
The Truth about a Failing Startup - throwawayrandom
http://pastebin.com/BgxFCTEC
======
orangethirty
Been there, done that. You know what? Failure is just an event. Its not you.
You havent lost your "touch", because there wasnt one to lose from the start.
You just got lucky. It didnt work out. Now, understand that being average is
OK, and pretty awesome too. So you didnt hit it big, but you had an average
run. You did not become Instagram, but you had average sales. You made average
money and had average success. Again, average is awesome. You got further down
the line than most other people have (me included).

So you failed. Dont obsess about it. Tell your family the company is not
working. Dont try an be a hero. Be honest, they appreciate that more (fuck
them if the dont). Entrepreneurs have to meet these weird social standards
that are never within reach. You think Warren Buffett has ever getting a
break? He gets shit every day from deals gone sour.

But keep your head up. Failure is not you. You are a person, and you did
pretty good. Your investor lost the money the minute he decided to play
investor. Doesnt have to do anything with you.

If you want to talk about it with someone who fails hard every month, just
send me an email (on profile). I wont make this public.

Also, dont be ashamed. You got to the NBA, but you were not Michael Jordan.
Who cares? I bet you played a good game, and got some good stories from it.
Best wishes!

~~~
demione
I do believe this reply has OP's best intentions in mind, but I find it to be
a bit fatalistic. OP may very well have "the touch", it just may be that this
particular venture wasn't the right opportunity for that to shine through. My
point is, noone can tell you how far you will or will not go in life; a single
failure is a data point, sure, but only one among many. If OP wants to go on
continue being an entrepreneur, he should learn from his mistakes, dust
himself off, and go at it again if he can find the opportunity.

~~~
orangethirty
Thats what I meant, but you put it in a nicer manner. Thanks!

------
Maro
Hey, fellow failed entrepreneur here. My startup failed about 6-9 months ago.
It was a very difficult time, our business partners went back on their
promises and with that 3+ years of my life went down the drain. It was a
terrible couple of months, lots of lost sleep, high blood pressure, I'm still
dealing with it.

I was unemployed for a couple of months, then finally took a job at a great
company, where I feel great. Things were finally picking up. I thought I was
fortunate because I had my wife who supported me through it all.

Then a month ago my wife, who I thought would be my partner for life left me.
Bam. You think a failing company is bad, try this. I just got thrown back to
being 25 and looking for a date, sth I thought I left behind me forever. It
was I hope the final price I payed for concentrating too much on my startup
the preceeding years.

Lessons learned? Too many, but I'll just say this. The buddhists are right,
the only constant in life is change. Shit will happen to you, whether you're
rich or poor. Companies will go under. You may lose money. You will be fired
from jobs. Your partner may not turn out to be who you thought she is.
Somebody close to you could get sick. Your parents will die. It's just life.
You have to accept these things will happen and do your best to prepare for
them.

It's though, some people are much better at it than others, but it's normal if
you can't get over these things in a day or week. Medicine might help (eg.
sleep, anxiety), but go easy with that stuff.

Don't lie to your parents. They're your safe harbour, they will understand and
help you. Tell them what's going on. I'm 32 and although it doesn't feel very
manly, talking to my parents about my current situation is what's keeping me
sane.

~~~
danabramov
>Don't lie to your parents.

This. During a bad period, I moved in to live with my family for a couple of
weeks. It helps to eat and talk together, and if you had a happy childhood,
you'll feel safe and refreshed.

~~~
whatsit
I agree. In late 2009 when my startup tanked and my SO left me I was in a
really bad place. Having a large family (parents, but also siblings) really
helped me stay sane.

------
gaborcselle
Things may not be as bad as they seem.

Don't worry about the investor's money - it's called venture capital for a
reason.

You've probably learned a tremendous amount from the experience.

Think about what the next step for you is after this company. Sounds like
you're a developer and can easily get a well-paying job. Sounds like there is
still some money left and you can take some time and decompress from the
experience.

This isn't doom. It's the first step of what you're doing next.

~~~
mrchess
Agreed. Part of the job of being an investor is to balance your portfolio, and
losses are to be expected. Such a world doesn't exist where investments are
risk free.

There are many entrepreneurs who have raised again from VCs even after they
didn't make it from their first raise. As long as you tried your hardest,
there isn't much else more you can do. Keep at it.

~~~
j45
OOC, Have either of you built and lost others money from investors as well as
lost your own?

~~~
mrchess
When I was 25 I lost more than $20,000 of my own and FFF money investing in my
own project only to have it fail. At the time I was obviously, really upset.

Fast forward to today -- looking back it was one of the greatest investments
in my life so far as all the stuff I learned both emotionally, psychologically
and professionally has really helped with current work and life.

I used to think losing money was a big deal, but now I realize it isn't.
Investors are in a sense "buying" your time. Can you really put a value on
your time? Your own life?

Sure, the memories were disappointing and frustrating, but I wouldn't have had
it any other way. And yes, I plan to save and try it again.

EDIT: Just to be clear I'm not saying throw VC money around... of course you
still need to be responsible.

~~~
j45
It sounded like you supported what the original commenter said, not to worry
about investors.

Having a slack attitude towards money (our own money or others) doesn't build
a business or an understanding of value that ultimately ends in a revenue
stream.

It's nice of you to share you story -- I don't think many folks do. I have
similar experiences (good and bad), but I think the one thing that really
stands out for me is that investors are in a sense "buying" your time, not
much different than consulting...... :)

~~~
bigchewy
"investors are in a sense "buying" your time, not much different than
consulting"

Brilliant. I've never heard the concept of investing in a startup phrased so
well.

~~~
j45
It was a gong moment for me too.

I think I'd be much more open to funding if it was like this because I'm used
to people paying me to build ideas, it just might be my own ideas that someone
else happens to agree with.

------
coffeemug
My company has a really good chance of succeeding, but I still face these
doubts every day. Here are some of the things that make the game worth the
candle for me, even if we end up failing:

    
    
      * I'm proud of the product we've built. Even if it doesn't take off,
        nobody can take that away from me.
    
      * I'm incredibly proud of my engineering team. We're "a bunch of kids"
        who've built something incredible. Even if the company ultimately
        doesn't survive, we will have done really well.
    
