
Ask HN: Failing startup, how to leave? - thingchattooga
I am in a complex situation and would like to hear your opinion on how to proceed. I am a cofounder (4 friends from college) of a startup, at first we had great progress with the development of the product (i am one of the hardware developer). We started almost 13 month ago, but till this day we don&#x27;t have a clear understanding who our customer are or how large the market we target is. When I point out one of these open points(there are many more), I am referred to some google research, which is supposedly completely bulletproof.  I think my co-founders are blinded by all those unicorns out there, they think everything is going great and there are only little problems on the way before they get rich. I would like to leave, but I don&#x27;t want to be the one getting blamed, when the company finally goes bust. How can I handle the situation?
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kowsheek
Having been in this situation more than once (I caught the startup bug), I can
tell you that there is no good way to leave an unsuccessful startup.

What I learned is, my time is mine to protect and my skills are mine to
dedicate where I see fit. Noone can oblige you to spend these things on what
you don't want to.

People will always blame others for their lack of application. If they were
true entrepreneurs, they will find a replacement for you.

But you are unique that you want to leave what is really a pet project (I've
been in those too many times) and build a real business. You should!

Don't worry about what others will think, you can't control that.

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pbjtime1
"I think my co-founders are blinded by all those unicorns out there, they
think everything is going great and there are only little problems on the way
before they get rich"

A start-up is about bringing something its founders are passionate about to
market. Anyone who thinks a start-up are a way to make money, are in start-ups
for the wrong reasons. This sentence has failed start-up all over it.

The mindset that also comes with this idea generally leads to alot of burn out
for those passionate and those who are feet up lets get rich with minimal
effort. Which is was the fate of my start-up experience. 3 of 5 founders were
passionate and hardworking, and 2 of 5 considered it a 'side thing'
contributing much less (and even nothing when half-assed). When time came to
find buyers to start cycles of improving the product e.g.'fitting the niche of
our product', things fell apart. The same 3 of us called out that we are
failing and don't see a path, and the 2 others completely did not see the
death of the company/idea in front of them. We had majority and dissolved the
company.

~~~
pbjtime1
As for the ruining your friendship with the founders, not sure you can avoid
this. To me if they de-friend you for pointing out facts, then they were not
your friends in the first place. I am still very close friends with one of my
ex-cofounders.

Maybe that my comment is pessimistic, but from my perspective start ups are an
experience in failing.

The difference here is, if you choose to continue failing with these
'friends/cofounders' or make a call it quits. 13 months is a short life of a
startup, but really this is the decision that you and only you can make. No
one but you has the perspective and knowledge to make such a call.

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rudimental
It sounds complex. At any moment, you have 3 options. You can accept it,
change it, or leave it.

Do you have paying customers? If so, that's not a bad start. Do your potential
customers pay to solve the problem you are trying to solve? That's also not a
bad start.

Have you considered hiring a consultant to help solve the problem, or to be
the bearer of bad news (not having a clear understanding of your customer or
the market)? I've helped people / companies figure out their target customer
and what would solve their problems. Feel free to reach me at helpthingchat
a.t gmail dot com if you'd like.

As to leaving, you can find the best way to frame it, and then do it. If
they're really your friends, they will accept it. If not, who cares what they
think?

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Jugurtha
> _but till this day we don 't have a clear understanding who our customer are
> or how large the market we target is. When I point out one of these open
> points(there are many more)_

The startup is about to die and you guys are pointing out the cause of death,
googling shit, and already divvying up blame inheritance? Get out there. List
your assumptions, meet people, try to get paid, get told your product sucks,
get proven right or wrong, repeat.

> _I would like to leave, but I don 't want to be the one getting blamed, when
> the company finally goes bust. How can I handle the situation?_

Which situation? Leaving or making saving your startup? If you'd like to
leave, just leave. Just ask yourself if you've given it a real shot.

------
codegeek
"started almost 13 month ago, but till this day we don't have a clear
understanding who our customer are"

This takes time but the key is that all of you as cofounder need to make this
a priority. I literally was thinking who the heck is my target customer today
and I have been running a bootstrapped company for almost 6 years BUT the
point is that you have to constantly refine that as needed.

Honestly, if you cofounders don't understand that it is all about identifying
the market and the whole "product market fit" thing, it will be over anyway.

------
konradb
Why do you believe you would be blamed when the company finally goes bust?

Would this blame matter because of your friendship with your cofounders? Or
does their blame affect you in some other way?

~~~
thingchattooga
Because in the past I've been held responsible as the bearer of bad news. And
I don't want to jeopardize my friendship with the co-founders.

~~~
_ah
When you go into business with friends, you are already jeopardizing your
friendship. That particular ship has sailed.

You now have an option to (1) do what's right for you, and (2) potentially
have some friends at the end of it. BTW it's not guaranteed that you can have
_either_ of these, let alone both.

If you are convinced that you want to leave, I think the best way to phrase it
is "I no longer believe that the direction we're headed is the right one. You
deserve a co-founder who is _all in_ and believes in the mission. Even though
I know this will be painful for everyone, the best path _for the rest of you_
is if I leave now." Expect to give up most or all of your equity position, and
maybe stay working a little longer than you'd like to get things wrapped up
and in a good place to hand off. Also expect that this won't work and everyone
will still be mad at you, but you'll learn a lot and your conscience will be
clear. Maybe someday your friends will stop being upset and will realize that
you were right, and you can be friends again. No guarantees though.

Best of luck to you.

~~~
wolco
Why give up all of your equity ? As a founder you created something, shouldn't
you insist on a buyout?

~~~
rckoepke
Maybe there's not really a legal way to protect any of your equity assets when
they aren't worth anything. I'd imagine any future investor interest would be
scared off by the disclosure that there's an uninvolved past founder with "25%
equity" on the cap table. Rather than worry about potential last minute
negotiations with the ex-founder after an investor expresses interest, I'd
imagine the remaining partners could potentially found a new group and
dissolve the current group by "selling" it and all assets to the new group for
$1 and mail the ex-founder $0.25 or something.

This would likely be moderately illegal if done at a stage that the equity is
demonstrably worth something (e.g. Eduardo Saverin's FB situation) but I don't
think it would be much of an civil/legal issue before the startup had any
demonstrable financial value. I could be wrong. And people will diverge widely
on how they see the moral/ethical implications of this.

~~~
wolco
It's interesting. If there is a later sale at say facebook scale you could
have a case.

After spending a year building the product I would hate to walk away.

~~~
thingchattooga
I think that if they are really going to turn what we currently have into a
company on facebook scale, then this value will have to be created after I
leave. Right now, the startup is certainly worth almost nothing.

