
Slipping out of the Honeymoon Phase. Waking up Scared.  - ttruett
http://about.retickr.com/blog/2011/10/spending-a-lot-of-money-user-retention-slipping-out-of-the-honeymoon-phase-waking-up-scared-oh-shit-this-is-real
======
devs1010
"Basically, we are spending my entire life-time earnings every four weeks"

What the hell, did I seriously just read this? So this guy hasn't even made
$18,000 in income in his entire life yet he is funded for a startup at
approximately $216,000 per year. Thats great that he can get funding given his
complete lack of real work experience but thats just a bit unsettling and
scary, are we really going down the dotcom bust road again?

I'm similar in age (26) and have made well over 18,000 in my lifetime earnings
(anyone who works as even the juniorest of junior dev's should blow that
number out of the water in half a year even), work as a dev and I don't think
I would even dream of taking any amount of money in funding anytime soon, what
ever happened to working for a few years, learning from more experienced peers
and then maybe trying it on your own (once you actually have some real
financial stability of your own)?

I realize everyone thinks they have the next big idea but if you don't have
solid dev experience (without any oversight) you are going to mess up on
something, probably something that matters (and won't be realized until later
down the road) and this is best prevented by working with more experienced
developers early on

~~~
jstuder
We think that funding young people and their ideas is an important thing to
do. And frankly, $216k is a reasonable amount for what retickr is trying to
accomplish (cutting the noise out of social media overload). Will they fail?
probably. Is it the job of venture capitalists to fund that failure? We damn
sure think so.

Is $216k a year a smarter initial investment than $41m for an experienced team
of entrepreneurs? (see Color). Or $30m for a wiki based company that pivots
into gossip? (see Wetpaint).

For the money that was invested in Color (and any number of other startups run
by "experienced" management teams), we could theoretically start 80 retickrs
(assuming 2 years of burn rate for retickr). Or over 1,000 YC companies.....

Retickr is making mistakes, some of which we, their investors, warned them
against. But a good investor doesn't dictate to entrepreneurs, we mentor and
guide. If we wanted to be the CEO of a startup, we would do that. We’re trying
to leverage our experience. And assuming a de facto role as CEO at each of our
portfolio companies is the exact antithesis of scaling. At least until we
figure out cloning or consciousness replication....#ss11

Btw, thanks to the whole community here, you’re doing an amazing job of
creating a healthy environment where crazy people like Travis who are willing
to put themselves out there in the open can get honest and productive
feedback. Kudos

~~~
devs1010
I just look at it from an engineering perspective, having worked for some
companies where the code base was just "hacked" together, in an unmaintainable
way and I just sometimes think it would be better for the tech community as a
whole if everyone and their mother didn't try to start a company with little
experience ( a few years down the line, sure go start one, no problems with
that), sure they may have some minor success but it just exacerbates bad
development practices and these young companies usually hire more
unexperienced developers and the effect just snowballs. I am talking from my
own experiencing working with "post-startup" companies that were a few years
old to where I am just glad I have continued learning on my own (reading
online, reading books, etc) as anti-patterns and bad practices that can occur
without experienced dev's on a team can really cause problems.

In the interest of full disclosure, before I got really into software
development / programming, I too had a lot of ideas, wanted to start my own
companies (even tried to do so with some small ecommerce stores, etc) but
overall I'm glad I didn't succeed with that because it forced me to learn
development and realize just how hard and involved making a scalable web app
really is and if I ever go on to make a real serious attempt at creating a new
company (not for a few years at least) I think I would be in a better position
to make a real contribution and make something that is technically sound and
viable.

------
biot
Looking at your team (<http://about.retickr.com/retickr-team/>) it seems
rather top-heavy. Two people have the title of "Co-Founder and Vice President"
... VP of what? Additionally, there's a CTO, yourself the CEO, a sysadmin,
plus two software engineers. It's no wonder your burn rate is so high. This
seems like the kind of app that would get developed by two "devops" kind of
people.

