Hacker News new | past | comments | ask | show | jobs | submit login
My Startup Failed. Fuck. (nemrow.tumblr.com)
287 points by nemrow on April 11, 2013 | hide | past | favorite | 178 comments



Reading about failures can be more illuminating and educational than reading about success. It's interesting to see how you reached a number of gateways where you could have terminated but instead continued to pursue your goals/dreams (despite going against what many would consider the logical conclusion to close).

I wonder how many other business have adopted that strategy (of ignoring initial reduced interest in your startup) to only find glory and success down the line.

Either way you failed but you should be commended for it.


I think part of the difficulty of knowing when (or when not) to quit is that opportunity lurks even inside failure.

My first startup attempt was a coaching marketplace and community for poker players. My co-founder and I were both successful professional poker players and coaches at the time, but we were young (20ish) and all but clueless about technology. I still think the market opportunity was there, but we hired an agency who outsourced everything, made bad tech choices, took forever, and gave us a fraction of what we originally agreed on. I learned to program myself in order to complete a major component of the site (in flash) which they had just completely botched.

What we ended up with wasn't terrible, but it fell way short of the vision we had, and our marketing efforts fell mostly flat as well. We were able to recruit a few smart people to post and discuss hands here and there, and we wrote a few articles ourselves that showcased the flash hand analysis tool I had built (the best functioning aspect of the site), but we weren't getting any other traffic. There were a few bugs and an assortment of minor ux issues which made the site feel a bit clunky, and people's feedback was pretty unenthusiastic, so all in all we weren't feeling very good about the direction of things. It didn't take very long (maybe six weeks or so) before we threw in the towel.

It wasn't a complete failure--after all, I had learned how to program and discovered that I quite liked it (certainly much more than grinding poker online), and both of us had learned a lot of lessons about business and technology. But there was another lesson that we only discovered with time.

Even after we completely abandoned the site and it went dormant, I would still check google analytics from time to time to see if there was any traffic, and an interesting trend started to emerge: a few of the hand posts and articles we had posted were developing really steady search traffic. One article in particular was generating something like 20 uniques per day.

At that point, we were both just done with the whole endeavor and had no motivation to try to pick it up again, but we realized that if we had kept at it and continued to create more and more quality content, that we probably could have had an seo goldmine on our hands, developed reputations as poker strategy bloggers, and leveraged that into the community we had originally envisioned. Who knows if it would have gone that way, but it seems like there was at least a relatively unobstructed path to success available to us if we had been willing to stick it out and let the long tail kick in.


Startups often live on the cusp of 'other people think we should quit but we're not going to!' I appreciated these sorts of posts because they are illustrative. The only thing to be bothered by is if you don't find anything to learn from the experience.


I feel like this is a point that is often lost. It's why being an entrepreneur is such a huge risk.

You have to be stubborn enough to succeed in a world where the majority of people will tell you you're going to fail, you have to ignore all that.

Often times however, you do fail.


I think the opposite problem is also worth considering. No matter how bad the idea some people you trust will probably say go for it.


Good point, it's why it's such a difficult situation to be in. You really do have to block out everyone EXCEPT the customer that's actually using your product.


Yes, it is definitely a test of resourcefulness to persevere in the face of challenge, but you have to also know when you're doing the wrong thing or going down the right path. Persevering in the face of clear, direct evidence that what you are doing is not going to pan out is stubbornness. But persevering and LEARNING from what is working when other things are not is a best practice. The key is realizing when something is not working and then iterating to find the success. Or knowing that perhaps what you are doing will work, but the timing or market circumstances are not optimal, and then just biding your time until the market changes. This is not as obvious as one might think.


That is what great minds of business say about pivoting, especially in the early stage of business. Google didn't get into the ad selling business until they aquired AdSense. Now if I only can pivot some of my own ventures...


Life is difficult. Not just start ups.

Almost anything worth doing is difficult and to an extent risky. You are likely to fail both wasting time, money and other resources. But you are also likely to win big.

Anything that is easy is either already solved, or leads to mediocrity or pays too less.

To succeed at your goal you either need to get lucky or simply persist until you get there. Some can, many can't. Some just get lucky.


>I think part of the difficulty of knowing when (or when not) to quit is that opportunity lurks even inside failure.

No, it does not. Since, statistically, most startups fail, it's is mathematically sound to assume that mostly failure lurks inside failure.

At some point you have to stop and do something else. Even if you've lost money and time, it's wiser to quit and do other stuff, than continue to losing money and time in the same endless sink.


Cool to hear! I've just built a simple HTML5 web based poker HUD. I'd love to pick your brain what you think I should do with it!


Sure thing... I haven't been involved with poker for several years, but I'd be happy to take a look and talk it over--email is in my profile.


I bought into a couple poker training sites. What killed a lot of that business was Poker Black Friday, I'd guess most the income for these sites was coming from US players, and that dried up immediately. There might be another opportunity coming up though. I can hardly wait to play when on-line poker starts up again in the US.


Learning from failures is invaluable. Focusing only on successes is like getting a math exam back and only studying the ones you got right. Paraphrasing Tolstoy: all successes are alike, each failure is unique. It seems like there are far more ways to go wrong than right, but developing that catalog of mistakes from which to learn is difficult when it can be so painful to share (and often to listen to) unpleasant experiences.


I like the idea of a catalog of mistakes. TechCrunch makes it easy to get caught up in all the success stories, but there's no easy way to learn from the failures, which can be far more enlightening.

I decided to start a Twitter profile to collect all these post-mortems in one place. If such a resource already exists, let me know!

https://twitter.com/StartupGrave


There's the TechCrunch deadpool.

http://techcrunch.com/tag/deadpool/


True, but those are more like PSA's than post-mortems. There's not much one can learn from those announcements.


