So you failed. Dont obsess about it. Tell your family the company is not working. Dont try an be a hero. Be honest, they appreciate that more (fuck them if the dont). Entrepreneurs have to meet these weird social standards that are never within reach. You think Warren Buffett has ever getting a break? He gets shit every day from deals gone sour.
But keep your head up. Failure is not you. You are a person, and you did pretty good. Your investor lost the money the minute he decided to play investor. Doesnt have to do anything with you.
If you want to talk about it with someone who fails hard every month, just send me an email (on profile). I wont make this public.
Also, dont be ashamed. You got to the NBA, but you were not Michael Jordan. Who cares? I bet you played a good game, and got some good stories from it. Best wishes!
An American basketball player, having not had much luck with NBA aspirations, took a job in Western Australia, playing for a state league team. These state league clubs have a player budget of about $60,000 spread across a men's team and a women's team - 20 players in total. The league in question is not likely in the top four leagues in Australia.
Said player told his hometown paper that he had a three-year deal for $1m, that he was going to be playing in the best league in Australia, that it would be on a tropical island in the West (it's mainland), that he'd get a beachfront 3BR apartment, that the club was flying him and his family the last leg on a private jet (it would've been a bus from Perth) and that his signing made news across Australia (fat chance).
His club found out about these claims, learned a bit more about his character besides this, and cut him before he'd played a game.
zerocool1989 3 hours ago | link [dead]
I've missed more than 9000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed. -- Michael jordan
I disagree, anyone who has the balls to start something new, whether they succeed or not, is far from average.
Wise words indeed. One of the things that has always bugged me about certain portions of the startup culture is that over valuing of 'success'. As far as I am concerned, if you learn something from the experience, you can't fail.
Or maybe he is?
Thanks for writing that, it resonated strongly with me for some reason.
It's also something I have heard echoed strongly in pg's recent essays on why/how/what to build as a startup.
I was unemployed for a couple of months, then finally took a job at a great company, where I feel great. Things were finally picking up. I thought I was fortunate because I had my wife who supported me through it all.
Then a month ago my wife, who I thought would be my partner for life left me.
You think a failing company is bad, try this. I just got thrown back to being 25 and looking for a date, sth I thought I left behind me forever. It was I hope the final price I payed for concentrating too much on my startup the preceeding years.
Lessons learned? Too many, but I'll just say this. The buddhists are right, the only constant in life is change. Shit will happen to you, whether you're rich or poor. Companies will go under. You may lose money. You will be fired from jobs. Your partner may not turn out to be who you thought she is. Somebody close to you could get sick. Your parents will die. It's just life. You have to accept these things will happen and do your best to prepare for them.
It's though, some people are much better at it than others, but it's normal if you can't get over these things in a day or week. Medicine might help (eg. sleep, anxiety), but go easy with that stuff.
Don't lie to your parents. They're your safe harbour, they will understand and help you. Tell them what's going on. I'm 32 and although it doesn't feel very manly, talking to my parents about my current situation is what's keeping me sane.
I understand what you mean by this, but just wanted to comment that this is not unambiguously good advice. Some parents have their own issues (severe anxiety, substance abuse, poor interpersonal skills, etc) and can't act as a safe harbor; lie to those parents if you've got to! Leave them in the dark! Find someone else to talk to about your problems.
I am glad that you have supportive and stable parents, though, but some people don't.
I bet they understand a lot more about life than you do.
I know this isn't a reply to me directly but here's an example of the sort of thing I had in mind. I have premature twins that were born last January three months early (they are doing great now, BTW). While they were in the hospital, family came and visited sporadically. One of our parents (I'll be vague) was with us in the hospital when my wife and I were mistakenly told by doctor that our son had potentially severe brain damage (IMMEDIATE PARENTHETICAL NOTE: he did not and is doing great, they misread the MRI). So, my wife and I are pretty alarmed and stressed.
The visiting parent, on the other hand, was stammering and incoherent for days afterwards, totally unable to handle it.
If we had been counting on him or her for emotional support, understanding, really anything at all of substance this meltdown would have been a problem. But we weren't, because, you know, we've known this parent for a while now and realize and accept his or her limitations. This response was unsurprising.
The point I was trying to make in my initial comment is that, for some people, it is naive and dangerous to think of your parents as a "safe harbor" and you need to look elsewhere. Not everyone has all of the strengths and perspective that I can only assume your parents do. Mythologizing people as universally "knowing more about life than you do" because they're a little older is bullshit.
This. During a bad period, I moved in to live with my family for a couple of weeks. It helps to eat and talk together, and if you had a happy childhood, you'll feel safe and refreshed.
I agree with you about the only constant in life being change. I think it's even older than buddhism, I seem to recall it was Heraclitus who put it as "change is the only permanence".
As for the OP, I hope he stops taking losing investor money so personally. The investors knew well they bought a lottery ticket. Had OP succeeded, the investors would, of course, have gladly taken their part of that upside. Now, he didn't, and they lost their ticket money. And that's all it was: ticket money, their fee for getting to play the game. I sympathize with what he's going through, and hope he'll get through.
