
The life and death of a startup - j_s
https://cecinestpasun.com/entries/autopsy-of-a-slow-train-wreck/
======
20years
I think a lot of this comes down to the sector they were going after.

Speaking from experience, software for Plumbers, Roofers, Pest Control,
Cleaners and most home improvement type sectors are really hard to scale. It
really is an up-hill battle getting them to spend more than a couple hundred a
month and the churn was so much higher than any other sector I have worked in.

You have HomeAdvisor, Angie's List, etc. who are heavily tapped into this
market and understand the challenges that come along with it. We developed a
lead gen, crm and follow up system targeting this sector. So many of the
Plumbers and Roofers we talked to would complain about HomeAdvisor and other
similar providers. How bad the leads were, that they were shared (sent to 5+
others), etc. but were not willing to pay for a higher priced offering that
fixed those things. Most that were willing to invest were horrible at even
answering calls from prospects. They would call prospects back 2+ days later
to discover they went with someone else who actually did answer their phone
and would then say it was a bad lead.

The experience gave me a much better understanding on why the competitors
focus on shared leads. Hopefully at least 1 of the 5 roofers the lead is sent
to will actually respond in a timely manner.

~~~
obilgic
I have a feeling that there is a reason, these small businesses stay as small
businesses; They are not the most economically rationale decision makers

~~~
johnvonneumann
As someone who comes from parents who own a small construction company, I
think you've actually gotten it the wrong way round. What you say could be
construed as correct, but in the wrong way. From what I understand, many small
businesses (especially those who are Mum and Dad run) are only looking for
small business, they have no interest in going bigger, why would they? In the
majority of cases, the work they do more than covers the bills, people may
think that bigger is always better, but when the business supports a family,
this is rarely the case, bigger can actually be far worse. Not to mention that
much like was mentioned/alluded to in this article, founder rates of
pay/benefits are pretty much never the same as would have to be paid to a
"normal" employee. This is unscalable, I know Paul Graham has referred to this
idea before, so I won't explain it worse.

TL;DR

Most small businesses owners are far better rational decision makers than you
think, because most of the time, the aim of the game is not a unicorn, it's
support of the family.

~~~
shubhamjain
There's one kind of growth where you are investing dollars in marketing,
sales, hiring and scaling the YoY percentage points; another, where you're
investing in efficiency, automation, better gigs, and reduced work load. Why
wouldn't anyone be interested in the latter? Small businesses aren't aware
what technology can do for them and often, there's a reluctance to change.

I am not sure if businesses have become tired of the constant bombardment of
promises that don't have a solid ground but I believe some level of effort can
make a positive change in their lives.

~~~
gedrap
Maybe good enough is just good enough for some business owners?

If you are making good profit already, which more than covers your needs, why
bother looking into improved efficiency, automation, getting better gigs, etc?
It's not that you can just flip 'efficiency' switch and things are more
efficient.

In some cases, sticking to doing things in a familiar way and which works well
enough is a rather reasonable decision in the grand scheme of things.

------
BeetleB
>but in our case, the purchase decision was rarely made by the person who
actually had to use the software. And you have to get those people on board.
If anything, they're more important, because they're the ones who are going to
make the bosses life hell if the software they buy isn't doing the job - or
worse - is doing the job too well.

>Over and over again, we saw internal sabotage. People would simply refuse to
change processes, and would find any excuse. "Oh, the software didn't work, so
I had to go back to doing it manually".

This one resonated with me, from a former workplace. Even when their jobs were
nowhere near at risk, people don't want to change habits. The employees did
not get paid more for being more productive, so they would find fairly
pointless excuses for not using tools that made their lives easier.

Ultimately, it's a problem with management and their incentives (or lack
thereof).

~~~
penpapersw
On the flip side, as someone who's tried to change stacks or IDEs or other
software a few times, there's something to be said for already having momentum
using existing solutions. Sometimes alternatives can be a little better, but
not better enough to justify the time/energy/etc costs of switching. And more
often than not, alternative solutions have their own flaws too. I tried _three
times_ in the past week to switch my portfolio website
([https://sdegutis.com](https://sdegutis.com)) to using Jekyll or Metalsmith
or Hexo, and each time it just didn't prove any better than my own hand-rolled
Node.js site generator, and in most cases, it was definitely worse in some
ways, at least for the specific requirements I had. So switching tools _can_
be good, if it's legitimately better in some way, and not worse in any other
ways. But that doesn't isn't the case as often as we'd like to hope.