Great pull in from Tolstoy!


So, I guess I'll be the wet blanket here. It's pretty clear to me reading this that this person and their partner were nowhere near ready to found a startup. It highlighted the potential benefits for some people of getting a corporate(ish) job, learning about the business world, and learning the trade a little more before trying to starting a company.

It's like the demotivator for "Mistakes", this is probably best as a cautionary tail for people that have a startup itch, but don't necessarily have the necessary skills yet. I mean, this really talked about business and technology problems, but even assume they hit lighting in a bottle with the business model and didn't run into the technical issues, does it sounds like they would have been able to capitalize on it? I got a feeling that it was organized in an ad hoc way, and they weren't set up as an llc/s-corp/etc, had equity agreements, or basic contracts (otherwise, how did the one artist change not know they terms of the business, or opt out so quickly?) I feel like they would have ended up in trouble with the IRS, in a lawsuit with each other, or getting screwed by a less than scrupulous VC.

That said, everyone is better off from sharing, and I thank the author for it.


Hmmm, not sure about that.

I mean, it's clear to me that their startup failed. But "nowhere near ready to found a startup"? What does that even mean? Where do I get my secret decoder badge of startup readiness exactly?

Reading through it, I saw and empathized with their mistakes--they decided they'd found validation before they really had. They kept it going too long. They ignored the writing on the wall for too long. But aren't those always the tough questions? When should a founder give up versus persevere? It's not a straightforward answer and as a business owner I find it frustrating when I see people (particularly other business owners) suggest it is.

Bottom line though--everyone needs to decide for themselves if they want to go into business for themselves. But are they "ready"? Who the hell knows? There isn't a list of required skills and credentials for this position.


Regarding being ready to found a startup, I'll fall back on the Justice Stewart's line that, "I know it when I see it".

When I was a young kid, I had an idea that I was going to have a plant store (really. I had just learned about splitting African violets) that would have 'low price days' and 'high price days'. I swear. They idea was that people would be so grateful for the low price days that they would go to the high price days to help keep the place in business. This would have been an idiotic company.

You ask when the authors of the blog post should have given up vs persevere? I would say either when the drew up the business plan or after the beta when the found that people didn't like their product and that they couldn't execute on their idea.

I'm unromantic on this point. To me a startup is to make money (as a profitable business or on the exit), not find creative outlet or have a life experience. I'd rather see 20-somethings blow the ~$5K spent on EC2 hosting apps with fundamentally broken business models instead on (AirBnB) trips through Europe or South America and getting a little bit interesting as people first.

It's up to them, but (to avenger123's point) almost nobody is a Jobs, a Zuckerberg, or a Musk. Most startups fail. Plenty of YC class startups fail, and they're the winners of a highly selective process with access to unbelievable connections.


You know, I respectfully really disagree with you.

Based on the blog, I get the sense that the founders are in their early twenties. At that age, no one is "ready" for a startup.

I doubt that Mark Zuckerberg, Steve Jobs, etc. were ready to start their company.

At that age, you just do it, since the risks are low.

Unless your parents are wealthy or you have access to a lot of money, at that age its unlikely that a lot of money is on the line. Sure, they "wasted" time on this startup but this is valuable for the next company they will build.

Also, if there was a lot of money involved (and it wasn't their's) its likely that the business would not have gone as far as stakeholders would have wanted validation.


Age is largely irrelevant. I'd argue that no one is truly ready to found a startup.


I'm not sure anyone is completely ready to found a startup. If you are, you're probably not all that hungry. Obviously a line, but these guys demonstrated plenty of competence.


So what are you suggesting people do? Go get a "corporate-ish" job first? Personally, I agree with the sentiment of others: no one is "ready" you just have to try. Going the corporate route first has a high chance of getting you addicted to a steady income. Once that happens you'll probably never be able to do a startup because you can't take the salary hit.


I'm saying that founding a startup is not terribly different than founding a bakery, it's just the ROI characteristics of the business model are better. If one's skills are lacking in marketing, the basics of business/contract/tax law, time managment, accounting, or the core competency of the business then it's probably a bad idea. Some people are rockstars and can learn these skills on the fly, most can't.

So my point is this: if someone is not a rockstar and they don't already have these skills, they can learn a huge amount by joining small companies in their C or D rounds (ie, corporate-ish) and practice those skills by applying them in a structure where it's likely they have more experience coworkers to learn from. Then they can found a startup when they have the tools and an idea they're passionate about.

If a person can "get addicted to a steady income" then their financial planning sucks or they aren't committed enough. Better off they don't bother and waste time and capital that could go to people that give a damn.


I strongly agree. I'm grateful for people who post articles like this.

I do wonder (gently) if there's something like cargo-cult avoidance though? "These people didn't do this thing, and they failed, so we have to do it."


If this thing = making sure users want what you're making, that particular cargo cult would find to their delight that planes were starting to land.


Yes, well, people are terrible, terrible, at thinking for themselves. And when they do think for themselves, they are even more terrible at acknowledging that their thoughts don't shape reality.

That's glib. There is a very, very difficult balancing act between trusting your innermost convictions and learning to doubt said convictions frequently, as an exercise which reinforces the good bits and dispels the nonsense within them. Failure is the most valuable when you fail at something you personally believe in, because you're forced to confront yourself in the failing. Failure because you followed some BS system for doing or creating a thing without using your own thought processes along the way might teach you to stop being such an idiot, but usually it takes many failures of that sort before the message seeps in.


Definite commendation for even giving it a go.

Remember the famous maxim: "I failed a thousand times but each one brought me a step closer to stealing what I needed from Tesla"


If there's a common thread between endless startup failure stories, then it is "we talked to a bunch of people who said they'd spend money on this" and when push came to shove said people didn't actually spend money.

