and dedication as
product required in its initial phase and I was not able to push him hard
because of personal relationships. He was about to get married too so he was
under pressure to get a fulltime job. 2\. Few people were ready to join my
organization and they were ready to invest some money too but I was always
afraid to give them equity of the company in return. I was in believing that I
can run the company from profit I was earning from selling packages. 3\. I was
not prepared for the scenario when the product is ready to go to the next
level.

I learned :

1\. I should trust people more and give them chance to involve. 2\. Personal
relations should stay away when there is work involved. 3\. Seed funding could
be helpful to give the product a better shape.

Note: product([http://www.legalisor.com](http://www.legalisor.com)) is still
running but I am not much active with its development.

------
screwed-over
Posting anon. My startup failed when my backstabbing co-founder struck a side-
deal with our biggest customer to essentially "sell" our IP via consulting
directly to them. We were easily acquihire material which would have
_possibly_ netted us single-digit millions, but instead my co-founder took the
bird in hand and "cashed out" all our internal secrets.

As I learned, lawsuits are expensive and you have to prove things that you may
not be able to "prove."

------
a13n
Very relevant: [https://www.failory.com/](https://www.failory.com/)

"Interviews With Startup Owners, Learn From Their Failures"

------
bruncun
Bootstrapped a fitness app (Bruiserfit -
[https://bruiserfit.com/](https://bruiserfit.com/)) with a friend based on my
own measurable high-intensity physical training workouts. We built the first
version not really knowing what we were doing, slapped AdWords on it, but
users never came. We couldn't get past the activation phase - the initial
product wasn't intuitive and compelling people to workout is challenging. Over
the past couple years we've iterated on the user experience to an adequate
state, but we still lack retention. It seems like the format is still
confusing for beginners and that most people simply don't want to train
themselves to do tough, fast bodyweight workouts.

On the technical side, we used Rails 5 and followed the Thoughtbot playbook.
But neither of us were very experienced in native development, which prevented
us from offering many of the bells and whistles that other market offerings
provide. If I had to do it all over again I would probably give it a shot with
React + Firebase.

Like others have said here, democratically running an equally shared company
with friends sounds better on paper than it is. Different personal beliefs and
approaches often lead to deadlock. Communication is essential to avoiding
resentment. It gets easier with practice, but there was still too much to
juggle for us and not enough time, know-how, and motivation.

We still casually hack at the project on the side. My cofounder and his wife
swear having the project on his resume landed him his current and very comfy
gig. I'm still waiting to see if anything beyond the experience itself comes
out of it for me.

------
rubyfan
Because you’ve done something similar three times before in different
categories doesn’t mean you’ve found a market.

Solutions shouldn’t search for problems.

Identify market fit without investing tremendous time and energy. If you have
to contort yourself then you haven’t found it.

CEO should sell the product vision above all.

Hire people who are smarter than you, hard working and honest. At any sense of
dishonesty or questionable behavior, show them the door.

Know when you’re done and cut bait ASAP.