Change and motion are apparent. The only constant in life is LIFE ITSELF, which is stated as:
1 - balance (if one word is enough)
2 - rhythmic balance (if two words will do)
3 - rhythmic balanced interchange (if 3 words are necessary)
or cold still white magnetic light = life itself = rest = balance...
Change and motion are false information gained by sensing.
I will now step down off my Walter Russell soapbox and humbly request you read "The Secret of Light" by aforesaid :)
Not totally true. I want to point out that there's a huge gap between what Buddha saw and taught and what is said by the teachings in modern Buddhism.
Gautama Buddha went to people basically every single day for 45 years and tried to awaken them. He absolutely did not teach people that it's possible to eliminate suffering while alive, and he never taught that meditation is a way to enlightenment. Instead, if we make a gist of the content of his life work teaching we can see that he taught two things: the theory of transmigration (reincarnation), and the law of cause and effect. He taught these things to make people realize how the world works, and what he taught is still totally accurate even by the view of today's world. There were ways in his teaching from the problems people have to the solutions they want to get. But those ways are absent from modern Buddhism.
So we can conclude that while things in the world exist through change (reincarnation), there is another constant meaning in the world, and that is "truth", or law, of how the world works – the law of cause and effect.
When we see and understand the world of the truth then what we find is permanent and never changes. All the answers are fixed. Only questions change.
Further, I studied buddhism for a while. I have no idea what you're talking about. In other words, YMMV.
You didn't point out a problem clearly, so I'm not sure what you think I should have done instead of branching a philosophy discussion. You'll note that the only thing to which I replied from Maro's answer is his comment about Buddhists being right. My reply has nothing to do with his commiseration, and I believe I stay on topic 100%. Besides, if you want me to reply to Maro's commiseration, my answer is that we should verify everything in OP's post first before deciding with what to commiserate. Why commiserate in places where OP is actually repeatedly at fault and chose the wrong way? How can you properly commiserate at times when OP was right if you can't see where they are? That's not justice to the investors, nor OP, nor is it the way to help OP to find the right way. Fact is neither you nor I know OP. Anyway, see my own reply to OP in my comments.
"Further, I studied buddhism for a while. I have no idea what you're talking about. In other words, YMMV."
I've often experienced this kind of reaction from today's Buddhists. I don't understand why. What I do know is that it's impossible to understand the truth with untruthfulness inside oneself. I also studied Buddhism for long years, traveled a lot, and met a lot of people, but I've never found in any country a Buddhism which is for the living people.
It's critical that this result is informed accurately to human society so that people can protect themselves from being cheated by falsehood.
I've never found in any country a Buddhism which is for the living people.
Very interesting. You and I would probably get along just fine.
Did the Buddha teach the Four Noble Truths? The third noble truth about the "cessation of suffering and the causes of suffering". How can what you say be true then?
You asked a very good question. Buddha, when he was Enlightened, also attained nirvana. What this means is that he saw the world of origin, where everything dies and is reborn again. This is why he could see that all the results are made by the causes. So, it's because nothing exists in the world of origin that Gautama said that there's nothing there. But Buddhist monks often misunderstand this as that when you attain nirvana you can finish all your suffering. However, Buddha never claimed that. He explained that when he attained nirvana he could be free from agony and illusions. But no creature while it is alive can be free from suffering. If we don't eat, we suffer from starvation. If we go to a cold place, we feel cold. So to cease suffering forever means that one would have to stop being reborn and die forever. The only way to free from suffering while you are alive is to disengage your consciousness from your body. This is what modern buddhism guides you to do through meditation. But it's the exact opposite way of Buddha's teaching. Buddha taught people to save themselves and to live forever, not to die forever.
In other words, one person's dominant world viewpoint is not everyone elses, and that's perfectly ok.
For example, for me, trying to understand spirituality/meditation with the mind, is like trying to be a know it all about swimming by studying, watching, and discussing swimming without jumping in the water. True teachings of any kind in my mind are meant to teach one to lead themselves through whatever comes up. Then again, I'm pretty anti-dogmatic, ritualistic but still maintain some mindful disciplines to keep my attention where I want.
See how I said something so personal to me but it might not mean anything to anyone until they've done the equivalent in their own way?
To know what they taught, look at their life activities. Even though people didn't treat him very well while he was alive, Buddha had endless love and mercy for people, and tried repeatedly to awaken them so that they can save themselves.
Because Buddha tried to help awaken people non-stop for 45 years and because his teaching is still accurate by today's view, I know that he would never lie and tell people to practice something wrong. That's why whatever is true or not true, among what Buddhist monks claim is Buddha's teaching, can be proven by the facts. If it's Buddha's teaching, it will have all the evidence and no falsehood.
I've also met many Buddhist monks, so if you're still not convinced, I can show you as much evidence as you need that they don't realize anything about the true teachings of Buddha. As long as you give me questions I can give answers. One simple fact is that if monks know Buddha's teaching then they should have some evidence that they learned directly from the master. But that is impossible since Gautama Buddha died 3000 years ago. So I'm not claiming I know Gautama's teachings but my reasoning and experiences as explained here are only that which I've seen with my own eyes and verified with substantial proof.