We're not failing, but even from a (modestly) successful startup perspective, the vast gulf between "people who like to talk to you as if they will spend real money" and "people who will actually spend money" is painfully apparent.


The vast gap between talkers and doers.... In this article, in the end they contacted 1700 people only 1-10 were interested. That sounds more like the four standard deviation crazies who just want to be polite.


I like to live by the motto:

You never know if someone is willing to pay until you ask them to open their checkbook.

The same theory can be applied to most investors. (pre-handshake protocol at least)


So then... is Kickstarter the only true way to validate a startup idea?

You throw up a cool pitch with some videos and vague promises, and watch the cash roll in. If the cash does indeed roll in, then it's a good idea!

Then you get to work, and hope no one remembers in 6 months that you promised to deliver them some amazing gifts. :-)


PPC + Landing page works wonders.

Avoid the confirmation bias of your peers, and target people actively looking for your idea.

Build a fake checkout that collects no data, and thank your 'paying' users for signing up to be notified when X goes on sale.

(You should also probably tell them that no financial information was actually stored.)


I never been on such a website, but doesn't this make people angry? Or is the trick to do it also withe fake product and company name, so that you know it would work, but noone can hate you afterwards for lie to him?

Kickstarter seems like a better approach, since everyone KNOWS there is no product to buy.


I can't imagine being anything other than angry after filling out a payment form and then being told that there was no reason to have done that. On a new web application?


Although I consider the practice unethical, the other side would (does) argue: "Who cares? You are trying to get 20,000 customers and you pissed off 100 to get there."

I still can't bring myself to do it, though.


You wouldn't really have any customers if you weren't accepting payments though, it would be more like you pissed off all of your potential customers just for a bit of market data.


This is advice Tim Ferriss actually gives in his first book. I generally agree with your sentiment.


If I put my credit card number into a site and the next page said "actually this isn't real, and we promise we didn't save your card number", my next step would be to call my bank and cancel the card.


Surely the next step for a lot of us would be to devote an afternoon to bringing public misery upon the site operators. Don't take this advice, kids.


That's funny and true.


"Build a fake checkout"

Are you serious? That's a criminal act called fraud.

Please don't follow this advice. Just do something legal like having users sign up for a mailing list.


I'm genuinely curious - if no money ever exchanges hands, how can this be classified as fraud?


This will probably seem obvious afterwards...but if you sign a contract with someone to provide a good or service for $0 and then fail to do so, that could be considered fraud.


You could put some sneaky stuff in a ToS in theory


This is the worst advice I've ever seen on HN.

Much better to have PPC + landing page and a "tell me when this is available" signup.


Isn't this exactly what leads to the "a lot of people said they'd pay for it" false assumption? Not such a sound advice either...


The distinction is your landing page is only found by people looking for the solution you want to offer. They've already decided they have a problem, and need to fix it.

Contrast that with polling a random sample of your target demographic, where any number of things can spoil the results. People could say they like the idea just to be polite. People could have never thought about the problem you're solving before, but think it's neat. People can misjudge how much they care about it. People can have an enthusiastic initial reaction, but think the idea is dumb on further reflection.

It's the same sort of problem with polling for election results: you can't ask a whole bunch of random people who they're going to vote for and turn the raw results into a pie chart. To get useful data, you have to carefully predict which of your respondents will actually turn up for the election, and which ones aren't going to change their mind between the time you poll them and voting day. And even then, in the end, it's not the pre-election polls that determine the new leader, it's the election itself.

That distinction is what's being presented here; asking a bunch of people is only useful if you're very careful about filtering out the junk answers. You should instead measure people who have already decided, without your prompting, that they have a problem and have decided to seek out a solution for it.


I'm sure this works for things which you might buy having only see the website (and maybe a few screenshots) but beyond a certain level of cost/complexity you actually need to have some real software for them to try before they'll pay.


The thing is, you cant really ask them for money too early or you'll be hearing NO too often for the wrong reasons...

What you should be trying to find out is:

   1. if they currently spend their money somewhere else to solve their problem

   2. if your product is so much better at solving the problem, that they will want to switch.


Yes you can, you can put up a page that describes the thing, and pretend it exists, and try to get someone to click the "let me put my credit card # in already!" button.

One click, a single click will not destroy you brand. And OP would've realized that no matter even with their best shot they couldn't get 10 clicks.

10 disappointed non-customers won't destroy your brand.


The problem is how do you learn from this?

Okay i have a page and i HAVE to get people here with paid traffic like adwords because no one will write about my non-existent app.

So now I get a bit of traffic but nobody clicks the buy button...

Is it because i drew the wrong crowd? Is it because they don't know me? is it because adwords conversions are usually very low so do i need to pay for more traffic?

If it actually is because my product sucks, then cool.. But what do i change?

There is no way to know this; which is why i believe the buy button is not the way to go.... at the beginning.

You can still do this before you start building, but it must be done after talking to at least a few customers.

The traditional customer interviews are always the best way to start.


You can learn a lot from this.

Firstly you can learn how other people describe the type of product you are offering - not necessarily how you describe it. With Adwords you'll see the types of keywords that people are typing to have your adverts displayed, some of these keyword phrases may include words you haven't considered. You then add these new words to your list and see the results. Rinse and repeat.

Now people are coming to your site you can track what they do. What price point has the most clicks, what wording bounces the least, etc.

I have done exactly what erikpukinskis described and it serves to not only validate (or not) your idea, but the great thing about this is I learned far more what real people are actually wanting, not what I thought they wanted.

A couple of weeks investing in a quick wordpress site and some adwords to validate and modify an idea before building is so much better then building it then seeing if they will come.


