
My Startup has 30 Days to Live - hidingmyname
http://mystartuphas30daystolive.tumblr.com
======
greghinch
I'm going to say this knowing that I may get down voted to heck. And I don't
mean it as a "told you so" to the OP, but rather hopefully some cautionary
advice for would-be founders.

I have come to the opinion that if you are bootstrapping, you have no business
calling your company a startup. You are building a small business. And there
is nothing shameful about this. You are among solid companions with your local
plumbers, restaurants, and barbers. You make a good living building a
sustainable business that is growing steadily but slowly, to serve a small
group of loyal customers.

But you are not a startup.

Startups are about growth. About chasing metrics like 5% week over week. About
going from 100 customers to 100,000 in a month. That is the reason you take VC
money. It's not "I have this idea for a business, but I need some money to
quit my job while I work on it". It's "I have an idea for a business that
could be huge but I need to build it up _fast_ ".

So when I see someone bemoaning the advice they were given by their investors,
telling them they should be meeting all these crazy metrics, I can't help but
ask, what did you expect? The VC isn't in the business of slow, organic growth
of your company. They are in the business of generating a return for their
fund within a relatively short timeframe. The advice you get is their best
effort to try and help you find "explosive" growth.

Before you sign your bootstrapped business on for investment money, ask
yourself: is this business, and more importantly am I, really suited for
massive, short term growth?

~~~
tptacek
Ah, the "hacker/cracker" debate equivalent for software entrepreneurship,
complete with the person who says other people have "no business" calling
themselves something if they don't meet their specific definition of that
something.

Bolted, of course, to the top of any thread that mentions "bootstrapping" or
"VC".

~~~
greghinch
This is more about an internalized understanding of the type of business you
are building for the founders than it is about external perceptions. That can
be difficult for some, particularly with the prestige we in this community
attribute to the word "startup". But understanding the needs of your business
and how you want to grow it are key. If you're thinking of your business as a
startup, that massive growth is the only way forward, you'll make decisions
like taking VC money. If you think of it as a profitable small business, with
measured and planned growth, you can recognize that VC money may not be the
answer for you.

~~~
tptacek
I think we understand that you believe businesses that don't aim for shoot-
the-moon growth shouldn't call themselves "startups".

The problem is, not everybody agrees with you. I've done both kinds of
companies and don't think growth trajectory is the defining feature of a
"startup". I'm also not particularly interested in debating the point, since
it has very little to do with the story we're commenting on. (I also
understand your rebuttal to that point, that the problem this person had was
not understanding the distinction you're making, but I also disagree with that
argument and find it a little mean-spirited.)

~~~
greghinch
My only point is to offer hopefully helpful advice to the legions of folks who
come to HN wanting to learn how to start their own business for the first
time. Many unintentionally assume they need to operate like a startup to their
own peril, when in fact they could have had a successful business if not for
chasing that label. Certainly no intention of being "mean-spirited". The fact
that it might come off that way likely speaks as much to the aforementioned
prestige which we place on the term "startup" as anything.

I think creating a business can be one of the most rewarding things a person
can do, and I want as many people to find success in that as possible.

~~~
peterarmstrong
All funded startups are startups, but not all startups are funded.

It is possible to create a business with a very ambitious growth trajectory
regardless of whether you have taken VC or angel funding or whether you are
bootstrapping. It's just a lot easier to do this if you've taken funding.

In the valley, most plausible ambitious growth trajectory businesses are VC-
funded of course; this is not necessarily true elsewhere. As someone who has
lived in the valley for many years and before starting a startup outside of
the valley, it's easy to understand why: not all funding climates are created
equal.

The thing is, your comments come off as extremely dismissive: the implication
is that anything not-funded is a "small business", which is the equivalent of
a pat on the head and "nice lemonade stand, son" (or, Italian restaurant, if
you're DHH).

Finally: say a startup has a high growth trajectory and closes a Series A
round. Was it a startup before it closed the round? I'd argue the investors
thought so...

~~~
tptacek
I think he actually means to communicate the opposite --- he's dismissing
"startups" as he defines them, and chiding the author of the post for pursuing
that model.

------
patio11
So, it sucks, but it happens, and it won't matter _nearly_ as much in June
2014 as it seems to right now.

Your co-founder will, hopefully, not find out about this through guessing "Is
this my company?" on Twitter, but rather in hearing it from you. You may be
heartbroken about it, you may cry a bit (totally OK). Then, you will put on
your Responsible Adult pants, call your employee into the office, and tell
them the situation. You will emphasize that it is in no way their fault. You
will tell them the status of your future payments to them (you can make them
-- good), and instruct them that they have no job now other than lining up
their next gig, and that you are totally at their disposal for making that
happen. _First among all things you take care of your employees_ \-- they have
the worst risk situation of anyone involved.

You will then tell your investors that you're failing and will be proceeding
to wind up the business in an orderly fashion. They probably already know
this. None of the ones who you care about will hold it against you -- "this is
the nature of the business we have chosen." Some of them may likely attempt to
invest in your endeavors in the future, if you decide to go down that route.

You will then draw up and execute on a plan to wind down the business in an
orderly fashion. Give your customers a window on their apps going dark, if
appropriate. Turn off new signups now. Turn off ability to take money now,
unless it is absolutely required to continue paying your employees. There
likely a small mountain of very boring administrative work here -- your lawyer
and accountant can help you through it.