> The contents of those scriptures have been retranslated countless times. Besides this fact, they were only written down about 500 years after Gautama Buddha died. Third, the words that were written down were those as transmitted by ordinary people, who had a huge gap in level of consciousness between them and Buddha, so they didn't understand exactly and didn't write down Buddha's exact words.
This could be true.
> Buddha said that he never taught anything of his own.
What is your source for this? How do I know that your source hasn't also been re-translated countless times? How do I know it wasn't only written down 500 years after Gautama Buddha died?
The majority says that the Buddha taught that we could end our suffering in our life. You say he didn't. You say he taught something else, but you offer no evidence. I'm just wondering what your evidence is.
edit: I truly mean no disrespect in this. I'm just curious.
My answer to what proof I have claiming Buddha said that he didn't teach anything of his own is in scriptures, but it's in numerous ones. When Gautama was passing away, a disciple asked Buddha from whom he should learn and Buddha replied that he should learn from himself. Gautama also advised a great number of people to confirm everything directly, and not to jump into believing words without confirmation. Verification is the way that people can save themselves from a lie. So I don't know Buddha's words since I never heard from him directly but I can tell that he taught that to people since it's found consistently throughout all accounts of him.
I'm sorry you lost your wife - it's one of the hardest things we can go through, but like all bruises and cuts, it's not gonna be permanent. All the best wishes for you.
Also an entrepreneur here, and admittedly no (major) failures as yet, but I envy you at least having parents to fall back on.
All alone in the world here. Nothing like the absence of any safety net to make you consider your decisions carefully.
Don't worry about the investor's money - it's called venture capital for a reason.
You've probably learned a tremendous amount from the experience.
Think about what the next step for you is after this company. Sounds like you're a developer and can easily get a well-paying job. Sounds like there is still some money left and you can take some time and decompress from the experience.
This isn't doom. It's the first step of what you're doing next.
There are many entrepreneurs who have raised again from VCs even after they didn't make it from their first raise. As long as you tried your hardest, there isn't much else more you can do. Keep at it.
Your investors would not be investors if the failure of any one of their investments would create an insufferable financial burden upon them. If that statement is not true about a particular investor, that's their fault and not yours.
Fast forward to today -- looking back it was one of the greatest investments in my life so far as all the stuff I learned both emotionally, psychologically and professionally has really helped with current work and life.
I used to think losing money was a big deal, but now I realize it isn't. Investors are in a sense "buying" your time. Can you really put a value on your time? Your own life?
Sure, the memories were disappointing and frustrating, but I wouldn't have had it any other way. And yes, I plan to save and try it again.
EDIT: Just to be clear I'm not saying throw VC money around... of course you still need to be responsible.
Having a slack attitude towards money (our own money or others) doesn't build a business or an understanding of value that ultimately ends in a revenue stream.
It's nice of you to share you story -- I don't think many folks do. I have similar experiences (good and bad), but I think the one thing that really stands out for me is that investors are in a sense "buying" your time, not much different than consulting...... :)
Of course you need to value other people's money, but when they gave you they money they know that there were higher chances to fails than to succeed. If you did 100% of what you could have done, you have done your job. If it was easy everyone would do it.
Brilliant. I've never heard the concept of investing in a startup phrased so well.
I think I'd be much more open to funding if it was like this because I'm used to people paying me to build ideas, it just might be my own ideas that someone else happens to agree with.
Best of luck, but definitely do _not_ feel guilty.
* I'm proud of the product we've built. Even if it doesn't take off,
nobody can take that away from me.
* I'm incredibly proud of my engineering team. We're "a bunch of kids"
who've built something incredible. Even if the company ultimately
doesn't survive, we will have done really well.
* I love my work and I love the people I work with. There are
conflicts, sometimes I have to deliver bad news, deal with stress
and monotonous work, firefight problems, etc. but in aggregate the
work I do and the people I do it with bring me joy. I will always
remember this time fondly.
* When I started, I was a good engineer and a terrible product
manager. Now I'm a good engineer and a good product manager, which
makes me 100x more valuable. There is a bazillion other things I've
learned, but this alone makes everything worthwhile.
* Facing doubt every day made me face the darkest corners of my
soul. I stopped being an obnoxious cynical windbag and started
appreciating the nuances of life, people, art, poetry, strength of
human spirit and true magnitude of human dignity.
* We're taking a real shot at building hard, sustainable technology
that has a good chance to change the world. Even if we fail, I'll
never regret taking the chance.
* I met hundreds of people on my path. I dismissed some of them, but
in retrospect I've learned from them all. I appreciate humanity a
lot more now, and I understand where the dark parts of it come from
* Perspective is worth 80 IQ points. If you start a company you gain a
lot of perspective.
You will feel an immense sense of freedom and lightness.
It's pretty obvious why: a weight is about to be lifted from your shoulder. Where your path was a narrow funnel leading to one specific destination, you will now have the infinity of all possible and reachable paths ahead of you. You couldn't do anything but worry about the startup - now you can do anything you want.
The end of a start feels very dramatic before it happens, but once it's done, you will feel a whole lot better. Trust me.
A weight has lifted, and I'm slowly regaining energy - almost feel like I might one day have enough again to start on the journey of another startup.