Seems like you only read my first line


I am probably not making myself clear

> Is it because i drew the wrong crowd? Is it because they don't know me? is it because adwords conversions are usually very low so do i need to pay for more traffic?

You don't just put up one ad using some keywords and be done with it. You constantly tweak, seeing what keywords people are using to find your ads, which keywords have the highest click through rate.

When I did this for a little idea I was thinking of doing, this was incredibly helpfu

The product I was think about doing was related to niche websites. I thought most people would use the word "niche" to describe them, it quickly became apparent that the real word people used was "affiliate" I saw "affiliate" appear a lot with related keywords and in the stats on the site, so I added an adword targeting that and related keywords, CTR doubled.

Using adwords helps you define and recognise the crowd you draw so you can best cater to them.

> If it actually is because my product sucks, then cool.. But what do i change?

Again, don't keep it static. In my experiment above, the first 100 clicks saw no interest. I changed some wording, a tiny improvement (less bounces etc). I changed the price, less bounces. I added FAQs, less bounces, I tweaked the available functions - possibly people would want feature X. Bang! people clicking on the "order now" button. Feature X is what people want

> There is no way to know this; which is why i believe the buy button is not the way to go.... at the beginning.

Seems like you haven't tried it, ;)


iBrow i get your point

All im saying is - as i summed it up in the last line - you need to talk to customers before wasting adwords dollars.

What you describe is using adwors to find your audience. I guess there might be situations where that would be useful


But talking to customers is exactly what these guys did:

> So we talked to a few artists who said they thought it was a cool idea. BOOM! Our idea had been validated!

The idea had not been validated at all, just been told it was "cool". What they should have done next (or possibly at the same time) is spend a couple of hundred dollars on adwords to see if a cool idea converted into something people would actually want to buy.

What they should not have done is

> stopped talking to artists for a year and built (and rebuilt) the software until we thought it was acceptable

My point is that I would far rather spend $200-$500 on adwords and not on 1 year development of a product that is thought to be cool, but no one has actually had the opportunity to come to it fresh and click on an "order now" button.


This post is a bit on the extreme side of not talking to your customers. Of B2B that fail, I'd be surprised if most burn out this badly. Most get someone to use them.. just not enough.

As for the advice of getting clicks, strongly product dependent.

Imagine you are a PaaS, say Heroku. It'd be a bit hard to adequately market such a product without convincing docs and people actually playing around with it. That is.. building the product.

And even if you could get some CC conversions, it still wouldn't validate the product because so much of the stick/not stick with it will come down to user experience. Which for a pretty technical product is a bit of an unknown.


Completely agree with your point.

The problem is that the majority of first time founders are: (1) overly protective about their non-existent brand (2) afraid that they will not get any clicks (3) so attached to the idea that even if no one clicks, the design is to blame not the idea

This leads into spending far too much time not iterating on a broken realization of an idea, insisting that "with time it'll work out" or "just a little further, we're gaining momentum", when evidence shows that the company is actually at its worst :P


This story seems more like "If we build it, they will come."


can't get no satisfaction unless you take action!

stop worrying about what might happen, and do experiments to see what does happen.

ask people to buy and collect money. if they do, tell them it's not ready yet, do they want to wait, or do they want a refund?

S I M P L E S !

@startupjerkfest


Has this tactic worked for you previously?


I'm sure it's painful, but thanks for sharing. I agree with cup, that reading about failures can be more valuable than reading about successes.

If anything, your story adds more fuel to the fire for the approach that @sgblank advocates[1][2]. Get out of the building, talk to customers, validate customer needs, etc. We've been doing this, but - to be honest - we haven't done as good a job as we could. Hopefully we will soon start another big round of Customer Development interviews, much more targeted this time, building on the feedback we got the first go-round, and moving more into what Steve calls the "Problem Presentation" phase.

It's a tough slog, but I continue to remain convinced of just how important it is.

[1]: http://steveblank.com/category/customer-development-manifest...

[2]: http://steveblank.com/category/customer-development/


Startups repeatedly make the same mistake of not talking to customers enough and dying as a result.

One of the most helpful guides is to try to make a mistake in the other direction. Try to talk to your customers too much. No early stage startup ever died from talking to their customers too much.


I mostly see it as a matter of empathy with existing people, or exposure to existing problems. I would say one of the best ways to come up with an idea for a startup is to be working for your potential customer.

I have seen so many people start their own company after breaking off from some existing company and "doing it better" or realizing some previously un-claimed niche specifically because they had the industry knowledge.


So we talked to a few artists who said they thought it was a cool idea. BOOM! Our idea had been validated!

Why was that sufficient data to justify spending months and months of your life bringing this startup to fruition?

EDIT: I did not intend to make a sly insult toward the author. I've seen people do startups with similar justifications and I am confused.


This seems unkind. What data would you want? It's easy to jeer in hindsight, but frankly if focused and professional market research could reliably determine the existence of new markets there would be no need for a startup to find them. This very web site wouldn't exist.

They played a hunch and lost. The linked post details lots of mistakes, but this particular one doesn't seem like one to me.


I agree that was unkind. But treating a little positive feedback as validation is, as the original author now clearly realizes, a giant mistake.

You've got a business when people repeatedly exchange value with you. Kind words are validation of a sort, but the weakest kind. To go from there to spending a year building a platform is basically hearing what you want to hear. Better not to ask than to believe what you hear uncritically; if you don't ask, at least you know you don't know.


> What data would you want?

The data that was lost right here: "After that moment we basically stopped talking to artists for a year [...]"

Find customers as early as possible, engage with them as often as possible, and really really listen to what's being said. This is a huge benefit of bootstrapping. Customer engagement from the earliest possible time is vital to the process of transforming an idea into a product.


