
My failed bootstrapped startup: a retrospective. - aaronlerch
http://blog.beautifulsavings.com/post/10051412771/so-long-and-thanks-for-all-the-fish
======
swanson
These kind of posts always leave me with a mix of inspiration and
discouragement.

It is awesome to read about someone like you (local developer, similar
learning style, beginner entrepreneur) who actually builds something. There is
a lot to be proud of for just Doing Something - even if you fail. But at the
same time, I feel like I would fall into the same pitfalls that you mentioned.

I am not looking forward to doing anything related to setting up an LLC, doing
sales calls, etc. I like my job and don't want to quit. I know other
developers but end up working on my own stuff alone in most cases.

Thanks for sharing Aaron - I'll have to try to make it out to the next Devs
With Side Projects meetup.

------
kariatx
My story is just like your story except that each time something didn't work,
I took a few days or weeks off and then tried another site. And another. And
another. It took dozens of ideas until I found a business that worked for me.

Take the lessons you learned and start again. Sooner rather than later. You'll
probably fail again too, but eventually you'll stumble upon something that
clicks. The key is refusing to give up.

Perseverance is much more important than any idea, programming language, or
system of doing things. People who get it all right on the first or second try
aren't skilled entrepreneurs. They're just lucky.

------
Ash__V
Sometimes, the best startups start when you are dissatisfied with your present
job, have nothing else to lose, but are smart, and have a couple of ideas you
think are really awesome and a game changer. Check out this TechCrunch article
where one of the cofounders of DoubleClick, Kevin O'Connor talks about the
attributes of an entrepreneur: [http://techcrunch.com/2011/08/19/founder-
stories-kevin-oconn...](http://techcrunch.com/2011/08/19/founder-stories-
kevin-oconnor-good-entrepreneur/)

He lists a few signs of a successful entrepreneur. A desire for control and
the ability to challenge authority are near top of the list. A way to detect
the second trait? "Have you told your boss to shove it?"

------
rick888
Most of the time, if your startup is a side-project (IE: you have a full-time
job), it won't be successful. Not to say that this is impossible.

I've found that when you are working full-time on something, your mind is in a
different place. You can also move much faster.

~~~
akg_67
I don't recommend anyone to quit a FT job unless startup is already generating
cash flow and need more hours of your time to scale further. My last startup
failed because we foolishly quit our jobs prematurely, it created pressure on
us to generate income, we had to abandon bootstrapping, forced us to look for
outside financing, wasted too much time trying to chase angels and VCs instead
of focusing on business, made us quit 12 months before cloud backup (our
target) took off.

Now, whenever someone tells me that such an such angel asking him to quit job
to show commitment to startup, I tell him to tell angel to write a check for
$X and then you will leave your job. Don't quit job if someone want to see
that as your commitment to the cause.

~~~
rick888
Either the startup is generating cash or you have enough money in the bank to
last you at least a year. A year and a half ago, the company I was working for
went out of business and I was let go. I had 3 years of savings and I decided
to go full-time with my side projects.

It's tough to juggle both because you have to switch your mind from one thing
to another. Not only this, but if you are working full-time and working on
your company in your free time, you have little time left over to just relax.
This caused me to burn out a couple of times a year.

Another concern of mine was that the company I was working for would try to
claim ownership over my projects if they ever became successful. Even though
the code bases were completely different (and so were the industries), I never
wanted to take that chance.

I suppose I could have just put everything out there and told my former
employer what I was working on, but this would have caused lots of problems
for me.

I'm in a better place now and I've accomplished more in a week than in a month
when I was trying to do both. I am also in a good position because I don't
have a wife or kids. I realize that not everyone can do this.

~~~
akg_67
Only point I wanted to make was that quitting job is not a pre-requisite to
having a successful startup, which you were implying. I used to hear that
often and naively believed that to my own peril. I discourage others to do the
same however amount of saving you may have unless you are at a stage where you
never need to work for money.

~~~
rick888
"Only point I wanted to make was that quitting job is not a pre-requisite to
having a successful startup, which you were implying. I used to hear that
often and naively believed that to my own peril. I discourage others to do the
same however amount of saving you may have unless you are at a stage where you
never need to work for money."

If you don't have any money in the bank, then you shouldn't quit your job.
However, I feel that it's better to quit your job after saving money than toil
away for a much longer period of time trying to do both.

