
A Terrible, Horrible, No Good, Very Bad Hardbound Update - rmason
https://medium.com/@nbashaw/a-terrible-horrible-no-good-very-bad-hardbound-update-eacaf767db6a
======
taneq
Why didn't the fundraise work? Maybe because your business model doesn't
appear to be working at your current scale, you're not scaling fast enough to
make it work any time soon, and you didn't seem to have any clear plan to
change this.

I don't mean to be harsh, it sounds like you gave it a shot and it went pretty
right. But you got caught up in the unicorn-chaser Silicon Valley mindset:

    
    
      1) Do something that only works if you're huge 
      2) Raise lots of capital based on the idea that you will one day be huge 
      3) Use that capital to become huge enough that your thing actually works
    

Sure, planning for your startup to be a unicorn is great if it works, but "big
or bust" almost always ends up in "bust".

~~~
nerdponx
I was wondering about this too. Why does this product only work if you're
huge? It sounds like something you and a programmer buddy could have started
as a side project and grown organically.

~~~
jeffjose
VC's are only interested in high growth startups. That means they'll have to
pass up on a lot of good ideas such as OP's. The whole thing boils down to
power law that guides investment. VCs are hoping that out of 10, at least 1
would be a super-duper hit (think facebook, google) that'll offset the losses
of the other 9.

In short - go with "disrupting" world-changing ideas to the VCs. If your idea
is good, but not great, you're better off finding money on your own and
growing it organically.

~~~
mysterydip
Wouldn't an investor want a "diverse portfolio" divided between low yield low
risk (such as OP pre-unicorning) and high yield high risk such as you mention?

~~~
mcguire
For the same reason Berkshire Hathaway isn't investing in your lemonade stand:
they have billions to invest, so if you're only making hundreds of thousands
on the best day, you're not worth the required effort.

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alphajulietmike
Sounds like you should be the platform and let content creators in. Pay them
commission on sales and you can QC anything coming in until you can afford to
pay someone else.

~~~
nbashaw
It's definitely something we considered! We actually were really focused on
that for a long time, but didn't get a lot of traction with it, because
creating content in our format requires illustration and animation, which is
not easy to do. A lot of people said they wanted to do it, but very few
followed through. We did some partnerships with media companies but we didn't
solve a critical problem for them (the original inspiration was the end reader
experience) so there was not very much urgency or willingness to pay. So we
pivoted to a "full stack" model where we create the content and build the
platform. It was working decently well (it's not easy to get 1,200 people to
pay for access to content), but just not well enough.

~~~
dayve
Have you tried creating a 'creator's' software that's lightweight, easy to use
and has lots of pre-loaded illustration packs (with a wide variety of themes)
& drag-and-drop style animation presets?

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blizkreeg
To the founder: you're equating the failure of your business/idea with the
failure to raise money. They're not the same. Perhaps try to delve deeper into
this thinking. That thinking is toxic.

You do still have the option of keeping your "vision" afloat and your business
going (also, please, call it a business, not a 'startup'). Get a job, use the
$2500/mo to keep producing content with the resources you can afford and work
at 4xing that $2500/mo that you're currently making. You'll eventually be back
in business, if you are flexible with how you think about this.

$1B or nothing is fool's errand.

~~~
nbashaw
Am I?

"Now, everyone has moved on but me, and I’m trying to figure out how to move
forward. For the time being, we’re not going to be able to release any new
stories (it sucks, I know), but the app and website will stay up. I am not
ready to quit just yet. There probably will be some big changes, but I am not
finished."

Also:

"The second option [continuing with our same model & creating all the content
myself] is tempting, because I have no significant new data that changes my
mind about Hardbound’s potential. Investors are wrong all the time. But if I
just jumped into that, I would need to spend all my time working on new
stories and I wouldn’t have very much time to learn from what just happened.
So I have reservations about immediately jumping into this route."

When I reference "failure" in the post, I am referring to my failure to keep
our bank account full.