After this is over, you'll probably be very stressed. That is fine and
natural. You're in the hottest market ever in terms of hiring right now. If
you want a job immediately, you will have many offers for it. "Built a company
with real revenues from nothing. Got into an accelerator. Took funding. It
didn't work." is enough of a resume to get you an interview at any number of
places. If you need introductions, you are probably well-networked enough to
get them, but if for some reason you want more drop me an email. Your designer
co-founder will have, similarly, no shortage of offers.

Like tptacek says below, this will not meaningfully hurt your chances of
creating a business later. You've likely learned plenty through the
experience.

It sucks. It will be better, very soon. You don't have to be scared: this is
routine and, while it doesn't feel like it, you're actually in very good
position, both absolutely and relative to many other people.

~~~
mst
Ask yourself: who did you compete with to hire that developer? Are they still
short of somebody?

The one time so far in the history of Shadowcat I've had to cut people for no
reason other than lack of money, I talked to managers I knew at other
companies who might have an interest in the sort of talent that I was about to
force onto the market.

Two people finished working for me on a friday and started a new job on the
following monday. The reduction in stress and guilt and hence increase in my
capacity to focus that resulted from knowing that was the outcome for them
repaid the time spent finding them new gigs within a handful of days.
Maintaining a positive relationship with those people afterwards - and the
attitude of people who saw how I'd handled it - was effectively just gravy.

Or: Handling this sort of situation with honour tends to help turn it into a
positive sum game.

~~~
jakejake
I have a similar guilt when we're hiring and I wind up with several great
candidates. sometimes I have 2 or 3 people and I wish I could hire them all. I
feel like it's a waste if I can't at least create something out of the
situation. Especially considering it's hard to find good people and I have
friends who are often looking for staff. A few times I've contacted the
candidates and asked if they would allow me to put them in touch with another
company. I think I've managed to hook up a few people with jobs.

~~~
90002
Good to know that we still have some good people in the world who care about
one another.

------
tptacek
Your startup is going to die, you're going to get a new job (which you'll have
no trouble doing), and sometime in the future you'll start another company.
Maybe you'll do the next one smarter, since you'll have more experience.

Signed,

Been there.

~~~
mathattack
It is very hard to say "This too shall pass" during your darkest days, but
tptacek is correct on this one. You'll also know who your true friends are
once you get out on the other side.

~~~
dkrich
_You 'll also know who your true friends are once you get out on the other
side._

Spot on.

------
vidarh
I recognize a lot of this from startups I've been involved in.

At the height of the bubble I co-founded a vanity e-mail business. We wanted
it to be a paid service. Our only competitor was a paid service. But when we
looked around, we saw ludicrous valuations per user for users that provided
little to no revenue. And the VC's saw it too. And everyone were seduced into
going for a free service and figure out monetization later. So that's what we
did.

Of course the bubble burst, and the lofty valuations disappeared, and we had
to hunker down. The business survived, but we fired 45 or so people - the vast
majority of the team, and the VC's lost most of their investment.

I have two big takeaways from that experience: Be conscious whether or not you
want to gamble. A gamble can be worth it, but you may be much happier building
a company that'll stand a reasonable chance of giving you steady returns and
pay you a salary than taking a long shot at millions. We started out wanting
that reasonable chance, but got seduced into the long shot without really
thinking about it.

Secondly: Keep in mind the VC's often have a vastly different risk preference
than you. A founder is usually investing all his/her time in a single
business, often for years. A VC spreads their investment over a wide range of
companies, and spreads risk accordingly. For them, it's not such a big deal if
a few of their portfolio companies fail, if they get the occasional massive
return, so it may make sense for them to be willing to take risks with your
business that are not in _your_ interest.

It's vitally important to think through how much risk you're ok with _before_
going out and getting investment, and to look for money accordingly, as well
as consider how much control you're willing to give up depending on how
aligned you think your interests are with the profile of any investors you
bring in.

Failures makes valuable lessons (and I've had more lessons...).

------
mathgeek
"This week, I need to speak to the other founder and fire our first employee
before he leaves on a planned vacation. He’s a good developer, but I won’t
fucking make payroll next week if I don’t clear him and his severance out of
the company."

Is it wrong that I feel worse for this employee than for the author? He's
looking forward to a (probably well-earned) vacation, and he's about to be
forced into a job hunt instead.

~~~
hidingmyname
You should. I feel fucking shitty about this.

~~~
damon_c
Can't you wait till he gets back so he can have a good vacation?...Although
I've seen the whole "got fired upon returning from vacation" thing happen a
few times. That sucks too! Sorry for both of you.

~~~
throwit1979
Apparently you missed the part about not meeting payroll. There are few things
worse( legally, in employment law )than missing payroll.

~~~
beat
Ugh. I remember what it was like the first time the 2000-era dotcom I was at
missed payroll. A co-worker and I had taken the day off to take our kids to
the state fair, and found our money wasn't where we thought it would be. They
announced the payroll shortfall the day it happened, in company email we
didn't read because we were off that day.

Kinda sucked.

------
jpdoctor
> _I’m scared._

Congratulations: You're normal. Look at it this way: You are commanding on a
battlefield, there are a helluva lot of guys about to die. If you freeze up,
they all die.

So make some fucking decisions, save as many as you can. Throw some into the
line of fire for the sake of the others. It's what battlefield commanders do.
The gods have chosen you for this role, rise up and do your best. You will
make some bad calls, and don't sweat it. Focus on making the right calls, then
course correcting the bad ones.

Good luck.