A cool idea does not equal a business model. That is why I think soooo many startups fail. They build something awesome, amazing, cool whatever, but they don;t stop to ask people, "Will you pay for this? Is this something you think I could charge for?" That is the data I WANT and need.


Ahem... Have you heard of Facebook? Or GMail? Or Hotmail?

These are money-losing businesses. As we speak.

Real life is much more complicated.


Those are all examples of outliers, not real life.


All successful startups are outliers. "Real life" startups, to first approximation, fail. This one did too. But frankly it wasn't because of the lack of market research.


People begging you to take their money.


The post was clearly meant to be firmly tongue-in-cheek. That part in particular was simply self-deprecating sarcasm.


Exactly. Sometimes when you think your idea is good all you need is one or two other people to tell you they think its good and that's it: it's a good idea. How did Instagram come to the conclusion that their idea was a good idea? Or any other startup for that matter. If Zillionears turned out to be a success no one would have thought that having a few people say "good idea" in the beginning was insufficient to get started.


Yeup. Lots of arm-chair advice these days. It's a business all in itself. It's funny watching people compile lists of "all the mistakes" in hopes that not repeating a single one of them will equal success. Plenty of wildly successful businesses became so without having MVPs or setting up fake landing pages. They spent years building out real product-breakthroughs, maybe with even real technology/science. I'm willing to bet that for every rule that's broken in that StartUpGrave twitter list above (I haven't looked so I don't know what's really there, but I'm going on just the idea of compiling lists of mistakes), there's a company who succeeded while still failing the rule.

There's so much retro-active quarterbacking that goes on (especially in the VC-world) that says X company was success because they applied this-thing-I'm-just-now-naming as a rule. Even though, Apple has taught us things like you're users don't always know what they want or need.


I totally agree with that! There are tons of companies that "win the lottery", and build a product with no validation and succeed. It is obviously not the "right" way to do it, but sometimes it does work.


Bingo! :)


Getting to the point where an idea is truly validated by unbiased and honest customers is way, way more difficult than we all pretend like it is. I think the idea that you can figure out if your business is viable by talking to a few people can be just as dangerous as it can be helpful.


PPC + Landing page is typically promoted as a valuable tool for validation around here.

With launchrock + adwords this has become stupid easy.


Maybe this explains so many me-too consumer based websites are de rigueur around here? I'd like to hear more feedback about MVP practices within the enterprise space.


I think that's his point (illustrated with sarcasm) - with the benefit of hindsight he realises it wasn't.


It wasn't sufficient data. OP was describing their foolish attitude at the time.


And then the next sentence: "After that moment we basically stopped talking to artists for a year."


"Dynamic pricing" -- does anyone really like that? I've seen reports of online booksellers (no, not Amazon) giving people different prices based on the account they use. No one really likes to feel like a sucker.

EDIT to add: Some people might bring up airline tickets or hotel rooms. Limited analog inventory, not infinite digital inventory.


It's also called value-based pricing [1]. You're correct in your edit, hotels/airline tickets where you're auctioning off a limited value is one thing, selling a inexhaustible commodity at different rates without any reasonable factor like location (water in a desert = more valuable) just feels dishonest.

Amazon and Travelocity rightfully caught a lot of flack when they were caught trying this (perhaps pricing A/B test?) years ago.

[1] http://en.wikipedia.org/wiki/Value-based_pricing


Analog? You mean planes and hotel rooms are non-quantized?

Sorry, had to say that :) It's fun for me how analog/digital have become synonyms for material/virtual.


Even more fun because the material world seems to operate in mostly quantized steps at its most fundamental level.


This is not dynamic pricing. This is subtracting a dollar after every sale.

Companies like this make it very hard to explain what we do which is use machine learning to maximize profits.


More importantly though, people really didn’t really LIKE anything about our product. No one that used the service thought it was that cool. In fact, some people that participated in the sale didn’t even like our “dynamic pricing” system. They were trying to support the artist, so saving a few dollars didn’t excite them. They could easily have just gotten his music for free elsewhere.

i am one of those people. why do so many bands have such a minimal online presence that i cannot even buy a t-shirt? surely these days it should be trivial for any band to create a store with some basic items generated from a few uploaded images. there are people out here looking for something cool to buy to give back money for what we just heard... even stickers are nice.


Man, I feel your pain. I have developed the most awesome products the world has never seen 4 times now. We had a "build it and they will come" attitude too :(

We decided to ask ourselves one question: How to we validate an idea before wasting months on an idea that only we seem to think is cool?

So we are creating WillThisFly? to ask that very question... it's a site that allows you to try out your ideas and projects, get feedback and refine them before committing resources to it.

Shameless plug: http://willthisfly.net (Just launched last night)

Only thing on there at the moment is WTF? itself.

All I can say is, it has happened to probably everyone at one stage in their startup career... don't give up, refine your ideas, create MVP's and keep trying...


Excellent initiative. I'll check it. I hope you will also provide some general talks on strategies we could use to test this as early as possible.

Sometime it just need a few more optimization iterations. Considering the Facebook example and prior art, this must be really frustrating for those who missed the gold pot.


The main point of WillThisFly? is to test out an idea or project at any stage of its development before committing too many resources and finding that your awesome idea isn't so awesome after all.

If we had something like this when we first started out it would have made life so much easier and we wouldn’t have wasted months on projects that weren’t going anywhere but may still have been salvageable with the right feedback.

The iterations and feedback are key: This involves a simple, instant method (voting) and the more involved approach (comments). With both of these, a project owner will be able to find out if his project is worth pursuing and if it is, be able to iterate, change or pivot accordingly until he is happy he has a product that will work.

We will be adding a blog shortly that will outline strategies and features and more information about WTF?