~~~
blizkreeg
I certainly don't want to be presumptuous about your thinking. You obviously
know better how big a role the failure to raise money played.

~~~
nbashaw
I appreciate that! I mean, obviously I was wrong about _some_ things,
otherwise I wouldn't have had to write that post. So I'm super open to new
ideas and learning. That's also why I'm replying to all these comments. I'd
rather reply with more detail so people can give better feedback. I just wish
more of the commenters here would start from a perspective of asking
questions, than thinking the answers to all my problems are glaringly obvious.
Reality is extremely nuanced, in my opinion! I would love if more people were
asking more questions, rather than making strong claims based on a very small
amount of information that was more intended to communicate a very important
life event to friends and users, than to be a detailed diagnosis of everything
that happened.

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comstock
Ok, here's some advice from an Internet random person.

1\. Yes, if you can take some time.

2\. Do some crying. You probably feel depressed, burnt out, stressed out.
Crying is a great release.

3\. You don't need to do anything right now it's ok not to do anything right
now.

4\. If you're under personal financial stress try and resolve that. Perhaps
move somewhere cheaper.

5\. You probably don't need to think too much about what went wrong right now,
maybe take some time first?

Realize that there will be a time when the stresses of this business will be
long behind you, and you won't feel it with the same intensity anymore. Maybe
read some good books, it can really help you feel alive again.

All this is very biased. It's based on how I would be feeling, if I'd gone
through the same process as you.

Good luck!

~~~
nbashaw
Thank you! This is very thoughtful. I'm definitely taking some time and
thankfully not under too much financial stress. But honestly I actually feel
really fine. This happened a couple weeks ago and I have had some time to
process it. Writing the post was super cathartic.

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jaclaz
Maybe it is just me, but I cannot refrain from noticing how the "layman
examples" and "imagining" he makes seem a bit off in a funny way.

>There’s an image in my head that helps me make sense of this:

><image>

>I’m driving towards the horizon in the desert.

Wait a minute, a man can dream, but the image in your mind is driving in _a
Ferrari_ towards the horizon in the desert.

And right after:

>Instead, the car ran out of gas, and it’s just me now.

Maybe if you had an ordinary pickup with a couple jerry cans in the back you
would have gone further?

~~~
nbashaw
The ferrari thing was definitely a little distracting, for sure, but literally
it was the only good free photo I could find of a car driving towards the
horizon in the desert.

~~~
jaclaz
Yep, I understand that, I only saw it as "funny", I am sorry, but it is
stronger than me, you depicted verbally something very like the final of
Terminator (1st), "a storm is coming":

[https://www.youtube.com/watch?v=5C6GZQ7UNaU](https://www.youtube.com/watch?v=5C6GZQ7UNaU)

and I visualized that (or any of the movies where the car is a battered old
car, possibly an old jeep or a pickup) before noticing the Ferrari logo.

Maybe this one would do (not a photo, but a painting) to better explain what I
visualized:

[https://www.flickr.com/photos/alberto_ollo/5229651715/sizes/...](https://www.flickr.com/photos/alberto_ollo/5229651715/sizes/z/in/pool-1238939@N25/)

------
ernsheong
Reconsider.
[https://signalvnoise.com/posts/3972-reconsider](https://signalvnoise.com/posts/3972-reconsider)

~~~
hinkley
I know a guy who has run a small social gaming company for eight years and
about four years in he moved to bigger, nicer offices.

I tell him I'm impressed with his success and he kinda downplays it. I've
worked plenty of places that failed after four or five years. If you can keep
the wheels on that long you must be doing an abnormal number of things right,
and you should be objectively proud of that.

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rexreed
You should never have raised money in the first place. It sounds like this was
not a business that was compatible with the goals and requirements of a
venture-backed business. The moment you accepted your first investment you
were committed to that path. I agree - not all businesses are VC businesses,
and many startup failures are a result of pursuing the wrong model for
assuring continued operation and not a reflection (necessarily) of the
"business".

~~~
ryanwaggoner
Assuming significant investment, I would agree. On the other hand, they might
have just raised $50k from an angel or two, which wouldn't really cause issues
with bootstrapping...

...unless they used it to bump up burn rate to the point where another round
or layoffs were inevitable, because profitability before out of runway was
never feasible. That's what it looks like, but hard to tell from outside.

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scandox
> I see a huge range of possibilities:

> 1\. Try to get acqui-hired and pretend I didn’t fail to fundraise, as is the
> tradition in our industry (“our incredible journey!”, etc). Hint: I’m not
> going to do this.

In the words of Oliver Cromwell: 'put your trust in God; but mind to keep your
powder dry'.

~~~
nbashaw
What does that quote mean in this context? I am trying to decode the meaning
but am failing haha

~~~
titanomachy
Keep your powder dry probably refers to gunpowder... old flintlock rifles had
separate gunpowder and bullets, and if the powder was really wet the gun
wouldn't fire. So, have faith but do everything you can to improve your
chances of success.

------
Semiapies
I'm really wondering how VC money was supposed to make this business
profitable. Sure, the idea is let them last long enough to grow their customer
base, but with "millions" of pages read, they were making ramen-profitable-
for-one-guy money from something that required a team of people. I imagine it
didn't seem clear to investors that there was a big potential for growth, and
they'd need big growth just to _survive_ , much less provide a return to
investors or drive off into the sunset in a Ferrari.

~~~
nbashaw
Actually we had a pretty detailed financial model for how we expected to get
to profitability! We currently have ~1,200 subscribers, and about half are
paying us $1.99/mo (our old price point) and the other half is paying
$3.99/mo. Our growth model is based on people sharing our content, and so we
can predict pretty well how many new customers we'll get every time we post
something new. With a $15k monthly content budget (a couple writers, network
of freelance designers) we were pretty sure we'd be able to bend the growth
curve to the point where we'd reach profitability (~15k subscribers) in about
10 months, assuming modest improvements in conversion rates and share rates
(we'd obviously be doing a ton of experiments to move these numbers).

At the end of the day, investors weren't convinced, so you certainly have a
point! There may have been something seriously wrong with the plan. But I
challenge your assertion that we'd need "big growth just to survive". Yeah
we'd need pretty good growth, for sure. But not "unrealistic, crazy unlikely"
growth.

And on the upside, once we got there, all growth would be pretty much pure
margins after that! We don't think we'd need to dramatically increase our
investment in content.

Basically, it might not be as dumb as it seems.

~~~
comstock
I'd assume most investors are not really interested in you reaching
profitability. In fact it's probably a negative for them.

What they want of for you to reach a high valuation which allows them to get a
+10x return on their investment. What they want is for you to need more money
from them in order to survive, so if they believe in the play they can
increase their stake.

At some point they want liquidity. But that doesn't have much to do with your
profitability.

Honestly, you probably know better than me. But this has been my limited
experience.

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fulafel
It's about a book app, not the memory safety feature (
[https://www.semanticscholar.org/paper/Hardbound-
architectura...](https://www.semanticscholar.org/paper/Hardbound-
architectural-support-for-spatial-safety-Devietti-
Blundell/1810f70bdcb6f50ff70bed2c165918046e6a8aef/abstract) )

------
kehers
Just by the way, you may want to check out this interview of Blinkist (a
similar app)'s co-founder: [https://mixergy.com/interviews/sebastian-klein-
blinkist/](https://mixergy.com/interviews/sebastian-klein-blinkist/)

------
lazyasciiart
That analogy really didn't work for me. "Crawling towards the horizon" seems
to correspond to option 2, continuing to run the business at a much slower
pace. Options 3+4 are more like stopping to look at the car, take a breath and
re-evaluate whether it's designed right.

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csense
How do they make money? Do users pay for the service? It is not obvious from
the website.

~~~
goodJobWalrus
yes, it's I believe $5/month to unlock all of the stories, otherwise you get
just the newest one.

~~~
nbashaw
It's $3.99 but yeah, we have a subscription model

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dayve
Hardbound once launched a 'YC for writers' program
[https://www.producthunt.com/posts/hardbound-writer-s-
program](https://www.producthunt.com/posts/hardbound-writer-s-program)

Maybe focusing on opening the doors for content creators is what they need to
create _enough_ stories for user demand

