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Ask HN: If my startup fails, what are the impacts on my future career prospects?
63 points by uptownfunk on June 19, 2016 | hide | past | web | favorite | 39 comments
For the seasoned startup vets out there, I was wondering about how working for or starting a failed startup would impact career prospects down the line.


I closed my startup 1 year ago.

Your career prospects are at least what they were before you started your company, but you will have to answer much different questions than most people.

1. People will be concerned that you don't want to work for anyone else. It is important to remind the people that you meet with that you were willing to take on many, many more bosses than a typical employee. Customers, investors, future employees etc. You can talk about how you helped them etc.

2. If you are a developer, there a lots of options. Business is harder, but there will be life after your startup. (I can code a tiny amount but I am not a real developer. I am really knowledgeable about finance and financial modeling. It took me about 30 days to find something in finance... more on this below)

3. When I decided to shutdown my company, I emailed basically everyone I had talked to about the company and told them first that I decided to shut it down and thanked them for their previous help. I did it because it was the right thing to do, but it actually helped a lot in my search because people all offered intros when I asked later on.

4. Asking for intros is the way to go. Find companies that you like and find a 2nd connection there or 1st connection there. If it is a 1st connection, tell them you would like to grab a coffee with them to get information about their experience at the company you are interested in. If you have someone who is a 2nd connection at a company you are interested in, ask the intermediary connection for an intro. Most people will happily help!

5. When you shut down your company, you will probably want $$$ immediately. Try to resist taking the first offer unless you are sure it is a good fit. I made the mistake of taking an offer from a manager I wasn't sure about and it turned in to a full disaster.

6. Email me if you need help with your story or want to understand the introduction process better. (email in profile).

Best of luck, you will either have success in your company or finding another role. In 2 years, this period of extreme stress will be behind you so just keep doing the right things.

May I ask what kind of products your startup was based upon, like online shopping, online community, real estate etc. and if possible what do you believe was the core reason or events that lead to its shutdown. Thanks.

I was attempting to remove risk from a niche of the real estate funding market while providing small funds with more access to capital. Ultimately there was only weak demand for what I was providing. The switching cost from the way they were currently doing business was not overshadowed by what we were providing. I am happy to provide a more lengthy explanation if you are in that space. Just email me.

My startup failed last year. It wasn't the greatest feeling to be back searching for a job. I did find a good job and I'm at a good place now. I joined as a developer.

I was the CTO of my startup and was a senior architect looking across multiple domains in my previous job. Now, I'm more a specialist, looking at one single thing while it's expected that someone has the responsibility to solve a different problem.

To me, that's the biggest career impact. In our startup, everyone did everything. Need to hotfix something in production in the morning and then head off to a investor pitch in the afternoon? Come back and rework on our marketing message? Yes. Yes and Yes.

Now, I'm just a dev. Not the marketing guy. Not the finance guy. That's someone else's responsibility. Am I being paid less? Not really.. But am I having lesser responsibilities? Definitely. Is that a career downturn or not? I don't know, but I do see others who joined the same company from a more successful startup being "higher up" when it comes to responsibilities and job titles.

i think this is the reason most companies fail. people do too much, and aren't able to do a good job at any of it. people lie to themselves and think it's even remotely possible, when it's not. you're going to do a shit job at every one of those 4 jobs if they're all your responsibility.

i think companies that raise or make money quickly are able to actually dedicate people to very, very, very critical shit, and will have an astronomically higher chance of success for this reason alone.

It can be a big competitive advantage to do everything yourself, because you see inefficiencies that fall through the cracks between job descriptions. That's what's left after you've specialized and optimized: all the things about the product that suck because they are nobody's responsibility. Fix them and you not only are doing something that your competitors aren't, but you're doing things they can't do without re-organizing and losing all the accumulated domain knowledge that they have.

The flip side of this is that you need to pick a problem where this is actually an advantage. If you're solving the same problem that your competitors are but they have 100 highly-specialized employees but you have one generalist, you're going to lose. Big. But if you identify the problem that they're not solving because nobody in their organization has the relevant expertise or job description, you can get a solid foothold, then use that to hire the expertise that you were missing in the first place.

> It can be a big competitive advantage to do everything yourself, because you see inefficiencies that fall through the cracks between job descriptions

i agree, but this is begging the question of actually being able to do a good job at any of it. i'm not saying it's impossible, i'm saying most can't.

The point isn't to do a good job of it, the point is to do a better job than the people who are not doing it at all.

This is probably the most counterintuitive part of founding a startup that I've observed so far: if you're doing it right, you'll suck at everything you do. Why? Because if you don't suck at something, it's time to seek funding, hire people, and train them to do it. The founder's job is to seek out problems where everyone else sucks more and yet people still want it, which itself is quite a challenging task.