I suppose it also depends on your startup. If you are trying to start the next
zany Twitter or Facebook app or your goal is to just get funding, then yeah,
maybe a year of savings won't work...

~~~
mattm
I'm at a similar point. I have about one years worth of savings in the bank
and could probably stretch it to two years if I sell some stocks. I'm also
young so if I blow through that money I will recover.

A friend of mine had a great idea that we are going to work on and I just
thought it's now or never. If I try to work and do this on the side, I don't
really see myself putting in as much as I could and it would be a regret down
the road.

The "To quit or not to quit" question isn't so black and white. Definitely
don't quit if you are living paycheck-to-paycheck but if you have at least a
year's worth of living expenses saved up, I think it's worth it to give it a
shot.

Yes, some people build businesses while they are working full-time. Other
people need the motivation or time of giving it their all. It's a case-by-case
scenario.

~~~
alain94040
Before you quit your job and plan to spend a year on your startup, _validate_
your asumptions. Will there be anyone who cares about your product once it's
finished? Don't write one line of code until you really know the answer to
that question.

~~~
mattm
Yes, we've talked to some people and believe they would be interested when
it's ready. Obviously it's not a sure thing but I'm fairly confident this idea
is something that is needed. It's a B2B app.

PS. I like your equity calc.

------
DavidTO1
I really enjoyed reading your story. I had similar experiences with my side
project as well.

In my case, I tried to take on the behemoth that is Intuit. I spent 2 years
working on the same side project. In my third year, I decided to quit my job
and focus on it fulltime. Six months into working on my startup I realized
that I made the mistake of trying to pick a fight with Intuit since the
product that I was building was too much for me to handle.

I decided to switch course and focus on niche products for the Mac App Store.
Two months after my pivot, I was making a few thousand a month from my apps.
I've since accepted fulltime employment and am continuing to work on my Mac
Apps as they are still generating the same amount of money.

From this experience I learned its best to focus on a niche market if you are
a one man band. I think your failure was because your focus was too wide.
Perhaps for your next project, you should consider focusing on a niche market.

Good luck.

------
chexton
I think starting anything in the coupon space is difficult as it's not about
the technology, it's about the sales. Groupon has an extremely simple
website...it is merely a platform to display the deals: their success is
essentially totally driven by the massive sales force they have at work them.

I think that technology in this space will play a greater role in the future
(mobile, targeting, etc.) but for now the winners are those who sign up the
most businesses and the most consumers.

I don't think the author should give up on startups entirely; it sounds like
they have indeed learnt some skills and can apply those to any number of
future projects. At least they have worked out this space is not for them!

~~~
aaronlerch
Don't worry, I haven't given up. :) Well, I haven't given up for good... in
the short term, I just can't swing work+fam+startup. For now I'll just keep
working on side projects and see if any of them make any headway. ;)

------
TWSS
I fought against the need to quit my job for over a year while I was working
on startups on the side. It took an idea that I was wildly passionate about
and a well-timed layoff to make me realize that being "all in" wasn't just a
poker metaphor the already-successful used to look down on plebes like me.

That said, I'm stupidly well-placed to be working on my own idea, unpaid - I'm
using the self-employment assistance program through my state's unemployment
department to get UI checks without having to job hunt (I do, however, have to
submit business plans and the like). I also have enough in the bank to cushion
me when the government cheese runs out.

~~~
mgkimsal
What state are you in?

~~~
TWSS
Oregon. One of only a handful of states with self-employment assistance
programs - the others are Delaware, Maine, Maryland, New Jersey, New York, and
Pennsylvania, AFAIK.

------
kayhi
The long and sometimes lonely path of a start up... apologies as this maybe
slightly off topic.

I keep seeing stories of start ups that are a huge success, launching or died.

Where are all those companies in between? Perhaps it's a combination of not
being exciting to report on and founders being busy (both of which could be
related to working hard).

Anyone know of place for those between launch and dead?

~~~
byoung2
_Anyone know of place for those between launch and dead?_

In between "I'm shutting down because of lack of traction" and "I just got
acquired for $20 million" I know a few people whose startups have become
"lifestyle businesses". Though that term seems synonymous with failure on HN,
for the people I know, it means being the boss, not having one, working from
home (or Hawaii, Thailand, etc. for a few weeks at a time) instead of working
in a cubicle. They're making anywhere from $150k to $240k per year, and will
likely continue to earn that but not much more because the businesses don't
scale easily, but they're doing what they love.