Sometimes it takes experiencing a setback before you learn this. The confidence you gain from the experience can sometimes be worth more than the gain from everything going as planned.
I'm thinking that's going to vary from person to person. There are a lot of factors involved. Age being an obvious one. For us older folks, who may have an "I only have so many 'at bats' left" mindset, the end of a startup could be seen as the end of, well, pretty much everything.
I know that I, personally, am feeling a bit of a "do or die" thing with my startup. If the day comes that I have to acknowledge that I've failed with this, I'm thinking I am headed to the liquor store to spend whatever money is left on booze, and then driving to Vegas to drink myself to death. My biggest hope will be that I find a hooker who looks something like Elisabeth Shue.
After you've left your first startup behind you, take a break.
Mine was only a month, but it was the most productive, thoughtful, and interesting month ever. I came up with new ideas about business, people, philosophy, and the world, and just had some of the best and most clear thinking I had had in many years. I processed my former mistakes and turned them into valuable lessons that I will remember forever. I had tons of new ideas and started writing them down. I went skiing a lot. That month has proved immeasurably valuable.
It's amazing what your brain can do when it has space, and you need to let it have that space, especially after such a long time being focused on one thing.
My explicit recommendation to the OP: leave it all behind for as long as you are able (a week, 2 weeks, a month), travel, and bring a journal.
And remember—you'll have a new perspective on all of this in a year's time. Try to keep that 1 year/5 year/10 year outlook and just take the next step. Don't worry, it's just life.
If 'doom' is still a month or two off, but inevitable, attempt orderly wind-down. Maybe a corporate entity is bankrupt. Maybe employees need a fair warning. Maybe there are salable assets. You can ask for help, even from strangers, even non-anonymously. It will be hard to get help if still presenting a facade of "everything's great", and since the 'doom' will be public knowledge soon enough, stop pretending. Instead, use this as practice in confronting the worst and making-do as best as possible with bad options.
treat everyone with respect, honesty, and be forthright. it'll feel awful and scary, but it'll mean a lot more than if you made everyone rich, or at least helped them with some more paychecks. people will remember your character and your behavior far more than any money you made or lost for them.
i think a lot of people forget the incredible risks and burdens founders take on. i saw a quote in inc magazine that put it best, something to the effect of "if this business goes under, you lose your job, but i lose my house and maybe even more." never having founded anything i can't imagine the burden your under, but i know it's immense. that said, remember to be forthright with everyone.
This is one reason why I will never take money from an external investor. There are some scenarios when you definitely need an investor's help. But right now, the trend is almost like "it's a cool factor to seek investment for your startup".
The problem with taking money from someone else is that, you become obligated/answerable to them. Remember, we all start-up because we don't want to go down the traditional working-for-a-corporate route, because we don't want to be answerable/obey no one/their orders. But seeking investment (in most cases) just defeats this purpose of starting up.
Why the hell would someone want to be answerable to a third party for running YOUR company in YOUR way?? And what happens when that company fails? You need to either apologize/console the investor that you will somehow get back his money. Contrast this with having no investors at all, worst case scenario would be you lost all your money. But that's much better than losing someone else's.
I find nothing wrong in trying to build an Saas that generates $10000-$50000 a month in revenue from day one, without external investment, instead of seeking millions in investment for a bunch of photo filters on a phone only to later worry about monetizing the idea.
Could not disagree more. I co-founded and am the CEO of a funded company. Investors (at least professional ones, which, if you have a good company, you can vet them as much or more as they vet you to make sure they are professional!) will encourage you, meet with you, and even help you work through problems and issues. But by no means are you obligated to do anything that they say. In fact, most would prefer that if you have market data that disagrees with them, you go with what the market says--after all, you are the expert in this space, not they...
> "And what happens when that company fails? You need to either apologize/console the investor that you will somehow get back his money."
No, on typical seed round investments (and even Series A and above), you do not owe the investors back their money. There's not even a moral obligation to pay them back--they understand the risks, and as others have stated above in the comments, if this loss was going to make them destitute, they should absolutely not ever have been investing in your round. (Which is why you should be doing the due diligence on them as much or more as they were on you, before they invested.)
Getting investors and pitching, etc. was really scary for me. But once I found the right people, I realized how awesome it was. They have a (small) financial interest in me, so I can ask them honest questions and get answers from their perspective. It is a blessing and it has helped me run my company better than I ever would have without investors.
You could use the same logic to convince yourself never to convince anyone to quit their job and come work with you. Or to move their family across the country. Or to convince their boss that using your startup as a vendor rather than SAP is the right thing to do.
Making something work is going to require convincing others to bet on you - with money, with time and with credibility. Betting involves risk. It's unavoidable. But doing it "on your own" is largely a fiction.
This sounds like a negative statement, but it actually has extremely positive repercussion: you no longer have to worry about them AND you have a few months to do whatever you want. Anything. Have fun and enjoy it. Maybe build something cool, completely new, something that you want to see exist in the world. And you never know, just letting go of the burden, accepting that what's done is done, and enjoying creating something for fun may actually lead to something.
The basic issue that made us decide the way we did was that accepting VC money locks you into the VC exit strategy. This means you are building either an acquisition target or a company you want to take public. If that's what you want to do, partnering with VC's makes a lot of sense. They may help you get there faster. If you aren't sure that's what you want to do there is nothing wrong with taking the first steps on your own before committing to such a strategy.
There's a second issue too, which is what I call "overfunding syndrome." The basic truth is that the vast majority of businesses will fail before they succeed. If you are funding it yourself and the like you have more options than if you are racing towards the VC exit strategy gamble. This is why bootstrapping can often be a real business saver.
I suspect we could find investors if we wanted or needed to. But the fact that we don't need to at the moment and aren't sure we want to lock ourselves into the acquisition-or-IPO cycle means for us the best option is keeping our options open. That doesn't preclude changing our minds down the road, but it is a lot easier to decide that "you know, maybe we could use venture capital after all" than it is to change one's mind and get out of the funding cycle. To my mind this is part of staying upstream of the larger problems.
They took a risk, and my sense is that they are probably more aware of how the game is played than you do yourself. How many startups have they invested in? How many do you think have failed?
This is probably incredibly difficult to internalize in the moment, but it's true. Remind yourself that the guilt is irrational.
If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too:
If you can wait and not be tired by waiting,
Or, being lied about, don't deal in lies,
Or being hated don't give way to hating,
And yet don't look too good, nor talk too wise;
If you can dream---and not make dreams your master;
If you can think---and not make thoughts your aim,
If you can meet with Triumph and Disaster
And treat those two impostors just the same:.
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build'em up with worn-out tools;
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings,
And never breathe a word about your loss:
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: "Hold on!"
If you can talk with crowds and keep your virtue,
Or walk with Kings---nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much:
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And---which is more---you'll be a Man, my son!
I'm sure you worked hard. Tried your best. What else can you do. If it's over, move on and get out of the current gig now. Tomorrow even. It sounds like your investors already have.
You've made sacrifices as well. Call them tomorrow, thank them for what they did, shut the door and open a new one.
In life there is a right way to do things and a wrong way. The 37 signals (bootstrap) model is the proper way to do web business. Taking other people's money is the wrong way.
To author: Dude, you probably care more than the investors. Make it into a good thing, raise awareness on why the investing model should be approached with trepidation and skepticism. Then move on.
Maybe...maybe not. Sometimes capitalization is what your business really needs. Sometimes it isn't. I can provide a whole list of "web businesses" that bootstrapped to profitability, but I can come up with an equally impressive list of companies took really significant capital. I can certainly find businesses that would have not succeeded without the capital to sustain them through their early years (I experienced that first hand) ahead of their ultimate success.
Smart entrepreneurs know how to be strategic with their fundraising. They know when to take money, and (just as importantly) when not to. They know that at key moments a capital infusion can propel a company to big growth. They know that at the wrong moment money can be the distraction that keeps them from executing.
I have a huge issue with your post. You're wrong. Experience has shown me that funding can be a huge asset, except when it's not. It's what makes entrepreneurship so incredibly difficult. Funding, and the way you pursue it, are really tough to choices you have to make. After which you have to live with the consequences. To reduce it to "In life there is a right way to do things..." shows a real lack of understanding of that challenge.
One position from which raising money might be a good idea is when you have a product that is already scaling and shows strong product/market fit, and you know (know, not think) that going 10x on spending is going to let you grow a lot faster.
I don't get why web business people want to change the way business had been done for all of history.
You make a product, you sell it, you use that money to grow.
Don't dilute that process, and if any key part of that process is being omitted you should be very skeptical.
It seems old fashioned, but the business model part of a startup is often the trickiest and the most unknown -- and worth figuring out, because ultimately the go hard or go home mentality.. goes home when they're cut off, or run out of cash. Faking it till you make it saying things are "great" like everyone leaves you where everyone ends up -- going home. Having real people around, not full of phony killing/crushing-it-isms is worth more than funding in a lot of ways, a good group of peers helps pick you up and keep you going.
To the poster, thank you, you're brave in being open and honest so those disillusioned by this kind of thing can't look away and flinch. Take your lessons forward and build something to take care of a problem that others want solved as well, not focused on the goals of investors.
Who cares about growth? I don't. Not when it means I need to compromise my board, take on debt, ect.
I don't know how else I can get the point across but all you should care about is profitability.
And again those big deals are such a small percentage that you shouldn't even plan for that. Just make a profitable company.
I'd rather be profitable at a significantly smaller scale, because this isn't a sprint and in the end you actually have sustainability.
While I understand this completely, they also realize the same. Investments are always risky. Especially in the startup world. They know what can happen. Don't worry, it's just money, and money isn't the most important thing in life.
You haven't failed. You have learned something out from this experience. This isn't the end of the line. Last but not least, don't give up. Unless you want to work full time for an employer. Failure is something that everyone runs against in their life and it shouldn't stop you from doing other things.
For all you know, this time next year, you could be booming with some other amazing idea you get.
OP, hang in there and find someone you can talk about your feelings to, even if you have to keep your "confident face" on all day.
Failing that, listen to a lot of Nine Inch Nails. No, wait, that was Dotcom 1.0.
A startup is a venture. If the venture fails, it does not mean you are a personal failure for all of time. It just means that idea, with that execution, did not succeed in the marketplace at that time.
In the way that you sold your idea to the investor (whether it was by way of having a product to show, or just fancy talking, or a combination of both), you will have to rise from the ashes and prepare to do it again.
You can, and probably should eventually frame this as experience, because thats exactly what it is. A lot of investors will look at this as a learning experience for you, if your able to keep yourself from being rattled out of the game.
The next time around, you will be able to look back on your experience, and hopefully make different choices that will help you stay at the edge of your seat.
Lastly, sometimes ideas just don't work, despite all your best efforts. Sometimes there is little you can do to change the course of history. Often, its a combination of both bad decisions, and being in the right place at the wrong time, or the wrong place at the right time.
We got A+ investors but we failed to deliver. We had founder breakups early on and I was made a single founder for the last two years. I ended up working twice as hard to make up for my founder's departure. (The stress and long hours actually made me less productive.) It almost killed my health and my relationship with the loved ones.
Don't take it personally. You have given your best shot and remember you have your own opportunity cost. It's a fair deal to the investors. The important thing is to handle the wind down professionally. Try to savage what you have (team or product). You or your investors may not get anything out of it but they sure would appreciate your effort.
If it's any consolation, they may be watching to see whether you just give up, or stick with it to the end. You may be surprised that they would back you again with a different idea, since you're so obviously sweating over every dollar of their money...
My hunch is that if the OP feels the way he describes he needs to explore his relationship to failure and uncertainty and figure out how he can better handle those experiences.
Fuck ‘m all
Having lost touch
You just got lucky
It is ok to be xyz
You aren’t alone
Things may not be as bad
Don’t give up
The first time is the worst
It can be hard to keep our head
Taking other people’s money is a big one
On the brink of bankruptcy
Staring death in the eye
Going down with the ship
Poems and questions from social heroes
Emotional generalizations, value-based references, hero-based metaphors are stomach (feeling) based expressions.
Probably posted in the hope to change our colleague’s feelings. I hope it works.
An additional approach is to move our focus & energy away from the stomach and into to the head (thinking).
As such, a non-emotional metaphor would be something like:
A startup = an analysis + a set of assumptions/decisions + certain actions, resulting in specific projected results.
The original analysis includes the resource constraints assumptions (yup, if xyz happens, we will run out of $ by this month).
Then the standard actions start:
Regular review the of obtained results + if not as projected, revisit the analysis, decisions and actions. Keep doing these steps till the projected results are realized or till the resources run out.
Whatever comes first.
Feelings not required.
1 - If you are so sure you're failing in a couple of months, shut down now and return the money that's left. Simple as that.
2 - Startups fail. Investors know that. They don't talk to you because they know already (rude of them, but I understand).
2a - Don't worry about this. It's part of the business. Priced, accounted, etc. It's nothing personal, just business.
In university I had this Economics teacher. First class: "Why are you going to build a business with your money? Don't be stupid, do it with someone else's money". Very true words.
Own it. Own this failure and figure out (if you havent already) what went wrong and own it. This isn't just about damage control, this is about realizing the struggle in keeping a business a float is an asset, extracting as much data and knowledge will drive the success of your future projects.
And above all, do not let the investors forget you with a bad taste in their mouth. Own it, again. Remind them why they invested you in the first place, you never know what the future holds. Don't let it just burn up!
Sad to read this founder's story. Even sadder that it by far the rule, rather than the exception. Good advice, learned the hard way.
The personal loss was not great (around $10k USD) and it was money that I had earned myself over a few years freelancing while working 9-5 so I was prepared to loose it all if it came to that.
The feeling of loss and 'doom' when this little stash of money did eventually run out was very, very, debilitating however - more so that I would have imagined it could be. I was forever thinking how the money 'could' and perhaps 'should' have been used elsewhere on more efficient and better planned projects and how if I had a partner at least we could have shared the 'blame'.
I think that in the end, it doesn't matter where the money comes from. When you get investment, it 'feels' like it's your own money anyway, if it doesn't, then you're probably doing it wrong.
FYI, I HackerNews-d this last week to zero response if anyone cares to pipe in:
Try and let your friends and family know what's going on. Give them a chance to support you in your tough times exactly the same way you would want to support them. Also, it will make it much easier to tell them if the company does fail.
Assuming that's true, then perhaps you'll end up with a tarnished reputation, but your life isn't crumbling apart. It shouldn't be too difficult to find a more conventional job with a decent salary, especially if you've managed to create a product that people wanted to invest in.
All of our funding so far was raised from my personal friends and family. None of them ever invested in anything even nearly as risky as an early-stage startup before, but they trusted in me enough to take the leap. I dread the day I have to tell them that they aren't getting their money back just a few months after sending optimistic status update emails telling them all about our user acquisition efforts and new product developments. It is very difficult for me to not think of our failure as a betrayal of their trust. I intend to pay all of these family members and friends back with my own money, but until then I can't imagine escaping this guilt.
Has anybody else gone through a similar thought process? How did you deal with it?