At the moment we are using WillThisFly? to develop WillThisFly? and it's early days but it's coming along nicely and we are always open to suggestions :)


A lot of comments have thrown flak, justifiably, at your landing page video; it is terrible. But the reason is not simply aesthetic, it's because you chose to present an image of musicians that relies on tropes which could only possibly be relevant to non-musicians, and even they would probably think it was not funny. Nobody who is seriously pursuing art thinks of themselves or their work in the way you portrayed them.

Your problem wasn't amazon payments, or flakey artists jumping ship. It was that your audience wasn't even on your radar.


I had a similar impression. the video looks like the founders really don't know anything about the business they are getting into. The video looks cheesy, like a corporation trying to speak teen's language to sell them ice cream, not like somebody who understands artists.

also it was hard to understand what the site does, there is something like a price slider on the demo page but does not slide. what the hell is going on? better read some explanation...

the founder probably did many mistakes, good luck next time.


Your startup may have failed for other reasons. Just saw the promo video on your website, am not impressed. It actually looked like a parody video. And the reference to drugs (are you saying that all musicians take drugs?). NOT impressed. Product with maybe a good idea but seriously poor execution/marketing. Be more serious when doing a startup (unless your intention is to be less serious, ala 9gag) or risk being a terrible parody joke.


Even the people at the very top of the value chain in the music industry --- the vanishingly small set of people who produce commercially viable music --- can't make the business work. So I'm curious as to why you'd have tried to start a company in music. Did you start before Dalton Caldwell's talk?

I'm just interested in how people pick the ideas they pursue.


A friend of mine who worked for a venture fund expressed the theory that people tend to do startups based on things they like a lot. Since many startup founders are young guys, this leads to an oversupply of startups in things that are young-guy-ish, like music and video games.

The notion was that both VCs and founders should look at broad markets and dig in to find opportunities. As Bezos did back in the day with books. Less fun initially, sure, but taking one's company behind the barn is definitely not fun.


I got the feeling there were in college or fresh out of college when they started this. Probably they were just doing what they had an interest in and thought they knew something about.


Exactly the situation.


> Did you start before Dalton Caldwell's talk?

Who is this Dalton Caldwell, and why is he relevant?



Would have been a valuable talk to watch, before we got started.


Thanks


"Zillionears | Sell your $h!t with Social Sales!" - Sorry but as soon as I seen your landing page title, I was put off.


Understandable, most Christian musicians where not excited about our slogan.


Well, that's a comment that betrays a lot about you and, potentially, why your startup failed.


Likely they are extremely young and can't conceive of why that is a terrible thing to put on a serious commercial site.


That and the landing page video — it was both cheesy, and patronizing to both musicians and their fans.

And after watching it I still don't understand the "decrease price by a dollar" pricing scheme.


All of these things I DO agree with. And yes, we are young. We might not use the word "shit" on our homepage next time. But Hell, I used the word "fuck" on the title of this article, and it sure turned alot of heads.


At the end of the day, you're trying to make money. Transactions are very intimate events and you have to pay attention to what your customer feels when they navigate your site. Copy that conveys distrust is going to lower conversion rates.


I was referring to the dig at Christians. Not the vulgarity.


Sorry if you took my comment as a dig at Christians, I was merely stating an observation based on the data we collected. I personally encountered a handful of Christian musicians who stated our use of vulgarity and drug references were the reason they were not interested in our product. For example, we also had some female musicians who were not excited about our video because it was geared towards guys. not a dig at female musicians


"I don't apologize for what I said, merely how you took it."


I see this happen more and more that we talk to our potential customers about the idea we've been brewing and they say 'heck yeah I would totally use it', later only to find no interest in it. One thing I learned is, most of our ideas are pretty cool and most likely all the potential customers would agree when you try to validate but very few would actually hop on to try it. May be the implementation wasn't right, or may be its too hard to change the customer behavior to switch. Sometimes the customer was not serious enough when you pitched.


The correct answer is that people don't like being rude and saying no, particularly when its' easy for them to agree.

If you have no product and are not asking for a sale, saying 'yes' has not cost to the person. Saying 'no' makes them a grouch, and they would have to justify why they said no. So lots of people say 'yes' even though they don't really mean it.

That's why the only data worth talking about is sales and adoption, and why minimum viable product is the way to go.


Ouch. One thing that leaped out at me was your mention that the first beta was a disaster because it didn't comply with Amazon's payment-processor requirements, so you burned a lot of capital making good on your promises. This sort of thing is why I keep saying more startups need a legal person on board early on - and with a surplus of underemployed JDs around, now is a great time to work that into your team plan.

Lawyers are not just there to object to things and make life difficult for dreamers, they're there to spot major potential pitfalls like this and steer around them. Far too many entrepreneurially-minded people see contractual and statutory constraints as some sort of obstacle course designed solely to prevent competition or enterprise, and react to said constraints by simply wishing them away. I was impressed that your reaction to this problem was to pay everyone as promised and retool your application to be compliant with Amazon's requirements, rather than simply blaming them for your problems. A hard lesson to learn, but one which will put you ahead of the pack in future.


Would they work for equity? Sorry I couldn't help myself :) /developer.


Some would. I know quite a few lawyers in startups. That's why I mentioned 'underemployed JDs' who have an incentive to explore other avenues if they can't get a job at an established law firm or public body. You might not be aware that there's a major supply-demand imbalance in the legal field right now.


Often, yes, if you have a good relationship with a well-established firm or have someone who does vouch for you. Most top tech law firms (WSGR, Orrick, Fenwick & West, Gunderson Dettmer, etc.) will defer payment or even waive certain fees for early-stage startups in exchange for a small amount of equity.