      * I love my work and I love the people I work with. There are
        conflicts, sometimes I have to deliver bad news, deal with stress
        and monotonous work, firefight problems, etc. but in aggregate the
        work I do and the people I do it with bring me joy. I will always
        remember this time fondly.
    
      * When I started, I was a good engineer and a terrible product
        manager. Now I'm a good engineer and a good product manager, which
        makes me 100x more valuable. There is a bazillion other things I've
        learned, but this alone makes everything worthwhile.
    
      * Facing doubt every day made me face the darkest corners of my
        soul. I stopped being an obnoxious cynical windbag and started
        appreciating the nuances of life, people, art, poetry, strength of
        human spirit and true magnitude of human dignity.
    
      * We're taking a real shot at building hard, sustainable technology
        that has a good chance to change the world. Even if we fail, I'll
        never regret taking the chance.
    
      * I met hundreds of people on my path. I dismissed some of them, but
        in retrospect I've learned from them all. I appreciate humanity a
        lot more now, and I understand where the dark parts of it come from
        much better.
    
      * Perspective is worth 80 IQ points. If you start a company you gain a
        lot of perspective.
    

I could keep going, but I hope I've made my point. I'm not trying to sugar-
coat anything -- failing may very well be the worst thing you've ever
experienced emotionally to date. But keep everything in perspective and don't
get cynical. You might still change the world in a big way. You might still
change it in a small way. It doesn't matter. Enjoy the people around you. Get
into adventures. Try to do something meaningful. Do the best you can -- things
may not turn out how you wanted them to, but they'll probably turn out ok.

------
swombat
Once your startup actually fails and is behind you, here's the surprise:

You will feel an immense sense of freedom and lightness.

It's pretty obvious why: a weight is about to be lifted from your shoulder.
Where your path was a narrow funnel leading to one specific destination, you
will now have the infinity of all possible and reachable paths ahead of you.
You couldn't do anything but worry about the startup - now you can do anything
you want.

The end of a start feels very dramatic before it happens, but once it's done,
you will feel a whole lot better. Trust me.

~~~
shimms
Having just gone through this I concur 100%. Everything, and I mean
_everything_ , now seems just a little bit more achievable. The good things in
life feel better, the bad things not as bad. I smile more, and am sleeping
better.

A weight has lifted, and I'm slowly regaining energy - almost feel like I
might one day have enough again to start on the journey of another startup.

------
gojomo
If they're professional investors, they know all the investments don't work
out. Communicate honestly about what's been tried and failed, but don't
ruminate excessively about having "let them down".

If 'doom' is still a month or two off, but inevitable, attempt orderly wind-
down. Maybe a corporate entity is bankrupt. Maybe employees need a fair
warning. Maybe there are salable assets. You can ask for help, even from
strangers, even non-anonymously. It will be hard to get help if still
presenting a facade of "everything's great", and since the 'doom' will be
public knowledge soon enough, stop pretending. Instead, use this as practice
in confronting the worst and making-do as best as possible with bad options.

~~~
jnazario
came here to say what gojomo said.

treat everyone with respect, honesty, and be forthright. it'll feel awful and
scary, but it'll mean a lot more than if you made everyone rich, or at least
helped them with some more paychecks. people will remember your character and
your behavior far more than any money you made or lost for them.

i think a lot of people forget the incredible risks and burdens founders take
on. i saw a quote in inc magazine that put it best, something to the effect of
"if this business goes under, you lose your job, but i lose my house and maybe
even more." never having founded anything i can't imagine the burden your
under, but i know it's immense. that said, remember to be forthright with
everyone.

------
neya
Thanks for sharing the reality instead of writing articles like "How I started
X and made Y in Z days". This is really painful to read.

This is one reason why I will never take money from an external investor.
There are some scenarios when you definitely need an investor's help. But
right now, the trend is almost like "it's a cool factor to seek investment for
your startup".

The problem with taking money from someone else is that, you become
obligated/answerable to them. Remember, we all start-up because we don't want
to go down the traditional working-for-a-corporate route, because we don't
want to be answerable/obey no one/their orders. But seeking investment (in
most cases) just defeats this purpose of starting up.

Why the hell would someone want to be answerable to a third party for running
YOUR company in YOUR way?? And what happens when that company fails? You need
to either apologize/console the investor that you will somehow get back his
money. Contrast this with having no investors at all, worst case scenario
would be you lost all your money. But that's much better than losing someone
else's.