~~~
ThrustVectoring
Currently running into this moving from Vim to Spacemacs. Even with vim
bindings, it works just slightly differently enough that there's a good chunk
of friction. Specifically, mashing escape no longer reliably gets you into
normal mode, bash is in a separate window instead of in tmux, some of my
settings are different in ways I don't want to spend the time analyzing
(probably scrolling? IIRC I set things up to center themselves as best they
can in the window in vim), and the tab-completion for opening a file with :e
is different through trying to be way more "helpful".

~~~
sokoloff
Assuming Spacemacs is like regular emacs, Ctrl-g [(keyboard-quit)] is the
moral equivalent to esc in vim. Mash away.

If you want esc to work that way, put in your .emacs (but I really discourage
it):

    
    
      (define-key key-translation-map (kbd "ESC") (kbd "C-g"))

------
onion2k
_we were selling software_

No. You were selling the solution to a painful problem that just happened to
implemented in software. That's not the same as selling software.

 _We 've been conditioned to expect that physical, tangible things are
expensive - but software? That should be cheap, or better still free._

I think this is where the Django influence is strongest. People who buy
enterprise software _don 't_ think that it should be free. Quite often they
have strange expectations that they need to pay prices far higher than anyone
would reasonably charge. $5000/month for an app that could be replaced by a
cron job and a shell script isn't unheard of. I strongly suspect Tradescloud
could have greatly benefitted from a mentor who had experience and success in
selling B2B software.

------
cyberferret
I wish startup and industry publications spend more time with post mortem
style stories of businesses that didn't work, rather than making it seem that
all you need to do to print money is to start some sort of software as a
service company.

Sure, it won't sell as many copies or ads for the publication, and some may
say it will discourage the entrepreneurial spirit, but I think it is far worse
to see a legion of young, bright, keen people quit jobs and start writing code
dreaming about what colour their Ferrari is going to be.

The inevitable disappointment (for 99.9% of them) from unrealistic
expectations, and the sheer, gruelling reality of just how hard it is to make
a dollar in a self owned business will surely do more to crush spirits and
shatter dreams.

~~~
simonswords82
You might be interested in [http://autopsy.io/](http://autopsy.io/)

------
phonon
Should watch this complementary presentation too.

(Russell's issues with depression/burn-out.)

[https://www.youtube.com/watch?v=OC3v5uXR9Qc](https://www.youtube.com/watch?v=OC3v5uXR9Qc)

~~~
anon1987gtx
Thank you for posting this. I'm watching this before going to bed and just
started crying when he said "You're not alone". I need to get some help.

------
whalesalad
Does this have anything to do with Django whatsoever? The title is misleading.

~~~
meric
Django have an "engineering is important" philosophy so developers attracted
to Django have a similar mindset. In this case they're showing how despite
superior engineering and a proven market is insufficient on its own - the
start up required more effort in marketing, sales, financing.

~~~
whalesalad
This is building a business 101. I still feel it's disingenuous to begin this
long winded post with the connection to Django.

As an aside, I'd argue that any modern web framework with decent community
interest also attracts the same "engineering first" individuals.

If you're betting the farm (read: assuming your progressive choice is going to
do anything more than speed up dev time) on your choice of web framework
you're definitely doing it wrong.

The software you create is a means to an end.

~~~
meric
Yes. I think if we think of ourselves as Django developers while building a
business it's possible we will fall into the same pattern as exhibited in the
article. That's how I see it's helpful to me as a developer who works with
Django - it's a warning not to identify myself with the tools I have.

------
qq66
The fact that the author thought of his company as a "Django startup" is
probably one of the major reasons for its failure. Two-sided marketplaces
almost never live or die by their technology. eBay's technology and user
experience is complete dogshit but it is still the only place you ever go to
buy or sell a vintage Dukes of Hazzard lunchbox.

~~~
mattmanser
The irony of this comment being that the comment right below you at the moment
is asking "what's this got to do with Django".

It's a very good article, you should have taken the time to read it.

------
lushn
This is a bit of a strange article. I see where they're coming from, but a
number of things that come to mind as I read through this:

\- Competing against Yell, Yelp, Google...etc. for local reviews and listings
isn't exactly going to be easy. I'm not sure how prevalent all those local
services were in 2010, but even if it had gained traction, it likely wouldn't
have lasted long (or perhaps if they're lucky, been bought out).

\- Did they only try cold calling? If so, that's ridiculous. Did they attempt
multiple marketing methods? Did they try to educate the market before trying
to get a meeting/sale? Did they run group sales events? They really didn't
seem to know what they were doing at all, so how is this enlightening to
people reading? Maybe learn sales and marketing before trying to actually
build a business...

\- Local businesses often aren't very good at running a business. It's that
simple. Some survive through luck (and referrals). They're often disorganized,
and so busy dealing with clients they can't even think about sales and
marketing. And often even if you can outline a very clear ROI, they won't go
for it since small businesses are often more of the consumer mindset (emotion
driven) rather than bigger business mindset (ROI driven).

\- And also, as another comment mentions, a lot of small businesses don't want
to really grow. If they're earning enough to cover their bills, they're happy.
The stress of managing employees is often more of a deterrent than the benefit
of earning more.

\- A $50k solution to a local business? That's a ridiculous price and
expectation. At least have multiple service levels, and a free version is a
great starting point too.

\- At least they understand that there's often massive resistance to changing
how they do things, especially if some members of staff aren't comfortable
with technology (as many people aren't).

I'm just slightly shocked that they had to learn such fundamental truths about
business, in such a hard way.

Did they consider hiring a sales/marketing consultant?

Did they test other selling approaches?

With great sales and marketing, you can sell a poor quality product. Not
recommended of course, so if your product's good you have happy customers and
also referrals.

They had the product-part right, but didn't seem to have a clear product-
market fit, and certainly hadn't found a dependable sales/marketing approach
that allowed them to grow.

------
mikecx
I feel like another step missing or at least not fully acknowledged is knowing
your competition. I just did a quick check and both Angie's List (1995) and
Yelp (2004) were around years before this idea (2010). While it's certainly
possible to be late to the game and win there's no visible differentiator
here.