------
SolubleSnake
We were on an incubator where the staff were insistent that all the start-ups
be 'high-growth' rather than work towards simply surviving, as an initial
goal. This meant the projects were pushed to being ambitious to the point of
farce...The other two in my team started trying to appeal to this 'high
growth' mentality by just making absurd claims about what the technology would
be able to do (without anything actually existing yet) and I was the CTO, so I
got a bit annoyed by this and eventually just had to start saying 'look this
is totally ridiculous now'. They said they didn't want to work with me if I
wasn't willing to do it. I just said I can't do it so there's no point. I went
to work at a consultancy for a bit and now I'm a research associate at a
university. I have no idea what happened to the business in the end. I guess
they just slowly died without proper tech staff.

~~~
SolubleSnake
What I learned (Just realised I forgot this) is it's basically impossible to
start a company with people you've not met before (we were basically put
together like boy bands).

Also, choose one thing and do it well.

Also, have someone with deep knowledge of the industry you're working in (we
didn't, and when we did customer research from people in that industry, it was
clear).

------
dpezely
Discovering patterns from chaotic datasets, albeit via Graph Theory techniques
(instead of ML) for populating a knowledge graph. e.g., find commonalities
among documents, such as a single occurrence of a common phrase in each that
connects otherwise obscure papers.

This technique is well suited for datasets with insufficient features for
machine learning...

Initial tech focus was on finding commonalities within a set of documents,
such as by crawling all links on first 10 pages of Google search via their CSE
API. Next search optionally increases the pool.

Initial business focus was for marketers, who not only know their pain but are
willing to pay to make that pain go away.

Nothing unique about the market... but with Lean Interviews and with 100% hit
rate for interest among the 40 highly qualified leads, it seemed like a simple
matter of assembling various bits that we had each previously built.

Lessons learned:

Even if a long-time friend commits to joining, has the financial means to
contribute several months, owes you the personal favour to do so, etc., etc.--
Don't bank on that.

Like a perfect storm, I had _multiple_ friends who previously committed to
assisting, then each suddenly experienced extenuating circumstances preventing
them from joining. One would have been our NLP lead-- ouch!

More mundane lessons learned captured in articles:

[https://play.org/articles/new-entrepreneur-
checklist](https://play.org/articles/new-entrepreneur-checklist)

[https://play.org/articles/introduction-to-natural-
language-p...](https://play.org/articles/introduction-to-natural-language-
processing) (i.e., unlearning misconceptions about "synonyms" to fully
deployed with spaCy.io)

------
mathattack
One I joined failed due to:

1 - Inability to convert unpaid customers to paid. (And a focus on the wrong
vanity metrics)

2 - Poor analytics which caused number 1. (The AI didn’t work)

3 - Weak governance. (Too much money too early, and a paradoxically bad
founder/funder relationship)

4 - Excessivr nepotism, side projects and conflicts of interest.

This gave me a checklist to look for in companies I subsequently interviewed
at.

------
UzhasKakoi
There is one and one only reason why companies go out of business: they run
out of cash.

Many a situation may lead to this, but lack of cash is the reason. When Leaman
Brothers when under, the company had half-a-trillion dollars in assets but it
could not convert these assets fast enough into cash to continue its
operations.

------
vegetablepotpie
My first startup failed because of doubt I had in the product and because of
poor coordination with my co-founder.

My finance co-founder and I wanted to make an IoT device for kitchens. I made
a prototype with 3D printed parts and an Arduino. My co-founder was going to
market and seek investors. While working on the prototype I found out that
there were tremendous numbers of edge cases that would make a marketable
product far too complex and my co-founder didn't do the things he said he was
going to do. So I stopped working on it and me and my co-founder mutually
decided to end the project after completing the first prototype.

Two lessons I learned was to make sure to find a co-founder you know can
deliver on their promises and to work on something you're really passionate
about, not just something you think will make you money.

------
ramigb
It failed because I was an idiot who thought he knew it all. It also failed
because my co-founders were my best friends so the "partnering" wasn't based
on skills or what you bring to the table, but rather the fact of us being
friends. And finally I've fought my incubator/accelerator who were idiots
enough to fight me back and it was almost a bullying tournament, I'm glad we
solved that and everyone carried on with their lives.

I've learned a lot, to listen more and to choose wisely, not to spend any
money before knowing what it will return to the company and also not to over
promise. If I have to do it all over again I would but with the mindset of "I
want to change my self first" before thinking about changing the world.

------
nojvek
I made a small startup while backpacking. It was called backpackbud. Contained
list of hostels, tips, things to do etc

Maintinaing it was pain, backpackers are cheap and I didn’t make any money. It
died.

Then I started bewolo.com with some friends. Those friends brought in their
friends and I was the only technical guy. My shares were <10% and I had little
social life while building it. It was around travel space. Think airbnb for
things to do. I got burnt out. Working for a big company and building a
startup at some time is really hard. I got burnt and left. Other founders
couldn’t run it and it died eventually.

Startups are hard. We only hear about the successes and big IPOs and think I
can do it too.

I’m probably going to do it again but this time, try to go full time for at-
least an year.

------
motohagiography
My last failure was an idea so terrible and provocative it had to get some
kind of traction. Never failed to get a "that's brilliant," laugh, but
required more finesse to get people to follow through.

Burned some bridges, but really, who wants flammable bridges anyway.

------
denkmoon
\- Founder gave up, went bush for weeks at a time, and I (the "right hand
man") had no experience managing staff let alone running a company without the
founder. We wasted tonnes of money on staff that I couldn't adequately manage
or train which resulted in huge technical debt on almost every feature.

\- I should have opened my mouth 6-12 months earlier and put my foot down
regarding my own capabilities. Also, hiring great programmers is really hard.

I'm still trying to work out how to get co-workers and staff to come ask me
questions when they need to, I'm unsure if it's because I'm not approachable
(I always try to be!) or if they don't recognise that they need to ask a
question.

~~~
philprx
Suggestion: Have one on ones with each of them, regularly, and have them speak
(it's not you speaking during this meeting) to explain what they're doing,
they will tell you what problems they face.

Speak after them to answer within short timeframe, and most importantly follow
up to help them, frequently and in the long term, with thei problem they
expressed.

I hope it will work for you.

------
jstrebel
We tried to set up a small startup of 3 people with the goal of offering a
service for social bot detection, reporting and (eventually) removal. The
assumption was that they are an annoyance and might be a danger to the public
opinion and to brand reputation. We started on Twitter for our MVP. We failed
to generate interest in it and it turned out that social bots are actually
mostly marketing tools by ad agencies to promote their customer's product.
Their goal is to make a topic trending, so that real people start noticing it.
There is a strong business case for social bots. We should have created some
Social bot toolkits, that would have probably worked much better...

------
DonHopkins
Q: Why did your startup fail?

A: Brilliant beloved and trusting visionary founder just didn't have a
functioning crazy person detector (which was fortunately why he hired me), but
he also unfortunately hired a self-proclaimed " _Serial Hacktreprenuer_ " (I
shit you not) as a "game finance expert", who failed to do his job raising
money, and whose bizarre behavior and "volatile and erratic work habits" led
to battling lawsuits and the failure of the company, who claimed the founder
"tried to push him out of the company and committed an "atrocity" by trying to
take away" his equity, who called the dispute a "genocide", and who then
threatened to publish an "exposé documentary" by tweeting: “Looking for PR
professionals to build awareness for “THE INCONVENIENT TRUTH ABOUT WILL”, an
exposé documentary, releasing on YouTube 6/2012.”

But they eventually settled the lawsuits, and Will issued a statement
officially thanking him for his "tenacious execution" of the company ( _insert
capital punishment joke here_ ), so he never followed through on that threat.

Q: What did you learn?

A: I learned to program iOS and Unity3D, and to stay out of company politics,
and to listen to my bullshit detector.