Some comments on your home page: it's being dominated by a screenshot that's
impossible to read and doesn't convey what the heck it does. There are a
couple of teaser bullet-points-in-boxes that gives a high-level view, but I
think the home page would really benefit from an in-your-face description
conveying the clear _benefits_. At a minimum, start out by replacing the
static screenshot with the video that is immediately clickable. However, this
is speaking to user acquisition and doesn't address the problem you state of
your 8% user retention rate.

I haven't used your app, but from the description it looks like it doesn't
solve a hair-on-fire problem. The problem is that people have information
overload. There are only so many things a person can follow that they quickly
get overwhelmed trying to keep up. Your app looks to just throw it in their
face which only highlights the fact that they can't keep up, and it does so in
a distracting fashion by continuously animating the information they already
have a difficult time reading. In a way, it sets their hair on fire.

A better value proposition would be to solve the information overload problem
by only showing them news that is valuable in a manner that is not
interruptive to their workflow. Trivially, this could be done when a piece of
news is liked/+1'd/tweeted beyond a certain weighted threshold or for the
infrequent news that comes from sources the user specifies as being important,
like a friend's blog that is updated a few times a month. Something to the
effect of "You only have so many hours in the day, but there are dozens of
news sources you'd like to be aware of. Who has time to follow every single
news item? Retickr lets you follow as many news sources as you want, then
gives you a summary of the top three things you need to be aware of every
hour. Then, just click to read the full story. If you have time to kill, our
easy to use app lets you browse additional stories by source, topic, author,
and many other criteria."

~~~
btrautsc21
I absolutely appreciate your input. We have some major work to get done, and
your advice provides some great directions. Personalization and delivering a
user only the news that matters to them is our goal. This is great feedback,
please keep it coming. Brian

~~~
temphn
If you are interested in feedback, had a similar reaction. Many people are now
more interested in reducing distraction, not increasing it. Maybe you could
find a way to do that, blocking and batching feeds.

------
latchkey
Your jobs page brags that you have 14 servers on your site. WTF? I've run 15+
hardcore porn totally dynamic websites taking millions of hits on just 3
servers and two of those were just for redundancy! Seriously, I've never heard
of your company and you are burning through that much cash? I'm sorry, but
this really just sounds like a case of 'doing it wrong'. It really sounds like
time to hit the reset button before you are completely broke.

~~~
tommi
This got me looking at the careers page as well. "really nice office" isn't
one where you can't stretch your legs forward without banging them to a fellow
employee. Seriously, you have space, use it wisely.

------
larrys
I understand that you are located where you are and that is how you ended up
with the lampost group but I have to say that I don't see in any way how these
investors and this incubator is the correct support group that you need for
what you are doing.

If you look at the experience of the leadership of Lampost it simply doesn't
appear knowledgeable in things that would be important to a company such as
yours. Read the bios. It seems like a "me too" from a bunch of guys that saw
The Social Network and decided to give investing in internet startups a whirl.

<http://www.lamppostgroup.com/lamp-post-leadership/>

Look at the other companies that they have invested in and you can clearly see
what their focus is on.

<http://www.lamppostgroup.com/company-roster/>

While there is probably little you can do about this now this is something for
others to keep in mind before they take an investment and end up waking up
scared.

------
0x12
I'll give you just two sentences of advice:

Cut your burn-rate until you've figured out what it is that you are doing. You
will need that money badly later on.

~~~
christoph
Please change the huge PNG's on your site into JPEGs of the correct size. I
shouldn't be sitting waiting for thumbnail screen shots to download. A similar
thing happens on the blog gallery section - you have huge images, that just
display as thumbnails, re-compress/re-size and reduce your bandwidth.

Looking through your site you really need to spend more time on your core
product. You have loads of pages about who you are, your office, your mentors,
yada yada yada. I see more content about your company than your product at the
moment. Also, most/all of your top nav opens new tabs (on the homepage), this
is just annoying. You seem to be running two sites, one of which appears to be
just a fancy homepage (www. & about.).

As others have said, you seriously need to address your server
count/infrastructure. It's just throwing money away.

------
rsynnott
> I just found out yesterday how much money we are spending.

