
What I learned from my startup’s failure - JayTsa
https://medium.com/@SoldOutSupplier/my-startup-failed-i-lost-everything-heres-what-i-learned-44658a116464
======
dqdo
>"My startup had to deal with payment processing (at least initially before I
pivoted) so I thought I needed it."

You generally don't need a payment processor when starting out. The first
~200k in revenue can be done manually. Payment processing is something that
takes time to do and most likely you will need to tweak it a few time as you
figure out your business model.

>Paying for dev/design work by hour for a new startup is an insane concept to
me now. There are always gonna be bugs, something that doesn’t work, something
that needs to be added, etc.

Tech products are very complex. There are thousands of bugs and edge cases
that needs to be resolved for a high quality product.

>And ideally, especially if you’re a non-tech founder like me, PARTNER.

One of the worst idea is to have non-technical people try to create a tech
business without a strong technical co-founder. Imagine starting a dentistry
office without any prior knowledge or a partner who is a dentist. Imagine
trying to start a restaurant without a chef, etc. Creating a tech business is
not a get rich plan. It takes a lot of skill, knowledge, and luck to get a
business off the ground. Unfortunately, the media stories that we read make
creating a great product or fundraising millions of dollars super easy. The
reality is that running a start-up is probably one of the hardest things that
one can do.

~~~
carsongross
_> One of the worst idea is to have non-technical people try to create a tech
business without a strong technical co-founder._

The best formula I have seen is one business guy and two strong programmers,
where one of the two has some talent in ops.

~~~
KennyCason
I concur. Our initial team was just that. We had an myself (Engineer), A
sales/marketing guy, A new Engineer, someone in Ops part-time. The combination
made the division of labor so much easier, which directly results in a faster
go-to-market.

------
pthreads
It's unfortunate and I sympathize with the author. But that said most of, if
not all, the lessons-learned points he makes could have been potentially
avoided if he had just spent some time reading even one or two startup-how-to
books. There are hundreds of those now.

There are many many founders who have been through the exact same situation in
almost exactly the same fashion. And they have shared their experiences. So
why not read up or ask advice from them before jumping head first? It doesn't
take long; 2-3 weeks tops.

This is my advice to future entrepreneurs -- read on a variety of topics
before you jump in head first. No matter what your idea is or area of
expertise gain some understanding of at least some areas of running a business
including but not limited to marketing, sales, technology, finance,
incorporation, financing, growth, hiring practices, legal, equity, etc. etc..

~~~
nostrademons
The problem is that most startup books tell you what _not_ to do, not what
_to_ do. Actually finding an underserved market that can be serviced by
something a founding team can build is a bit of a black art. Anyone who finds
one is busy building that startup, because the financial returns of actually
serving the niche are so much better than that of telling someone else about
the niche.

Before anyone mentions Lean Startup or Startup Owner's Manual - I've read
them, lent them to friends, actually put them into practice, and that startup
(startup _s_ , actually) still failed. And I've got a half dozen or so friends
and acquaintances who have done it too, and their startups all failed too. The
advantage of that methodology is that you fail _fast_ , oftentimes before you
quit your day job, but if founding a startup is something you really want to
do, knowing a few dozen ideas that _aren 't_ viable businesses is only
marginally useful.

~~~
skynode
> _The problem is that most startup books tell you what not to do, not what to
> do._

This is actually better. Because it means that the authors have had their
failures (hopefully?) and are telling a practical story. It's subtractive but
it works, re. _Ten Commandments, via Negativa style._

It's actually much worse to tell somebody who'll probably be halfway across
reading your book to jump x metres when the wind speed is just under y mph to
achieve some z business effect.

Point is your context may not be somebody else's context, so it's much better
to harp on universal principles which you violated in business than to show us
a sequence of events which leave out the role of timing, chance and other
unknown unknowns.

------
tbabb
I think there should be a word for the particular kind of bikeshedding that
happens when the first task undertaken is to make a name and logo, which is,
at the start of a project, literally the least important thing.

I think it's some kind of signifier that a project is doomed when logo-making
happens so early; maybe it's because it means that no one wants (or doesn't
know how) to do actual work. I've seen it happen multiple times.

~~~
kpommerenke
Paul Graham called it "playing house."
[http://www.paulgraham.com/before.html](http://www.paulgraham.com/before.html)

------
bhouston
Interesting stuff, thanks for sharing.

Losing $50k and a college friend may seem like a lot but I think it is at the
beginning of your career. But good that your learn these lessons before you
have a $$$ home, a wife and kids -- then losing it all is a lot more serious.

I would not be surprised the hard nootropics played more of a role than you
give it credit for in taking you down such a path. Hyperfocus drugs and
anxiety-inducing drugs are not conducive to globally optimal decision making
in a diverse and rich environment that is critical for running a successful
business.

~~~
taneq
I still don't get why he was taking nootropics when he wasn't doing anything
technical. In fact I'm not entirely sure what he was doing, at all. He seemed
to want to "start a startup" without knowing what he was building, for whom,
to solve what problem, or what kind of value he was aiming to create.

The biggest red flag to me was that they tried start a startup to which (as
far as I could tell) neither founder brought any actual useful skills. You can
get away with that sometimes if you have huge funding and can work the hype
machine, but not as a pair of self-funded kids.

(As an aside, point 8 'Go Lean' is basically saying "push your risks/costs
onto others, exploit your workers, better yet partner with someone who has
skills so they can do the work for you." I've met guys who (try to) work like
that and they're leeches.)

------
yawz
_> Great guy, but he had no idea about marketing, no dev/design skills, wasn’t
investing any money, and was just willing to help. ... Lesson — if you are
going to get a co-founder, actually choose one for the right reasons. Avoid
friends/family if possible._

But... but... how was he even supposed to contribute and pull his weight
without any crucial competency in an area that directly impacts the product's
success? The issue, here, is not that he was a friend/family. He was simply
not useful.

~~~
uiri
Yes, if he had to match the author of the post in terms of financial
commitment (or even throw in a non-trivial-to-him sum of money), he would have
taken the startup more seriously and have been less likely to just walk away.
The issue wasn't that he was a friend/family

~~~
KennyCason
Regardless of whether that was the primary issue or not, I think the trap most
people fall into is to simply work with somebody only because they are
comfortable with them. Or perhaps the other person even insisted on it, but
the founder didn't have proper experience to realize that was a bad idea.
Comfort is an easy trap to fall into.

------
Gibbon1
> Don’t limit yourself to starting only what you think could be a billion
> dollar company

Small comment about valuation vs return. A lot of business types have really
rotten valuation yet provide a somewhat steady income stream for the owners.
The valuations are crummy because the potential passive income stream is too
small. However these businesses can be lucrative for an active
investor/manager.

------
alexashka
There's a deeper trend here that the author is still unaware of, and that is -
being delusional and not having any friends/family who will point out your
head is really far up your own ass.

The issue is when you're in your 20s and you had some financial success, you
can use that to justify not listening to anyone and even feeling like you are
eligible to give anyone else advice!

Reality is, in your 20s, there are things you don't know know that you don't
know. That's how little you know :)

This is a subtle point - you don't even know, the types of things you don't
know, you are not aware. That's what being delusional is about - it makes you
write blog posts that you genuinely feel will help others, and all the while
you are VERY much lost.

Anyhoo :)

~~~
brianwawok
On point. He says some ok things. But I have no indication he really gets it,
so not who I would listen to advise from.

------
salesguy222
This poor guy actually did get fleeced.

Sure, there are people who aren't very technical and don't have any MVP to
speak of, but most of those people know to stop before they've blown through
$50,000 and have shredded their liver with "brain drugs" (which are just drugs
btw, there is literally no pill for hard work)

I'm glad he eventually got a start up going elsewhere, but I'm genuinely
worried for this guy. His writing is all over the place and he was ripped off
by shovel sellers during a gold rush. He couldn't see any fault with paying
thousands of dollars for legal services and developers when he had barely any
customers and no discernable product?

Yikes, poor guy.

~~~
FussyZeus
> ...he was ripped off by shovel sellers during a gold rush.

Good luck trying to convince the prospector that there isn't actually gold in
them hills.

Yeah maybe he got fleeced by some opportunists, but he also dove head first
into making a "epic company" with no idea what he was actually selling (at
least that's how it sounds). It's not the shovel seller's job to vet the
skills of the prospectors, and even if it was, do you really think the
prospector would listen?

~~~
salesguy222
Sadly I can only agree with you my friend!

A businessman probably shouldn't be judged by the success of his customers.

You can sell the horse some directions to the nearest watering hole, but you
can't be judged on its drinking ability ;)

------
ganeshkrishnan
Attempting a start-up is like learning how to walk. You will fall, and it's
really hard to teach someone. You have to learn on your own in your own way.

For me two important points 1) always surround yourself with people smarter
than you 2) it's all about money. Hit the ground and start making money

All in all this is a very good post. I cringed at the first line when I read
he was non techie. That explains most of the failure. Plus his choice of co-
founder.

My startup doesn't even have a good logo, or confirmed co-founders or is
registered but with focus on earning revenues we are making money

~~~
digitalshankar
May I know about your startup?

~~~
ganeshkrishnan
[https://www.aihello.com](https://www.aihello.com) We use machine learning to
help online retailers sell more efficiently on Amazon/ebay

------
noonespecial
_And yah it’s just something I avoid now.. if you’re going to make something
that helps people, charge for it. Note: I’m gonna get crap about this
probably.. I’m not saying this can’t work, obviously it has worked for a lot
of companies and continues to._

So there's this meme:

    
    
      1)Make something awesome
      2)???
      3)Profit.
    

Don't know where along the line we forgot that #2 was simply "sell it to
people for money" but it's definitely worth a reminder now and again.