~~~
ChuckMcM
I think commanding on the Battlefield is the wrong metaphor, we use it a lot
but its not a battle, its a sport. When you tell your developer you can't
afford to pay him any more it isn't that he (or she) "dies" its that they move
on to their next job. Is it painful? Of course. But it isn't death.

Sports analogies work better since there is always next season with some of
the same and some different players. You decide to go for the touchdown for
the win instead of the field goal to tie on 4th down. Its a choice, it works
or it doesn't, you go on to the Superbowl or your don't. The decisions
tomorrow will be affected by today but you will still have decisions to make.

Start-ups (and I think this is one, and I think pizza stores are start-ups
too) are sprouts of a business. Sometimes they grow into bushes, sometimes
trees, sometimes they can't develop enough to stay alive and they die after a
while. But a start-up "dying" isn't people dying. Its people going on to do
something else. For non-founders their work day may proceed pretty much
unchanged other than office environment and neighbors in a new job somewhere
else. As for founders? Well it demands reflection and inspection to glean the
maximum amount of understanding about what worked and what didn't. Sadly its
the only way to learn some of those lessons.

~~~
jpdoctor
> _Is it painful? Of course. But it isn 't death._

No, but firing somebody who is the head of household and has major medical
issues at home, is a helluva lot more serious than 4th down.

~~~
ChuckMcM
Absolutely it's serious. But if we're talking laying someone off because you
can't make payroll, that is quite different than dismissing them for cause.
Generally the latter is what I think of as 'firing'.

There are scenarios one can construct that are quite painful, the person you
convinced to move out of their home town away from an ok job and family to
work for you who, due to the high cost of living, had a really long commute
and got into a vehicle accident their first week, because they had been
putting in 80 hour weeks to come up to speed quickly, that put them into the
hospital but they they hadn't worked long enough to qualify for California
Disability Insurance. Can we make it any worse? Perhaps their girlfriend found
out she was expecting that week and so that was why this poor guy was rushing
home? And your startup goes out of business because the lead investor pulled
out just before the round closes, so now they don't have a job.

I'm sure we could pile more on.

My point is that the common case, the general case, is that people have
multiple jobs throughout their lives. Sometimes it is wonderful, sometimes it
sucks, but when they are 60 looking back at their 20's it will be part of a
much larger tapestry of experience. If for the majority of people it isn't the
end of their world.

------
gyardley
It sounds like you waited a little too long before trying to arrange a soft
landing, so now you're probably going to have a hard landing.

In this situation, I would tell your investors immediately that their
investment is going to zero if you can't manage to sell the company for the
value of the team - and that in order to even _try_ to sell the company for
the value of the team you're going to need a bridge loan, because otherwise
the team is going to evaporate.

If you can get a month's worth of bridge, get all your investors to start
looking for a home for the team and concentrate solely on that. If you can't,
tell the employees to start job hunting and use the small amount of money
you've got left to wind things down gracefully and sanely. Winding things down
on your own without the help of a lawyer is a pain in the ass, and lawyers
cost money.

------
anigbrowl
If you can't make payroll, stop staring at the ceiling in your bedroom and
feeling so alone, while you plan how to fire your expensive first hire.

Hold a company meeting, put the accounts up on the wall, explain that you have
almost no money left and the company is about to go broke. Be willing to
consider ideas, but don't string people along so you can postpone pulling the
plug on them. It's possible that your employees (individually or collectively)
will come up with solutions that you can't; your lack of transparency about
the firm's health may be part of your problem.

~~~
sebkomianos
That. Since you have pretty much accepted that you failed as the "leader" of
your crew, why pretend you are one now?

Have a meeting with the guys that do work for your company/product first,
LISTEN to them, and then take it from there.

------
mamcx
What I see of this, is similar to my experience in be part of the
"startup"-machine business. I won a award in my country (for my business
idea), and participate in several contest where I land in the finalist.

What tremendous waste of time.

Triying to chase the "investor money" was the most damaging thing I do. I
waste months on that. Building investor plans, do meetings, and work on CANVAS
and other methodologies where some company, that get the real $$$ to "create
startups", guided each of us to the path of silicon valley..yes, rigthhh....

At the end, I understand that we was part of a masterplan, where the money was
on the big players sucking from the gov funds on build startups, with pre-
pakaked advice and zero of the real value that we need.

I think that YCombinator is the only that truly make sense, and the rest copy-
cats are more a waste of time than not (even with good intentions).

------
acjohnson55
Thanks for sharing. I sympathize with you, because I just recently went
through something similar, with less success than you've had. It sounds like a
tough situation, but you're not out of options. You might just be out of the
preferred options.

It seems to me that if you're truly out of money, you can either:

1) Try to double down on funding. Your investors can either re-up you or kiss
the money they've put in and the debt/equity they have goodbye. But this just
puts you on the treadmill for another X months. If you don't like how that
feels now, maybe it's not the best direction. 2) Try to get acquired by
someone who will pay you to finish your product. 3) Get outside work to pay
the bills and put your startup into side project status. Surely with what
you've built, you have made yourself highly employable, and if you're in a
big-time accelerator, you probably know people who need your skills. 4) Make a
"personal pivot", and use the skills and experience you've developed to
springboard into something else.

I've come to learn that the discourse in the startup world is completely
slanted toward success stories, even though success is far from the most
common outcome. Almost no one gets it right the first time.

For example, from my own limping startup, I've learned a lot about what I did
that didn't set myself up for success, and how I would do it differently. I
got a day job--which I'm loving so far--and I'm planning to save a substantial
portion of my pay to build a warchest over the next few years, such that next
time, I won't dive in already broke (just one of several crucial things I
would do differently).

------
austenallred
Interesting. I feel like the time most previously successful startups begin to
fail is when the founders are intellectually dishonest and push forward
through cognitive dissonance. You have to see and believe in a vision to make
it come to life. That is my big takeaway from this - if you disagree with your
VCs or don't think something will work, you _have_ to say so.

This may be a shot in the dark, but if it were me I would call up the VCs and
begin having the hard conversations. "Hey, we're in trouble. I think we made
mistakes here, here and here. I'm in over my head, what do we do now?"

They may ask for what's left of the money back, your business may fail, but at
least you go out having been straight-forward with yourself. And you can get
on the horse and do it again.

Just my two cents.

------
marcelftw
> "The day we set foot into the doors of the accelerator, we had a business
> that DHH would be proud of"

DHH is well known for being against investors in general. Why would he be
proud ?

My point of view on this : investors are OK while the funder(s) have more than
51% share, and therefore still making the decisions. You kind of sell your
thing to satan here brother, you shouldn't have. You are not in charge of what
you put so much work building, from scratch. People with money come here and
change your view on the business, on your values ?

Also, I feel you don't talk enough to your co-funder(s). You should not have
secrets, work-wise of course.

A bit of advice, if I may : at my startup (in which I'm associate, not
funder), we make a scrum retrospective meeting every now and then (2-3 weeks).
In these meetings every member of the team explains : 1/ what we should do
more 2/ what we should do less 3/ what we should do the same (SAME !) 4/ what
they have found frustrating 5/ what they are happy about 6/ any questions I
feel this is really important so that every one is happy. It takes courage to
explain all this in front of people, but it builds up the team...

Anyway, good luck brother.