This strikes me as a stunningly stupid thing for a _CEO_ to admit to in
public, and should give any potential investors pause.

------
k33n
There will be lots more criticism here. Either way, thanks for sharing the
story in such an honest and complete way. Writing like this is rare in the
startup world, and it's extremely positive to have around.

------
jallmann
> What can I do today that will help justify the eighty-hour work weeks that
> Adam and Josh have been putting in for the last six months?

What is everybody else on your roster doing? Cut some fat. And if your devs
are pulling 80h weeks, why are you watching TV at night?

------
jasonshen
My question is just how the heck have you only made 18k over 10 years of
working. That's only 56 weeks of full time 8/hr work. I don't get it.

~~~
ttruett
Part-time work at a grocery store for years, and years, and years... Some
retail work is thrown into that time span as well. $8/hr is high-living! I was
making $6.50/hr at The Fresh Market.

~~~
getsat
Please tell me you're joking. If you're a good programmer, you could move to
San Francisco and have a six figure salary within a week.

------
yakto
How do you have a burn rate of only $18,500/mo with seven (apparently) full-
time employees? Is that burn rate net of some kind of revenue, or are your
seven employees making an average annual salary of about $31K each? Even for
TN that seems awfully low.

As a point of reference, in SV a ballpark OPEX for 7 employees in a startup
would be $80-90K.

~~~
cheald
$18,500 burn rate is their monthly negative cash flow, not necessarily total
monthly expenditures.

~~~
ttruett
We live _extremely_ cheaply, even for Tennessee standards. We all share a
house and play limbo with the poverty line... A couple of our developers are
part-time guys that have helped when needed, we currently have a full-time
staff of five.

~~~
scienceguy_ae
Wait, "a couple" of your developers are part-time? According to your team page
you have 7 employees. It looks like 3 of those are technical (less than
half... that alone is astounding), so if "a couple" of those three are part-
time, that means you only have a single full-time technical employee, unless
the full-time guy is the Systems Administrator, in which case you have zero
full-time developers.

Sorry, but that seems like a pretty big warning sign for a software startup.

------
dpapathanasiou
" _Take comfort in the fact that the poor start-up founder and the rich
corporate CEO both go home at the end of the day, eat dinner, watch TV, and go
to bed._ "

Dinner, maybe.

The other two are not guaranteed.

------
dkoch
Curious about the 14 servers mentioned on your careers page -- why so much
hardware to support only 325 active users?

~~~
ttruett
We have built out infrastructure to support about 50,000 users. Premature?
Sure, but fairly reasonable for the price. Most of the server capacity
consists of our Cassandra cluster which we are using to personalize user
content...

~~~
kainosnoema
Is there a particular reason why you decided to purchase 14 physical servers
instead of spinning up virtual instances (or even co-located servers) for easy
scaling? As you've discovered, it's hard to estimate what kind of load you'll
need to handle, and the up-front cost is impossible to recover.

Also, I'd recommend spending some time looking at your architecture, as you
should be able to handle 50,000 active users with a lot less metal. The extra
infrastructure can often be more expensive than a well-designed architecture.

------
SemanticFog
Comforting words from pg...

If you start a startup, you'll probably fail. Most startups fail. It's the
nature of the business. But it's not necessarily a mistake to try something
that has a 90% chance of failing, if you can afford the risk. Failing at 40,
when you have a family to support, could be serious. But if you fail at 22, so
what? If you try to start a startup right out of college and it tanks, you'll
end up at 23 broke and a lot smarter. Which, if you think about it, is roughly
what you hope to get from a graduate program.

------
sskates
One of the most comforting realizations is when you find out no one else
really knows what they're doing either and that all startup founders are on
the edge.

------
alkimie
Hi there.... I went ahead and downloaded and installed the app. Really had
trouble with the popup agree to terms and conditions thing. Had to force quit
several times before I succeeded in registering.

Tried the wizard selecting technology news but when the ticker started, it was
filled with stuff from Fox News and other stuff that is irritating more than
informing.

What I was looking for, and hoping for, was a simple ticker for sites that I
am interested in, such as this site, slashdot, NYtimes and WSJ technology
SECTIONS, etc.

Even when I deleted my playlist, stories from 'The Beast' flowed across the
screen. In sum, I had no sense that I was in control of your application. I
could see myself using such a feed--if it did what I wanted--while relaxing,
but in it's current form.....

Best of luck with this! I do hope you persevere. I'd suggest completely
rethinking how the USER can drive this thing.

...and you might want to add a direct download for those of us who don't
always want to log into apple's app store just to try something like this.
Almost quit at that point.