I find nothing wrong in trying to build an Saas that generates $10000-$50000 a
month in revenue from day one, without external investment, instead of seeking
millions in investment for a bunch of photo filters on a phone only to later
worry about monetizing the idea.

~~~
ericabiz
> "The problem with taking money from someone else is that, you become
> obligated/answerable to them."

Could not disagree more. I co-founded and am the CEO of a funded company.
Investors (at least professional ones, which, if you have a good company, you
can vet them as much or more as they vet you to make sure they are
professional!) will encourage you, meet with you, and even help you work
through problems and issues. But by no means are you obligated to do anything
that they say. In fact, most would prefer that if you have market data that
disagrees with them, you go with what the market says--after all, you are the
expert in this space, not they...

> "And what happens when that company fails? You need to either
> apologize/console the investor that you will somehow get back his money."

No, on typical seed round investments (and even Series A and above), you do
not owe the investors back their money. There's not even a moral obligation to
pay them back--they understand the risks, and as others have stated above in
the comments, if this loss was going to make them destitute, they should
absolutely not ever have been investing in your round. (Which is why you
should be doing the due diligence on them as much or more as they were on you,
before they invested.)

Getting investors and pitching, etc. was really scary for me. But once I found
the right people, I realized how awesome it was. They have a (small) financial
interest in me, so I can ask them honest questions and get answers from their
perspective. It is a blessing and it has helped me run my company better than
I ever would have without investors.

------
jakek
You failing is part of your investors business model. They've moved on, they
no longer care.

This sounds like a negative statement, but it actually has extremely positive
repercussion: you no longer have to worry about them AND you have a few months
to do whatever you want. Anything. Have fun and enjoy it. Maybe build
something cool, completely new, something that you want to see exist in the
world. And you never know, just letting go of the burden, accepting that
what's done is done, and enjoying creating something for fun may actually lead
to something.

See: <http://www.physics.ohio-state.edu/~kilcup/262/feynman.html>

------
einhverfr
The point about taking other people's money is a big one. I am in the process
of starting a business doing cloud computing for accounting and ERP and we
decided specifically _against_ taking other people's money. I know that will
sound like heresy on HN, but I want to discuss why we made that decision. I
think other founders may find this to be a useful piece in that it may confirm
that taking other people's money is a good decision or it may help question
that. I don't think our decision was right for everyone.

The basic issue that made us decide the way we did was that accepting VC money
locks you into the VC exit strategy. This means you are building either an
acquisition target or a company you want to take public. If that's what you
want to do, partnering with VC's makes a lot of sense. They may help you get
there faster. If you aren't sure that's what you want to do there is nothing
wrong with taking the first steps on your own before committing to such a
strategy.

There's a second issue too, which is what I call "overfunding syndrome." The
basic truth is that the vast majority of businesses will fail before they
succeed. If you are funding it yourself and the like you have more options
than if you are racing towards the VC exit strategy gamble. This is why
bootstrapping can often be a real business saver.

I suspect we could find investors if we wanted or needed to. But the fact that
we don't need to at the moment and aren't sure we want to lock ourselves into
the acquisition-or-IPO cycle means for us the best option is keeping our
options open. That doesn't preclude changing our minds down the road, but it
is a lot easier to decide that "you know, maybe we could use venture capital
after all" than it is to change one's mind and get out of the funding cycle.
To my mind this is part of staying upstream of the larger problems.

------
doktrin
The investors are adults. They made an educated decision, and as long as you
acted in good faith you have upheld your end of the bargain.

They took a risk, and my sense is that they are probably more aware of how the
game is played than you do yourself. How many startups have they invested in?
How many do you think have failed?

This is probably _incredibly_ difficult to internalize in the moment, but it's
true. Remind yourself that the guilt is irrational.

~~~
userulluipeste
My thoughts exactly! ...and Paul Graham's too as it seems, as it must be also
the thoughts of every realistic investitor. This is a high bet and if that
failed antrepreneur is sincere and acted in good faith, it still stays as a
candidate future investment in my book (considering also the fact that he must
have some experience after his first enterprise).

------
madcat123
If

    
    
      If you can keep your head when all about you
      Are losing theirs and blaming it on you;
      If you can trust yourself when all men doubt you,
      But make allowance for their doubting too:
      If you can wait and not be tired by waiting,
      Or, being lied about, don't deal in lies,
      Or being hated don't give way to hating,
      And yet don't look too good, nor talk too wise;
    
      If you can dream---and not make dreams your master;
      If you can think---and not make thoughts your aim,
      If you can meet with Triumph and Disaster
      And treat those two impostors just the same:.
      If you can bear to hear the truth you've spoken
      Twisted by knaves to make a trap for fools,
      Or watch the things you gave your life to, broken,
      And stoop and build'em up with worn-out tools;
    
      If you can make one heap of all your winnings
      And risk it on one turn of pitch-and-toss,
      And lose, and start again at your beginnings,
      And never breathe a word about your loss:
      If you can force your heart and nerve and sinew
      To serve your turn long after they are gone,
      And so hold on when there is nothing in you
      Except the Will which says to them: "Hold on!"
    
      If you can talk with crowds and keep your virtue,
      Or walk with Kings---nor lose the common touch,
      If neither foes nor loving friends can hurt you,
      If all men count with you, but none too much:
      If you can fill the unforgiving minute
      With sixty seconds' worth of distance run,
      Yours is the Earth and everything that's in it,
      And---which is more---you'll be a Man, my son!
    

Rudyard Kipling

~~~
xijuan
Powerful poem. Love it!

~~~
barrkel
Read about what happened to Kipling's son before you believe too much in it.

------
8ig8
Fuck them. Don't let it ruin your life. It was a gamble and they knew it. No
risk. No reward. If it were a sure thing, credit unions would be giving cash.
If they were investing their retirement funds, that's their issue, not yours.

I'm sure you worked hard. Tried your best. What else can you do. If it's over,
move on and get out of the current gig now. Tomorrow even. It sounds like your
investors already have.

You've made sacrifices as well. Call them tomorrow, thank them for what they
did, shut the door and open a new one.

------
timmm
This is why I fundamentally don't like investments. This is why profitability
is king. Not users, not revenues, nothing except profits! This is why self
funding is so important.

In life there is a right way to do things and a wrong way. The 37 signals
(bootstrap) model is the proper way to do web business. Taking other people's
money is the wrong way.

To author: Dude, you probably care more than the investors. Make it into a
good thing, raise awareness on why the investing model should be approached
with trepidation and skepticism. Then move on.

~~~
enjo
_ugh_

Maybe...maybe not. Sometimes capitalization is what your business really
needs. Sometimes it isn't. I can provide a whole list of "web businesses" that
bootstrapped to profitability, but I can come up with an equally impressive
list of companies took really significant capital. I can certainly find
businesses that would have not succeeded without the capital to sustain them
through their early years (I experienced that first hand) ahead of their
ultimate success.

Smart entrepreneurs know how to be strategic with their fundraising. They know
when to take money, and (just as importantly) when not to. They know that at
key moments a capital infusion can propel a company to big growth. They know
that at the wrong moment money can be the distraction that keeps them from
executing.

I have a huge issue with your post. You're wrong. Experience has shown me that
funding can be a huge asset, except when it's not. It's what makes
entrepreneurship so incredibly difficult. Funding, and the way you pursue it,
are really tough to choices you have to make. After which you have to live
with the consequences. To reduce it to "In life there is a right way to do
things..." shows a real lack of understanding of that challenge.

~~~
davidkatz
Second this. Bootstrapping is great, and it's even underrated. Most people
raise too much too early, and it ends up hurting them. In the end VC capital
is a tool though, and you can use it well.

One position from which raising money might be a good idea is when you have a
product that is already scaling and shows strong product/market fit, and you
know (know, not think) that going 10x on spending is going to let you grow a
lot faster.

------
dutchbrit
"If I had failed using my own money, I could live with it. But having a team
of investors believe in you, only to let them down is an incredibly difficult
thing to deal with."

While I understand this completely, they also realize the same. Investments
are always risky. Especially in the startup world. They know what can happen.
Don't worry, it's just money, and money isn't the most important thing in
life.

You haven't failed. You have learned something out from this experience. This
isn't the end of the line. Last but not least, don't give up. Unless you want
to work full time for an employer. Failure is something that everyone runs
against in their life and it shouldn't stop you from doing other things.

For all you know, this time next year, you could be booming with some other
amazing idea you get.

------
alexbosworth
I've missed more than 9000 shots in my career. I've lost almost 300 games. 26
times, I've been trusted to take the game winning shot and missed. I've failed
over and over and over again in my life. And that is why I succeed.

Michael Jordan

~~~
nickzoic
Thanks Alex for posting the first quote from a sportsperson I've every
actually found inspirational.

OP, hang in there and find _someone_ you can talk about your feelings to, even
if you have to keep your "confident face" on all day.

Failing that, listen to a lot of Nine Inch Nails. No, wait, that was Dotcom
1.0.

------
danbmil99
Your investors were grown-ups. If you did everything legally, they are
"qualified investors" (meaning they have wealth &/or high income); they signed
a bunch of papers that explicitly say they have a good chance of losing all
their money; and if they are at all professional, this is part of their
business, and in fact believe it or not they are much more likely to invest in
your next venture than some random investor you never met.

A startup is a venture. If the venture fails, it does not mean you are a
personal failure for all of time. It just means that idea, with that
execution, did not succeed in the marketplace at that time.

------
spotman
It can be hard to keep your head up in this situation, but, you should try.
Just because this startup fails, don't let it effect you forever. Sure you
have a right to be upset for now, but know that you have to move on.

In the way that you sold your idea to the investor (whether it was by way of
having a product to show, or just fancy talking, or a combination of both),
you will have to rise from the ashes and prepare to do it again.

You can, and probably should eventually frame this as experience, because
thats exactly what it is. A lot of investors will look at this as a learning
experience for you, if your able to keep yourself from being rattled out of
the game.

The next time around, you will be able to look back on your experience, and
hopefully make different choices that will help you stay at the edge of your
seat.

Lastly, sometimes ideas just don't work, despite all your best efforts.
Sometimes there is little you can do to change the course of history. Often,
its a combination of both bad decisions, and being in the right place at the
wrong time, or the wrong place at the right time.

------
rwhitman
A CEO of a company I worked for once told me that the best thing to do here is
realize the end is near and do everything to save some of the money from going
down the drain early so you can return something to the investors. This will
get you more respect than just waiting hopelessly for the bottom to fall out
and losing everything. They may respect your effort and invest in you again,
or at minimum protect your reputation enough to stay in their network (useful
for getting a day job afterwards).

------
gfodor
You shouldn't lose more sleep over your investors' money than they do. And by
the sound of it I can pretty much guarantee that you are losing more sleep
then they are, if they are professionals.

------
thomaspun
I have gone thru this state of mind.

We got A+ investors but we failed to deliver. We had founder breakups early on
and I was made a single founder for the last two years. I ended up working
twice as hard to make up for my founder's departure. (The stress and long
hours actually made me less productive.) It almost killed my health and my
relationship with the loved ones.

Don't take it personally. You have given your best shot and remember you have
your own opportunity cost. It's a fair deal to the investors. The important
thing is to handle the wind down professionally. Try to savage what you have
(team or product). You or your investors may not get anything out of it but
they sure would appreciate your effort.

------
mdda
Your investors are unresponsive to your questions? Then they've probably
already mentally moved on : They're not hanging on your every word; They're
not dependent on you; and you're not letting them down as badly as you feel
you are.

If it's any consolation, they may be watching to see whether you just give up,
or stick with it to the end. You may be surprised that they would back you
again with a different idea, since you're so obviously sweating over every
dollar of their money...

------
ritchiea
Is it really this bad for everyone? I am just starting to fund my startup now
so I have yet to be in your position. But I've certainly faced a lot of
challenges in life and in my career, depression included, unemployment
included, confusion after receiving an expensive degree from a liberal arts
college in the middle of the worst part of the recession included. I survived
all those things. I am incredibly optimistic and passionate about the startup
I'm working on. But the part of me that worries feels like: if it doesn't work
out it will be horrifying but it's a challenge I can handle because I've
handled all those other things.

My hunch is that if the OP feels the way he describes he needs to explore his
relationship to failure and uncertainty and figure out how he can better
handle those experiences.

------
xijuan
To the author of the article: I have been staring at the screen for two mins
after reading the article. I really want to say something encouraging and
supportive; but I found myself at a lost of what to say. Maybe it is because I
really understand what you mean by the sense of "impending doom." When I had
the sense of "impending doom," I feel that people just don't understand--How
can I not feel depressed when the situation is getting worse and worse? But
life moves on.. And the situation will get better one way or the other. Ten
years later when you look back at this, I am sure that you will realize that
it is not as bad as you think it is... You have to stay hopeful!

------
Ajayava
The reactions to an emotional post from one of our colleagues are interesting
in that they too contain a large amount of emotional references. Some random
examples:

Fuck ‘m all You failed Having lost touch You just got lucky Being average It
is ok to be xyz You aren’t alone Own it It sucks Things may not be as bad
Disappointing Frustrating Don’t give up The first time is the worst It can be
hard to keep our head Freaked out Taking other people’s money is a big one On
the brink of bankruptcy Staring death in the eye Going down with the ship
Don’t worry Poems and questions from social heroes

Emotional generalizations, value-based references, hero-based metaphors are
stomach (feeling) based expressions. Probably posted in the hope to change our
colleague’s feelings. I hope it works.

An additional approach is to move our focus & energy away from the stomach and
into to the head (thinking). As such, a non-emotional metaphor would be
something like: A startup = an analysis + a set of assumptions/decisions +
certain actions, resulting in specific projected results. The original
analysis includes the resource constraints assumptions (yup, if xyz happens,
we will run out of $ by this month). Then the standard actions start: Regular
review the of obtained results + if not as projected, revisit the analysis,
decisions and actions. Keep doing these steps till the projected results are
realized or till the resources run out. Whatever comes first. Period. Feelings
not required.

------
raverbashing
Ok, here's my 2 cents

1 - If you are so sure you're failing in a couple of months, shut down now and
return the money that's left. Simple as that.

2 - Startups fail. Investors know that. They don't talk to you because they
know already (rude of them, but I understand).

2a - Don't worry about this. It's part of the business. Priced, accounted,
etc. It's nothing personal, just business.

In university I had this Economics teacher. First class: "Why are you going to
build a business with your money? Don't be stupid, do it with someone else's
money". Very true words.

------
faramarz
Good story..

Own it. Own this failure and figure out (if you havent already) what went
wrong and own it. This isn't just about damage control, this is about
realizing the struggle in keeping a business a float is an asset, extracting
as much data and knowledge will drive the success of your future projects.

And above all, do not let the investors forget you with a bad taste in their
mouth. Own it, again. Remind them why they invested you in the first place,
you never know what the future holds. Don't let it just burn up!

------
Dalkore
Tell us about the app. You still have time. Why is it failing?

------
systemtrigger
Reminds me of something DHH said in his talk Unlearn Your MBA. He said "I have
been talking to a lot of people in the Web 2.0 space and a lot of them have
taken venture capital. I have not met one who said he wouldn't do it different
if he were to do it again." His entire rant on spending other people's money
is excellent.

Sad to read this founder's story. Even sadder that it by far the rule, rather
than the exception. Good advice, learned the hard way.

------
mkjonesuk
On the subject of 'your own money' I recently failed at my first (and only)
self-funded start-up: [http://wpcandy.com/presents/the-story-of-wonderthemes-
starti...](http://wpcandy.com/presents/the-story-of-wonderthemes-starting-a-
wordpress-theme-marketplace/)

The personal loss was not great (around $10k USD) and it was money that I had
earned myself over a few years freelancing while working 9-5 so I was prepared
to loose it all if it came to that.

The feeling of loss and 'doom' when this little stash of money did eventually
run out was very, very, debilitating however - more so that I would have
imagined it could be. I was forever thinking how the money 'could' and perhaps
'should' have been used elsewhere on more efficient and better planned
projects and how if I had a partner at least we could have shared the 'blame'.

I think that in the end, it doesn't matter where the money comes from. When
you get investment, it 'feels' like it's your own money anyway, if it doesn't,
then you're probably doing it wrong.

FYI, I HackerNews-d this last week to zero response if anyone cares to pipe
in:

<http://news.ycombinator.com/item?id=5200221>

------
davidbanham
Try and disassociate your sense of self from the wellbeing of your company. If
your company fails, you continue to be a multifaceted human being with many
other successes and failures ahead of you.

Try and let your friends and family know what's going on. Give them a chance
to support you in your tough times exactly the same way you would want to
support them. Also, it will make it much easier to tell them if the company
does fail.

------
rcfox
If you've set up your company correctly, you should be personally protected
from liability if the company fails, right?

Assuming that's true, then perhaps you'll end up with a tarnished reputation,
but your life isn't crumbling apart. It shouldn't be too difficult to find a
more conventional job with a decent salary, especially if you've managed to
create a product that people wanted to invest in.