~~~
kohanz
I'm not sure if you read the blog post, but they pivoted away from that idea
early on.

------
ak39
What is the best answer to "We won't go with you because you are too small?"

~~~
barrkel
Find the subset of the market who will go with you, and work your way up the
market (down the riskiness scale) as you build reputation and market
awareness.

It's tricky because simply being a startup is a brand negative as you try to
sell to increasingly conservative customers.

There's books about it. Here's one:

[https://www.amazon.co.uk/Crossing-Chasm-Marketing-
Technology...](https://www.amazon.co.uk/Crossing-Chasm-Marketing-Technology-
Mainstream/dp/1841120634)

------
donmb
I honestly don't understand how you can develop a product without speaking to
potential customers or users (in this case the plumbers). Reading this
article, this makes me wonder if you really took this serious.

~~~
maruhan2
well they did after they developed a prototype. If you think you can build a
prototype fast enough, then I can understand the decision to make the
prototype first to have a clearer idea.

------
septimus111
This is a great article. One thing I can particularly relate to is when
working on a 'blue sky' project, how easy it is to rationalise away the
obvious red flags and keep going until everything falls apart. When one has
invested a lot of time and built up the momentum, it's very hard to admit
failure and accept the big changes that must come with letting go of a
project.

I think it's particularly hard for people who are used to, and enjoy being
successful - is that perhaps why university dropouts often make good company
founders?

------
nihaar
> Our burn rate was closer to $22k per month.

Seems like this should have been mistake #1. That is an awfully high burn rate
for a startup still trying to find product market fit.

~~~
dtien
I interpreted that as them including their salaries, and not actual on-going
server, marketing, advertising costs, etc.

~~~
dboreham
And that would be an incorrect way to compute burn rate. Should include all
outgoing cash regardless of the purpose.

------
paulie_a
While this is interesting for many reasons and quite frankly because of a
similar situation in my life. The choice of framework had little to do with
anything.

Django was on the page 11 times, 5 of those were regarding DjangoCon

My personal lesson and the take away from the article is: On the list of hats
you wear founding a startup, salesperson is 1st, 2nd and 3rd, engineer is
10th.

------
EvanKRob
I don't understand how this is considered an autopsy, what was he selling?
what was his conversion rate? what was customer acquisition? what was
retention?

Paid high salaries and burned through investment without closing sales? That's
probably a little more indicative of why this one failed.

------
notimetorelax
If I understand it right, you effectively acted as cheap consultants for your
big accounts? Did you have a stable product that you could sell without any
modifications to it?

------
nraynaud
"slow train wreck"->a boat wreck

------
meric
This is a good article, well worth the read.

------
gauravhp
They missed the opportunity to title this article "13 reasons why"

------
snambi
what is django got to do with this?

------
git-pull
It's a fine startup postmortem.

A small gripe: I don't get why Django has to get dragged into this. Whether
it's the title, or the venue. It distracts from the broader lessons he brings
to the table in hindsight as a CTO-founder.

Other than the author making fleeting references to Django, there's no
technical depth or major points delivered on how the stack effected
operations.

I have nothing wrong with Django criticism, but the title needs to be fixed.
Maybe: "Autopsy of a slow train wreck (DjangoCon 2017)"

~~~
amjith
He was the president of Django Software Foundation while running the startup.

So naturally he was a big proponent of Django and his stack was written
completely in Django.

~~~
kornish
Right. But what outcome did Django have on his startup? Seems to me they
likely would have committed all the same business mistakes had they used, say,
Rails or Play.

~~~
stickfigure
The article is adapted from a speech given at Djangocon. The title includes
"Django" to explain why Django developers would be interested in it. Out of
context here on HN, any startup failure draws interest (no matter what
technology), so the Django mention looks odd.

------
potus_putin
The article is unclear, uses subheadings that have no connection to the
content and is far too long. I am not surprised that their startup crashed and
burned, if they cannot even write a clear article.

From looking at the description of their app on Appstore: "With this mobile
app, field workers can receive jobs sent to them from the TradesCloud web
service and then update them in the field. " their service seems to have been
a way to message the staff in the field.