[https://venturebeat.com/2011/11/16/will-wright-
hivemind/](https://venturebeat.com/2011/11/16/will-wright-hivemind/)

[https://venturebeat.com/2012/06/03/game-pioneer-will-
wrights...](https://venturebeat.com/2012/06/03/game-pioneer-will-wrights-
personal-gaming-startup-falls-apart-in-litigation-exclusive/)

[https://venturebeat.com/2012/11/01/simcity-pioneer-will-
wrig...](https://venturebeat.com/2012/11/01/simcity-pioneer-will-wright-
settles-game-startup-hive-mind-lawsuit/)

[http://gamingsession.taterunino.net/2012/06/03/will-
wrights-...](http://gamingsession.taterunino.net/2012/06/03/will-wrights-
hivemind-tied-up-in-atrocity-and-genocide-legal-battle/)

[https://en.wikipedia.org/wiki/HiveMind](https://en.wikipedia.org/wiki/HiveMind)

~~~
gt2
How far along to completion would you say the game was? Even 50%?

~~~
DonHopkins
On one hand it was culmination of widely known ideas and "intellectual
property" that Will had been openly thinking about, talking publicly about,
experimenting with prototypes and proofs of concepts about, shipping products
about, and even producing reality TV spots [1] [2] and a cable TV show [3]
about for decades.

And on the other hand it was also a lot of handwaving and vaporware and trendy
ideas and creepy social networking and online privacy surrendering and crowd
sourcing and user content creating clichés.

The "Serial Hacktreprenuer" had absolutely nothing useful to bring to the
table other than the self professed ability to raise money (which he failed
at) and a complete lack of shame and honesty (which is very useful in the
games industry, and a skill that Will lacked), but no original creative ideas
or track record whatsoever.

But he strongly believed he deserved all the rights to all the ideas that Will
had been talking about his whole lifetime, and that if Will didn't go through
with his deal (which was just misleading talk that he exaggerated), Will might
turn around and sell the "Serial Hacktreprenuer's" intellectual property that
he presumed he now exclusively "owned" to some other company if Will didn't go
through with the deal that the "Serial Hacktreprenuer" (pretended to) make.
You know: "genocide".

For example, he was in secret talks to sell the company to Zynga, who actually
only wanted to acquihire the company to get Will himself just because he was
Will, not because of any ideas or execution plan the "Serial Hacktreprenuer"
came up with.

But he didn't consult with Will, who didn't want to drop everything he was
doing (including his other companies) to work on the next Cow Clicker [4], and
he wasn't honest with Zynga or anyone else. And EA (an investor in Will's
other company) was not particularly pleased with the idea of losing Will and
their investment to Zynga, either. It was totally untenable along many
dimensions.

So many people just want to be the "idea guy" because it's easy and glamorous
and means they won't have to do any hard work, since they think their own
untested unoriginal ideas are brilliant and unique, and they will be able to
simply tell other people what to do all day, then criticize and blame them for
not living up to their own brilliant vision if and when they fail.

Will is the opposite of that, but when the "Serial Hacktreprenuer" had a real
honest to god "idea guy" in his lap with ideas and experience and a plan of
how to execute, but his job was just to raise money around that fact (not
auction the idea guy's meat off to the highest bidder like a golden goose), he
wanted to throw away all of Will's ideas and experience and substitute his own
behind his back without consulting him, instead of trying to sell what he
already had. (That's also why SimCity 3000 was delayed for so long, and EA
ended up buying Maxis.)

The Venturebeat article [5] and the PDFs of the lawsuits [6] [7] explained and
revealed some parts of it pretty well:

>In papers disclosed by Ansari, Ansari said that Hive Mind was in talks to be
acquired by or receive an investment from Zynga, the largest social gaming
company. That deal reportedly valued Hive Mind at $75 million. The talks took
place in November, but nothing ever panned out. By December, Parekh and Wright
resigned.

>It was unclear whether Zynga was really serious about buying Hive Mind at a
high valuation, or if it simply wanted to hire Wright. Ansari alleges that
Wright is trying to sell the Hive Mind ideas again, only through the Stupid
Fun Club, as if that entity owned them. He also says Wright is trying to
implement the ideas through yet another company, Friendly Gravity.

[1]
[https://www.youtube.com/watch?v=KXrbqXPnHvE](https://www.youtube.com/watch?v=KXrbqXPnHvE)

[2]
[https://www.youtube.com/watch?v=NXsUetUzXlg](https://www.youtube.com/watch?v=NXsUetUzXlg)

[3] [https://www.engadget.com/2010/03/31/will-wright-to-
produce-r...](https://www.engadget.com/2010/03/31/will-wright-to-produce-
reality-show-with-user-created-storylines/)

[4]
[https://en.wikipedia.org/wiki/Cow_Clicker](https://en.wikipedia.org/wiki/Cow_Clicker)

[5] [https://venturebeat.com/2012/06/03/game-pioneer-will-
wrights...](https://venturebeat.com/2012/06/03/game-pioneer-will-wrights-
personal-gaming-startup-falls-apart-in-litigation-exclusive/)

[6] [https://www.scribd.com/document/95620882/CA-HiveMind-
Complai...](https://www.scribd.com/document/95620882/CA-HiveMind-
Complaint-20120208#download&from_embed)

[7] [https://www.scribd.com/document/95675531/Verified-
Complaint#...](https://www.scribd.com/document/95675531/Verified-
Complaint#download&from_embed)

~~~
gt2
So any code?

Great collection of info you posted about it (and a shame about legal
happenings that can hamstring capable people) but I'm even more curious now as
to whether there was any code at all written!

~~~
DonHopkins
The "Serial Hacktreprenuer" never wrote a line of code -- he just destroyed
companies and tried to take credit for other people's ideas. But here are some
earlier demos and prototypes I developed for Will at the Stupid Fun Club,
exploring his ideas about storytelling, social networking, mobile and
geolocated gaming, a community scripted TV program, geographical music
organization and navigation, and a reality TV show with robots, which got
tangled up with the HiveMind boondoggle and was never released (so I can't
release the sources, unfortunately). You can read the articles and his lawsuit
complaining how Will was committing an "atrocity" and "genocide" by taking all
the ideas he presumed he owned and doing them without him, but take it with a
grain of salt because we had been working on that stuff for many years before
he came along, and they were pretty obvious widely known ideas:

Stupid Fun Club StoryMaker Demo:

[https://www.youtube.com/watch?v=_2yEHs_WLzQ](https://www.youtube.com/watch?v=_2yEHs_WLzQ)

>Demo of the Urban Safari StoryMaker technology, developed for Will Wright's
Stupid Fun Club, by Don Hopkins. Originally developed for CurrentTV's Bar
Karma TV show, the first online community-developed network television series.
Branching collaborative storytelling and voting.

[https://en.wikipedia.org/wiki/Bar_Karma](https://en.wikipedia.org/wiki/Bar_Karma)

>MediaWiki front end server. Python back end server. Flash Storymaker client.
Geolocated storytelling. Google map overlays. Administrative back-end content
management system. MediaWiki integration and embedding. iPad Storymaker
application. MapKit integration. Facebook StoryMaker app. Voice synthesizer
reading stories. Facebook album import and export. 3D branching story
visualization with Unity3D.

MediaGraph Music Navigation with Pie Menus Prototype developed for Will
Wright's Stupid Fun Club:

[https://www.youtube.com/watch?v=2KfeHNIXYUc](https://www.youtube.com/watch?v=2KfeHNIXYUc)

>This is a demo of a user interface research prototype that I developed for
Will Wright at the Stupid Fun Club. It includes pie menus, an editable map of
music interconnected with roads, and cellular automata.

>It uses one kind of nested hierarchical pie menu to build and edit another
kind of geographic networked pie menu.

Servitude:

[https://www.youtube.com/watch?v=NXsUetUzXlg](https://www.youtube.com/watch?v=NXsUetUzXlg)

>Stupid Fun Club's "Servitude" One Minute Movie about Robot Servitude, written
by Will Wright. Robot brain and personality simulation programmed by Don
Hopkins.

Empathy:

[https://www.youtube.com/watch?v=KXrbqXPnHvE](https://www.youtube.com/watch?v=KXrbqXPnHvE)

>Stupid Fun Club's "Empathy" One Minute Movie about Robot Empathy, written by
Will Wright. Robot brain and personality simulation programmed by Don Hopkins.

------
BitterSweets
Not my startup but worked for one until they pivoted. We had a photographer
platform ([https://picr.com](https://picr.com)) competing with Thumbtack
(except our photographers were to be paid higher instead of a bid to the
bottom.

Everything seemed right. We had the right market (Portland, OR), with a
beautiful design and great customer experience. We managed to get roughly 100
photographers on board but the customers never came. After a year or so, Picr
ended up pivoting to more of a photographer platform than a AirBnb/Thumbtack
alternative. Most of the team was let go and only a few devs stayed.

Lesson learned: Building a two sided market is hard.

~~~
plasticman
Really like the concept of your product. I do have some questions for you. If
you have the time get in contact with me. Email is found in my profile.

------
JoeAltmaier
Market penetration. We had an always-on collaboration tool for distributed
groups. All anybody knows is conference tools, and even the customers that
signed up for our product would have a session average time of 1 hour. The
product was intended to be always-on, not started and stopped for meetings.

Anyway we figured it took 2 days of requiring the team to keep the product
running, before folks 'got it' and began to use the features fluidly. After
that they'd take off. But that's way, way too long a trial and almost nobody
would stick it out. Our few successes came from enterprise customers that
could control what was running on the team's devices.

------
Thriptic
I was a co-founder at a SaaS health startup that ultimately failed because our
team imploded. I learned a variety of very useful lessons from our failure.

#1 If you do not have strong domain expertise in your target market, your co-
founder must. If none of your co-founders have strong domain expertise, you
are in for a world of pain. It's possible to succeed without someone from the
industry onboard (and we almost did) by figuring stuff out for yourself
through talking with customers, but not having that person makes things 1000
times harder. Apart from having to spend a lot of time learning the domain,
you also miss out on low hanging fruit initial customers / advisors who an
industry cofounder would be able to acquire through their network.

#2 This is related to the first point above, but if you can, try to get angel
funding from someone from the industry. Our angel was able to put us in touch
with several industry players and regulators who were incredibly helpful.

#3 Before you start any venture, you need to sit down with your co-founders
and explicitly agree on what the mission of the company is, what everyone's
expectations and desires are, and what everyone's responsibilities will be.
Take a decent amount of time to do this, put it in writing, and have everyone
sign it. In my company we had three people with the title co-founder, all of
whom had different ideas about what being a co-founder meant. One co-founder
really wanted to be an advisor and never did any work, another co-founder
really wanted to just be CTO and didn't really want to deal with non-technical
matters, and I was left doing most of the day to day work. We also had 3
different opinions on risk tolerance and persistence. If you can map things
out beforehand then you can hold people to your agreement when they aren't
pulling their weight.

#4 Be flexible with your team. We had an initial product idea that didn't work
out and we needed to pivot. Unfortunately the team that was a decent fit for
the first space was not the right team for the second space. Don't be afraid
to be honest about what the new requirements are and to let people go if you
are still in the early stages and some people can no longer add value.

#5 If a vendor, advisor, or other entity says they will do something for free
for you, it means they won't do it. We had 3 entities offer us free services
because we were early stage and none of them actually did real work when push
came to shove. Demand solid contracts from your vendors and demand to pay
them.

#6 Hold off on incorporating until you have to. I spent an inordinate amount
of time dealing with incorporation bullshit, tax bullshit, and compliance
bullshit when we didn't even have a product and were still doing early stage
work. Don't do this. Wait until you are at least ready to start development
before you incorporate.

#7 Very few ideas are truly unique. A bunch of people probably failed at what
you are about to try to do in the past. Do your research and figure out why
they failed. Perhaps even try to reach out to them. I would gladly talk to
anyone that asked me for advice or information on the state of the industry /
product space.

#8 Get an accountant. There is SO MUCH TAX BULLSHIT and you don't want to be
dealing with it yourself.

Ultimately we got unlucky in that our primary venture was in a space that was
undergoing tremendous regulatory upheaval which made our product irrelevant,
but given the nature of our team and circumstances, I'm not sure we would have
had success even had the space not changed rapidly.

~~~
aliswe
6\. What do you mean with incorporating?

~~~
Thriptic
The act of registering a corporate entity (c Corp, s Corp, LLC etc) in a
state.

------
catcontent
I partnered with a much larger company to profit from an existing sales
structure and their technical infrastucture. To me it seems like -- due to
their size -- they wanted to cut a larger piece of the cake for themselves, so
negotiations about the details didn't really come to an end. They started to
create and sell the product on their own with lots of stolen concept details.
I am glad they failed. My lesson is to bootstrap and implement fast. Don't
worry if sales are not exploding. However, check if sales are pointing upwards
and finance is under control.

------
ALee
I basically learned that failing a startup is similar to dealing with end-of-
life care - we all make the same mistakes so in a weird way, I think the best
way to learn from this experience is to read Atul Gawande's book Being Mortal.
It'll put things in perspective.

Here's the post I wrote, hope it helps folks: [https://medium.com/startup-
grind/startup-mortality-what-end-...](https://medium.com/startup-
grind/startup-mortality-what-end-of-life-care-teaches-us-about-startup-
failure-7d568c736d90)

------
RandyRanderson
Never start a business offering/selling to rational customers.

I know for most that's obvious for most but apparently not me. :<

Randy's law 248: At the heart of _most_ successful businesses is an irrational
consumer.

~~~
woogiewonka
How do we know which ones are irrational or how to find them? :)

~~~
RandyRanderson
I have this theory that ppl throw out crazy ides like the earth being flat or
that there are giant apes living in the pacific northwest in order to find
irrational consumers. If anything sticks, you've got one!

Makes sense, right? If someone, say, actually believes the earth is flat,
despite having access to the Internet, etc they must an imbecile. These are
exactly the types of ppl that can easily be separated from their money.

Apologies, Alex Jones, for revealing your business plan. ;>

~~~
raverbashing
Then you can sell supplements that turn people red, it's a win win

~~~
webmaven
Supplements that turn people blue are good
too:[https://www.wired.com/story/does-colloidal-silver-
work/](https://www.wired.com/story/does-colloidal-silver-work/)

------
cattlefarmer
I started a Wordpress consultancy with a couple of friends. The idea was to
eventually transition into a proper design agency that can also code.

One friend was part-time and did only design because he didn't know how to
code. The other friend never did any work at all so I ended up having to do
almost everything, which wasn't really that much anyway since we only had a
handful of customers.

Eventually one of those customers led to a full time gig so I shut the whole
thing down.

There were many lessons but the main lesson was that you cannot rely on a
person's word.

------
CugelTheClever
In 2011 we launched Birthday Dollar, a Facebook app that let users send and
receive small gifts of money and gift cards through the platform. We watched
usage tic up day after day and felt momentum grow.

Then Facebook announced they had acquired Karma, a gifting company, and
planned to integrate them into Facebook as Facebook Gifts.

I immediately pulled the plug on Birthday Dollar, processed the last
transaction and shut the whole thing down.

What did I learn? I learned that there's no shame in surrendering without a
fight.

------
lbriner
It's hard to tell the exceptions from the rules.

Many people would say, e.g. don't deal with large companies because they will
drag you along, eat your revenue and then not commit to a sale 12 months
later. You will also find plenty of companies who will say that 1 big customer
was their route to some early cash and success.

The bottom line with any business success is the CEO/executive team
understanding how to take a high level view of the company and fix anything
that isn't working!

------
kolleykibber
You learn the old business cliché that the old business clichés are true.

It would be interesting to see a list of clichés tabulated with the number of
failures.

------
wgx
We built an app that let people pay for goods and services (in the real world)
with their smartphone, we grew fast, raised, built a product our users loved.
Then... contactless payment (and later Apple Pay) came along and killed us.
Lots of other stuff happened along the way, but with the benefit of a few
years' hindsight - this is basically what happened.

------
imeyou
I started a location-based Q&A social app. A Twitter-like quora app as per
location. The idea was well received early adoption, and user retention
couldn't be achieved. Learnings were that (1) there was no niche it was a very
horizontal platform and people did not know what to best use it for (2) Lack
of trust between strangers to answer queries

------
rafiki6
Failed because my co-founders weren't committed and I didn't care enough about
the idea to attempt to pursue it on my own. Learned that having good committed
co-founders is critical if you'd like to have them at all. Also learned that
starting a business in an industry you have no experience in is incredibly
hard.

------
wink
It's not about the best tech.

We seemed (well no one knows for sure) to have the best data available (it was
an analytics product) over our competitors, but didn't earn enough money with
it. I can't blame our sales department as I have zero ideas how to even sell
sliced bread, but our customers regularly said they liked our data better than
what they got from the competition.

We did spend months improving our tech and even had stuff like geo-based load
balancing, multi-DC failover, and a lot more. We prepared for a lot more
customers and traffic than we needed to handle in the end. Some of it was
warranted, but especially improving our data/algorithms even further was
absolutely wasted time. We went from like 90% professional setup to 95%, and
went from 99% good algorithms to 99.5% good algorithms, but we should have
added more fancy dashboards and better UX. Admittedly, many customers just
logged in and grabbed a CSV export, they paid for the data. But a not
insignicant amount of customers also said the competition's presentation was a
lot better. We never had a dedicated front end person with real design chops
(not just being a JS developer), we should have hired one or two.

We also held on too long to old features/products that weren't the current
focus but spread our resources too thin. We weren't enough developers/SREs for
the workload, that means we either moved too slow or stuff got postponed.

I think we also never fully made the switch from "we'll do some customizations
for customers to get them to fully make a commitment" to "this is the SaaS
offering, take it or leave", but maybe the market space was also too small for
that. It was B2B and the customers weren't something like Small businesses,
where you have thousands.

Things that 100% did not matter: permanent overtime, too much vacation time We
were a German startup acting within German work conditions, e.g. 40h were the
norm (sure there were exceptions when something exploded), we had paid oncall
and if you didn't sleep the whole night then you just handed over in the
morning and went to sleep.

TLDR: Lack of focus on a single product, not selling to enough customers, did
not perform step to lower-maintenance SaaS (worked too much like an agency)

------
megamindbrian2
I wrote a rigid system. Investor fatigue.

~~~
turdnagel
What did you learn?

------
jamesleonard
\- Co-founders didn't have enough domain expertise \- Poor execution on our
mission which allowed peoples personal side interests to pull tech and
development in every which way \- Many other reasons

What did I learn: Strong leadership = Strong execution If you can't
communicate you can't create.

------
xyproto
Try to sell the product before spending the time to build it. Sell the dream,
then build it.

------
Leigho15_M
A person is not necessarily dumb because their start- up failed. For me: 1\.
Improperly defined market. 2\. Did no consistent marketing- marketed to a
broad group for one month then quit. 3\. Lost interest in the business idea-
boredom!

------
nathan_f77
So far I've had at least 4 failed side projects/startups, and one mildly
successful product (so far).

Back in 2014 I tried to build a product recommendation service based on Reddit
subreddits, where I would make money from Amazon referrals. I actually got to
the front page of Reddit and Hacker News, but Amazon rejected my referral
application, because apparently they don't approve any websites that have a
grid layout of products (too similar to amazon.com.) I retried a few times but
still couldn't get it approved, so shut the website down.

My first attempt at cofounding startup was a social network for skateboarders:
[http://hdwr.co](http://hdwr.co). It wasn't a great idea but our team was
pretty amazing. We set up a lunch with Tony Hawk (although nothing came of
that), and were in talks with The Berrics (a big skateboarding brand) about a
partnership, but couldn't work out a deal. In the end we didn't have enough
users or growth, and after a few years everyone got bored and we shut it down.
Never made a single dollar.

I had an idea for a mobile game that I thought would be fun:
[https://itunes.apple.com/us/app/boops-boops-
swoops/id1128234...](https://itunes.apple.com/us/app/boops-boops-
swoops/id1128234938) It had an "AR" mode, a few years before that became a big
thing. Anyway, I executed poorly and the game sucked. It just wasn't very fun,
and I didn't make any sales. I learned that I'm not very good at making games,
and even good games are a lottery ticket.

Second game: [https://sudoblock.com](https://sudoblock.com) I had a lot of fun
building SudoBlock, and it was really good to learn React Native. It was
awesome to build a single app that could run on Android, iOS, Windows, and
web. I posted it on Reddit and tried some other marketing things, and I earned
a total of $30 from in-app purchases. I learned that I'm still not very good
at making games. I think the execution was a tiny bit better than my earlier
game, but still pretty bad. And the game just wasn't very fun or addictive. If
I ever do another game, I should probably hire a designer. But I probably
won't, because I enjoy doing everything myself, even if it sucks. And maybe
I'll get better at it eventually.

My current project is FormAPI ([https://formapi.io](https://formapi.io)),
which is a B2B SaaS service that I've bootstrapped. I launched about 11 months
ago, and I'm not really comfortable with disclosing the revenue, but it's
doing really well. I'm excited to keep working on it for the next few years
and seeing what happens.

------
ritoune
Started a company with a close-ish family member who also had a prestigious
full time job in the sector we were in.

He promised meetings with execs and experts in the sector, and expert advice.
We split equity 50/50\. After three months, we had an MVP that customers
loved, a contract with a large client, and several interested angels.

Unfortunately the co-founder hadn't delivered on anything (all business
meetings were from cold calls, I had to learn all domain expertise on my own,
my co-founder was spending no time at all on the company and kept promising to
do things that he didn't end up doing).

After trying to get him to execute what he said he would do with a positive
attitude for three months, he called me and told me he "didn't want me to make
him feel like he wasn't doing enough". If he was a stranger I would have found
a way to kick him out. But to preserve family relationships we killed the
company.

TLDR: people in your family with great jobs don't make for good co-founders

------
nerdbaggy
Burnout

------
ilamont
Choose cofounders carefully, understand the platform dynamics of your
industry, don't discount models that experts and the in-crowd look down upon
(solo founder, bootstrapping, etc.)

~~~
jlelonm
I’ve heard “understand the platform dynamics of your industry” a lot in
various forms but it’s always seemed so vague to me. How do you know when you
do? What does that look like?

------
paulie_a
We didn't get enough clients. Step 1-100 is sales, the technology is pretty
much irrelevant. you are a sales person first and foremost and a developer
sometimes.

------
olh
They thought I would be just another brazilian and join their corporate
corruption scheme against a major hospital here in southern brazil.

The main guy, a PhD in Physics from a top university in europe (but a retard
IRL), will be cleaning sewers until death comes.

True story.

edit: i was the founder and they were clients in a bootstrapping program
involving a top 10 tech giant and a hospital

~~~
digitalzombie
> will be cleaning sewers until death comes.

What does this mean? Is this a prison punishment?

~~~
olh
"out-of-court settlement", let's say, for when rule of law does not exist.

------
iamcasen
TL;DR: We were way too ahead of our time.

Back in 2010 I joined the founding team to build a crowd-sourced video editing
platform with the goal of getting people to edit their countless hours of home
movie footage into short clips they will actually watch instead of them sit on
a tape or hard drive somewhere.

We built the whole platform, had the economics all worked out. Did a number of
innovative things like connect to a royalty free music API, and Dropbox's API
before that was ever released to the public.

In the end it failed because the average consumer did not have fast enough
internet in 2010. Most people simply could not upload their files to us, even
after we implemented a dropbox integration. Gigs of video files just took too
long and people lost interest.

In hindsight, we should have seen that coming and started out by partnering
with a digitization service that could handle various formats like tapes, and
we should have also done some form of shipping raw media so that consumers
wouldn't have to upload files to us. I think we would have succeeded in that
case.

------
VSerge
TL,DR, my main takeaways are: \- it's all about the team (what every VC will
tell you) \- don't start a company with friends you haven't already worked
with and really tested \- first mover advantage won't help if you move
straight into a wall

It's really all about the humans. I started a UAV company with some friends
about 12 years ago, and we had a very ambitious initial project: an amphibious
drone. I had gone to work right after graduating, while my friends had studied
some more, so that when we started the company, with my 2 years of work
experience, I was the most experienced one around. Needless to say, the
original plan didn't work, and it was all about the team not being good
enough.

We raised over a million, paid ourselves shit salaries (ie less than minimum
wage), and managed to survive 3 years. After year two, a couple of the co-
founders were given the boot for gross negligence (burning over 100k through
sending the wrong plans to production..), and a pivot happened. It started
working, then an accident happened and no money was left to recover from it.

It could seem that a bit more money could have saved the day, as in the third
year we finally were onto something which we could do and for which there was
a market fit. But the pivot only happened because the team changed. The
remaining members of the team, notably the flight test / composite
manufacturing team, were very competent, but I suspect they were just spent
after 3 years of startup purgatory. So, when it seemed like we might survive a
bit longer, they decided to just kill any such possibility and finally be able
to walk away. The other co-founder that was left let it happen and just
folded, going so far as to forbid me in writing to try anything further to
sell our assets or save the company.

It was very hard realizing that my co-founder friends, some of whom I thought
of as brothers, had behaved the way they did. It is heartbreaking to see
people you trust be negligent and ruin the efforts made by others, and betray
the trust of the people who had trusted a bunch of 20-somethings with a big
pile of money.

I'm not blameless either. I should have reacted much earlier to the lack of
professional standards of some of my colleagues, and either left or asked for
them to leave. Friendship made me blind, and way too trusting. I should also
have tried to raise more money when we pivoted, and focused a little less on
product and business development, but I couldn't see that at the time.

------
bane
I've worked for two startups that failed in entirely different ways.

Startup A: We built custom analysis software, a 1.5 million line-of-code C++
codebase with 2 major products.

Head count: 20

Reasons we failed (IMHO) - in order of importance

1) Heavily saddled with tech debt. 1.5 million lines of C++ code is not an
asset. When we started Web technologies were simply not able to provide the
kind of functionality we were offering. So we kept doubling down on the thick-
client software. When the web finally started to catch up, we had the wrong
skill sets in the wrong places to pivot the tech without rebooting the entire
company. We hit a weird technology gap where thick client software was on the
way out, but web tech wasn't _quite_ up to par for most of our existence. Near
the end it web tech stacks were probably good enough, but we ended up going
down the wrong path.

2) When we did try to start over with a clean code-base our tech skills
couldn't move to the kind of technology that was becoming fashionable in
enterprises. So we built another desktop client very quickly in C#. It worked
well, but it was like selling a different kind of horse in the age of the car.

3) Absolutely terrible sales staff. I learned more about how important sales
teams are from this ride than from any other experience. Nearly 90% of the
sales came from word of mouth, and the rest from a couple of us tech guys bird
dogging it out on the street. 4 successive sales guys produced $0 of sales
over 6 years. To make matters worse, none of them were ever able to gain
enough proficiency with the software to sell it themselves, they always had to
pull along a "sales engineer" to demo. Total mess, and it's made me pay much
more attention to corporate sales apparati over the years.

4) Funding funding funding. Our total VC investment was too small, and our
executive team too inexperienced to realize this. We easily needed 10-20x the
investment to make it work, hire good staff, pivot to better tech stacks and
approach the market correctly. When we started the VCs claimed that we'd be
the next unicorn, the money never added up to make that claim makes sense.

Result: I rode the ship down because I was learning so much on the way. The
people were good to work with so it made it worth it. Everybody ended up in
good jobs elsewhere and we're almost all in senior or executive positions,
applying the lessons we learned.

Startup B: Web-based analysis software (I can learn!)

Head Count: 60

1) Absolutely dishonest, immature, corporate leadership who couldn't work
together to operate an elevator. Treated key employees like garbage and
ignored the rest. It was like middle-school.

2) The bad behavior extended to customers, who were often put against each
other by the CEO in a web of deceit. Hard to explain, but very bad behavior.

3) Tech looked awesome, the back-end was rubbish because the engineering team
was incredibly poorly run. I mean like builds completely breaking every day,
completely unscalable critical architecture components, senior engineers
insisting pet projects be included.

Result: I fled like a deer stampede in a wildfire. The company closed shop not
too long after I left and the CEO and some of the senior C-level staff have
disappeared from the face of the Earth. If they're doing something, it's not
public in any way these days.

------
pbhowmic
I could write a freaking book on it.

------
quicon
working alone get a team

~~~
quicon
sorry, I meant: why did my startup failed: I was pretty much working alone
what did I learn: build a team

------
angersock
My own startup about five years ago (I've worked at several others, all
different types of failures):

 _Running out of money._ We were bootstrapped, and the style of work we were
doing had some decent capital costs. We failed for a "bargain" (less than 7K),
but we had cut to the bone and deeper while trying that. Side jobs to make
rent just increased stress and distracted from the business.