~~~
marquis
If this person has a very good way of explaining to potential employers about
the logistics of what went down, it shouldn't be a liability in getting a job
and powering up the skills before trying again, if that's their life goal to
be self-employed. Most of the startups I've seen fail isn't for lack of
technical ability but for completely over-estimating there being a market for
their product - either wrong time or wrong market or wrong product.

------
6chars
I'm going through this same process of admitting failure right now, and it
seems like everybody gives people in our position the same advice: "Don't
worry about the investors. They knew what they were getting into." In our
case, this is simply not true, and we can't be the only startup in this
position.

All of our funding so far was raised from my personal friends and family. None
of them ever invested in anything even nearly as risky as an early-stage
startup before, but they trusted in me enough to take the leap. I dread the
day I have to tell them that they aren't getting their money back just a few
months after sending optimistic status update emails telling them all about
our user acquisition efforts and new product developments. It is very
difficult for me to not think of our failure as a betrayal of their trust. I
intend to pay all of these family members and friends back with my own money,
but until then I can't imagine escaping this guilt.

Has anybody else gone through a similar thought process? How did you deal with
it?

~~~
bm1362
This sounds like a nightmare. I'm sorry, but you've got a tough road ahead of
you if things don't take an upward swing. I'm just a student, no
entrepreneurial experience (yet!), but the best advice I can give you is to
man up and avoid trying to hide from the people you've let down.

Be honest, no one respects a coward.

At the end of the day, you'll be alive. You have clean water and probably an
iPhone- it could be much worse. You've learned a lesson too, don't take loans
from friends/family.

------
erichocean
I've been there too. The first time is the worst.

It was hard, but I still do startups and wouldn't change that for anything.

It'll get better. Don't give up on yourself. :)

------
ishener
Is it just me or people in the startup world are taking failure too hard. OK,
so someone put some money in your idea, you tried your best, and you failed.
Big deal. Just move on to the next thing in your life, without losing
enthusiasm. The startups scene is supposed to be dynamic and fast, no?

It's all just a game anyway, especially when all you lost is OPM (other
people's money)

------
Felix21
You failed, it sucks and it wasn't your fault.

Investors saw an opportunity the same way you saw one, that's their game, its
a numbers game for them. They invest in lots of promises, they win some, loose
more but the wins cover the losses so don't worry about them.

You did your best and that's all that matters; the rest was beyond your
control.

People fail like you every single day. In fact, almost every successful
entrepreneur has a CV of failure much longer than you would have guessed, but
no one ever talks about these failures; by the time they hit their big win,
the failures are long forgotten.

Only the successes ever make it to TechCrunch and hardly anyone ever gets
there on their first try.

So stop beating yourself up; get up, dust-off your shoulders and get to work
on your next gig. When you reflect on this experience as you work on your next
startup, you'll be able to see just how much you've learnt from this failure
and maybe even be able to appreciate it.

Keep tossing the coin and your win, your success, will come soon. You haven't
failed until you quit.

Best of luck.

------
brianmcconnell
I've started four companies in my career, two of which ended up nicely, one of
which was an utter train wreck that bankrupted people, and one a work in
progress.

You'll learn more from a bad outcome than from a success. I agree with
everyone saying don't worry about the investors. They invested in a highly
risky business. Turned out it wasn't the next Facebook. Well, that's 99.999%
of startups.

More likely than not, the business was doomed by circumstances before it even
began (bad timing, bad market fit, etc). If this was your first or second
business (likely), no reasonable investor can blame you, even if you did make
avoidable mistakes.

So treat it as a learning experience, and don't obsess about the impact on
your reputation, etc. Shit happens, and anybody who knows the tech business
understands the odds are stacked against you.

------
stephenhacking
I'm not sure if I agree with this.

1\. There's nothing wrong in failing 2. Investors run a business - with a
business, you have things that fail and things that succeed; they know that
there is a probability of your startup failing and have gone through that
multiple times

If your investors don't want to talk to you anymore just because your startup
failed - you have shitty investors.

If they truly believe that you are solely responsible for the failure - they
suck. It is their responsibility to help you succeed, and when you dont, be
there for you and try to take responsibility for a small part of that failure.

I know it sucks to fail. When impending doom closes on you, you always feel
like writing a 200 word rant essay on pastebin, but it is OK to fail and you
will succeed. It's all a question of learning from this experience and moving
on..

------
awicklander
The thing that makes me most sad about this is that you're beating yourself up
for losing investor's money.

Let me tell you - the investors are entering the arrangement knowing that they
have a 90% chance of failure. That's why they want deals that _might_ give
them a 10x return on their investment and they turn down "lifestyle" business
that might return a meager 8% year over year.

It's great that you obviously care about your investors. But you should feel