If a company is swimming in money, whether it's from investors or revenue, then yes, hiring people to handle specialized jobs is definitely the best thing to do.

But there's always a point at the beginning where a company doesn't have a ton of money laying around, and at that stage, I think your advice is bad. It's better to have those jobs getting done poorly than to have them not being done at all.

If you are going to be a CEO then it is important to wear many hats in the beginning. It is important to understand the basics of accounting, law, sales, etc so that you have some idea what is going on with those aspects of the business when you are able to delegate those jobs to experts.

yeah, a lot of entrepreneurs learn this stuff through a bunch of failed businesses where they do everything themselves. keyword: failed.

It is not that hard to do the business side in the early days. That isn't even in the top 10 reasons companies fail.

really? overspending and poor record keeping (accounting and control), terrible or non-existent sales and marketing, inability to recruit good people, etc.

these are 'business side' things, and are basically the most common reason companies fail.

It substantially depends in what region you are located or more to the point from what culture you are coming from. Different cultures have massively different attitudes to independent workers and personal failures.

In Asian cultures the common expectation for a worker is to be loyal to its company, know its place in the hierarchy and diligently follow the procedures. An independent thinker with many creative ideas and innovation proposals will unlikely to be welcome. Failure at something is generally a point of embarrassment that needs to be covered up or at least not advertised.

In Western cultures independence, experimentation and failure are seen as normal elements of the life process. There have been many inventors and entrepreneurs in the Western history exactly thanks to those liberal perceptions. Failure is not tragedy but useful experience. You learn a valuable lesson that will help avoid mistakes in the future and ultimately achieve success in what you do.

In reality of course it's not as black and white. There are both types of people living in all countries, and many people are somewhere in between on that axis. Also, even among Western countries there are those which are more Western and more adventurous than the rest and some are less Western and more risk-averse. There is the full spectrum out there.

Back to the software industry, I'd say somebody with an experience of failure is way more valuable than a person who never did anything wrong. Humans learn more from failure than from success. If you do something and succeed right away then you'll never know why you succeeded - because you did everything right or just because of the right set of circumstances, fortunate timing and some good luck. Meaning you won't know what components are crucial for success. When you fail you learn what elements are responsible or have contributed to the failure. You may not know yet what ingredients you need to have to succeed but at least you know which obstacles you need to remove to not fail.

In general, experienced people do value failure and can appreciate the usefulness of someone with that kind of background. They should not have any problems hiring that person because they recognize the knowledge that comes with it.

I too have had some failures in my professional life and I'm not ashamed to admit them. Each of them taught me a valuable lesson. On a personal note, I would be more inclined to hire somebody who was bald enough to attempt something big, failed and learned from it than someone who just drifted from one safe employment to the other never actually interacting with the real world in the wild.

TL;DR: Don't worry about it and go for it.

P.S. Sorry for the typos. For some reason the edit/update function has no effect for me so can't fix them.

As long as you have solid skills, success or failure doesn't really matter at all (although if you were successful you wouldn't be applying for a job, which leaves us with failure in this case).

From my experience companies only look at your objective skills when they hire you. And a lot of large companies actually respect that you have worked on your own company even if it failed.

So don't worry about what it means, if you're trying to find a job, study for the interview really. That's one thing I messed up when I shut down my company and had to get a job for the first time in my life. I didn't even know "preparing for an interview" was a thing and failed miserably at some of the early interviews I did, but later figured out there's a formula and then I aced everything, ended up getting multiple job offers and chose the one I wanted.

Mind sharing details on what you mean by "preparing"? Like .. a weekend worth or a lot more? I go into interviews with a half day of prep and admittedly it isn't always pretty. How does someone with a high responsibility/workload current job get the focused prep time? A friend of mine said "3 months to prep for a Google interview" ... I couldn't believe him.

As someone on the other side of the table at a startup, I always ask, and it depends on the answer.

-- Con: flight risk, collaboration risk

-- Pro: for valid reasons, they don't want the founder stress, risk, focus, whatever (say due to family, time, whatever), but love the environment. Such people are amazing: a classic "barrel" (http://firstround.com/review/Keith-Rabois-on-the-role-of-a-C...) .

We've been working the past few months with someone like this, and he is basically a multiplier on our ability to execute!

The "con" part actually has nothing to do with whether you failed at a startup or not. Like you said it depends on the answer, which means you make the decision based on the personality at the end of the day, not based on the failure itself. So I would say there is no "cons".

- Anyone with startup experience will high five you during the interveiw when you mention the failure, and will be interested in discussing what went wrong.

- People coming in from the outside, such as HR and recruiter staff won't get it, and will snidely try to get you to admit that you were actually fired for cause, or were responsible for the ship going down.