~~~
hnwh
seconded.. I was pretty eager to use this app, as it looks like exactly what
i'm looking for.. but dealing with the Apple store download BS made me say,
screw it..

------
watmough
I think your landing page could use a reasonable facsimile of your product
running across the top of the screen. I appreciate it might need to be in
Flash or in HTML5, but it might bump your conversion rate if your main selling
point, "stuff, in front of you, now," is clearly set out on the landing page.

But second thought, haven't we already seen PointCast crash and burn? Not sure
if I have the name right, but I'm thinking of the push technology that was
such a buzz word in the original internet bubble.

~~~
nwatson
And Chirpscreen already did Pointcast for social:
[http://m.techcrunch.com/2007/10/18/remember-pointcast-
meet-c...](http://m.techcrunch.com/2007/10/18/remember-pointcast-meet-
chirpscreen/)

~~~
ttruett
We are _hoping_ to be the next evolutionary step. Pointcast did news.
Chirpscreen did social. We will (hopefully in a couple months) do real-time
personalized content, which would include news and social..

------
graupel
Quick feedback, on the product - rather than the blog post.

Easy download & quick install.

I am news junkie who works for a large offline & online publisher who needs to
keep tabs on stuff as it happens.

The idea of a ticker is interesting, but the usability of a scrolling feed is
tough for me - I'd much rather see a series of headlines pop up, and
disappear, than constant across-screen motion.

There's no way I could leave this on all day with that motion across the
screen - but I could if the UI was less distracting.

Just my 10 cents - good luck with your product.

~~~
ttruett
Appreciate the product feedback graupel. We all feel like we are on the right
track and the product has come a long way in the last six months let alone the
last several weeks. We feel like we have a better understanding of what our
users want now and hopefully retickr round two will provide more value..

------
rottendoubt
Cut your costs down to just rent plus servers. Keep only the technical people
plus yourself. Have everyone work for free in exchange for equity until you
see traction. The ones that believe in the company and the idea enough will do
it.

~~~
elliottkember
Have everyone work for free? That's a quick way to lose good people.

~~~
rottendoubt
Make one or two of them co-founders. Until you see traction, you have no
choice but to keep the team extremely small and bootstrap like crazy.

------
Merik
The lack of a professional graphic designer in a lead role is a fatal
oversight. It's the reason your user experience is lacking and the reason your
website sucks.

------
16s
Big button for Mac download. No button for Windows download. Perhaps that's
why you have so few users.

~~~
ttruett
Haha yea I would agree and I am a Windows user myself. One thing that we were
told very early on by our investors is to focus on one platform and one
platform only in the beginning. Our current client has changed so much over
the last six months that it would have been a monumental waste of time to be
developing Windows alongside it. Our Mac client should be stable (design-wise)
relatively soon and then if we gain some form of market acceptance proving our
concept we will move on to Windows and mobile development.

~~~
phaus
Having learned a bit from your article, I figured I would check out retickr
even though I had no idea what it was. When I looked at your site I realized
that just the other day I was wishing I knew of a program that did exactly
what yours does. Unfortunately I enjoy video games too much to justify buying
a Mac. I agree that it seems like a really good idea to support just one
platform until you are established. I just happen to think that you picked the
wrong one.

Don't get me wrong, I like OS X and more than a few different versions of
Linux/Unix, but that doesn't change the fact that the overwhelming majority of
home users run windows.

I sincerely hope that things start to click for you in the near future. I'll
probably check retickr out in VMware or something. Good luck.

~~~
alttab
This. Don't develop the product you want - develop the product users can
access.

------
jmonegro
You need to hire a good designer.