Maybe it is a marketing problem. The domain name is nice, but what does it tell about you, about your product, about people sharing the url ? For you it was probably a matter of being zillionears but for music lovers ? The dynamic pricing thing looks also fishy in the sense that no one except you are in control of pricing, or its algorithm. This gives the feeling to be exposed to be screwed, the artists and the potential buyers.

My feeling is that you conceived the startup guided mainly by your desires than the one of the artists, visitors and clients. Unfortunately your desires where not attractive for them.

Mistake n° 1 is the domain name which is the first message you give about your business and service.


Thank you for sharing your experience but to me, the whole post is about how you didn't really listen at all and built something that people didn't want, which ended up failing, yet you still learned a ton. I bet you learned something but did this experience really teach you a LOT? You don't mention any other learning experience in this post (you say you'll write more later) but somehow in the end, this failure was super insightful. I just don't see how... Sorry if that sounds negative. I wish all entrepreneurs success but the end of this article just fell flat for me.


I hear what you are saying. I have tons of pages of lessons I learned that I will touch on in later posts. I tried to summarize the whole experience in to one page. My experiences took me to business meeting after business meeting, and opened my eyes to the entire tech / music startup scene. The main lesson I learned was not listening to feedback early on, but I also have insight on co-founder issues, legal issues, budgeting issues, personal/work dilemmas, etc.


Can I ask how much money this whole thing cost ? Or is that rude ?


Out of curiosity, what did you do wrong originally that was against Amazon's terms?


We were a middle-man to the artists. We had it setup so when a fan bought their music all of the money went directly to us, and then we paid out the artist. That is where we went wrong. You need to use "recipient tokens" so the money is split by Amazon. This way the money goes directly to the artist and we get sent a cut directly from amazon.


Ah, thanks for the response.


I wish you had read The Lean Startup by Eric Ries. It stresses the fact of build a Mean Viable Product very early on and testing hypothesis like "will artists pay for this service" in a real life scenario with an ok product. Aardvark did this in a really cool way (check Aardvark out).

Also, there is a notion amongst us entrepreneurs to persevere amongst all odds. This might be dangerous at times. There might be a massive market for your product yet you have approached it in the wrong way. The thing is, if you have no data, it is very difficult to know what REALLY went wrong. For example: Drew Houston from Dropbox early on stated that selling Dropbox through adwords was costing them something like 300 dollars per acquisition, once they introduced their double-sided referral scheme Dropbox started selling like mad. It was what Eric Ries calls a Pivot.


Reminds me of Pud's Fandalism which he created pretty quickly and ramped up traffic also quickly: https://news.ycombinator.com/item?id=3559081

When it comes to commerce, I'm liking the model of first building an audience and then adding commerce.


Good post and you had me all the way up until you said "journey". I hate that word. Pre-internet Journey meant something now every man and his cat uses it to talk about the incites they had while doing something, it has lost its impact. However like I said I enjoyed the post until then.


Sorry to hear it didn't work out. I might just share two thoughts that occurred to me:

1. The site's tagline is "Sell your $h!t with Social Sales!" which I would think is kind of off-putting in the context of a vendor relationship

2. Your sales model appears to be in contrast to how supply and demand work. Your model is that as more buyers sign up, the per-unit price goes down. I understand your theory is this causes people to share it with their friends. But, people who are buying indie music not only don't want to screw the artist -- they're also not going to bother talking their friends into something just to save a nickel.

3. I think this would have made more sense for the artist if the price went up (slightly, like from $4 to $5) as sales went up, with the early people locking in their price.


I've been there done that, so I get the frustration you went through. Lesson # 1 What people say is cool doesn't mean that it's something that they'd use. Just because you say you're building the next Facebook will get you some "that's cool" responses but doesn't mean they'd actually use it.

One of the most useful things I do to validate an idea is to actually use YC's application- if you can't answer all the questions about your idea without any doubts, you're don't have a solid idea yet. And validating your idea means to follow up at the very least with the people that said it was "cool". Forget the stealth startups, be completely transparent in what you're building and have beta users follow you from day 1.

Good luck with your next thing!


Now that you have learned how not to build product, I suggest you take a one month break, and go build something else.Don't build the product without knowing what the market wants. In your case, people wanted an easy way to support their artists.Don't market a product in such way. In your case, learn the basics of online marketing, and pay someone to build a good landing page for the product.Don't take it so personally. Shit happens. It failed. Who cares? The more value you put on failure, the less value you put on iterating. That's where success comes from.I do have to say that your landing page is pretty crummy. That contributed in a huge way towards the failure.


Keep Moving Forward. Pick up the pieces, mend the broken bones, take a vacation, regroup, do something else that you love and are passionate about. Failure is part of life. You miss 100% of the shots you don't take, right? Just keep at it.


I love the honesty and the spot on diagnosis.

For a site that resonates with artists, check out Reverb Nation:

http://www.reverbnation.com/

A sample artist page here:

http://www.reverbnation.com/evangibb

Instead of buying their music, the site is focused on you listening to it via the embedded player and then going to see them live. You can even buy them a gift card so that they can buy advertising. They're growing like crazy with a marketing budget close to zero.

Thanks for sharing your hard learned lesson. It reminds us all to get out of the building and talk to users.


I would be interested in:

Once he found out about the dynamic pricing he tells us “I think I am just going to release with another platform.” FUCK! Are you serious????

What other platform(s)? What were differentiating factors between those, and your service? Do artists suffer any particular trending pain-points in alternate services?

1,700 or so artists could probably provide great feedback into what they actually want in a platform, vs building it in a vacuum.

Thank you for sharing!


i realise you want the actual answer here, but if i was going to sell my own stuff, i would be using bandcamp http://bandcamp.com/ and have as a buyer many times. it's simple to set up and purchase from, is the main selling point.