~~~
kayhi
Do any of them have blogs or communities that they frequent? I would be
interesting in hearing their perspective, thanks.

~~~
byoung2
Shoot me an email at {my HN username} at gmail and I'll get you in touch with
them

------
manuscreationis
I've been writing a similar tale of my own - with a surprisingly similar name,
as a matter of fact.

It's never easy to watch something you've poured so much work into fall apart
like that, so my condolences on your loss

<http://lookingbackaretrospective.posterous.com>

------
fens
Best of luck on your next startup. I honestly think that in the end you just
had to ask yourself if you were willing to spend the next 10 years of your
life working on Beautiful Savings. If your answer is "no" then obviously,
pouring more time and effort into that startup seems painful. There's no point
iterating continuously on a solution for a problem that you're not dedicated
to solving.

I think though once you find that idea that you're genuinely excited and
passionate about, you'll find that failure only occurs when you decide to stop
iterating. If a person has a solid idea and solid execution, I find it hard to
believe that the end result will be graded an "F", more likely it'll be a C or
D, unless you are very very unlucky. The idea is the that the next iterations
bring it to an A or B.

------
Luyt
He writes:

 _"I dropped MongoDB in favor of using a relational database"_

I wonder what made him abandon a perfectly good datastore in favor of a SQL
thing, because everybody knows that <http://www.mongodb-is-web-scale.com/> ;-)

~~~
aaronlerch
Lol, love that vid. :) Actually I happened to have gone down the same road as
Rob Conery: [http://wekeroad.com/building-things/tekpub-a-six-pack-and-
yo...](http://wekeroad.com/building-things/tekpub-a-six-pack-and-you)

Except in my case, since I was learning as I went, I didn't have time to
figure out why the less-mature technologies weren't working just right. Or I'd
look at a problem and see it solved nicely for relational DBs, but still
needing some manual work to make it work with a NoSQL DB... and when it came
down to actually getting stuff done, I hated writing code I didn't have to
write.

That's actually an interesting thought: if you're trying to learn a
technology, doing a startup is the _wrong_ thing to do. Because ultimately you
are just wasting precious time on things that the business side doesn't care
about. I hit that "conflict of interest" quite a bit through this process.

~~~
Luyt
In my new sideproject I'm using MongoDB for the first time in my life. It
works well and I haven't run into any obstacles yet; however, the data model
for this webapp is trivially simple.

------
ivix
Looks like he made the two classic mistake of a software guy with a startup (i
made them too)

1\. Spend too much time futzing about with the technology. No one cares.

2\. Spend too much time futzing around with stuff you think a business needs
to be a 'real' business.

------
pkamb
_"As a new player in the space we couldn’t offer huge traffic or guaranteed
results. So we had to give it away for free."_

How were you making money?

