
Ineffective Entrepreneurship: Post-Mortem of Hippo - Gormisdomai
http://effective-altruism.com/ea/1oq/ineffective_entrepreneurship_postmortem_of_hippo/
======
scandox
> The work I was doing for Hippo – designing the product and talking to users
> – I was able to do much quicker than David was able to build the product (he
> had a normal developer job).

> I think my particular mistake was probably being too optimistic about how
> much development work David and A would and could do. I should have been
> more critical of our development productivity and not given them so much of
> the benefit of the doubt.

Developers: Don't work for these people. This is why it is so important to
donate your time to people who are serious. Do not give your time to backstop
someone's else fantasies of doing something "important" or getting rich.

~~~
snaky
I think all the model of modern startup culture is suboptimal but widely
spread and so considered the only possible scheme by literally everyone.
Couldn't we imagine the case when not enterpreneur dictates 'what to build' to
developer, but exact opposite of that? Developer knows what he is going to
build, and just hires marketing-minded guy for legwork wrt funding, marketing,
and other extrovertial stuff - for the same little wage and stock options as
it's done usually.

~~~
rkangel
This happens, and you could argue is how Google and Microsoft got started.

In practice though, knowing WHAT to build is at least as important a skill as
HOW to build it. Things an engineer wants to build are not necessarily things
a customer will buy. So starting with someone with understanding of the market
is probably more likely to bring success.

~~~
snaky
The question is who is the boss. And almost always it's the marketing guy, we
usually call him enterpreneur. I don't think this model is good or bad per se,
I'm just talking about maybe, just maybe, it's not supposed to be like that
everywhere every time.

------
iovrthoughtthis
This is full of classic early stage business mistakes.

\- Married to the "how": app, app, app, app. It didn't have to be an app. You
wanted to use technology to make people happier. There's a lot more technology
than apps.

\+ talking to users: well done!

\+ reaching out to potential customers!: really, well done!

\- not following up with customers: face palm. But that's ok, talk to another
one and keep in touch!

\- not using customer agreements to raise money for product dev: you should
have used the banks agreement to a trial to help fund developement. The bank
could have sponsored the initial build! You could have raised a little money
from people based on that. Gone to an accelerator, it didn't have to YC.

\- started a PhD: focus!!!! Argh. Now you're just going to half ass both.

\- couldn't develop product faster enough: perhaps you needed a more
experienced developer? Maybe you needed different tech. Because you were
basically building a business off the back of a favour, you were pretty stuck
though. You can't fire a favour.

\- 9 months to launch an Alpha: this is too long to wait to get a simple mood
tracking app into alpha. It didn't need to be anything more than that at this
point. The fancy can come later.

\- let's use ML!: NO! You do not have time for the distraction. Unless you're
going to use the Hype train to raise funds.

\- not useful, technical issues: fix them?

\+ apply to YC: good, seeking mentorship is probably a good idea :).

\- only apply to YC: all your eggs in one basket is not a good strategy.

\- still struggling to articulate the idea: what did you tell the bank? That
seemed to work. Mayhaps you're a little dissolusioned? Take a break tbh.

Generally great approaches, I think if you were to try again a few times you'd
make it. It's evident that you have some of the right mind set to make it
work.

I think you gained a fair amount of CV worthy skills and experience tbh.

------
influx
This is like me who knows nothing about making music, convincing a bunch of
actual musicians to create a band, not pay them, come up with a vague idea for
an album and then send them e-mails every other week asking about progress,
and then calling myself a failed band leader when they go off and get actual
jobs.

------
JanisL
One thing that really struck me was this comment:

> Stardom and riches beckoned! I could practically see my face on Wired
> magazine.

Many years ago I worked with a sports psychologist and one of the things he
impressed strongly upon me was that you don't want to get caught up in dreams
of the end success. The reason being that your mind can't always clearly tell
the difference between the real endpoint where you can kick back and relax and
the daydreams of that end point. As a result if you spend too much time
dreaming about what it will be like at the end you risk getting disengaged
because you've created a situation where your mind might think you have
already made it more than you really have.

(Hopefully this paraphrasing gets the idea across)

------
lpcrealmadrid
I have deep respect for this entrepreneur because it is so damn easy to
theorize impact/success in one’s brain and masturbate over pure thoughtstuff.
It’s a whole different story when the rubber hits the road and so I really
appreciate the author sharing their story. The parables to one’s personal life
are impeccable.

The “Hippo” irony comes from a story from the incredible Ernesto Sirolli:

“SIROLLI: It was a project where we Italians decided to teach Zambian people
how to grow food. So we arrived there with Italian seeds in southern Zambia in
this absolutely magnificent valley going down to the Zambezi River. And we
taught the local people how to grow Italian tomatoes and zucchini. And of
course, the local people had absolutely no interest in doing that so we paid
them to come and work, and sometimes they would show up. And we were amazed
that the local people in such fertile valley, would not have any agriculture.
But instead of asking them how come they were not growing anything, we simply
said, thank God we're here. Just in the nick of time to save the Zambian
people from starvation.

And of course, everything in Africa grew beautifully and we had these
magnificent tomatoes. In Italy, a tomato would grow to this size. In Zambia,
to this size. And we were telling the Zambians, look how easy agriculture is.
When the tomatoes were nice and ripe and red, overnight, some 200 hippos came
up from the river and they ate everything. And we said to the Zambians, my
God, the hippos. And the Zambians said, yes, that's why we have no agriculture
here. Why didn't you tell us? You never asked. I thought it was only us
Italian's blundering around Africa, but then I saw what the Americans were
doing, what the English were doing, what the French were doing. And after
seeing what they were doing, I became quite proud of our project in Zambia
because, you see, at least we fed the hippos.”

------
wiz21c
There's an intersting nugget :

>>> Failing unremarkably can happen and is something you should consider as a
possibility. If I were to claim I had built career capital as a result of my
2.5 (mis)adventure, I would be deceiving myself. As it is I walk away with no
cool story, no CV points. At least if I’d blown some money (mine

That's real failure.

------
rossdavidh
While it is pretty easy to think of things to criticize with this article and
the author's strategy, I admire the willingness to share stories of failure.
It's an interesting contrast with several stories I've read recently about
Elizabeth Holmes and Theranos, the startup that had an idea that didn't work
out, that wouldn't quit, kept getting money, kept doing whatever it took to
keep trying, and ended up resorting to deception. There is something to be
said for the honest admission, "this isn't working, it's time to stop and try
something else." Getting lots of money invested in your idea may make it
harder to admit when you need to try something else.

------
icc97
I loved his 'the Mom test' link to Rob Fitzpatrick's 'how to get feedback when
your customers are lying' video [0]. It reminds me of an old Jakob Nielsen
post about user testing. You need to watch users actually using the product
without your help, but you can probably get away with only 5 users [1].

[0]:
[https://www.youtube.com/watch?v=O_xjb7LB7VY](https://www.youtube.com/watch?v=O_xjb7LB7VY)

[1]: [https://www.nngroup.com/articles/why-you-only-need-to-
test-w...](https://www.nngroup.com/articles/why-you-only-need-to-test-
with-5-users/)

------
lazyasciiart
I am extremely curious what they were actually trying to build, because as
described it sounds like the sort of thing I'd expect to take at most a few
months as a side project.

------
packeted
Though this was concerning the company who handle our home insurance, also a
startup named Hippo, who are great. Thankfully not!

------
dasil003
As a developer it's pretty easy to laugh a little condescendingly at the
naivete and the missteps outlined here. However I think it's worth pointing
out even skilled developers have their own version of this where they spend
months or years churning on code that never produces any value because they
are scared to ship and face real user feedback.

------
Seanny123
Oddly enough, my friend and I were looking for almost exactly what Hippo is
offering. I guess the market is too small and not flush with cash for
something like this to exist? See requirements here:
[https://softwarerecs.stackexchange.com/q/45070/2134](https://softwarerecs.stackexchange.com/q/45070/2134)

------
darepublic
Seems like maybe the lack of random nudges during the day was the biggest
missing piece here? Maybe the founder could have hired someone for minimum
wage to just manually send these notifications on a schedule and send the
recommendations. Scale with more cheap labour as necessary until you finally
have the fancy ml automated solution

------
arikr
If you like this article, you might also enjoy this one by the same author:
[http://effective-
altruism.com/ea/yv/is_effective_altruism_ov...](http://effective-
altruism.com/ea/yv/is_effective_altruism_overlooking_human_happiness/)

"TL;DR version: Mental illness is probably much worse than poverty or physical
illness. Interventions which change how people think - i.e. reduce mental
health and increase happiness - may be more cost-effective ways of increasing
happiness than AMF or Give Directly. I outline some new opportunities EA
should look into."