~~~
kpommerenke
There's a South Park episode using that meme:
[https://www.youtube.com/watch?v=tO5sxLapAts](https://www.youtube.com/watch?v=tO5sxLapAts)

~~~
jedberg
As far as I know, that South Park is where the meme came from.

------
samfisher83
I think was the most important lesson: Get clear on WHO you’re making this for
and how they can be reached. This was one of my bigger f ups. Fast forward 8
months to when I had something ready to get my first users.. I knew it was for
business owners (B2B) but didn’t realize that they are that much harder to
reach (for me anyways) than consumers, and I also had the type of platform
that I had to grow city by city (f’ing nightmare). After a couple days of
going door to door to businesses I could start to see how this was going to be
a problem.. I didn’t account for the time/costs it will take to reach my ideal
customers. It was a big smack in the mouth. So figure out WHO you are making
this for and how you’re going to reach them before you start. Just take that
into account so you have the right expectations and you can plan/budget for
it.

If you can't reach the customer you are screwed.

~~~
naasking
> I think was the most important lesson: Get clear on WHO you’re making this
> for and how they can be reached. This was one of my bigger f ups.

Probably one of the most common f-ups: not having customers that actually want
your product.

------
austincheney
Why would anybody invest in a startup without #4 and #5? I simply don't
understand spending a huge amount of money like that without knowing what you
are spending it on.

------
FussyZeus
> Investors were like LOL, have a nice day (especially if you have poor
> traction). And yah it’s just something I avoid now.. if you’re going to make
> something that helps people, charge for it.

This times a million. I've been burned so many times I use as few "free"
services as possible, and nothing critical ever goes on one.

> Note: I’m gonna get crap about this probably.. I’m not saying this can’t
> work, obviously it has worked for a lot of companies and continues to.

It continues to work because the bubble is still holding. Eventually when
privacy regulations finally go into effect, that decades worth of millions of
users data that every startup trades around in back rooms is going to be
effectively worthless. I suspect a lot of companies will be shifting to
subscription models once we finally end open season on spying.

------
hartator
Overall rule of everything in life: nothing is worth it if it stress you out.

~~~
yawz
I so would love to believe in that, but I'm old enough to know that it's not
true.

I'm still upvoting your comment, just for its optimism. ;)

~~~
rckclmbr
Yep. My kids stress me out to high heaven. But I'd still say they are worth
it.

------
KennyCason
Thanks for sharing this, I really enjoyed reading it and while I was lucky to
avoid most of these pitfalls this time around, I definitely fell for a few of
them on earlier ventures. I can sympathize.

------
digitalshankar
>"Lesson — if you are going to get a co-founder, actually choose one for the
right reasons. Avoid friends/family if possible."

Can someone tell me if the above statement is a mistake of the author? I mean
the co-founder should be someone you know from long time that would be your
friend or family brother/sister right? I think the author has chosen the wrong
friend.

------
alexbiet
One invaluable thing, especially for first time founders, is to have a mentor
who's "been there and done that", to help with direction and important
decision making in the young startup company.

You can't win them all, yet there's a lot you learn from failing and the
lessons will stick with you.

------
skolos
> Once I had my idea, I spent about 2 weeks deciding on a name/domain I should
> choose.

We saw it many times before. And also you spend time setting up email on your
new domain, and simple website, and analytics for your launch page, and sign
up form and blog etc. Instead you should focus on your business, but it feels
that without all of this you don't have a legitimate business.

We started bunch of projects and saw this cycle repeat itself. Now we are
trying to help fellow entrepreneurs to get through these initial steps as
quickly as possible. For a small fee (that is much smaller than usual annual
fee at known website providers) we will do lots of configurations, email
confirmations, dns table editing to get you free email, website, blog,
analytics. We will even setup Stripe account for you (you'll just need to put
your bank info to be able to use it). Check out
[https://www.ninjalauncher.com](https://www.ninjalauncher.com). Sorry for the
plug, but it seems relevant for the discussion.

------
digitalshankar
Most of the mistakes the author did has been covered in Startup School Videos
by YC.

[https://www.startupschool.org/](https://www.startupschool.org/)

------
xkxx
> I Lost Everything

I doubt that a person who can post about it on the internet did actually lose
everything. Most likely he leads quite a luxurious life: he is a wealthy
(compared to other parts of the world) American, most likely wrote his story
from his MacBook and has a place to live. A lot of people can only dream about
a life like his. His expectations is what makes him believe that he "lost
everything".

P.S. Clicked on the link after writing this post. Yeah, the guy actually wrote
it from his MacBook.

~~~
elefanten
If you read all the way through, you'd see that they have since started and
sold another startup. At least, that's their story.

~~~
wolco
That is the part of the story that sounded made up. A few months later he
founded another company the right way and sold in it in 9 months.

Judging by the comment that he would never pay by the hour instead using a
flat salary he would simply assign expected tasks and deadlines. Not sure that
strategy attracts the type of developer who could build the next facebook.

The problem with trying to figure out what your product is by actually
developing it is usually solved by designing what you want with pen and paper
first.

Most successful businesses start with a product idea and the difficult part is
getting funding to built it. It sounds like the author started with money but
no vision.

------
JuliusKaiser
So basically take a year of business courses to not be a moron. Got it.

~~~
dang
Please don't post snarky comments here.