~~~
ikailan
I think you misread his paragraph. He was proud of the business the day in its
state that day he walked into the accelerator (and presumably for some time
before), not BECAUSE he walked into the accelerator.

------
KenL
This is a fantastic headline and a good writeup, but ... why?

Perhaps it's cheaper than a psychologist, but in the process of being
"stretched so thin" why are you spending time and effort into something that
won't materially help you.

Dude, you have 30 days left. Don't be one of those football teams that gives
up with :30 left on the clock. If you're going to lose anyway, throw the ball
into the fucking end zone and try your hardest until the game's officially
over.

Use your name. Tell us and the world about your company. Ask for ideas and
help. Take advantage of this medium to try and turn it around with a Hail Mary
pass instead of quitting early. There may be plenty of time for psychoanalysis
in August, so what have you got to lose?

There are already 148 people on HN who care enough to comment. And thousands
of readers, all of whom are tech savvy and perhaps more. You just never know.

Even if it fails, you'll go down a fighter instead of an anonymous blogger
bemoaning his bad fortune. Which would you rather be?

Good luck,

    
    
        Ken

------
badclient
Do you have any HAPPY customers? Talk to them. DAILY.

Why are they happy with you? ASK them and then shut up and write down why.

Take a step back. What do you need to achieve break even NOW and next month?
Who do you need to let go? Who do you need to keep?

------
alsostayinganon
The grass is always greener on the other side.

I too am running a startup with a downward trajectory. We have more like 6-12
months of runway left but things aren't looking good.

Our path tracks your alternate reality.

I started a project several years ago that took off. It wasn't meant to be a
business at the beginning but once it started getting traction I slowly
devoted more and more time to it.

It was "profitable" from the first day; the Adsense ads more than made up for
the costs of hosting it and the initial design work. I programmed it myself so
there was no development cost.

From the beginning it snowballed. It had a thousand users the first week, ten
thousand the first month, and 50k users 3 months in. It was at that point that
my amateur coding got in the way and the server crashed and burned.

By this time the business was making about $300/day in advertising. The costs
were basically zero (a single virtual server + me part-time while I was still
in school).

In retrospect this is the point I wish I had dropped out of school, raised
some funding, and started building a development team. But I didn't; I read up
all I could on scaling and hacked together some more code. That helped the
project grow to a million users by the end of the first year.

By this time I had added in for-pay features to the free product to augment
advertising and was making well over $1000 per day. I started plugging some of
this into advertising to accelerate the growth but most of it was being
distributed to me as the only shareholder. Things were going peachy until the
servers crashed again.

Again, I read up on scaling, bought a couple hours of consulting time, and
patched things up. Within a few months the advertising spend had paid off and
at the peak the project was raking in $20,000/day (most funneling straight
back to me since at this point it was just me [still part-time] and a couple
of part-time customer service reps). This was where the project hit its peak
of about 1 million monthly actives.

And, of course, the servers tanked again. This time by the time I was able to
get things stable again the market was not as good and we weren't ever able to
get back our exponential growth.

I wish I had at the very least "gone for it" and plugged the profits back into
the business to hire people to help me. It was about this time that my
competitors were discovering the same things I had been experiencing (easy
viral growth, cheap user acquisition) and raised about 100 million in VC
funding to buy up and saturate the market.

Long story short, we stagnated and slowly declined (no longer able to compete
effectively with our newly extremely well-funded competition). Our competitor
who raised 100MM in VC is now a public company with several billion in market
cap, and there are several others who took a similar path that are worth in
the range of a billion as well.

By the time I decided to hire and build a team it was too late to make much of
a difference.

