

Why did your startup fail? - nemrow

I recently stopped production on a failed startup and feel I learned SOOOO much from the experience. What was the tipping point for you to shut your startup down?
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hkarthik
I built a product which had the following goals:

1) Free to consumers.

2) Paid plans for business to get access to leads generated by the above
consumers entering their data.

The problem was that I did all my upfront market validation with the first
group, which jumped all over my product with comments like "I could totally
use that!" and "wow what a great idea!" type feedback.

I built the product for the consumers first and launched a private beta. Then
when I turned to build the other side of it for the businesses, I found most
of them didn't see the need for it, and it would take a high touch sales
process to get them onboard. At least until the product became a household
name and had millions of users.

I quickly realized that I had run into what I've since deemed "the Groupon
Problem". The only way to make the business work would be to pour in tons of
capital to hit really high user numbers while paying for a high touch sales
process.

I had envisioned being able to run the whole thing as a bootstrapped business.
When I realized it couldn't possibly work that way, I scrapped it.

I learned a ton though, and now I'm just waiting for another great idea to
really execute on.

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dpolaske
I recently shut down my startup as well, and definitely feel I learned a lot
from the experience.

My startup failed because we did not seek customer validation until our
product was already built (after months of development). And at that point we
realized we had built a product that nobody wanted. From now on I will not
start building a product unless I already have customers who want/need it!

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narayankpl
do you mean customer validation has to be done with an idea or concept. I
thought having a MVP helps in that customer can more easily understand what
you are talking about.

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nemrow
I like where this discussion has gone. I feel like the vast majority of us are
stating that we didn't understand our market well enough and didn't get
validation early enough.

Our product relied heavily on the technology behind (it needed to be fully
coded before being functional). So how do you all think we should go about
validating a market using an MVP without having the product coded out?

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orangethirty
From the last year _only_ :

Wrong product/market fit.

Overshot sales estimates.

Realized that I did not enjoy serving the market.

Co-founder issues.I never took in co-founders, gave it a try, realized I work
best alone. Issues were of productivity. I'm very productive, they were not.

Not enough funding.

Issues are spread out between a handful of projects.

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thisisdallas
I'm actually not sure if I have failed yet or not. I started a niche website
set up/hosting business targeted towards churches. After a month and a half I
have ~15 free users and no paid users.

I know a month and a half isn't long at all, and maybe these things just take
time, but it's just a bit discouraging when not one person signs up for a paid
plan.

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PonyGumbo
I just looked at your website. Why offer a free plan at all?

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thisisdallas
As a way for people to check out the backend and get a feel for everything.
I've thought about removing the free option, would you recommend it?

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PonyGumbo
Definitely, I'd drop the free plan and offer a trial instead. My guess is that
your plan distinctions are lost on most of your target customers who "just
need a website".

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codemonkeymike
Like most ideas I made a product for a market segment that I was not a part
of. They wanted nothing to do with my product after investing 4K and many
hours of time(this all happened when I was 18)

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nemrow
I feel ya! Did you spend your 4k on developers? Or are you a programmer?

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codemonkeymike
On developers, but I getting my BS in CS right now so that wont happen again!

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meerita
A totally immature market. Many technological barriers for end users to
install and use the solution.

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geldedus
"A totally immature market" = "I have no clue about the market's needis"

you can't dictate needs to the market

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meerita
Actually, we knew what the market wanted. But that need doesn't help anyone at
the end. I created a system so users can digital sign documents. People wanted
the silly Adobe PDF signature like to instead using their national eID. So,
those signed documents aren't valid to a judge.

Our biggest problem was that. Immature market because: a) very few people uses
their eID cards, b) there were technological knowledge involved in the
process.

We did a great job on taking down all the barriers but the OS ecosystem right
now is a mess with the digital signatures.

We really felt like Credit Card Companies when they launched, no one used CC
in the past until they become a major need.

When the government worry about stimulating the use of eID as it should be
expected, is when we will see the market grow and know what people need about
eID. But do the adobe thing is just a piece of cake and even using it on 1000
documents, all will be pure crap before a judge of the European Union or any
country, I assume, outside the United States.

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lgieron
As I understand it, in Polish law documents signed with XMLDSig (with a
qualified certificate) are as good as paper ones. I'm not sure how much it's
used in pratice outside transacting with governemnt (filing taxes etc.)

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skbohra123
You can start off by telling about why your startup failed?

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nemrow
Good call.

My startup failed because our team (who worked in the music industry, but were
not musicians) assumed we knew our audience (who were musicians) and made our
development decisions based off that assumption. If we put a "minimal viable
product" out to our audience sooner we would have been able to pivot heavily
and possibly create a product they would want to use. Also never work in the
music space! Ever!! :)

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junto
Why do you say, "never work in the music space"? Can you give specific
reasons?

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nemrow
Sure. First off if your business model relies heavily on the sales of actual
music, you are most likely doomed. The majority of the world thinks of music
as a free right, not as a paid privilege.

If people do pay for music, it is predominantly streaming servies where they
get all the music they want and pay one company.

Don't get me wrong, there will be startups that thrive in the music industry
in the years to come, but they won't be selling music. They will be the
companies that begin to think way outside the box and revolutionize the
commerce in the space (however that may be).

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myth
The general public is apathetic towards politics.

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timmm
Seems like a cop out, like you're blaming the public, sure some people don't
care. What about the ones that do? Or all the people that vote? How can you
engage, make them care, ect.