Why did we run out of money?

 _Focused on engineering instead of sales and marketing_. Manually spinning up
servers would've been the right thing to do--since we instead were both
technical we solved technical problems and kinda missed the people side of
things. It was real and hard work, but it was not work that was relevant to
making sales.

After we ran out of money, why didn't we keep at it?

 _Stress blocked further work._ Too much stress led to neither founder being
able to even think about the company and its business without severe anxiety.
Times were dark and bad.

~

I learned that you want to prioritize the money funnel over literally every
other thing that you as an engineer think matters. Coffee is for closers.

I learned to try out only with other people's money. Don't put your rent and
basic living on the line for an idea if you aren't comfortable with what that
can entail.

Probably most importantly, I learned that the glorification of the startup
lifestyle is a lie perpetuated by people seeking to make money from it at all
levels. Nowadays, even the glorification of failure and celebration of mental
health seems to be by people looking to advertise their businesses, cure-alls,
or just get internet famous.

It's rotten to its bloody core, and unlike finance doesn't even pay well.

~~~
mahesh_rm
"Probably most importantly, I learned that the glorification of the startup
lifestyle is a lie perpetuated by people seeking to make money from it at all
levels."

This I would say is my main learning point. My first startup failed because of
inexperience and team implosion following incapability of generating revenue
fast enough on one side, and attract favorable investment on the other.
Failure could have been lighter on both me and the other members of the team,
was it not for a self-immolation mindset probably driven by glorification of
"startup lifestyle". Things fail. Most of the time. Assume failure. Optimize
for resiliency. Never expect success as the natural outcome, but rather
consider it will come collaterally to continuous reaction to ugly realities,
and damn slowly. You can stumble upon a rocket ship, but it is not how
businesses usually get to come to life.

~~~
ak39
"Assume failure. Optimize for resiliency."

Printed and stuck on my desk. Thank you very much for this well-said wisdom.

------
goodsaas
Our founder went off the rails and developed a substance habit.

It got so bad that he was taking money from company account paying for drugs.
Eventually arrested, lawsuits followed and now he's sitting in jail. Just a
genius that couldn't control himself...

~~~
migibo
That's horrible.

This and mental issues are some of the darker sides of startups that are not
discussed a lot.

------
jacobsheehy
\- Poor leadership (me). Inability to align team on a common goal (!),
inability to communicate clearly about plans, etc.

 _I learned_ that I'm not the leader I thought I was.

\- Canadian business. Means US B2B enterprise checks get stopped at the border
for 3 weeks while they 'investigate'. Makes your last mile enterprise sale
that much harder. Investors are conservative. Wanted $5-10k MRR before
considering angel-level investment, no go until then. Harder to compete
against Valley companies.

 _I learned_ get the revenue first anyway, the days of bootstrap a free
service until funding are harder and harder to come by. Revenue first.

\- Problem we were solving was harder than expected (barometer data to weather
forecasts). Main product was going to be a weather model but we never made it
that far. Data quantity, quality control and user retention were bigger
problems preventing us from executing to success. This leads to running out of
money.

 _I learned_ that hard problems are hard. Your startup doesn't have as many
advantages as it thinks it does if the incumbents can copy/do better than you
with your "hard problem" solution _or_ if you take too long to build your real
MVP.

\- Team skills were not right to solve our problems. After company founding
and initial pivots we were not left with founders and staff that could solve
the problems we now had to solve.

 _I learned_ to be careful starting a company with your friends. And that
pivoting can have risks like a lack of skill required to complete the pivot.

\- Probably the final item would be despair. When things get bad there is
almost no way to come back because you've lost the trust of the people who
were holding up your fragile startup to begin with.

 _I learned_ to know when to quit before driving things into the ground and
taking your team with you.

\- One more item: If you can catch it before you start a startup, it's a good
idea to really make sure your hobby project shouldn't just stay a hobby
project. Maybe it has some organic growth and media attention - but that
doesn't mean it should be a startup.

 _I learned_ to keep my job and my hobby separate. I'm employed with a day job
now and I can do phone weather experiments in my free time with a hobby [1],
not trying to shoehorn some idea of a startup into an otherwise neat and
successful hobby.

[1] Labelling photos of the sky as a training dataset into machine learning
classifiers for auto-labelling of weather data in photos is a _hobby_ \- not a
startup:
[https://play.google.com/store/apps/details?id=com.allclearwe...](https://play.google.com/store/apps/details?id=com.allclearweather.android)

------
OkiiEli
I used to work at a multi-national and got fired. I always wanted to try
freelancing but didn't have the courage to leave a well paying full-time job
and take the risk. This gave me that opportunity and I went ahead to started a
productized content-as-a-service
[http://contentiskey.co](http://contentiskey.co) which offers unlimited
content for $250/mo Right now am busy searching for customers, you can join me

