
Ask HN: What happens to failed founders? - tomp
What happens, longer-term, to the founders that fail? There&#x27;s many forms of failure, according to PG [1] it&#x27;s simply a matter of &quot;keep going, don&#x27;t get demoralized&quot;, but from my limited perspective (I&#x27;ve never started a startup) it&#x27;s more complicated than that, you can also literally run out of money (either personally, or as a company not getting more investment), <i>or</i> you can rationally decide to stop because the value proposition just isn&#x27;t there in the market (noone needs it, or they need it but aren&#x27;t willing to pay enough for it to sustain it). So, my conclusion is that startups sometimes fail for &quot;good&quot; reasons.<p>What happens to founders afterwards? Do they start another startup? Do they continue in a &quot;job&quot; (career)? Do they start from scratch or move immediately into a management position? Are investors willing to invest into failed founders? Are companies willing to hire them? Do they value experience (similarly to an MBA, or similarly to an employee, or not at all)? Maybe they get hired by VCs to either mentor other startups, or help decide if they&#x27;re worth investing in?<p>The opportunity cost of starting a startup instead of continuing in your career can be significant (5+ years &quot;lost&quot;). I imagine Y Combinator and other accelerators&#x2F;VCs have some relevant experience with their alumni to answer this question. Is there any data available, an article or similar?<p>[1] http:&#x2F;&#x2F;www.paulgraham.com&#x2F;die.html
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muzani
Hi, "failed" founder here. I didn't make a million dollars but basically got
acquired for about 3 years of not taking a salary.

One thing many people forget about startups is that you're building assets,
not revenue. The company, the code, the whole customer acquisition process,
customer loyalty... all that is worth something to someone and can be sold at
a price. We were acquired by a startup that just wanted to grow faster. It was
another sales channel for them and far cheaper/faster than putting marketing
dollars.

So there's rarely ever truly a failure. Just waiting for the right buyer if
you've built something decent. This is usually what they mean by "don't die".
I found that it's easier to sell a company than get investors, though.

After that,

1\. A VC who didn't invest gave me several fun jobs teaching programming (his
core background was education). I've been doing it on and off for 3 years now,
training for programming certifications, and it's been a good portion of my
income and connections.

2\. Joined a couple of startups as a CTO, all fellow founders who I met in
accelerators. They didn't go well and maybe I was not competent enough for
them. Maybe they just had limited resources.

3\. Joined a Big Corp. Friends thought it was not part of my personality to do
so. But really, it was trying something I hadn't done, and proving to a
relative that I could. It seemed like a step down, so I stopped after half a
year.

4\. I regularly get and turn down CTO offers, sometimes two a month. Many were
more established and well funded, but I'm not willing to commit to them.

5\. I went back to freelancing. I make about 5x more than I did before my
startup. I specialize in MVPs, so my startup experience is essential to
current income.

But notably, I didn't have a lot of options when starting a startup. Had I
gone the non-startup route, I'd be working for a company in some large team,
making $1000/month in a developing country.

------
lm28469
> "keep going, don't get demoralized"

You can keep going and never make it. Statistically speaking you're more
likely to not make it. This isn't much more than the typical hustler
propaganda we see all the time in tech. "If you didn't make it you didn't try
hard enough"

> What happens to founders afterwards?

Founders are people, people chose different paths. Depends if you managed to
save a big chunk of money, have the will to start again, have kids, location,
visas, etc ... I don't think there is a stereotypical path.

> The opportunity cost of starting a startup instead of continuing in your
> career can be significant (5+ years "lost").

If you create a company that survives for 5 years you have to fuck up really
bad to lose everything. Unless you go for one of these business models relying
purely on investors cash, in which case you're doomed from the get go 99% of
the time.

~~~
muzani
Startups are usually a gamble at good odds. "Keep going" means you're just
rolling the dice at those odds again. But those who learn something improve
their odds for next time. People rarely do an "all or nothing" bet, so they
can often try again. And often investors prefer someone who has tried and
failed rather than someone whose trying the first time.

~~~
lm28469
> Startups are usually a gamble at good odds

Good odds for who ? The investors putting money in 100s of startups and making
10.000% ROI once in a while ? Sure

What about the founders / early employees who fail 90% of the time after
putting in countless hours of overtime ?

When the dice you play with is a 1d20000 and you need <= 2 to succeed you have
to be real tough, have a strong support network and know what you're getting
into. I guess it's part of the game but we should stop romanticising the
startup life, it's far from being a matter of "keep trying".

[https://s3.amazonaws.com/startupcompass-
public/StartupGenome...](https://s3.amazonaws.com/startupcompass-
public/StartupGenomeReport2_Why_Startups_Fail_v2.pdf)

~~~
muzani
It's also not a fail/succeed binary. Failures bring in experience and skills.

Also, you have to compare with the alternative. Someone who applies to Google
also has a high chance of failure - it's still a 3 month investment in
studying for interviews, with about a 5% chance of getting in.

Someone can apply to work with a moderate sized company at much higher odds
and lower pay, but there's a good chance the project may fail and they get
fired.

In this case you still get paid even if you get fired. With startups, failure
means you lose money and time, but the process rapidly levels up your value as
an individual. You build more elite connections, develop a lot of soft skills.
Spending 100 hours a week programming something has a side effect of improving
your programming skill much faster than someone who put in 40 hours.

If you studied months for an interview at Google and failed, your best next
move would be to apply at the next company at a slightly higher rate of
success. You can also choose to settle for something easy, with no interview
process, but then you lose your investment. This is the same logic as "keep
trying" at a startup. When you fail with one idea, you get feedback for what
other ideas would work better.

I personally chose the startup path because the alternate path is spending 13
years trying to get a $25,000 job. Someone getting offers for $200,000 jobs
would have a very different decision matrix.

~~~
inertiatic
Smart people who put in months of studying don't have a 5% chance of making it
into a large company after those few months.

Google might have a 5% hire rate but it's not 5% of qualified and heavily
prepared people. And you can just multiply your chances by applying to more
companies.

With skill and determination you will make it.

With skill and determination, starting a startup you're just buying a ticket
to potentially making it.

As you said, it only makes sense if your alternative doesn't offer you enough
money to live comfortably and save as well, or you are, well, atypically non-
risk-averse.

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clusmore
I think we need to stop using the word fail for things like this---expressions
like "fail fast" and "learning from failure" and "embrace failure" often give
people the wrong impression. Instead I prefer to re-calibrate success. If you
are doing a startup, or anything else (borrowing Ries' definition here) under
extreme uncertainty, your goal can't possibly be to succeed. This could very
well be an impossible goal, and you could fail for reasons entirely outside
your control and outside your visibility.

Instead, you should identify the unknowns where possible (your hypotheses) and
set your goal as de-risking these unknowns. For example, your startup idea
might be "Uber Eats for umbrellas" where you deliver umbrellas to people at
the push of a button. Can you build a successful company around this? Who
knows. I certainly wouldn't measure myself on my ability to build a successful
company on this. But I might measure myself on my ability to determine whether
there is a market for it. I might be successful in determining there isn't a
market for it and then decide not to continue any further, and I wouldn't call
myself a failure for it. And even if there is a market, then there's a
question of whether the economics make sense. Again, your goal now is to
determine the answer to this question regardless of the yes/no outcome.

------
dmitripopov
Failure is a part of the game. If you get demoralized this game is not for
you. Simple as that. It's OK to feel bad for a while, however.

Typically failed founders found something new. Targeted, simple, niche. Learn
from your failure.

~~~
relaunched
Getting demoralized is typical; real founders are the ones who get back up and
come looking for more.

------
deanalevitt
As I announced the failure and closure of my previous startup, I was invited
to be CEO of three other startups looking for direction.

I had a COO offer available too as well as a couple of less appealing job
offers.

I watched some job boards just out of interest and saw a number of roles
either as CMO, product manager or director that I would have been a good fit
for.

As it stands, I ended up co-founding a new company with an old partner.

No one seemed to think that failure under my belt was a black mark.

------
rafiki6
I think it really depends on what stage you "fail" and what causes the
failure. In my own experience, I was really young and tried something for
about 6 months. It didn't pan out because those who I was working with weren't
committed to it. We just went our separate ways after and I ended up working
as as a senior dev at a bunch of places. I'd love to see data about this, as
we always end up seeing only the survivors and their success stories.

------
raleigh_user
I’ve been messing around with an idea of starting something like
failedfounders.com. Basically an online repo of stories, learnings and the
like. It’s too taboo to talk about and I wish that’d change. 99.99% (made up,
don’t quote me) of people don’t hit it big on the first thing they do. Or
second. Some people just start earlier. Aka build programs and sell them in HS
vs at 28. If you find forward thinking execs they usually will love talking to
you and consider hiring you. I’ve found most everyone in TA/Recruiting to be
unable to process how you could have skills across multiple disciplines and
this doesn’t score well on their interview sheet. Relationships end up helping
a ton here.

~~~
muzani
I think there's a good demand for this. You should do it.

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itronitron
> The opportunity cost of starting a startup instead of continuing in your
> career can be significant (5+ years "lost")

Every year of your career, and life, is "lost" ... you can't save those years
and you can't get them back.