~~~
aaronlerch
I wasn't, unfortunately. This was self-funded. The idea was to give it away
for a period of time ("3 months free! Buy today, pay later!!!!1! OMG!!") in
order to crack the chicken-and-egg problem of content vs visitors.

~~~
pkamb
It's the "we _had to_ give it a way for free" part that you should rethink.
People like us are way to quick to price low/free because that's what _we'd_
pay for the service. Not at all what your target customers are willing to pay
however.

"Double your price": <http://news.ycombinator.com/item?id=1639712>

------
llch
Your product needs two sides of customers: merchants want to reach more
consumers and consumers want to get good deals. Breaking this chicken and egg
issue creatively is probably the single most important thing you needed to do.

------
cHalgan
I'm sorry, but I don't think you can say that "startup failed" if you haven't
even quit your day job and focus 100% on your startup. Maybe you can say that
investigation/discovery phase didn't yield desirable results.

------
nivertech
If all you building a Grouppon clone - then technology is the easy part.

------
switch
Please Note: This might seem critical but I'm just pointing out three problems
i.e. lack of effort, lack of measuring effort and other statistics, lack of
empathy with customers.

My argument would be that without at least 2 of these 3 the OP will keep
running into problems and keep blaming extrinsic meaningless things.

 __ __ __ __ __ __ __ __ __ __*

Credit to the person (aaron?) for writing this. However, the lack of measured
numbers is terrifying. And the disconnect with the customer perspective is
just hard to fathom.

1) How much time did you spend on this? Over what period of time?

2) How much traffic did you get? How many people bought coupons? How many
people went to other sites from your sites?

3) What amount of money did you spend? On what areas? What amount of money did
you make? From what sources? ______________________*

You say that you didn't listen to your customers. My point would be that you
didn't realize that you were making something FOR THEM and not for you.

You should consider thinking from your customers' perspective.

They really don't care about some of the things that you think are successes
i.e. using hosted services and learning Ruby and the site being BEAUTIFUL
because you think a site being beautiful is important to you personally.

Unless Indianapolis is 99% users of HackerNews.

 __ __ __ __ __ __ __ __ __ __ __ __ __ __*

You say that you were shocked that small business owners don't track things -
yet you write this post without giving any figures. Which makes a great post
meaningless because we don't know what 'You had no skin in the game' means.

Did you spend 40 hours a week after doing your day job? Did you do that for 3
full years? Did you put in $100K of your own savings?

 __ __ __ __ __ __ __ __ __ __ __ __ __ __ __*

Finally, you went into a space where you had very few competitive advantages -
not the first mover, not the best product, not the most money, not the most
resources, no brand recognition.

If you had tried a niche within coupons or a new area you might well have seen
much better results.

Also, you don't mention anywhere how much total time and effort you spent on
this which makes it difficult to know whether your lessons are worthwhile or
not.

If you spent 10 hours a week for 6 months - then obviously all your 'learning'
is probably useless.

If you spent 40 hours a week for 2 years - then it's very valuable stuff.

which one is it?

~~~
cjy
How is time spent on something in any way correlated with how much he learned?

The whole idea of failing fast is that you don't need to invest pointless time
after you have learned something is not going to work.

~~~
diolpah
If you believe the premise and results of the '10000 hours to expert' research
cited by Gladwell's "Outliers", then the obvious conclusion is that time
invested is highly correlated with learning.

~~~
mattm
10000 hours are needed to become a master or expert at something. An expert or
master is in the top 1% of people who know that skill. But with learning
something, anyone could reach the top 10% within 6 months. Dedicate to
learning something for 6 months and you reach the top 10%. It doesn't take
much time to go from nothing to a decent skill level. It does, however, take a
lot of time to go from a decent level to a mastery level.

~~~
switch
What diolpah said.

I'd rather learn from the experience of someone who became an absolute master.
Because the lessons of absolute mastery apply across fields.

Who cares about the top 10%? The top 10% isn't worth wasting your time on.
Especially if it means you spend 6 months each on 20 different areas and
become top 10% in 20 areas.

Much better to find 1 or 2 areas you absolutely love and become top 1%.

Top 1% - Going to the Olympics. Top 10% - Impress your friends.

~~~
mattm
While I mostly agree with you there are plenty of times where it's worth it to
be in the top 10% (or upper quadrant) but not the top 1%. These are things
that are important to be good at but not worth the time to be excellent at. To
say it's a waste of time to be in the top 10% is nonsense.

Take driving for example. When I started driving I enrolled in a driving
course for several months. Now it's debatable that this course put me in the
top 10% but it probably helped to put me above average. I have no ambition to
be a race-car or stunt car driver so this is a great trade-off. I believe I'm
a safer driver because of it.

Negotiating would be another example. It would make a lot of sense for a lot
of people to take a negotiating course or read and practice it for a few
months to get good at it in order to be able to negotiate their salary. The
payoff of just a few months work could result in tens of thousands of dollars
over your whole career. It wouldn't really be beneficial to spend 5-10 years
getting your negotiating skills to the top 1% unless you wanted to actually do
that for work.

Also the 10,000 hours really depends on if you are actually progressing or
not. I think it's pretty debatable whether merely 10,000 hours of driving
would put you in the top 1%. It's like the old joke that some people with 20
years of experience actually have one year of experience repeated 20 times.

Yes, you can't be great at everything but I think it's more valuable to great
at one thing and good at a lot of things rather than just great at one or two
things and mediocre at everything else.

Basically my point is, strive to be in the top 1% for what you want to earn
money at or do with your life and then be in the top 10% for other things that
either help you with that or benefit you in some way.