just about as bad over them losing their money as a gas station should feel
when people lose a dollar buying a lotto ticket.

They made the decision to play the game, knowing full well there was a higher
likelihood of failure than success.

Best of luck to you as you'll inevitably build something else.

------
micheljansen
Isn't being on the brink of bankruptcy, staring death in the eye and beating
the odds what running a startup is all about (at least initially)?

Reading "The money will run out within a couple of months, and the debts won’t
be able to be paid", I couldn't help but think: "wait, you have a couple of
__months __?". People have gone by on less.

Maybe failing to innovate for a few years has doomed your company to fail.
Then again, maybe not. The party's only over when the lights go out :)

I know it's cheesy to quote PG on HN, but what the hell: "Startups rarely die
in mid keystroke. So keep typing!" – <http://www.paulgraham.com/die.html>

------
gudman
You cant let this failure stop you. Many of the worlds most successful people
have failed many times before finally achieving success.

Nor can you let the fact that investors were involved get you down. Investment
is about risk, not guarantees. Your investors knew, or should have known that.

Investment is speculating.

The only guarantee you owe them is that you did your best. If your best wasnt
good enough this time, so fucking what?

You can only do your best today. Tomorrow's best is different, because you
learned from today.

Dust yourself off, reach into your idea drawer, pick out the next one and
start again. Maybe it works maybe it doesn't.

Some will, some won't, so what? On to the next. You learn from each attempt.

------
photorized
Regarding your investors not calling you back etc - they've written you off.

Surprise them. But before you can do that -

Come up with a new original plan, a pivot, anything that might just revitalize
the business. It sounds like you had given up before they did. Look at your
digital assets - can your codebase be repurposed for something? Would
rebranding work? What about your user base - could you interest them with a
new app or new service? Any IP you could license to someone else? There Amy be
a well-funded company out there that's trying to build what you already have.

------
salahxanadu
I just signed away 10% of a company I founded. It was hampered by loans from
the origination of the business 5 years ago. Had that orignal money not been
equity AND loans we'd have been profitable 18 months ago. I was laid off in
September and now have a good job after a few tenuous months.

I won't feel bad if they do end up making something of it and sell it for a
profit because I am glad to be out. I don't need a freelance job that doesn't
pay anything around my neck all week, every week.

The investors protected themselves and brought down the business with it.

------
arbuge
There is no shame in failure. There will be plenty of life to look forward to,
for you and your investors, after your 2 months are up. Go on to greater and
better things.

Many great entrepreneurs failed many times before ultimately succeeding. Even
a successful company goes on to a constant stream of failures, with enough
successes in the mix to come out a net positive. This is true of Amazon,
Google, and all the rest.

A Churchill quote comes to mind. "Success is never final, failure is never
fatal. The important thing is to never, never, give up".

------
HunterV
If I could add a paragraph to the end: Yet, sometimes with failure there comes
new beginnings. While my pain is real, I do understand that investing is a
profession with high risks involved. As much as I hate to admit it, this time
I was the risk that didn't turn out as well as hoped. So I have to take this
to note and head out to start something new. Endings are too easy. It's the
ones who keep the story going, no matter how well it ends up turning out, that
get remembered.

------
fourstar
Life Pro Tip: Always have a "plan B".

------
juanbyrge
Don't worry about the weirdo investors! They're still alive, they were not
harmed in any way, they'll be fine. They aren't even investing their own
money! All investors have a broad strategy, and they have anticipated that not
all their investments will work out.

Also, you should be celebrating the risk you took to build something great.
There's absolutely no shame in that. Feel proud of everything you learned,
these lessons will remain with you for the rest of your life.

------
aspinner
I wouldn't fret about it. Investors know that investing in tech startups are
as high risk as they come (b/c they have some of the highest rewards - risk
vs. reward). They know there is a chance that the investment will hit the
bottom, so don't worry about them. Start looking for some jobs. I'm sure from
your experience over a few years you can provide some great value to other
organizations who would take you in a second. Keep your head up.

------
bamazizi
We're about the same age and i totally resonate.

I personally think of failures as necessary steps towards the ultimate
success. So try to look back and reflect, take notes and consult with people
on why shit happened. It will be a true failure is don't learn anything from
it.

learning is a lesson is great but gaining wise experience is super important.

keep your chin up be proud of what you accomplished (startup idea, investors,
and a shot) it's more than other majority will ever get!

------
throwawaydebt
My company failed (unexpectedly) in 2008.

I had signed piercing agreements on a large contract, and on some financing
before the failure, so I ended up on the hook for a little over $500,000. The
risk/reward payoff looked much better the odds were in favor of reward.

Here's my progress to date: <http://i.imgur.com/IGQ3rz6.png>

It's an anchor. It's killing my dreams. I worry that the stress will literally
kill me.

~~~
defied
Good luck! You'll get there.

~~~
throwawaydebt
Thank you. It's a grind, and it's likely to go down as my life's biggest
mistake, but it will probably end.

------
snoonan
I had a company fold up on me like this as a team manager. I was close to the
founders and they ALL did just fine. I also did fine. The only one I fault
were some damn famous investors that didn't even respond to requests to have
us meet at their related hiring portfolio companies. Cold.

Everyone else (including the founders), love them -- we all ended up on our
feet and were better for the whole awesome startup experience.

------
George_ns
You're probably like me...you know exactly what you're going to do but you
need someone else to tell you (it feels a lot better that way, doesn't it?) -
so here it is take it from the legend himself Steve Jobs - he said persistence
is what separates a successful entrepreneur from an unsuccessful
entrepreneur...failure isn't an option, really that's why each time they ask
us. How's it going? We say great!

------
wiradikusuma
Curious question: If an entrepreneur raised money from VC, and things go
south, is the entrepreneur's career basically "done" (e.g. blacklisted by
every VC on the planet)? Can he start another venture and get VC money again?

How is it compared to being fired? (Being fired = you can find another job,
might need to explain why you're fired to potential employer, but life goes
on)

~~~
chetanahuja
From my (admittedly quite limited) experience with investors and entrepreneurs
here in the bay area, it's quite the opposite. Failure in itself is not at all
a black mark. Product/market fit not existing is a common reason for startup
failure and it's well understood in the investor community.

------
radley
Nobody expects you to go down with the ship. Everyone involved is much better
off with you putting positive energy into an effective completion.

You can shut down anytime so pick a date and inform your investors and
customers. Give everyone enough time to migrate then turn off the lights.

You'll feel much better the moment you pick a date. I guarantee it (I've done
it myself).

------
PaulAJ
Don't feel bad about your investors. They went into it with their eyes open,
knowing that they were taking a punt. Taking lots of punts is in fact their
business model. They knew there was a good chance they would lose that
investment. As long as you dealt with them honestly then you have nothing to
be ashamed of. Better luck next time.

------
michaelwww
You've got this backwards. You want to gamble with other people's money, not
your own. Some people took a stake in you because they thought it was a good
bet. I'm assuming they were intelligent rational people who could make their
own investment decisions. They lost and have moved on. You don't like being a
loser, so don't be one.

------
ux-app
_... having a team of investors believe in you, only to let them down is an
incredibly difficult thing to deal with._

don't beat yourself up about this. Any investment is a risk, and any mature
investor will be well aware of the high failure rate for start-ups.

Most businesses fail. That doesn't reflect negatively on you, it's simply the
nature of business.

------
jahewson
I've been in is situation, and the best feeling was when I called the shots
and quit. The _last_ thing you should worry about is investors: they are not
paying for guaranteed success, and they _should_ know that. It's exactly like
a lottery ticket - they pay for a chance of success, and that's what you
deliver.

------
adnam
Don't feel bad for the investors, they took a risk and it didn't work out.
Pick yourself up, dust yourself off etc.

------
Pitarou
Failure is a life event, and it sucks. (Just like getting ditched, getting
fired, getting sick, and so on.) Frankly, I'm glad I'm not in your shoes right
now. But it's not the end. This thing you built will not take you down with
it. You'll still be standing, and ready to move on to the next chapter.

------
AdamN
It's fine to feel down about failure but please don't feel bad about the
investors for a second. They invested in your idea for success, failure is
part of that investment.

If you're this far down the rabbit hole, stop digging, spend as little as
possible, and try a different idea ASAP.

And remember, above all else, be true to yourself.

------
pothibo
That's exactly what's moronic with investors, they invest in the company, not
in the founders. Unless you made them money, they will ignore you.

Until next time you succeed then, they will start following you back and talk
about old days how it was fun and exciting.

Yeah, exception exists and they have a track record showing it.

------
photorized
Been there. And you know what's more difficult than letting investors down?
("Debts won't be paid" etc)

Paying them back. Not immediately, perhaps over a period of 2 or 3 years,
while working on saving the co without making any salary.

Unfortunately, most entrepreneurs prefer to just walk away.

------
rburhum
Start the proper paperwork and close doors now. No point in waiting two more
months. Time to rejuvenate by either starting something new, taking a break or
getting a "normal" job for a bit. Dragging on what is inevitable is the worse
you can do to yourself.

------
aliebchen
Try not to let the thought of letting down investors bring you down. They're
investors, they put money in knowing they might not get it back. Obviously,
they've moved on...probably without much trouble. You're going to have a much
harder time of it.

------
Supermighty
> If I had failed using my own money, I could live with it. But having a team
> of investors believe in you, only to let them down is an incredibly
> difficult thing to deal with.

You shouldn't feel bad about this. Investors should know there is risk in any
investment.

------
blueprint
Unless you've consistently done stupid things and lost their trust, it sounds
like you've got assholes for investors.

Did they ever try to help you on product, business, or operations?

------
ragsagar
Failure is the stepping stone to success. Don't give up.

------
meerita
Don't worry about the investor's money, that is why it's called venture
capital for a reason. Investing money it's a risk itself.

------
olejolej
The biggest competition for entrepreneur is himself. Self-awareness is the
most important in my opinion. Example is Noah Kagan :)

------
p3nt3ll3r
Fuck it - that is the game and "investors" know it. Go drink an awesome import
beer. Rent a comedy and laugh your ass off.

------
momchenr
Keep your head up. I had a really, really, really hard time with it, too.
Identical situation (nearly).

------
grainawi
really strong words. thanks for sharing this. keep your chin up, the investors
knew the risks of angel investing / venture capital. be proud that your gave
it your all.

if you didn't take this risk, you would always look back and wonder what if.
Ik that's cliched to high hell but it's true

------
joshmlewis
A lot of people are saying just own it and move on. Well I'm going to try a
different approach. I hope you see this. I've been leading a team the past
couple months building my first major app that has traction. It's been a
roller coaster already but today we were able to get a version into TestFlight
and see it on my phone. It sucks, it's still buggy, and it's not up to my
standards yet but it was the most exciting thing seeing something that isn't
perfect yet come to fruition. Something I've thought about and lost sleep over
and spent countless hours designing and planning. It's finally starting to
come alive and I'm leading a team of awesome developers that are making it
happen and it's so exciting seeing it become real.

Now I know that you had to have this feeling with whatever you built. Remember
back to those times you kept refreshing the page to see how many new users or
page views you had since the last time you refreshed. You were excited about
it. You were elated to a point where you felt you were unstoppable. What
happened from here? Really ask yourself this. Ask what roads you took that
lead you to where you are. Just saying you 'ran out of innovation' is a pretty
crappy excuse. Some decisions you let happen led you to where you are today.

What I want you to see is a glimpse of that same spark you felt 2 years ago
when you first launched and when you were building your app. I am in the
opposite state of mind as you are currently. Things are looking good for me
but that's because I choose to see it that way. Even when things are crap, I
know that I can make them better if my heart is in it and I trust my gut.

You have the same power. You've already admitted defeat and chose to fail. You
said it yourself, you're going to fail in two months and I've already given
up. YOU CANNOT let your mind get in that state. Find out what is blocking you
from taking it to the next level and get there. If you are a true entrepreneur
at heart, find that spirit you had in the early days. It's not hopeless, it's
just what you see it as.

You can be another story of failure or you could just as easily be a story of
success. It is what you make it. I don't believe that there is no way out and
you're doomed to fail because your lack of innovation. Some things you should
kill if they don't work, but you better be damn sure it won't work because
it's a bad model and not because your innovation just ran out.

You wrote this and posted it to HN. You're trying to find a way out or you're
trying to find out what to do next. I'm telling you. Search deep inside
yourself. Remember you only live once. You were given a good chance based on
that initial passion and energy you had. Find that again. Figure out what you
need to do to turn things around and do them. If it's killing them fine, but
kill it being happy and confident. If you need support or someone to talk to,
my email is in my profile. Whoever you are, if we are at all in like minded
spirits, you just have to dig deep to overcome this mountain, and before long
you will regain that vision and compass of where to go.

Edit: a few words

------
toblender
Money is a tool.

The skills and knowledge you've gain can't be taken away like a tool can.

Time to get back up.

Rise.

------
chrisjtow
Who wrote this? I'd like to talk to you - chrisjtow@gmail.com

~~~
Trindaz
Me too - Dave.trindall@gmail.com

------
potatoman2
Best post I've read yet on HN. The feels man, the feels.

------
retrogradeorbit
There is no failure, only feedback.

------
mcakkan
thanks for sharing... it is always to dream the happy path, this was a real
good heads up...

------
justplay
get up start and start working. be optimistic . FTW

------
ominds
In Islam, the most fundamental principle is the worthlessness of this life. It
is simply a bridge to the afterlife, and it's the afterlife that's the true
reality, this is simply an illusion. This does not mean you should not live it
to your fullest, but accept that it will never give you the peace and
satisfaction you need. You're poor? You grieve. You're rich? Then you grieve
for your family members and friends, you grieve for your inevitable death and
the death of your loved ones. This is simply what life is. We try to mask it,
but it is what it is.

My wife lost a brother (40's) and a sister (20's) to cancer. Her parents
watched their children die in front of them. What amount of money could make
that easy? My brother's got a tumor in his ankle and we're eagerly awaiting
the biopsy results. Just hoping for the best.

I should note again that Islam does not tell you not to be happy or feel
happy. It doesn't tell you not to try to achieve or become. It doesn't tell
you not to help. But it tells you never to forget the nature of this life.
People who are trying to make sense of life simply fail to know it is as it is
by design. It was meant to be unjust and unfair, and overall, incomplete.

Finally, a few verses in the Quran that are quite interesting (the plural is
the plural of majesty):

"Those who do not hope to meet Us and are content and satisfied with this life
and are unaware of Our verses. Those are the ones who are destined for
hellfire because of what they do"

"He who does good, being male or female, whilst being a believer. We will
grant them a good life and will give them their reward from the best deeds
they used to do"

"We have created man to live in pain. Does he think no one is able to defeat
him? He says, I have squandered money in abundance. Does he think no one has
seen him? Did we not grant him eyes, a tongue and lips? And have given him the
two choices (obedience and rebellion)?"

context: God speaking to Adam and Satan after being banished from paradise "He
said, get out, all of you, from it. You are from now on enemies of one
another. Whenever my guidance comes to you (on Earth), he who follows my
guidance will not go astray nor live in hardship. But he who turns away from
my revelation, he will live a life of misery, and on the day of judgment, he
will be left blind. He will say: My Lord, why have you made me blind when I
once could see? He says, so have my verses come to you and you forgot them,
and likewise today you're forgotten"

Finally, anyone who would like to bash Islam or religion. Don't reply. I don't
care for your opinion. These are simply my two cents. Or as the Quran puts it
"he who wants, let him believe. And he who wants, let him disbelieve".
Wondering if I can sneak links in here?

<http://www.youtube.com/watch?v=C8Unyg83194>
[http://www.nation.com.pk/pakistan-news-newspaper-daily-
engli...](http://www.nation.com.pk/pakistan-news-newspaper-daily-english-
online/international/30-Jan-2010/Swiss-antagonist-of-minarets-embraces-Islam)

------
dschiptsov
Startups, like any love, suffers from the lack of reality checks. One must
keep the balance - too much reality checks - and you ruin the magic, too few -
and you become disconnected from reality which lead to the pain of cognitive
dissonance when eventually you face it.

So, delude yourselves responsibly.)

------
sweely
Move on to the next thing. You're a pussy if you let this get you down.

------
tapatio
What reason did your wife give you for getting a divorce? Did she realize you
weren't going to strike it rich and bailed? Now's the time to get out there
and bang as many 21 year old chicks as you can.