~~~
throwaway37585
Reduce mental health?

~~~
DoofusOfDeath
He couldn't have meant that, that would be crazy.

------
PhilWright
<rant>

Why do millennials think that working on a side project for a short while
constitutes a start up or being an entrepreneur? You had a vague idea, worked
on it for a while and it turned out to go nowhere. There is nothing wrong with
that. But it was just a side project and not a start up. It certainly does not
make you an entrepreneur.

By that definition I have had a dozen start ups and almost every programmer I
know must be an entrepreneur. When did the bar get so low? Is no action too
small for self-aggrandizement?

If I write a blog post I am not suddenly a published author. If I give $20 to
a homeless person I am not suddenly a philanthropist. Helping a friend with
some code does not suddenly make me a professional teacher.

Millennials, get over yourself.

</Rant>

~~~
iovrthoughtthis
No real Scottsman!

What is a real entrepreneur then? Someone who quits their job and risks
everything to fail?

You don't have to do that anymore for businesses with basically 0 startup
capital requirements, > 90% margins and minimal time commitments ala software.

Are you calling for the classic starving artist entrepreneur who struggles
through hell to build their business?

People don't always need to dance like that sort of monkey anymore, please
stop demanding the weird masochistic performance porn. Working your self to a
lonely death is no longer cool and shouldn't be again.

I'm sure you have other criteria that we must meet to be true entrepreneurs
though. I'd love to hear them!

~~~
brazzy
> businesses with basically 0 startup capital requirements [...] and minimal
> time commitments ala software

I don't know what world you live in, but in mine, new software takes a lot of
time to write, or a lot of money to pay someone to write it.

~~~
iovrthoughtthis
I live in world where I can write the MVP to prove a business case in a week
after / before work, sometimes with no code!

Edit: My MVPs may not meet your requirements for new software. They will not
be all singing, all dancing. They will do some tiny slice of core
functionality that allows me to prove the value of technologies application to
the problem. Often with serious manual intevention.

~~~
brazzy
An MVP is not a business.

~~~
iovrthoughtthis
I struggled to answer this without derogatory sarcasm.

I agree, an MVP is not a business. I would not expect that a business would be
built in a few weeks or even months. My personal experience with businesses is
that they take years.

But we're not talking about building a business. You do not launch an MVP and
call it a business.

I was specifically talking about proving a business case for a solution that
could turn into a business. This is precisely what the things we call 'MVPs'
are mean't to be for.

~~~
brazzy
> But we're not talking about building a business. You do not launch an MVP
> and call it a business.

Then what exactly _were_ you talking about when you wrote this:

> businesses with basically 0 startup capital requirements, > 90% margins and
> minimal time commitments ala software.

?

> I was specifically talking about proving a business case for a solution that
> could turn into a business.

At that point, however, you do not have a business. And you're not an
entrepreneur.

~~~
iovrthoughtthis
It's evident that you have no wish to change your mind and honestly, I have no
wish to change mine.