I made a couple million bucks and had a fun ride but I'm still kicking myself
for not seizing the opportunity to go all-in while the window was open.

We're now playing catch-up but the market is more fully developed now and it's
harder for underdog players to get an upper hand.

~~~
6d0debc071
If you know you're screwed, and you've made a couple of million bucks, why
aren't you just closing up the company and going home to have a money party?

That probably sounds quite harsh if it's something you love, but a million
bucks is like economic freedom for life, and you can try again with a
different idea later where there's less active competition. Sounds to me like
you did pretty well for yourself.

~~~
kirillzubovsky
In this day and age, a million bucks is not even close to an economic freedom.
@webwright has a good post on what he calls "Fuck you money", the amount you'd
need to retire rich. Well worth the read.

[http://www.tonywright.com/2010/no-you-cant-retire-rich-
at-30...](http://www.tonywright.com/2010/no-you-cant-retire-rich-at-30-if-you-
sell-your-startup/)

~~~
clarky07
Sure it is. You just have to have more reasonable expectations. A million
bucks can easily generate 30-50k a year in dividends, and without a mortgage,
that is enough to live a comfortable lifestyle. You can't go on permanent
vacation, but you can live and work on whatever you want to without needing a
job.

200k is a silly number to use in this calculation. Most studies show that
"happiness" stops having big returns past something like 70-80k. Could I spend
200k a year? Sure no problem. Do I need to? No way.

~~~
gaadd33
While 200K is silly, I don't think 1M is really enough to never have to work
again assuming a family.

You would have to purchase a house, it should be in a safe area with a good
school district, so that's probably 200K? (I don't know what prices would be
far away from the coasts)

So now you have 800K generating dividends for you, plus you have to save every
year to be able to cover your kids college tuition since you can't get any
need based money due to your nest egg. Even assuming you somehow do that on
50K/year (or your kids get merit scholarships), in 30 years (by the time you
are 60) your 50K has the purchasing power of ~25K.

~~~
ry0ohki
1) You don't need to pay your kids college tuition

2) Without a mortgage or debt, even 25k goes a very long way. Add up all of
your non-housing bills, it shouldn't come anywhere close to 25k, I just did a
sample budget and it still leaves 500 in savings per month.

~~~
gaadd33
1) So shoulder your kids with massive debt or hope the educational system has
changed enough that college degrees aren't required for everything and things
are affordable. Nice.

2) Assuming a low cost of living state, and you live frugally for just
yourself, I totally agree. I don't think that anyone would say raising a
family on that much is easy in any part of the country. (I'm not saying its
impossible, just not easy, probably to the point where you would say screw it
and go back to work.)

~~~
ry0ohki
1) I paid for my own college and know others as well. I also know many people
whose parents paid for their college. Guess who earns more out of this
admittedly small sample? When you have to shoulder your own education you make
many more money-making decisions, so that poetry degree from $200k school
doesn't look so hot.

2) It's not that frugal, that's my point, here's the budget I put together,
which still has luxuries like cable tv, smart phones, and $250 a month for
going out
_.[https://www.budgetsimple.com/budget/DKwEDsxt](https://www.budgetsimple.com/budget/DKwEDsxt)

_ Assumptions- You own your house outright, you own a car outright. There are
other costs like property taxes and car repairs, but with $500 savings per
month, those should be easily covered in a year.

EDIT- It's also worth noting, we're talking about income solely from dividends
on $800k. Once your kids are going to college if you want to help them out,
you have 800k (plus the $500 in savings per month to help them.)

------
rafe33
Maybe I missed it, but WHY does your startup have 30 days to live? You ran out
of money and have no raise potential? How could your employee and cofounder
not know this already?

~~~
hidingmyname
Founders are all very well aware, employees still in the dark.

No raise potential as metrics are nowhere near where they should be. Solid IP
and team that might make for a good acquisition, provided investors will OK it
(they've rejected one some time ago)

~~~
andrewcooke
shouldn't you give employees 30 days notice? or is the plan to just fire them
when the money runs out? before they've had time to look for another job...

~~~
paulhauggis
haha, has this ever happened?

If you give employees 30 day notice, most will look for other jobs and leave.
You will then have no hopes in turning the company around.

------
mck-
These are the stories that matter more than the success stories we read every
day on HN -- there should be more of these; this is reality -- great write-up
:)

------
nickfrost
If you let us know who you are and what company you're working on steering in
the right direction, I'm very certain there are people, like me, that would
love to help you in any way.

1\. I work for a company that can alleviate any back-office pain you have,
setting you up on the proper infrastructure, rather than startup blood-sucking
solutions like BackOps, TriNet, and Algentis.

2\. I have industry connections to help you find mentors, funding, or guidance
of any kind.

3\. I don't know you, but I am passionate about you. You're a founder and I
believe you have great value to offer the world. With this startup or any
other you create in your lifetime.

4\. You've drummed up great awareness for you and your product with this post,
so why not use it to get feedback on your product, with hopes to continue
developing something customers want.

That's all I can say. I wish you the best, and hope you're not too discouraged
if things don't work out with your current startup. You have the spark. Keep
it alive, and build something of value.

Cheers :)

------
calinet6
I've been through all of this, it sucks. But this line sticks with me:

"Honestly think the only thing that keeps my health and my marriage intact is
my running."

I gotta start running. That's the one thing I always get wrong.

Good luck. Just remember, this happens all the time. For you, it will be a
learning experience. In a year's time, you'll be in a new situation with
almost a completely new life, and your experience will be valuable to that
next step.

Next time will be a little bit better. You'll be a little more trusting of
yourself, with a little less naivete, and you'll create something again. Or
you'll help someone else create something. Either way, your life will get
better, because you're a capable person who started a company, and you're
capable of even more. Do the best you can right now and stay positive. The
future will be brighter.

~~~
noir_lord
For me it's cycling not running (arthritis runs in my family and one knee is
pretty fucked from a football injury).

It's _literally_ the only thing that keeps me going some days I reward
sustained effort with a ride and a ride wakes me up, clears out the cobwebs
and I get some of my best work done after a ride.

It also helps that I've lost more than a stone (14lbs) in just over a month by
switching diet and cycling 200 miles a week :).

------
random42
> I really love my co-founder. It’s an enduring bromance that will last a
> lifetime. He’s a talented designer, supportive listener and I trust him
> entirely. However, he left me alone in the cold. He didn’t mean to do this,
> he didn’t even realize he did. I became the guy who would “do-it-all”. Biz
> Dev, check. Product Management, check. Support, check. Accounting, check.
> PR, check. Ad Copy, check. Development Lead, check. While he took complete
> ownership over design (and really excelling at it).

Communicate. communicate! Cofounder relationship is like any other and
communication matters. a lot. You will get tired, feel low and discouraged.
you'll have to share it and let one person know who has an outside chance of
understanding it and help you out if possible. your co-founder(s).

------
speedyrev
Failure is a part of growth. This may be a monumental failure, but this blog
is both therapeutic and introspective for the author. Examining failures helps
us as we move forward. We get the added benefit of looking in from the
outside. Kudos for coming forward with this kind of honesty.

------
martinkallstrom
I have complete understanding of your situation, having been in the position
of having to let people go from a very small team a couple of times. It's hard
and feels awful, but you are doing what you see needs to be done which is
great in comparison to not having the willpower to act.

If the developer you need to let go is as good as you say, he won't have a
problem finding a new job. You feeling shitty will not help him nor you so
continue working to remedy the situation to the best of your ability. That's
all you need to do and I think it sounds like you will be able to look back to
all of this and be proud of you being able to make hard decisions even in a
situation when it's so much easier not to.

------
crabasa
Could the OP chime in as to why he is writing and publishing this blog? It
appears to be a cautionary tale, but I'm not sure what anyone can learn when
all the particulars are removed. Why not just write a retrospective after the
next 30 days?

~~~
hidingmyname
Not a cautionary tale, just a blog to vent my frustrations and record the
experience.

I'm not in a position to give "advice" nor do I suggest anyone follows
"advice".

If you're a new founder and about to get on the VC train, through the
accelerator and out again at light speed, it's good to know that this is one
way it can all end up. (Nobody really speaks about it anyhow)

~~~
jt2190
Here are some lessons I'm taking away from this article:

    
    
      > ... our initial desire to not raise a seed round was 
      > dismissed and we were thoroughly convinced that we had 
      > to continue on the VC rocket-ship in order to matter to 
      > anyone. My reluctance to do this was met by scoffs and 
      > dismissals from many others in the accelerator cohort...
      >  as well as by the mentors and investors who had offered 
      > their time, network and resources to help us succeed.
    

Lesson: VCs want founders to take larger risks with their company for the
reward of a larger payoff. If the founders don't want to "bet the farm" like
this, then they probably shouldn't be seeking out VC money, or at least wait
until they're profitable enough to have a lot more negotiating leverage.

    
    
      > I didn’t believe the shit I was selling investors. This 
      > was not the company I put my life on the line to build.
    

Lesson: Founders have to push back on their investors when the investors don't
understand the full ramifications of what they're asking the company to do.
First-time founders often fail to push back because the investor/advisor line
is blurry.

    
    
      > When I built this team, I didn’t build it with 
      > generalists and with people who could jump into any 
      > area of the business and get shit done. Instead, I built 
      > it with quality-minded perfectionists who build 
      > beautiful things.
    

Lesson: The founding team has to build two things: The product _and_ the
company that builds the product. Find people who can do both.

~~~
31reasons
For a VC your company is just 1 of 1000 they have invested in and so they are
focused more on the numbers game. But for you it could be your life's work. It
seems taking VC money early on is a big mistake for serious founders.

------
dmor
What if you just kept everyone, told them the truth that you can't pay them,
and kept going? If you still believe in the core underlying thing that was
working when you started then maybe you can turn this around.

------
kxu
Well, lesson learned.

> What happens next? Hard to tell without precise context, but: as far as I
> can tell, your company just needs money (paid customers I guess); you cannot
> be good at your (too many) jobs? Fine, if your company is B2B there is only
> 1 job to get done right now: business development, if you cannot do it
> yourself, let's find the best business dev guy you can in your industry. BTW
> "biz dev" is the only kind of guy I can sincerely hate and love at the same
> time; that's how I recognize them.

My 2 cents.

------
iblaine
I had a moment just like this. We would be short $20k on payroll and the
founders and myself and to come up with the difference. That sucked. Reality
really sinks in when you are not in a good place to write those checks but you
write them anyways. It was the responsible thing to do. Also, don't be a dick.
Inform your employees that they need to keep their options open.

My biggest regret was allowing my VC to convince me to not worry about
money...but you live & learn.

------
bomatson
Thanks for sharing your story. If you need someone to chat with:
[http://www.startupsanonymo.us/](http://www.startupsanonymo.us/)

------
fairywings
That's unfortunate but this is business, most successful people go through
this many times.

Best thing to do now is man-up, spend your last dollars taking your guys out
for a drink and try and leave it with relationships in tact.

Best of luck on re-entering the workforce and don't lose hope. You may find an
opportunity you can get started in your spare hours without all the extra
sparkly bits that brought you down this time.

------
infoseckid
Don't get me wrong but this is the classic example of "following the herd" of
current gen startups --- too much focus on pleasing investors, raising money,
eventually realizing you've relinquished control == don't feel sense of
ownership in the company, straying from the vision or not getting enough
traction, founders breaking up and then the ship sinking!

------
chrisstanchak
I think the best way to look at this is as a learning experience. You have
"scar tissue" now and won't make the same mistakes again.

Since you are an entrepreneur, you will inevitably build another successful
startup - except this time you'll make it happen in half the time with twice
the wisdom.

------
pajop
this thought popped into mind - don't be a zombie startup
[http://www.daniellemorrill.com/2013/03/zombie-
startups/](http://www.daniellemorrill.com/2013/03/zombie-startups/)

------
makerops
I am curious, as to why you didn't listen to your gut, and how old you are?

~~~
hidingmyname
The tempting lure of a big convertible note and a set of drooling investors
saying that we were building "the next big thing".

~~~
makerops
Did you have the self-awareness at the time to realize that what you were
building is something DHH would be proud of, or was that only in retrospect?
I'm asking these questions, because I struggle with listening to outside
advice vs listening to my gut, and Ive been trying to strike a balance as of
late.

------
_niss
I think the team should understand you and stand-up with you. Accepting a job
in startup means be ready for an adventure where things like this could
happen. Talk to them and look for a key feature or PIVOT

------
thibaut_barrere
You can alternatively pick the "indefinitely sustainable" road instead (for
instance by mixing bootstrapping with freelancing like I did).

It is much slower but much less stressful too, in my opinion!

------
jjmardlin
wow, hidingmyname, if nothing else, you've inspired one of the most positive
and supportive threads I've seen on HN (don't bother checking, I'm still a
pseudo-noob).

I can only echo what many others have said in one way or another: be at
integrity with yourself, do what you can to support your team and maintain
your honour, and I believe that you will look back at this, in 6 months, with
some kind of gratitude.

You lived it. :)

------
siscia
I would like to send you an email, can you contact me ? simone at mweb dot biz

------
GBiT
Is it legit? I saw a few 30 days left to live stories here, now 30 days for
startup to live. Is it PR shit or real deal? If you fire employee you must pay
compensation, so how can you not able to pay his payroll of week? If you fire
him it will be more expensive then one weeks payroll.

~~~
unreal37
In most states of the US (at will employment), you do not have to pay that
much severance. So you can either pay an employee their salary every 2 weeks
(and their vacation is paid), or pay then 2 weeks severance.

The amounts might not be that different. $2k paycheck versus $3k severance.

------
SurfScore
Elon Musk put his last $3 million into Tesla to make payroll a few years ago.

~~~
andy_boot
That guy has balls of steel and fame to fall back on. While I think Elon is a
man to be admired I wouldn't recommend copying all his decisions.

~~~
krichman
Also survivorship bias; we wouldn't be hearing anything about Tesla if it had
failed normally.

------
pbreit
Is returning to what you were doing in the beginning not an option?

------
timc
sorry for what you are going through. happy to try to be of help if I can.
[http://hall.com/tim](http://hall.com/tim)

------
mail2account
"Product after Product"

It seems like you were building mobile apps

------
talhof8
Now that's what startups are all about

------
oaktowner
He has time for running? I think I know what's wrong.

~~~
jng
I don't think you know. 1h of running could double the productivity of the
hours you put in afterwards. And, most probably, the issue stems from
product/strategy decisions. Not from spending 1h a day running and clearing
his body and mind.

------
graycat
This thread does a lot on asking what is a _start up_ and what about taking
equity funding, e.g., from a venture capital firm, versus remaining a company
100% owned by the founder(s).

The discussion keeps trying to find simplistic _patterns_ that cover most of
the cases. I claim that such _new businesses_ ( _start ups_ ) are so varied
that we should not look for simplistic patterns and, instead, just look at the
businesses themselves.

Here is an approach to some insight into the growth of a new business:
Commonly the intended or _expected_ growth is modeled with a spreadsheet with,
say, one column for each _planning interval_ (maybe one month) in the plan of
growth, but long ago I decided just to use an interpretive procedural language
with, essentially, a Do-loop with one pass for each planning interval.

So, of course the Do-loop has some variables. So maybe we have some variables
for business decisions, for random exogenous inputs, and for the _state_ of
the business.

Considering all of these variables and the _business dynamics_ during each
planning interval, we see that we can have a lot of complexity.

In particular, in some of this complexity, we can see that the business can
run short of various necessary _resources_ such as management time, capacity
of the server farm in users served per second, disk space used by the database
software, time to hire and train staff, floor space used by the staff, rate of
writing software, ads served per second, revenue from the ads, delays in
getting paid by the companies running the ads, etc.

So, there are lots of 'constraints' or limitations which can slow the growth
of the business.

Generally, if usage and revenue are growing slowly and the free cash is low,
then we react by slowing down on hiring, buying servers, etc.

Yes, it can be that a big check of equity funding can open or _relax_ many of
these constraints. But it may be that margins and free cash flow are nicely
high and the constraints that are 'tight', e.g., management time, rate at
which can bring on more software engineer staff, are not _relaxed_ by equity
funding.

Programming a multi-interval growth model makes these points quite clear. Just
envisioning such software should, for the HN audience, also make the points
plenty clear.

So, net: We can't generalize. It might be that for some start up, equity
funding cannot help its growth because cash is not nearly one of the tight
constraints and, instead, the start up might be able to grow as fast as
possible just _organically_. Common? No. Possible in principle? Yes. Possible
in practice? Maybe, but don't try to generalize or theorize. Instead, if have
such a case, then recognize, accept, and run with it and tell the people with
equity capital "no thanks".

So, really, we can't generalize: _Organic_ growth might be for a business that
has just one pizza shop and will never have more, a business selling donuts
that opens a new location once a quarter, a Web site that is a _lifestyle_
business and gives the sole proprietor and owner $5 million a year in income
but is not growing very quickly, or a similar Web site business that is
growing rapidly, as fast as the time of the sole proprietor permits.

Such an organically grown business might be the next "big thing", worth $400+
billion, depending just on the business, say, the Web site, how many users
like it how much, and how much free cash flow the revenue from the ads
generates. In general we can't say and have to look at the particular
business.

But, we can draw conclusions from what was common in the past? When looking
for "the next big thing" (NBT), mostly just simple empirical patterns from the
past are next to useless, deliberately, even nearly necessarily, so since the
NBT might be -- should be, likely is -- quite new and different.

So, again, when looking for NBT start ups, we have to consider them one at a
time with little hope of good help from past, simplistic patterns.

------
m3mnoch
ha! can a guy get a "hello fucking echo chamber!" up in here?

m3mnoch.

------
eclipxe
Any proof this is real?

------
michaelochurch
All I can do is wish you good luck and say that I admire you for having the
courage to try. These seem like empty words, so read some of my other posts to
see that I really say what I mean (i.e. I'm very harsh with people I don't
think much of, so when I'm nice, it _means something_ ). I'm sorry to hear
that this is happening and I hope things turn out for the best.

Where are you located? What's your next move?

I can't stand how these investors get so hung up on Playing God with other
peoples' companies. If they want to take over the world (and endure the risk
involved; since world domination has a much higher chance of failure than a
sustainable, mid-growth lifestyle business) they should do it with _their_
careers and companies, not someone else's.

Elon Musk is doing the right thing. He's chasing the vision with his own work,
rather than jumping into someone else's Magitek Armor and then deciding to
burn Narshe.

Also, these asshats are the reason it's so fucking hard for startups to get
clients. Businesses (clients) have been burned, horribly, in the past by
startups dropping them to chase dragons because their investors thought it a
better idea to drop the client and roll the dice on some red-ocean product
play with a 1-in-100 shot at success. This creates a world in which clients
are very cautious about dealing with startups.

We'd have a better ecosystem if the VCs were just passive investors who didn't
try to live out their own adolescent do-the-world fantasies. They'd certainly
make more money that way.

------
dpanah
This one got me out of just about everything, and it's very very true, good
luck;

Never, Never, Never give up. Winston Churchill

------
alekseyk
Can't make payroll? Complain about being stretched thin?

Start a useless blog!

Perfect!

~~~
lnanek2
Considering he got on the front page of hacker news, it is far from useless.
That's like 10k page views and good chance of investor/VC attention. I've
gotten a couple meetings with VCs thanks to being on Mashable/Verge/etc., so
Hacker News is likely no different. Actually, the page views are more from
Hacker News since people go to your site directly instead of reading an
article and maybe going to your site.

Too bad he doesn't have contact info or anything on there to capitalize on the
traffic.

------
cledford
Why not double down and keep pushing forward?

------
cheez
And in 90 days, you will be served with divorce papers.

~~~
GuiA
Screw you dude. For someone with over 1k karma and an almost 3 year old
account, you should know better than this.

This is a community meant for us, hackers and entrepreneurs, to help and
support each other out. Posting shit like this when a guy is exposing his
deepest anxieties to the world and reaching out for help should make you
ashamed.

~~~
cheez
It's the reality of the situation. Unemployed men or men who earn less than
their wives are more likely to be divorced. He needs to manage the situation
with his wife carefully. Don't show her that you are worried. Don't share your
problems with her.

~~~
krichman
That's so cynical that it looks sarcastic.

Isn't it far more likely to get a divorce if you are refusing to discuss
problems with her? Holy hell. If this is what your relationships are like, you
might want to look for different partners.

Thanks for making me appreciate my wife that much more.

~~~
cheez
Facts are not cynical:

[http://healthland.time.com/2011/07/11/unemployed-men-are-
mor...](http://healthland.time.com/2011/07/11/unemployed-men-are-more-likely-
to-divorce/)

[http://www.nypost.com/p/news/national/women_divorce_cur_SfyE...](http://www.nypost.com/p/news/national/women_divorce_cur_SfyEHTdYT8khsy625mbJOL)

I know there are women out there who would not dump their husband like this.
One of my friends who has been with his wife since they were in high school
went through a very tough 5 years in his business while trying to make it. He
lost hundreds of thousands of dollars which he never made back. His wife stuck
by him the whole time and even helped him out. They just had their first
child.

You are right that the quality of partner is what matters the most. I suspect
HNers on average choose a more morally upright class of women, however, I
would still counsel anyone to be cautious about appearing worried to their
wives.

Me though... I like firecrackers. Will never marry.