Be honest, no one respects a coward.
At the end of the day, you'll be alive. You have clean water and probably an iPhone- it could be much worse. You've learned a lesson too, don't take loans from friends/family.
It was hard, but I still do startups and wouldn't change that for anything.
It'll get better. Don't give up on yourself. :)
It's all just a game anyway, especially when all you lost is OPM (other people's money)
Investors saw an opportunity the same way you saw one, that's their game, its a numbers game for them. They invest in lots of promises, they win some, loose more but the wins cover the losses so don't worry about them.
You did your best and that's all that matters; the rest was beyond your control.
People fail like you every single day. In fact, almost every successful entrepreneur has a CV of failure much longer than you would have guessed, but no one ever talks about these failures; by the time they hit their big win, the failures are long forgotten.
Only the successes ever make it to TechCrunch and hardly anyone ever gets there on their first try.
So stop beating yourself up; get up, dust-off your shoulders and get to work on your next gig. When you reflect on this experience as you work on your next startup, you'll be able to see just how much you've learnt from this failure and maybe even be able to appreciate it.
Keep tossing the coin and your win, your success, will come soon. You haven't failed until you quit.
Best of luck.
You'll learn more from a bad outcome than from a success. I agree with everyone saying don't worry about the investors. They invested in a highly risky business. Turned out it wasn't the next Facebook. Well, that's 99.999% of startups.
More likely than not, the business was doomed by circumstances before it even began (bad timing, bad market fit, etc). If this was your first or second business (likely), no reasonable investor can blame you, even if you did make avoidable mistakes.
So treat it as a learning experience, and don't obsess about the impact on your reputation, etc. Shit happens, and anybody who knows the tech business understands the odds are stacked against you.
1. There's nothing wrong in failing 2. Investors run a business - with a business, you have things that fail and things that succeed; they know that there is a probability of your startup failing and have gone through that multiple times
If your investors don't want to talk to you anymore just because your startup failed - you have shitty investors.
If they truly believe that you are solely responsible for the failure - they suck. It is their responsibility to help you succeed, and when you dont, be there for you and try to take responsibility for a small part of that failure.
I know it sucks to fail. When impending doom closes on you, you always feel like writing a 200 word rant essay on pastebin, but it is OK to fail and you will succeed. It's all a question of learning from this experience and moving on..
Let me tell you - the investors are entering the arrangement knowing that they have a 90% chance of failure. That's why they want deals that might give them a 10x return on their investment and they turn down "lifestyle" business that might return a meager 8% year over year.
It's great that you obviously care about your investors. But you should feel just about as bad over them losing their money as a gas station should feel when people lose a dollar buying a lotto ticket.
They made the decision to play the game, knowing full well there was a higher likelihood of failure than success.
Best of luck to you as you'll inevitably build something else.
Reading "The money will run out within a couple of months, and the debts won’t be able to be paid", I couldn't help but think: "wait, you have a couple of months?". People have gone by on less.
Maybe failing to innovate for a few years has doomed your company to fail. Then again, maybe not. The party's only over when the lights go out :)
I know it's cheesy to quote PG on HN, but what the hell: "Startups rarely die in mid keystroke. So keep typing!" – http://www.paulgraham.com/die.html
Nor can you let the fact that investors were involved get you down. Investment is about risk, not guarantees. Your investors knew, or should have known that.
Investment is speculating.
The only guarantee you owe them is that you did your best. If your best wasnt good enough this time, so fucking what?
You can only do your best today. Tomorrow's best is different, because you learned from today.
Dust yourself off, reach into your idea drawer, pick out the next one and start again. Maybe it works maybe it doesn't.
Some will, some won't, so what? On to the next. You learn from each attempt.
Surprise them. But before you can do that -
Come up with a new original plan, a pivot, anything that might just revitalize the business. It sounds like you had given up before they did. Look at your digital assets - can your codebase be repurposed for something? Would rebranding work? What about your user base - could you interest them with a new app or new service? Any IP you could license to someone else? There Amy be a well-funded company out there that's trying to build what you already have.
I won't feel bad if they do end up making something of it and sell it for a profit because I am glad to be out. I don't need a freelance job that doesn't pay anything around my neck all week, every week.
The investors protected themselves and brought down the business with it.
Many great entrepreneurs failed many times before ultimately succeeding. Even a successful company goes on to a constant stream of failures, with enough successes in the mix to come out a net positive. This is true of Amazon, Google, and all the rest.
A Churchill quote comes to mind. "Success is never final, failure is never fatal. The important thing is to never, never, give up".
Also, you should be celebrating the risk you took to build something great. There's absolutely no shame in that. Feel proud of everything you learned, these lessons will remain with you for the rest of your life.
I personally think of failures as necessary steps towards the ultimate success. So try to look back and reflect, take notes and consult with people on why shit happened. It will be a true failure is don't learn anything from it.
learning is a lesson is great but gaining wise experience is super important.
keep your chin up
be proud of what you accomplished (startup idea, investors, and a shot) it's more than other majority will ever get!
I had signed piercing agreements on a large contract, and on some financing before the failure, so I ended up on the hook for a little over $500,000. The risk/reward payoff looked much better the odds were in favor of reward.
Here's my progress to date: http://i.imgur.com/IGQ3rz6.png
It's an anchor. It's killing my dreams. I worry that the stress will literally kill me.
Everyone else (including the founders), love them -- we all ended up on our feet and were better for the whole awesome startup experience.
How is it compared to being fired? (Being fired = you can find another job, might need to explain why you're fired to potential employer, but life goes on)
You can shut down anytime so pick a date and inform your investors and customers. Give everyone enough time to migrate then turn off the lights.
You'll feel much better the moment you pick a date. I guarantee it (I've done it myself).
don't beat yourself up about this. Any investment is a risk, and any mature investor will be well aware of the high failure rate for start-ups.
Most businesses fail. That doesn't reflect negatively on you, it's simply the nature of business.
If you're this far down the rabbit hole, stop digging, spend as little as possible, and try a different idea ASAP.
And remember, above all else, be true to yourself.
Until next time you succeed then, they will start following you back and talk about old days how it was fun and exciting.
Yeah, exception exists and they have a track record showing it.
Paying them back. Not immediately, perhaps over a period of 2 or 3 years, while working on saving the co without making any salary.
Unfortunately, most entrepreneurs prefer to just walk away.
You shouldn't feel bad about this. Investors should know there is risk in any investment.
Did they ever try to help you on product, business, or operations?
if you didn't take this risk, you would always look back and wonder what if. Ik that's cliched to high hell but it's true
Now I know that you had to have this feeling with whatever you built. Remember back to those times you kept refreshing the page to see how many new users or page views you had since the last time you refreshed. You were excited about it. You were elated to a point where you felt you were unstoppable. What happened from here? Really ask yourself this. Ask what roads you took that lead you to where you are. Just saying you 'ran out of innovation' is a pretty crappy excuse. Some decisions you let happen led you to where you are today.
What I want you to see is a glimpse of that same spark you felt 2 years ago when you first launched and when you were building your app. I am in the opposite state of mind as you are currently. Things are looking good for me but that's because I choose to see it that way. Even when things are crap, I know that I can make them better if my heart is in it and I trust my gut.
You have the same power. You've already admitted defeat and chose to fail. You said it yourself, you're going to fail in two months and I've already given up. YOU CANNOT let your mind get in that state. Find out what is blocking you from taking it to the next level and get there. If you are a true entrepreneur at heart, find that spirit you had in the early days. It's not hopeless, it's just what you see it as.
You can be another story of failure or you could just as easily be a story of success. It is what you make it. I don't believe that there is no way out and you're doomed to fail because your lack of innovation. Some things you should kill if they don't work, but you better be damn sure it won't work because it's a bad model and not because your innovation just ran out.
You wrote this and posted it to HN. You're trying to find a way out or you're trying to find out what to do next. I'm telling you. Search deep inside yourself. Remember you only live once. You were given a good chance based on that initial passion and energy you had. Find that again. Figure out what you need to do to turn things around and do them. If it's killing them fine, but kill it being happy and confident. If you need support or someone to talk to, my email is in my profile. Whoever you are, if we are at all in like minded spirits, you just have to dig deep to overcome this mountain, and before long you will regain that vision and compass of where to go.
Edit: a few words
The skills and knowledge you've gain can't be taken away like a tool can.
Time to get back up.
My wife lost a brother (40's) and a sister (20's) to cancer. Her parents watched their children die in front of them. What amount of money could make that easy? My brother's got a tumor in his ankle and we're eagerly awaiting the biopsy results. Just hoping for the best.
I should note again that Islam does not tell you not to be happy or feel happy. It doesn't tell you not to try to achieve or become. It doesn't tell you not to help. But it tells you never to forget the nature of this life. People who are trying to make sense of life simply fail to know it is as it is by design. It was meant to be unjust and unfair, and overall, incomplete.
Finally, a few verses in the Quran that are quite interesting (the plural is the plural of majesty):
"Those who do not hope to meet Us and are content and satisfied with this life and are unaware of Our verses. Those are the ones who are destined for hellfire because of what they do"
"He who does good, being male or female, whilst being a believer. We will grant them a good life and will give them their reward from the best deeds they used to do"
"We have created man to live in pain. Does he think no one is able to defeat him? He says, I have squandered money in abundance. Does he think no one has seen him? Did we not grant him eyes, a tongue and lips? And have given him the two choices (obedience and rebellion)?"
context: God speaking to Adam and Satan after being banished from paradise "He said, get out, all of you, from it. You are from now on enemies of one another. Whenever my guidance comes to you (on Earth), he who follows my guidance will not go astray nor live in hardship. But he who turns away from my revelation, he will live a life of misery, and on the day of judgment, he will be left blind. He will say: My Lord, why have you made me blind when I once could see? He says, so have my verses come to you and you forgot them, and likewise today you're forgotten"
Finally, anyone who would like to bash Islam or religion. Don't reply. I don't care for your opinion. These are simply my two cents. Or as the Quran puts it "he who wants, let him believe. And he who wants, let him disbelieve". Wondering if I can sneak links in here?
So, delude yourselves responsibly.)