What country are you in? How long was the company afloat? Was it ever cashflow-positive? Were you the technical guy or not?

Your career prospects largely depend on answers for those questions - it is different in US (attitude towards failure), different for non-techies, etc. etc. If your company was cashflow positive, then you can show at least temporary success to others (in objective, business terms).

In the past 20 years; I have had more than 10 different startup ventures; all with varying degrees of success; none of them were the "Golden Ticket" that allowed me to retire.

All were self-funded if that makes a difference.

It has not hurt my chances of finding paying consulting clients. Many of my clients like that I have that experience; and business experience is awesome when you're talking to small business owners who are not tech people and just want someone they can trust to build their project. Often the startup venture / project can be used as 'proof' of technical skill.

If you choose to list the startup company on your resume, you can easily give yourself a title / position relevant to the job you are after [programming / management / CTO / whatever ]

I haven't been in a traditional 9-5 employment situation in a long time; so I'm not sure about that area.

If you end gracefully by treating customers with respect, being honest and open with investors, helping the team move on, and understanding the where/how it failed, it won't be a negative.

Remember those customers, investors, and colleagues all trusted you. How you deal with that after.. people remember.

They are awesome!

In the last ten years all my projects and startups failed in the sense of hitting any type of home runs or even a single...but they led me on great, unique journeys that make me a more interesting candidate/coder then those who just code to make a living. After ten years of doing startups and coding/designing for a living I am never out of work and landing jobs and better ones is easy because and again my story is more interesting then the next guy who just codes for a living.

Doing side projects and or startups in the past or even present is a great thing for any coder and or designer for your resume! You will be more then fine and the market is great for us...get a few years under your belt and you will have recruiters banging at your door offering you a better job weekly or daily!

I don't think it matters at all. Any place where that would be looked on negatively is probably not a good fit for you anyway.

It's a really small sample size, but we've had several people join us after winding down or leaving their startups and they've been successful.

I was under the impression that the vast majority of startups fail. I don't think being a failed entrepreneur is a bad thing, if anything it's hard-won experience that should be valuable going forward. People expect startups to fail- actually succeeding is huge, but not getting there isn't a bad thing in itself. I can't imagine you would be judged for being associated with a startup that didn't make it, unless there were was something fundamentally unusual and terrible that happened that was scandalous or criminal or whatever.

It shouldn't affect your prospects too much. Just keep your skills sharp while you an building and running your startup.

I've built and failed at two startups. And after those failures I've found one of the most fulfilling jobs I've had in my career. I've learned so much about business building, managing, sales, and finances over the last few years. Use those skills you learn while building to help find your next role!

I'll build something in the future, once I've had a few years to recover from the startup world.

I think it depends on how you explain it, because it's bound to be asked about. If you can spin it as a learning experience and perhaps assuage worries about you jumping ship to start another company, any human recruiter (and most are) would interpret it as a plus.

On the other hand, if all you talk about are mistakes and failures to learn from them, or suggest that you'll be leaving at some point to do it again, a recruiter is likely to worry.

Failure of a startup doesn't mean you're a failure or even that you failed in this instance. There are many reasons why a startup can succeed or fail. Either way, if you've shown you learned from the experience, I think you're likely to find that some of the best teams to work with will value that.

I'm a regular employee at the bottom of the fruit bowl but I would imagine that starting a failed startup probably challenged you in a lot of ways and gives the interviewer the opportunity to ask a lot of deep questions in terms of whether you're a good team player that fits for them or not.

TLDR; nothing different IMO.

They say: "you're only as good as your last performance".

So, dust off. Stay positive and do another.

It's all about how you handle your (last) failure.

Most startups fail. The fact that you tried is more valuable than the result.

If you learned from it, there's no negative impact.

It helps if you can articulate the learned lessons.

Leave it off your resume.

This is the worst advice ever, don't try to give advice on something you have no idea about. It can change people's lives for the worse.

"Leaving it off the resume" means lying, and they will most likely ask what happened during that time. Even if they don't ask it's a bad sign since it means you come off as someone who's been unable to get a job for whichever duration you worked on your startup for.

Anytime I would see a resume with CEO / Founder on it I would immediately pass.

My thinking was this person won't be a good fit working for someone else if they felt the need to strike out on their own. Just like I wouldn't hire myself.

This was when hiring for a sales role mind you. Obviously different for different positions / experience.

CTO wouldn't scare me if we were hiring for a lower position.

Maybe people wouldn't feel "the need to strike out on their own" if they were better treated by their former employers.

It's the number one reason why people generally attempt to "strike out on their own" - lack of recognition and perspectives as an employed worker.

Also, some people just have ideas and the desire to implement them.

I see that your website is on squarespace and cant see much tech being used in your company so for you CTO might not make much sense but it cant be generalized.

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