Yes, Bandcamp was for sure our competitor. Simple to use, and well known. Our added value was the dynamic pricing (which we found out was not a value at all). There are many pain points for artists. The main one is "no one is buying my music". That pain point hasn't yet been solved in an easy way, and as time goes on, it seems its getting harder and harder.


Music is probably one of the hardest, if not the hardest industries to be successful in. Props to them for continuing to press on, hoping for a break and smart enough to throw in the towel and move on.

Also, happy to hear you didn't mortgage your life savings and burn out in grand fashion. You're wise beyond your years.


I'm sorry but let me offer a different perspective.

Your startup failure was good. It hit quick. You learned. You moved on.

If I had more time I'd tell you about all those failed startups that suffer a really slow death. Like the YC startups. Pretty much all of them are failed. They haven't seen the light yet. You have. Be grateful.


You done good. It's not supposed to be easy. You get an A for effort, and next time when you place your 120% into something you'll thank your younger self for getting the early learning phase out of the way when you were young and had unlimited energy.

Do take a break. A year sounds about right.


So did mine, largely because I was not able to commit to it for a variety of reasons that wouldn't be unfamiliar. I like reading the success stories, but I get pretty down thinking about my experience -- not the doing, but the way it ended up going down.


"we felt like we had already gone too far to quit" -- the bane of many a startup that should just pack it up / pivot / rethink things the moment this thought crosses their minds. If you're already thinking you've gone too far, you've gone too far.


I think part of the problem is that there is so many credible sources to draw from when faced with this sort of thoughts. The Lean crowd will tell you to pivot, but others will tell you to never give up, that big ideas are often brought to life by stubborn entrepreneurs. Many early entrepreneurs are often inspired by such stories and so that's probably quite natural for them to react that way.


Best advise I can give here is to do what Steve Blank, Martel, and many other advisers/founders/etc say - If you can get a check for the product. Then you've sold it. Then there is demand. Until that money is in your hand, you just have an idea.


NOTE: This doesn't mean you'll be a success. You may have found a market, but you need to do more customer development in order to really figure out if the market is large enough to sustain.


It was a very successful failure. You are much more likely to succeed given what you learned from it. I'd say that it is a blessing in disguise and very much appreciate that you shared the experience with us.


You have a tangible yet unmarketable product. Rather than abandon it completely, would you consider open-sourcing it? Any contribution to the open source community is a positive use of time (in my opinion).


I did want to open source it, but the problem is all of our passwords and keys for amazon and everything are in the code. Is there a way to get around that?


There was a discussion on storing passwords in source control here: https://news.ycombinator.com/item?id=5178914, Although if you plan to discontinue development entirely you could just substitute keys with placeholders (YOUR_KEY_HERE) and make a note of it in your README.


You actually have spoken to 1700+ artists? See if you could learn a few things about the market, and do a "pivot" as so many start ups have done. AirBNB started out selling air mattress...


Welcome... do it again.


Great story & thanks for sharing this. I was curious about why you chose to go with Amazon Payments... why not PayPal, or your own merchant account?


Billing info was authorized, but not captured until the end of the sale period. Similar to what Kickstarter does. Amazon is really the only option (that we could find) that would allow that type of flow.


Dans right (he's my co-founder). Amazon allowed for a much larger period of time between authorization and capturing. They are the only processor that had the technology on hand for us.


Someone should make a new Amiestreet. The business model worked (dynamic pricing) and the company was acquired, then it went away...


Fast iteration is cool assuming you have customer validation plans. In this case, it didn't sound like one existed.


Really seems like this was a great idea but somewhat poorly executed with the presentation on the site.


>Hit me up on twitter! I just got on there.

This is not something I would be telling tech-savvy people.


Knowing when to quit is like trading with bitcoins, you never know when to sell.


Hate the F word in the title, that word is for your mouth, not for writing on the public network so all can see(including my kids), unless, you have a 18-year-old warning on your homepage.


"Fall down seven times, get up eight times..."


seems like it shoulda really taken off for independent artists.


Mmm, if you look at the site it's really not that surprising it didn't take off.

http://zillionears.com/

Landing on that site and seeing the big 'Create Sale' button is pretty confusing. I don't think 'oh this is a site for musicians to sell their music directly to fans'. It also claims I can use 'social sales' but is that a meaningful term? I've never heard it before and it sounds pretty buzzwordy.

edit: Just watched the video on the front page and I can easily believe that only 1 out of 1700 people thought it was worth bothering with.

The execution just seems awful.


Completely agree. This doesn't show much knowledge for the music industry. The huge call to action button and the blond girl are just a bit demeaning for someone who is trying to establish their name to their fans


Maybe I didn't have my morning coffee yet, but the video seemed to be too disrespectful of musicians.


That was my interpretation as well and I didn't like "sell your sh!t" thing. I don't think a musician would like his art to be called shit.


Also, a small baggie of drugs or something from McDonalds is not the recommended way to generalise how musicians spend their distribution cheques :p


Hahaha, i'll take the honesty!


i didnt bother to look at the site the idea sounds good (as do many things)


gg go next


Definitely a great learning experience. I myself had my own business. Made enough to live comfortably, but in the end, the IRS made me pay back every red cent in back taxes, and then some when it came to a screeching halt.


Read the whole thing… still no idea what "dynamic pricing" is.


Can you go indept about what you did wrong that allowed payment processors to freeze your accounts? What about your software didn't comply with their terms that it had to be rewritten?


We were a middle-man to the artists. We had to setup so when a fan bought their music all of the money went directly to us, and then we paid out the artist. That is where we went wrong. You need to use "recipient tokens" so the money is split by Amazon. This was the money goes directly to the artist and we get send a cut directly from amazon




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: